Sword IT Solutions Limited - Period Ending 2019-12-31

Sword IT Solutions Limited

Contents

Sword IT Solutions Limited

Company Information

Sword IT Solutions Limited

Strategic Report for the Year Ended 31 December 2019

The directors present their strategic report for the year ended 31 December 2019.

Principal activity

The principal activity of the company is the provision of consultancy services which help clients to improve business performance and create new business opportunities through the effective application of information technology.

Fair review of the business

The directors are satisfied with the performance of the company for the year which is in line with management's expectations.

The company's key financial and other performance indicators during the year were as follows:

Turnover has improved due to new business generation on existing services with several new customers during the year. This has led to improved cash generation and a strong balance sheet.

The company seeks to ensure that responsible business practice is fully integrated into the management of all of its operations and into the culture of all parts of its business. It believes that the consistent adoption of responsible business practice is essential for operational excellence, which in turn, ensures the delivery of its core objectives of sustained real growth in revenue and profitability.

In a company this size, the directors consider there are collectively numerous non-financial performance indicators but no individual indicator is more important than any other.

Sword IT Solutions Limited

Strategic Report for the Year Ended 31 December 2019

Principal risks and uncertainties

The company trades within the IT sector, specialising in provision of IT consultancy services which help clients to improve business performance and create new business opportunities through effective application of information technology.

The company faces the business risks of the individual industries within which our clients operate and to specific business risks around the IT industry, such as technological changes. Management monitor these risks to ensure continuity of trade and to assist our clients to succeed within their own industry sectors. The company's results and strengthening balance sheet from the retention of profits provide a good base to react to any risks that the company faces.

As we are in the midst of a global pandemic which is creating a huge level of uncertainty to the global economy, it would be remiss of the directors to not discuss the potential impact that COVID-19 could have on the current and future business activities and the actions that we as an organization have taken in order to minimize these risks.

Central to our strategy in addressing the COVID related risks was the welfare of our staff as well as assuring the continuity of our busines activities. From the outset we have taken these risks extremely seriously and amongst the actions which we put in place from day one were:

• Identification of key business critical tasks and ensuring these could be carried out both in the office and at distance with appropriate back up in case of illness to key staff members.
• Daily meetings to address issues, and ensure regular communication to all clients and staff members.
• Clear communication plans to ensure all staff are spoken with on a regular basis and do not feel isolated.
• Home working strategies to ensure all staff can remain productive and carry out their duties from distance.
• Help lines set up to ensure that staff feel there is someone for them to raise any concerns with.
• Close tracking of government guidelines to ensure we confirm with current guidance and also understand the assistance available.
• Detailed tracking of working capital and cash requirements in order to ensure the company continues to be well managed.

Although at the date of writing this report the pandemic is clearly not yet over, our business to date has proven extremely robust and has performed extremely well during this period of crisis, our cashflow has remained strong, our pipeline of opportunities has also remained robust and our profitability has actually increased during this period.

Our underlying strategy of ensuring a strong element of annuity based recurring revenue has ensured that the underlying business has remained stable and our risk relating to projects being deferred during these uncertain times has therefore been minimized. During the past six months we have renewed all of our key long term contracts which bodes well for the future.

We have taken advantage of government assistance where available, deferred payments where possible, renegotiated with landlords and also made use of the furlough scheme where appropriate. The majority of our staff have been able to carry out their responsibilities from distance and as at the time of writing this report we currently have only one employee remaining on the furlough scheme.

Although there is clearly still uncertainty in relation to the global economy we have adapted well to working at distance and we indeed specialize in this area assisting our clients to do the same, some of the changes in working practices will clearly stay with us for the medium to long term and we feel confident and well placed ensure the long term health of the business irrespective of what the future holds.

Sword IT Solutions Limited

Strategic Report for the Year Ended 31 December 2019

Financial instruments

Objectives and policies

The company uses basic financial instruments, other than derivatives, comprising bank balances, and various other items such as trade debtors and trade creditors. The main purpose of these instruments is to raise funds for and finance the company's operations.

