Company registration number:
10967805
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COMPANY INFORMATION
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CONTENTS
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GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2022
I am pleased to report another year of significant progress for Cushon in providing workplace savings to individuals through our market leading technology platform. Losses before tax increased from £3.7m to £8.7m as we continued to invest in our employees and the growth of the business and the balance sheet remains strong with net assets of £7.2m at the year-end (2021: £5.4m).
Our purpose Cushon’s mission is very simple. It is to improve people’s financial futures through healthier savings habits. Our approach is to make saving for the future simpler, more rewarding and engaging. Our approach is to celebrate the small victories, whether that’s signing up for our app, increasing contributions or having your say on an ESG voting issue. Cushon believes in ‘doing the right thing’ and using its platform to drive societal change. In January 2021 Cushon launched the world’s first "Net Zero Now Pension" to widespread public and industry acclaim. Cushon’s strategy for growth is to extend the benefits of the proposition and technology to as many customers as possible, through both organic and acquisitive strategies. The growth strategy considers organic and acquisitive strategies as equally valuable in building scale through customer numbers, regular recurring inflows and accumulated Assets Under Management (AUM). Our clients Our aim is to support our clients to elevate financial wellbeing as a major workplace initiative. Our recent experience with Covid has highlighted the uncertain world that we live in and the importance of financial planning and resilience. The focus on wellbeing has therefore increased, and our client success teams work with HR and Reward professionals to deliver exciting launches and renewals of our workplace savings platform. We have seen significant increases in levels of engagement through the year. Our people We are fortunate to have a highly energetic, experienced and motivated team of people who have been instrumental in Cushon’s achievements to date. All staff can share in Cushon’s success through an all-employee share option arrangement. We continue to recruit high calibre staff to our team as our growth continues. We continue to support our clients and grow the business through the challenges brought by Covid. I would like to thank all our staff for their contribution to Cushon’s progress in the year.
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GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
Development of the business
During the year, we achieved the following milestones: • Completed the acquisition of Workers Pension Trust (WPT), giving us an additional 5,000 employers, 120,000 members and £350m AUM at the time of acquisition. The acquisition of WPT positioned us as the largest master trust provider in Northern Ireland. • Increased our number of workplace savings corporate clients by 70% to 317, adding brand names such as Marks and Spencer, Asda and Burberry to an already impressive brand roster. • Grown our total assets under administration to over £800m at the year end, with regular monthly inflows growing materially. • Increased our headcount to 78, investing across the business in sales and marketing, customer service and technology development • Secured further capital from new and existing shareholders to support our journey to become one of the leading workplace savings and investment platforms in the UK • Increased market recognition significantly, including winning or being shortlisted for a number of UK Employee Benefit technology awards. Looking ahead We look forward full of confidence and excitement, with market leading technology, a very strong pipeline of opportunities, a motivated team of people and an enormous opportunity in front of us. The Government continues to have an agenda that aims to drive greater financial awareness and sustainability across the UK population, and we believe that the workplace will remain a centerpiece for driving savings ratios. Recent announcements aimed at ensuring the workplace pension market offers Value for Money across all forms of Defined Contribution pensions will lead to significant opportunities for Master Trusts over the coming few years. As we scale the business, we will look for attractive acquisition opportunities as well as organic routes to growth, with consolidation of Master Trusts remaining a near term opportunity. We were delighted to bring the Creative Pension Trust into the group in April 2022. This added a further 14,000 employers, 240,000 members and £730m AUM to our business along with an additional 60 experienced team members.
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GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
We operate a group-wide risk management framework. The principle risks related to our Group and associated strategies to defend and protect against those risks are set out below.
