ACCOUNTS - Final Accounts preparation

An analysis of turnover by class of business is as follows:

Caseware UK (AP4) 2021.0.152 2021.0.152 2021-12-312022-05-092021-12-31The members have not required the company to obtain an audit in accordance with section 476 of the Companies Act 2006.false2021-01-01falseprovision of interim management, consultancy and recruitment services focusing on business and technology change, HR transformation and operational subject matter experts.4745false 05048716 2021-01-01 2021-12-31 05048716 2020-01-01 2020-12-31 05048716 2021-12-31 05048716 2020-12-31 05048716 2020-01-01 05048716 1 2021-01-01 2021-12-31 05048716 1 2020-01-01 2020-12-31 05048716 5 2021-01-01 2021-12-31 05048716 5 2020-01-01 2020-12-31 05048716 d:CompanySecretary1 2021-01-01 2021-12-31 05048716 d:Director1 2021-01-01 2021-12-31 05048716 d:Director2 2021-01-01 2021-12-31 05048716 d:Director3 2021-01-01 2021-12-31 05048716 d:Director4 2021-01-01 2021-12-31 05048716 d:Director5 2021-01-01 2021-12-31 05048716 d:Director6 2021-01-01 2021-12-31 05048716 d:RegisteredOffice 2021-01-01 2021-12-31 05048716 e:FurnitureFittings 2021-01-01 2021-12-31 05048716 e:OfficeEquipment 2021-01-01 2021-12-31 05048716 e:OfficeEquipment 2021-12-31 05048716 e:OfficeEquipment 2020-12-31 05048716 e:OfficeEquipment e:OwnedOrFreeholdAssets 2021-01-01 2021-12-31 05048716 e:CurrentFinancialInstruments 2021-12-31 05048716 e:CurrentFinancialInstruments 2020-12-31 05048716 e:CurrentFinancialInstruments e:WithinOneYear 2021-12-31 05048716 e:CurrentFinancialInstruments e:WithinOneYear 2020-12-31 05048716 e:ReportableOperatingSegment1 2021-01-01 2021-12-31 05048716 e:ReportableOperatingSegment1 2020-01-01 2020-12-31 05048716 f:UnitedKingdom 2021-01-01 2021-12-31 05048716 f:UnitedKingdom 2020-01-01 2020-12-31 05048716 e:UKTax 2021-01-01 2021-12-31 05048716 e:UKTax 2020-01-01 2020-12-31 05048716 e:RetainedEarningsAccumulatedLosses 2021-01-01 2021-12-31 05048716 e:RetainedEarningsAccumulatedLosses 2021-12-31 05048716 e:RetainedEarningsAccumulatedLosses 2020-01-01 2020-12-31 05048716 e:RetainedEarningsAccumulatedLosses 2020-12-31 05048716 e:RetainedEarningsAccumulatedLosses 2020-01-01 05048716 d:OrdinaryShareClass1 2021-01-01 2021-12-31 05048716 d:OrdinaryShareClass1 2021-12-31 05048716 d:OrdinaryShareClass1 2020-12-31 05048716 d:FRS102 2021-01-01 2021-12-31 05048716 d:Audited 2021-01-01 2021-12-31 05048716 d:FullAccounts 2021-01-01 2021-12-31 05048716 d:PrivateLimitedCompanyLtd 2021-01-01 2021-12-31 05048716 e:WithinOneYear 2021-12-31 05048716 e:WithinOneYear 2020-12-31 05048716 e:BetweenOneFiveYears 2021-12-31 05048716 e:BetweenOneFiveYears 2020-12-31 05048716 e:AcceleratedTaxDepreciationDeferredTax 2021-12-31 05048716 e:AcceleratedTaxDepreciationDeferredTax 2020-12-31 05048716 e:TaxLossesCarry-forwardsDeferredTax 2021-12-31 05048716 e:TaxLossesCarry-forwardsDeferredTax 2020-12-31 iso4217:GBP xbrli:shares xbrli:pure

Registered number: 05048716

PRACTICUS LIMITED

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

PRACTICUS LIMITED

COMPANY INFORMATION

Directors	B A Kershaw
	J W L Luckhurst
	D A Tolhurst
	P Wandless
	B Culora
	J Roop