It is and has been throughout the year under review, the company’s policy that no trade in non-basic financial instruments shall be undertaken.

The company does not enter into any formal hedging arrangements.

Price risk, credit risk, liquidity risk and cash flow risk

Liquidity, credit, price and cash flow risks are managed by the directors on a constant basis to ensure the company maintains adequate cash flows to serve its working capital requirements.

The company has a normal level of exposure to price, credit, liquidity and cash flow risks arising from trading activities which are largely conducted in sterling.

Credit risk is the risk that one party to a financial instrument will cause a financial loss for that other party by failing to discharge an obligation. Company policies are aimed at minimising such losses by authorisation of credit terms to customers who demonstrate an appropriate payment history and satisfy credit worthiness procedures.

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The company aims to mitigate liquidity risk by managing cash generation by its operations and ensuring regular monitoring of amounts outstanding for both time and credit limits in trade debtors.

Cash flow risk is the risk of exposure to variability in cash flows that is attributable to a particular risk associated with a recognised asset or liability such as future interest payments on a variable rate debt. The company manages this risk, where significant, and does not maintain any derivatives or complex financial instruments as explained above.

Future developments

The principal activity and trading performance of the company is expected to remain consistent for the
foreseeable future.

Approved by the Board on 12 November 2020 and signed on its behalf by:

.........................................
P Norgate
Director

Sword IT Solutions Limited

Directors' Report for the Year Ended 31 December 2019

The directors present their report and the financial statements for the year ended 31 December 2019.

Directors of the company

The directors who held office during the year were as follows:

D Bruce

P Norgate

J D Innes

J F Mottard

Important non adjusting events after the financial period

On 11 March 2020 the World Health Organisation declared COVID-19 a global pandemic, this resulted in many countries' governments introducing lock-down measures and the global economy entered into a period of uncertainty. Management's consideration on the impact of COVID-19 are detailed in Note 2 of the financial statements. As a result of COVID-19, it is not possible to predict the overall effect on the UK and world-wide economic outlook.

Disclosure of information in the Strategic Report

The company has chosen in accordance with s.414C(11) Companies Act 2006 to set out in the company's Strategic Report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 to be contained in the Directors' Report. It has done so in respect of future developments and financial instruments.

Disclosure of information to the auditor

Approved by the Board on 12 November 2020 and signed on its behalf by:



 

.........................................
P Norgate
Director

Sword IT Solutions Limited

Statement of Directors' Responsibilities

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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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:

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 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.

Sword IT Solutions Limited

Independent Auditor's Report to the Members of Sword IT Solutions Limited
for the Year Ended 31 December 2019

Opinion

We have audited the financial statements of Sword IT Solutions Limited (the 'company') for the year ended 31 December 2019, which comprise the Statement of Income and Retained Earnings, Statement of Financial Position, and Notes to the Financial Statements, 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:

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 UK, including the FRC’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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

Sword IT Solutions Limited

Independent Auditor's Report to the Members of Sword IT Solutions Limited
for the Year Ended 31 December 2019

Opinion on other matter prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

Matters on which we are required to report by exception

In the light of our 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 and the Directors' Report.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities (set out on page 6), 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.

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.

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.

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.

Sword IT Solutions Limited

Independent Auditor's Report to the Members of Sword IT Solutions Limited
for the Year Ended 31 December 2019

......................................
Darren Bond (Senior Statutory Auditor)
For and on behalf of

Brebners, Statutory Auditor
130 Shaftesbury Avenue
London
W1D 5AR

12 November 2020

Sword IT Solutions Limited

Statement of Income and Retained Earnings for the Year Ended 31 December 2019

Sword IT Solutions Limited

Statement of Financial Position as at 31 December 2019

Approved and authorised by the Board on 12 November 2020 and signed on its behalf by:

 

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

P Norgate

Director

Company registration number: 03165591

Sword IT Solutions Limited

Notes to the Financial Statements for the Year Ended 31 December 2019

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
1000 Great West Road
Brentford
Middlesex
TW8 9DW

The principal activity of the company is the provision of consultancy services which help clients to improve business performance and create new business opportunities through the effective application of information technology.