Financial risk The main financial risks that have been assessed on the basis of their potential impact on our Statement of financial position are: • Market risk • Credit risk • Liquidity risk We hold capital against these financial risks and review the risks on an ongoing basis. Financial projections are produced and reviewed on a regular basis by the Board. As well as forecasting under a set of central assumptions, stressed scenarios are also produced. Insurance is in place for those risks where it is possible and sensible to insure against them. Strategic risk (business strategy) This is the risk that the Company could fail to communicate or implement its strategies effectively. Risks to delivering the strategy need to be properly understood and managed to deliver long-term growth. We have a clear plan in place to deliver our growth, financial stability and customer satisfaction vision. We monitor progress against these areas and any risks to their delivery. These are regularly reviewed by the Leadership Team and the Board. We ensure that the strategy is communicated and understood by all our people on a continual basis. Operational risk (IT systems and infrastructure) The Group’s operations are dependent on the ability to process a very large number of transactions accurately and efficiently. Any significant disruption or failure could result in service disruption. Failure to manage the implementation of change successfully may result in increased costs or service disruption. We work on a near continual basis to ensure that systems remain suitable for both our strategic needs and the risk environment. We have extensive controls in place to maintain the integrity and efficiency of our systems, including detailed recovery plans in the event of a significant failure. We ensure that robust testing is completed before introducing a system change. We maintain key performance and key risk indicators which are regularly reviewed and reported and action is taken as required. Operational risk (cyber-attacks) The Group relies on IT in all aspects of its operations. Cyber crime continues to be a threat. The risk remains that new, evolving forms of this type of crime have the potential to move ahead of our ability to defend our systems against them. We are committed to safeguarding data and invest regularly in maintaining strong and reliable threat monitoring tools. We monitor operations to defend and protect against the threat of a malicious electronic attack. This is regularly reviewed and documented.
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GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
We maintain IT equipment in a controlled environment and the maintenance and development of systems, applications and software is authorised, tested and approved before implementation.
Operational risk (impact of legal and regulatory changes and non-adherence) The Group operates in a highly regulated environment and is subject to a variety of complex, demanding and evolving legal and regulatory risks. Changes in law and regulation can have a significant impact on our operating model – both positive and negative. We continue to remain in a period of significant regulatory change, particularly in the pensions industry. We continually scan the legislative, regulatory and policy landscapes for potential change. This allows us to identify change at the earliest possible stage and plan ahead to ensure we appropriately manage the change into our processes and systems. We actively engage with regulators and government bodies, often with our stakeholders, to support and develop the industry and the interests of our members. Our Advisory board assists us in understanding future trends, opportunities and risks.
This report was approved by the board
and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2022
The directors present their report and the financial statements for the year ended 31 March 2022.
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the
consolidated
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year
. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙
select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙
make judgements and accounting estimates that are reasonable and prudent;
∙
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the year, after taxation, amounted to £
8,168,573
(2021 -
loss
£
3,554,192
)
.
During the year the company did not pay any dividends. The directors have also not proposed any dividends.
The directors who served during the year were:
The company has chosen in accordance with Section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 to set out within the company's Strategic Report the Company's Strategic Report Information Required by Schedule 7 of the Large and Medium Sized Companies and Groups (Accounts and Reports) Regulation 2008. This includes information that would have been included in the business review and details of the principal risks and uncertainties.
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
Under section 487(2) of the Companies Act 2006, Menzies LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
In preparing this report, the directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CUSHON GROUP LIMITED
We have audited the financial statements of Cushon Group Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 March 2022, which comprise the Group Statement of Income and Retained Earnings, the Group and Company Statements of Financial Position, the Group Statement of Cash Flows, the Group and Company Statement of Changes in Equity
and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards,
including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CUSHON GROUP LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙
the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙
the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CUSHON GROUP LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
The Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations were most significant including The Companies Act, Health and Safety regulations and Client Money regulations issued by the FCA. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. We understood how the Company is complying with those legal and regulatory frameworks by, making inquiries to management, those responsible for legal and compliance procedures and the company secretary. We corroborated our inquiries through our review of board minutes. The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognize non-compliance with laws and regulations. The assessment did not identify any issues in this area. We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included: • Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud; • Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process; • Challenging assumptions and judgments made by management in its significant accounting estimates; and Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations. As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: • Lack of segregation of duties in the accounts department. • Posting of unusual journals. • Management of client money accounts. Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
. This description forms part of our Auditors' Report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CUSHON GROUP LIMITED (CONTINUED)
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditor
Victoria House
50-58 Victoria Road
Hampshire
GU14 7PG
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CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 MARCH 2022
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT
31 MARCH 2022
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(CONTINUED)
AS AT
31 MARCH 2022
The financial statements were approved and authorised for issue by the board and were signed on its behalf by
:
The notes on pages 21 to 37 form part of these financial statements.