Company secretary	R G Hunte


Registered number	05048716


Registered office	Riverside Barns
	Remenham Church Lane
	Remenham
	Henley-On-Thames
	Oxfordshire
	RG9 3DB


Independent auditor	James Cowper Kreston
	Chartered Accountants and Statutory Auditor
	Reading Bridge House
	George Street
	Reading
	Berkshire
	RG1 8LS

PRACTICUS LIMITED

CONTENTS

	Page
Strategic report	1 - 3
Directors' report	4 - 5
Independent auditor's report	6 - 9
Statement of comprehensive income	10
Balance sheet	11
Statement of changes in equity	12
Statement of cash flows	13
Notes to the financial statements	14 - 24

PRACTICUS LIMITED

STRATEGIC REPORT

FOR THE YEAR ENDED 31 DECEMBER 2021

The Directors are pleased to present their strategic report together with the audited financial statements for the period ended 31 December 2021.
Review of the Business
Our strategic purpose is helping people navigate change through the provision of Recruitment, Consulting and Advisory Services. Our principal markets include Strategic Change, Operational Efficiency, Cultural and Behavioural Engagement, Digital and Technology Change. The Company provides services across a broad portfolio of industries in both the public and private sector.
Over the last eighteen months we have been navigating our own internal change agenda. Practicus is transforming its Target Operating Model to a more diversified and sustainable platform and 2021 was our first full year of working that transformed model. The commercial team that was at the forefront of our strategic change back in 2020, posted an increase in gross profit year on year of 22% in 2021. The progress made validates the strategy we are pursuing and underpins our resolve to roll out the new model to the remaining parts of our business. Indeed, our CEO, Darren Tolhurst is leading the adoption of the model in our largest and most mature market, Healthcare.
2021 and 2022 are significant investment years for Practicus as we consolidate changes to our model and expand the scale and breadth of our offering to meet increased demand for our services. This investment will primarily be in people, but will also involve process, technology, training and the expansion of our successful community and partnership programmes. As we approach our 20th birthday (2024), we do so with absolute conviction that the business is extremely well structured and positioned to sustainably deliver on its’ purpose and promise to ‘help people navigate change’.
The Coronavirus (Covid-19) pandemic was more protracted than most expected. This has led to many organisations placing new change programmes on hold during both 2020 and 2021 whilst they navigated how to survive and thrive through this worldwide challenge. 2021 saw a much more stable level of business achieved at Practicus throughout the year, with growth picking up in the later part of the year and into 2022. During 2020, the company (including its Board) was operating on a short time working basis, which it was pleased to lift in full in the early part of 2021. The directors would like to thank staff for their support during the short time working period. Key performance indicators (KPIs) used by the company to monitor progress are set out below:
£000’s 2021 2020
Turnover 23,024 23,655
Gross profit 5,068 5,361
EBITDA 407 849
The investments made and being made are creating new energy and excitement throughout the organisation. We look forward to the rest of 2022 and beyond with positivity as we emerge from the Covid-19 pandemic with a growing team and a more sustainable business model.
The Deemed Employment (IR35) legislation changes were extended to the Private Sector from April 2021. Practicus had first-hand experience of managing this situation when the reforms took place for the Public Sector in April 2017. We were therefore well placed to support our Clients and Interim Community with these changes resulting in no deterioration on any business in progress at the time of the change. We continue to maintain early interaction and education with our clients and interims as well as maintaining our own IR35 panel to manage potential risk.
Principal Risks and Uncertainties
The Directors continue to make risk management a priority and devote their effort and attention to ensuring that risks are identified and mitigated such that the business has a robust, stable and sustainable platform for growth. A summary of the risks and actions taken to mitigate them is set out below:

Page 1

PRACTICUS LIMITED

STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2021

Risk	Action taken to mitigate risk
People The Company’s future success relies on recruiting, developing and incentivising its senior management and other key employees. The loss of key personnel may have an adverse impact on the Company’s business and relationships.	The Company continues to focus on ensuring that it has the necessary skills, resources and work environment required for a high performing business. The Company’s philosophy of incentivising people through share options aims at keeping people within the business for the long term.
Legal and regulatory changes The Company is subject to legislation and regulations in each of its locations. Any changes to these may impact the manner in which the Company conducts its business and could therefore affect its financial performance.	The Company monitors the legal and regulatory situations in the markets in which it operates. We use advisors with good understanding of the relevant laws and labour regulations. We have established our own IR35 panel to manage any potential risk.
Financial risks The main financial risks facing the Company are availability of funds to meet business needs and credit risks arising from customer defaults.	Funding The Company has flexible financing arrangements and finances its operations through invoice discounting. Credit risk Credit risk is tightly managed to minimise any bad debts arising from non-payment by our customers.

