ACCOUNTS - Final Accounts preparation
ACCOUNTS - Final Accounts preparation
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Company registration number: 06039312
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COMPANY INFORMATION
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CONTENTS
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STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2021
Accordance Technical Services Limited (the "Company") is part of the Sovos Group, which provides complete, connected offerings for tax determination, continuous transaction control compliance, tax reporting and more. Globally, the Sovos Group supports more than 16,000 customers, including half of the Fortune 500, operating in over 70 countries. The Sovos Group's SaaS products and proprietary Sovos S1 Platform integrate with a wide variety of business applications and government compliance processes. The Sovos Group has employees throughout the Americas and Europe and is owned by Hg and TA Associates.
The Company is responsible for certain aspects of the business of the Sovos Group across Europe. Through the Fiscal Reps business, which was acquired by Sovos in October 2017, Sovos provides a fiscal representation service and a solution for insurance premium tax in various European jurisdictions. Through the TrustWeaver business, which was acquired by Sovos in May 2018, Sovos provides cloud software that helps businesses authenticate and centrally archive electronic documents for VAT audit purposes. Finally, through the Accordance business, which was acquired by Sovos in July 2020, Sovos provides value-added tax (VAT) managed services.
The company’s sales performance was in-line with expectations. The company's operations reported a profit before tax of £598,381 (2020: £301,850).
The company's net assets increased to £1,249,304 as at 30th June 2021 from £75,509 at 30th June 2020.
Legal and regulatory risks
The Company faces a number of legal and regulatory risks, in particular: The Company holds significant funds on behalf of our customers that are remitted to taxing authorities, and this may expose the Company to liability from errors, delays, fraud, or system failures, which may not be covered by insurance. Changes in the application, scope, interpretation, or enforcement of laws and regulations pertaining to the Company’s business, or the business of the Sovos Group more generally, may harm the business or results of operations, subject it to liabilities, and require the implementation of new compliance programs or business methods. Changes in tax laws and regulations or their interpretation or enforcement may require the Company to invest substantial amounts to modify solutions, cause a change to the business model, or draw new competitors to the market. The Company’s ability to protect its intellectual property and the Company’s products and services, or those of the Sovos Group more generally, may in the future be subject to claims of infringement by third parties. Indemnity provisions in the Company’s agreements with clients and partners potentially expose the Company to substantial liability for different types of losses. The Company is subject to anti-corruption, anti-bribery and similar laws and non compliance with such laws can subject the Company to criminal penalties or significant fines and harm the business and its reputation. The Company’s products and services may use open-source software, which may subject to the Company to liability or other actions that could harm business. Financial risks The Company holds financial instruments in order to finance its operations. In addition, various financial instruments (e.g. trade debtors, trade creditors, accruals and prepayments) arise directly from the Company's operations.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
Interest rate risk
Funds which are not required to meet the immediate needs of the Company are placed with a main clearing bank and are held in interest bearing accounts. The Company is not financially dependent on these resources and therefore the risk of interest rate fluctuations is not significant to the business. Loans are at fixed rates of interest and there is therefore no significant risk of interest rate fluctuations relating to borrowings. Credit risk The Company monitors credit risk closely and considers that its current policies of credit checks meet its objectives of managing exposure to credit risk. Liquidity risk The liquid resources of the Company are invested having regard to the timing of payments to be made in the ordinary course of the activities of the company. Market risk The Company operates in a competitive market and this risk is managed by building relationships with partners and clients to understand their needs and by providing a competitive service. A large portion of the Company’s revenue depends on maintaining and growing revenue from existing partners and clients and adding new customers, and if the Company fails to add new customers, retain customers, or expand their usage of Sovos solutions, the Company’s business, results of operations, financial condition and cash flows would be harmed. Technology risk If the Company is unable to adapt to technological change by successfully introducing new and enhanced solutions and services, the Company’s business, results of operations, financial condition and cash flows would be adversely affected. Further, any failures in information technology or infrastructure could lead to disruptions of software, loss of customer data or untimely remittance of taxes, any of which could adversely affect the Company’s reputation and financial condition. Acquisition risk The Company continues to look to grow by acquisitions. Accordingly, future acquisitions of, and investments in, other businesses, software, tax content or technologies may not yield expected benefits, and the Company’s inability to successfully integrate acquisitions may negatively impact business, results of operations, financial condition and cash flow
This report was approved by the board and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2021
The directors present their report and the financial statements for the year ended 30 June 2021.
The directors are responsible for preparing the Strategic Report, the Directors' Report and the 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 of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company 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 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £604,750 (2020 - £242,034).
The directors do not recommend payment of a dividend.
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 Size Companies and Groups (Accounts and Reports) Regulation 2018. This includes information that would have been included in the business review, details of the principal risks and uncertainties, future developments, and the company's approach to compliance with Section 172(1) of the Companies Act 2006.
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
There have been no significant events affecting the Company since the year end.
Under section 487(2) of the Companies Act 2006, Menzies LLP will be deemed to have been reappointed as auditor 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.
This report was approved by the board and signed on its behalf.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ACCORDANCE TECHNICAL SERVICES LTD
We have audited the financial statements of Accordance Technical Services Ltd (the 'Company') for the year ended 30 June 2021, which comprise the Statement of Income and Retained Earnings, the Statement of Financial Position 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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company 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 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 Auditor's 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 ACCORDANCE TECHNICAL SERVICES LTD (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the 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 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 Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ACCORDANCE TECHNICAL SERVICES LTD (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 Auditor's 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 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 laws and regulations that were most significant included 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 and those responsible for legal and compliance procedures. 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 recognise 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 judgements 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 Auditor's Report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ACCORDANCE TECHNICAL SERVICES LTD (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 Auditor's 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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STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 30 JUNE 2021
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STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2021
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 11 to 22 form part of these financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Accordance Technical Services Ltd is a private company limited by shares incorporated in the United Kingdom. The address of both the registered office and the principal place of business, are given on the company information page of these financial statements.
The financial statements are presented in sterling which is the functional currency of the company and rounded to the nearest pound.
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 management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Sovos Compliance UK Holding Limited as at 30 June 2021 and these financial statements may be obtained from Companies House, Cardiff, CF14 3UZ.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
2.Accounting policies (continued)
The tax expense for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except that a charge attributable to an item of income and expense recognised as other comprehensive income, or to an item recognised directly in equity, is also recognised in other comprehensive income or directly in equity, respectively.
The current tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income. Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Statement of Financial Position date, except that: - The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and - Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met. Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
Goodwill
Other intangible assets
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.
The estimated useful lives range are as follows:
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
2.Accounting policies (continued)
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.
The estimated useful lives range as follows:
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.
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 The directors do not consider there to be any key sources of estimation uncertainty.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Analysis of turnover by geographical location:
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Other reserves
Profit and loss account
The company operates a defined contributions pension scheme. The pension cost charge represents contributions payable by the company to the fund and amount to £239,792 (2020: £206,645).
Contributions totalling £nil (2020: £35,966) were payable to the scheme at the end of the year and are included in creditors.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
The immediate parent company is Billy Byrne Limited a company incorporated in the United Kingdom, whose registered office address is Mocatta House, Trafalgar Place, Brighton, BN1 4DU.
The ultimate controlling party is Sovos Compliance LLC, a company incorporated in the United States of America, whose registered office address is Corporation Trust Center, 1209 Orange Street, City of Wilmington, Delaware, USA, 19801.
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