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COMPANY STATEMENT OF FINANCIAL POSITION
AS AT
31 MARCH 2022
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COMPANY STATEMENT OF FINANCIAL POSITION
(CONTINUED)
AS AT
31 MARCH 2022
The financial statements were approved and authorised for issue by the board and were signed on its behalf by
:
The notes on pages 21 to 37 form part of these financial statements.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
31 MARCH 2022
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COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
31 MARCH 2022
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CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2022
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CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
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CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 MARCH 2022
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
Cushon Group Limited is a private company limited by shares, registered in the United Kingdom. The address of its registered office which is the same as its principal place of business is disclosed on the company information page.
2.
Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in
the UK and the Republic of Ireland and the Companies Act 2006
.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).
The financial statements are prepared in sterling, which is the functional currency of the group. Monetary amounts in these financial statements are rounded to the nearest £.
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Income and Retained Earnings in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Income and Retained Earnings from the date on which control is obtained. They are deconsolidated from the date control ceases.
Cushon Group Limited has utilised the exemption relating to the audit of individual accounts under s479A to s479C of the Companies Act in respect of its subsidiary, Better With Money Ltd (company number 09943881).
The directors have undertaken a detailed assessment of the funding requirements of the business in the next 12 months, utilising various stressed scenarios to understand sensitivities and potential risks. The directors have compared these funding scenarios with available and committed funds to assess the financial position of the business.
The directors have subsequently satisfied themselves as to the financial position of the business and its ability to continue to trade as a going concern. the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
2.
Accounting policies (continued)
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only. The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Group keeping the scheme open or the employee maintaining any contributions required by the scheme). Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period. Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services received.
Where loans are provided that contain the potential for conversion to equity, the substance of the loan is assessed and where applicable (for example if the intention is for the loan to be converted, full control on this lies with the recipient and conversion has subsequently happened) the loan is recognised as equity in the first instance.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
2.
Accounting policies (continued)
Goodwill
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
2.
Accounting policies (continued)
The directors do not consider there to be any significant judgements made in the process of applying the entity's accounting policies. Key sources of estimation uncertainty Accounting estimates and assumptions are made concerning the future and by their nature, will rarely equal the related actual outcome. The directors do not consider that there are any key sources of estimation uncertainty that impact the Company.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
10.
Taxation (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
12.
Tangible fixed assets (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
19.
Share capital (continued)
During the year 54,466 ordinary shares with a nominal value of £0.001 each were issued at £18.36 and 123,570 ordinary shares with a nominal value of £0.001 each were issued at £31.52.
Additionally, 272,331 preferred A shares with a nominal value of £0.001 each were issued at £18.36 each and 373,413 preferred A shares with a nominal value of £0.001 each were issued at £13.39 each. Each ordinary share is entitled to one vote. In any circumstances each share has equal rights to dividends. Each share is entitled to participate in a distribution arising from a winding up of the company. The preferred A shares have attached to them voting, dividend and capital distribution rights (including on any winding up) as set out in the articles of association.
Share premium account
Other reserves
Profit and loss account
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
At the same time, Cushon MT utilised a further £22,000,000 of the agreed credit facility.
On 16 November 2022, 100% of Cushon Group Limited shares were acquired by Cushon Holdings Limited. Cushon Holdings Limited is the ultimate parent undertaking and incorporated in the United Kingdom.
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