Going Concern
There are no material uncertainties that may cast significant doubt on the ability of the Company to continue as a going concern that have been identified by the Directors. The company has sufficient reserves as well as an invoice discounting facility available to draw down on debtors.
The Company’s business activities, together with the factors likely to affect its future development, performance and position are set out in this Strategic Report.
Employee Involvement
Details of the number of employees and related costs can be found in note 7 to the financial statements.
The Company’s business is dependent upon its employees. As such, the Company continues to focus on ensuring it has the necessary skills, resources and work environment required for a high-performing business.
The Company continually seeks to develop its employees and invest in training to nurture talent in our business. There are a number of ways we ensure our employees are involved in the business and issues relating to its performance, including regular employee briefings via the monthly “Talking Heads” video, monthly employee feedback via “Listen to the Business”, bi-annual workshop led conferences and regular lunch and learns. To encourage employees to have a stake in the business there is also a share option scheme. We are humbled and more than a little excited to make the inaugural list of the 2022 Great Place to Work – Best Workplaces for Wellbeing – small organisation.
The Company has a formal approach towards succession planning, internal recruitment and promotion with decisions based on an individual’s ability to perform the role via a competency framework.
The Company gives full consideration to applications for employment from disabled applicants where a disabled person can adequately fulfil the requirements of the job. Should an employee become disabled whilst working for the Company, every effort is made to accommodate them or to find a suitable alternative role and to assist with any re-training.
Bribery and Corruption
Bribery and corruption is unfortunately a feature of corporate and public life in many countries. Practicus therefore has a policy in place so that all staff are aware of acceptable practices and behaviours. This is in accordance with The Bribery Act 2010 which came into force on 1 July 2011.

Page 2

PRACTICUS LIMITED

STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2021

Corporate Social Responsibility Statement
Practicus Limited is a socially responsible company. We make every effort to consider the impact of our business practices on society and strive to ensure that what we do, and how we do it, is beneficial to our clients, candidates, employees, communities and the environment. We believe in giving back and supporting the invaluable work performed by our chosen charities, by either getting involved and supporting their various activities or by making regular donations.

This report was approved by the board and signed on its behalf.

D A Tolhurst

CEO

Date: 28 April 2022

Page 3

PRACTICUS LIMITED

DIRECTORS' REPORT

FOR THE YEAR ENDED 31 DECEMBER 2021

The directors present their report and the financial statements for the year ended 31 December 2021.

Directors

The directors who served during the year were:

B A Kershaw

J W L Luckhurst

D A Tolhurst

P Wandless

B Culora

J Roop

Directors' responsibilities statement

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 judgments 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.

Disclosure of information to auditor

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:

∙so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and

∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Auditor

The auditor, James Cowper Kreston, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

Page 4

PRACTICUS LIMITED

DIRECTORS' REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2021

Small companies note

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.

................................................

D A Tolhurst

CEO

Date: 28 April 2022

Page 5

PRACTICUS LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PRACTICUS LIMITED

Opinion

We have audited the financial statements of Practicus Limited (the 'Company') for the year ended 31 December 2021, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of cash flows, the 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).

In our opinion the financial statements:

∙give a true and fair view of the state of the Company's affairs as at 31 December 2021 and of its profit for the year then ended;

∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

∙have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

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.

Conclusions relating to going concern

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.

Other information

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.

Page 6

PRACTICUS LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PRACTICUS LIMITED (CONTINUED)

Opinion on other matters prescribed by the Companies Act 2006

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.

Matters on which we are required to report by exception

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.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

∙adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

∙the financial statements are not in agreement with the accounting records and returns; or

∙certain disclosures of directors' remuneration specified by law are not made; or

∙we have not received all the information and explanations we require for our audit; or

∙the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the Directors' report and from the requirement to prepare a Strategic report.

Responsibilities of directors

As explained more fully in the Directors' responsibilities statement set out on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Page 7

PRACTICUS LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PRACTICUS LIMITED (CONTINUED)

Auditor's responsibilities for the audit of the financial statements

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.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, includingthose leading to a material misstatement in the financial statements or non-compliance with regulation. This riskincreases 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 involvesintentional concealment, forgery, collusion, omission or misrepresentation.
The specific procedures for this engagement that we designed and performed to detect material misstatementsin respect of irregularities, including fraud, were as follows:

∙Enquiry of management and those charged with governance around actual and potential litigation and claims;

∙Reviewing minutes of meetings of those charged with governance;

∙Reviewing financial statement disclosures and testing to supporting documentation to assess compliancewith applicable laws and regulations;

∙Performing audit work over the risk of management override of controls, including testing of journalentries and other adjustments for appropriateness, evaluating the business rationale of significanttransactions outside the normal course of business and reviewing accounting estimates for bias

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.

Page 8

PRACTICUS LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PRACTICUS LIMITED (CONTINUED)

Use of our report

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.

Darren O'Connor BSc (Hons) FCCA ACA (Senior Statutory Auditor)

for and on behalf of

James Cowper Kreston

Chartered Accountants and Statutory Auditor

Reading Bridge House

George Street

Reading

Berkshire

RG1 8LS

9 May 2022

Page 9

PRACTICUS LIMITED

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2021

	2021	2020
Note	£	£000


Turnover	4	23,024	23,665
Cost of sales		(17,956)	(18,304)
Gross profit		5,068	5,361
Administration expenses		(4,593)	(4,709)
Other operating income	5	-	161
Bad debt provision		(100)	-
Operating profit	6	375	813
Interest receivable and similar income		-	3
Interest payable and similar expenses		-	(10)
Profit before taxation		375	806
Tax on profit	9	(75)	(161)
Profit for the financial year		300	645

There were no recognised gains and losses for 2021 or 2020 other than those included in the statement of comprehensive income.

There was no other comprehensive income for 2021 (2020:£NIL).

The notes on pages 14 to 24 form part of these financial statements.

Page 10

PRACTICUS LIMITED

REGISTERED NUMBER: 05048716

BALANCE SHEET

AS AT 31 DECEMBER 2021

		2021		2020
Note		£000		£000

Fixed assets
Tangible assets	10		32		51
			32		51
Current assets
Debtors: amounts falling due within one year	11	3,196		2,694
Cash at bank and in hand	12	105		357
		3,301		3,051
Creditors: amounts falling due within one year	13	(2,794)		(2,863)
Net current assets			507		188
Total assets less current liabilities			539		239

Net assets			539		239

Capital and reserves
Profit and loss account	16	539	239
		539	239

The Company's financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved and authorised for issue by the board and were signed on its behalf by:

D A Tolhurst

CEO

Date: 28 April 2022

The notes on pages 14 to 24 form part of these financial statements.

Page 11

PRACTICUS LIMITED

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2021

	Profit and loss account	Total equity
	£000	£000
At 1 January 2021	239	239
Comprehensive income for the year
Profit for the year	300	300
Total comprehensive income for the year	300	300
At 31 December 2021	539	539

The notes on pages 14 to 24 form part of these financial statements.

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2020

	Profit and loss account	Total equity
	£000	£000
At 1 January 2020	(406)	(406)
Comprehensive income for the year
Profit for the year	645	645
Total comprehensive income for the year	645	645
At 31 December 2020	239	239

The notes on pages 14 to 24 form part of these financial statements.

Page 12

PRACTICUS LIMITED

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2021

			2021	2020
			£000	£000

Cash flows from operating activities
Profit for the financial year	300	645
Adjustments for:
Depreciation of tangible assets	33	35
Interest paid	-	10
Interest received	-	(3)
Taxation charge	75	161
(Increase)/decrease in debtors	(602)	1,234
Decrease in amounts owed by groups	-	225
Increase/(decrease) in creditors	12	(981)
Corporation tax (paid)	(162)	(167)
Net cash generated from operating activities	(344)	1,159

Cash flows from investing activities
Purchase of tangible fixed assets	(14)	(10)
Interest received	-	3
Net cash from investing activities	(14)	(7)
Cash flows from financing activities
Invoice discounting	106	(1,285)
Interest paid	-	(10)
Net cash used in financing activities	106	(1,295)
Net (decrease) in cash and cash equivalents	(252)	(143)
Cash and cash equivalents at beginning of year	357	500
Cash and cash equivalents at the end of year	105	357

Cash and cash equivalents at the end of year comprise:
Cash at bank and in hand	105	357
	105	357

The notes on pages 14 to 24 form part of these financial statements.

Page 13

PRACTICUS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

1.	General information

Practicus Limited is a limited liability company incorporated in England and Wales. The address of its registered office is Riverside Barns, Remenham Church Lane, Remenham, Henley-On-Thames, Oxfordshire, RG9 3DB.

2.Accounting policies

2.1

Basis of preparation of financial statements

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 judgment in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

2.2

Going concern

The Company's business activities, together with factors likely to affect its future development, performance and position are set out in the Strategic report and Directors report. The Directors have a high degree of confidence that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
Practicus’ financial position has strengthened during 2021 with the company’s balance sheet continuing a positive net asset position after the coronavirus pandemic year. This, together with a healthy level of financing facility in place, leads the directors to conclude that the financial statements have been prepared appropriately on the going concern basis.

2.3

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

Page 14

PRACTICUS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

2.Accounting policies (continued)

2.4

Turnover

Turnover is recognised on delivery of the service provided. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

2.5

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

2.6

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of comprehensive income in the same period as the related expenditure.

2.7

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.

Page 15

PRACTICUS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

2.Accounting policies (continued)

2.8

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss 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 income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet 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 balance sheet 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 balance sheet date.

2.9

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, straight line or reducing balance method.

Depreciation is provided on the following basis:

				Fixtures and fittings	-	25% - 33% reduced balance and 20% - 33% straight line
				Office equipment	-	25% - 33% reduced balance and 25% - 33% straight line

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.

2.10

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Page 16

PRACTICUS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

2.Accounting policies (continued)

2.11

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

2.12

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

2.13

Provisions for liabilities

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet 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 Balance sheet.

Page 17

PRACTICUS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

2.Accounting policies (continued)

2.14

Financial instruments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

3.	Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the amount of reported assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The following judgments and estimates have had the most significant effects on amounts recognised in the financial statements.
Provisions
In recognising provisions, the company evaluates the extent to which it is probable that it has incurred a legal or constructive obligation in respect of past events and the probability that there will be an outflow of benefits as a result. The judgments used to recognise provisions are based on currently known factors which may vary over time, resulting in changes in the measurement of recorded amount as compared to initial estimates.
Tangible fixed assets
Tangible fixed assets are depreciated over their useful lives taking into account residual value, where appropriate. The actual lives of the assets and residual values may vary depending on a number of factors.

Revenue from contracts with customers	23,024	23,665
	23,024	23,665

Analysis of turnover by country of destination:

					2021	2020
					£000	£000

United Kingdom	23,024	23,665
	23,024	23,665

Page 18

PRACTICUS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

5.	Other operating income
		2021	2020
		£000	£000

Other operating income	-	161
	-	161

The other operating income relates to the Coronavirus Job Retention Scheme.

Depreciation of tangible fixed assets	33	35
Fees payable to the group's auditor and its associates for the audit of the company's financial statements	15	14
Fees payable to the group's auditor and its associates for other services: Tax compliance services	2	2
Other operating lease rentals	135	221

7.	Employees
		2021	2020
		£000	£000

Wages and salaries	3,490	3,367
Social security costs	415	406
Cost of defined contribution scheme	71	103
	3,976	3,876

The average monthly number of employees, including the directors, during the year was as follows:

	2021	2020
	No.	No.

Employee numbers	47	45

Page 19

PRACTICUS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

8.	Directors' remuneration
		2021	2020
		£000	£000


Directors' remuneration	1,271	1,160
Company contributions to defined contribution pension schemes	17	84
	1,288	1,244

The aggregate of remuneration and amounts receivable under long term incentive schemes of the highest paid director was £265k (2020: £237k), and company pension contributions of £3k (2020:Nil) were made to a defined contribution pension scheme.
During the year retirement benefits were accruing to 4 directors (2020: 3) in respect of defined contribution pension schemes.
The total amount of employee benefits received by key management personnel for the year amounted to £1,288k (2020: £1,244k).

Corporation tax
Current tax on profits for the year	73	163
Adjustments in respect of previous periods	5	-
	78	163

Total current tax	78	163

Deferred tax
Origination and reversal of timing differences	(3)	(2)
Total deferred tax	(3)	(2)


	Taxation on profit on ordinary activities	75	161

Page 20

PRACTICUS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

9.Taxation (continued)

	Factors affecting tax charge for the year
	There were no factors that affected the tax charge for the year which has been calculated on the profits on ordinary activities before tax at the standard rate of corporation tax in the UK of 19% (2020:19%).

Factors that may affect future tax charges

In the Spring Budget 2021, the Government announced that from 1 April 2023 the main corporation tax rate will increase to 25%.

10.	Tangible fixed assets

		Fixtures, Fittings and Office equipment
		£000
	Cost or valuation
	At 1 January 2021	481
	Additions	14
	At 31 December 2021	495
	Depreciation
	At 1 January 2021	430
	Charge for the year	33
	At 31 December 2021	463
	Net book value
	At 31 December 2021	32
	At 31 December 2020	51

Page 21

PRACTICUS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

11.

Debtors

					2021	2020
					£000	£000


Trade debtors	2,234	1,841
Other debtors	38	161
Prepayments and accrued income	914	685
Deferred taxation	10	7
	3,196	2,694

12.	Cash and cash equivalents
		2021	2020
		£000	£000

Cash at bank and in hand	105	357
	105	357

13.	Creditors: Amounts falling due within one year
		2021	2020
		£000	£000

Invoice discounting facility	6	-
Trade creditors	1,497	1,303
Corporation tax	73	162
Other taxation and social security	452	786
Other creditors	38	15
Accruals and deferred income	728	597
	2,794	2,863

The invoice discounting facility is secured against the invoices in which it relates to.

Page 22

PRACTICUS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

14.	Deferred taxation

		2021
		£000

	At beginning of year	7
	Charged to profit or loss	3
	At end of year	10

The deferred tax asset is made up as follows:
	2021	2020
	£000	£000

Fixed asset timing differences	8	5
Short term timing differences	2	2
	10	7

15.	Share capital
		2021	2020
		£	£

Authorised

100,000,000 (2020 - 100,000,000) Ordinary shares of £0.00001 each	1,000	1,000

Allotted, called up and fully paid

27,000,000 (2020 - 27,000,000) Ordinary shares of £0.00001 each	270	270

16.

Reserves

Profit and loss account

Includes all current and prior period retained profits and losses.

17.	Pension commitments

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge
represents contributions payable by the Company to the fund and amounted to £71,356 (2020: £101,594). Contributions totalling £16,188 (2020: £9,523) were payable to the fund at the balance sheet date and are included in creditors.

Page 23

PRACTICUS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

Not later than 1 year	111	135
Later than 1 year and not later than 5 years	72	186
	183	321

19.

Related party transactions

During the year, Practicus recharged £16,667 (2020: £Nil) of Director’s salary to Meglio Limited, a company partly owned by some of the directors of Practicus Limited. The balance outstanding from Meglio Limited at the year end was £Nil (2020: £Nil). During the year, Practicus paid and recharged £Nil (2020: £1,489) for goods purchased on behalf of Meglio Limited. Practicus Limited also provided a loan to Meglio Limited of £200,000. The remaining balance at the year end is £100,000 of which the full balance of £100,000 as provided for as a bad debt.
During the year the Company paid £34,936 (2020: £34,978) to Curtis Banks Pensions for rent and rates for the property owned by the Directors' Pension Scheme. The balance outstanding from Practicus Limited at the year end was £Nil (2020: £Nil).

Page 24