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

Basis of preparation

Summary of disclosure exemptions

The entity satisfies the criteria of being a qualified entity as defined in FRS 102. Its financial statements are consolidated into the financial statement of Sword Group SE, which can be obtained from sword-group.com/en/investors. As such, advantage has been taken of the following disclosure exemptions available under paragraph 1.12 of FRS 102:

(a) No cash flow statement has been presented for the company.
(b) Disclosures in respect of financial instruments have not been presented.
(c) No disclosure has been given for the aggregate remuneration of key management personnel. .

Sword IT Solutions Limited

Notes to the Financial Statements for the Year Ended 31 December 2019

Going concern

The company made a profit after tax for the year ended 31 December 2019 and had net assets of £3,531,141 at that date.

As we are in the midst of a global pandemic which is creating a huge level of uncertainty to the global economy, it would be remiss of the directors to not discuss the potential impact that COVID-19 could have on the current and future business activities and the actions that we as an organization have taken in order to minimize these risks.

Central to our strategy in addressing the COVID related risks was the welfare of our staff as well as assuring the continuity of our business activities. From the outset we have taken these risks extremely seriously and amongst the actions which we put in place from day one were:

• Identification of key business critical tasks and ensuring these could be carried out both in the office and at distance with appropriate back up in case of illness to key staff members.
• Daily meetings to address issues, and ensure regular communication to all clients and staff members.
• Clear communication plans to ensure all staff are spoken with on a regular basis and do not feel isolated.
• Home working strategies to ensure all staff can remain productive and carry out their duties from distance.
• Help lines set up to ensure that staff feel there is someone for them to raise any concerns with.
• Close tracking of government guidelines to ensure we confirm with current guidance and also understand the assistance available.
• Detailed tracking of working capital and cash requirements in order to ensure the company continues to be well managed.
 

Although at the date of writing this report the pandemic is clearly not yet over, our business to date has proven extremely robust and has performed extremely well during this period of crisis, our cashflow has remained strong, our pipeline of opportunities has also remained robust and our profitability has actually increased during this period.

Our underlying strategy of ensuring a strong element of annuity based recurring revenue has ensured that the underlying business has remained stable and our risk relating to projects being deferred during these uncertain times has therefore been minimized. During the past six months we have renewed all of our key long term contracts which bodes well for the future.

We have taken advantage of government assistance where available, deferred payments where possible, renegotiated with landlords and also made use of the furlough scheme where appropriate. The majority of our staff have been able to carry out their responsibilities from distance and as at the time of writing this report we currently have only one employee remaining on the furlough scheme.

Although there is clearly still uncertainty in relation to the global economy we have adapted well to working at distance and we indeed specialize in this area assisting our clients to do the same, some of the changes in working practices will clearly stay with us for the medium to long term and we feel confident and well placed ensure the long term health of the business irrespective of what the future holds.

As such, having made enquiries, the directors have a reasonable expectation that the company has adequate resources to continue operating for the foreseeable future. Accordingly, the directors continue to adopt the going concern basis in preparing the financial statements.
 

Sword IT Solutions Limited

Notes to the Financial Statements for the Year Ended 31 December 2019

Prior period errors

Judgements and key sources of estimation uncertainties

Onerous lease provision
The onerous lease provision is calculated based on management's estimates of future lease payments, business rates, occupancy, subject to future events and are reviewed annually.

Sword IT Solutions Limited

Notes to the Financial Statements for the Year Ended 31 December 2019

Revenue recognition

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rate on the date when the fair value is re-measured.

Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

Tax

Tangible assets

Depreciation

Sword IT Solutions Limited

Notes to the Financial Statements for the Year Ended 31 December 2019

Cash and cash equivalents

Trade debtors

Trade creditors

Provisions

Leases

Share capital

Defined contribution pension obligation

Sword IT Solutions Limited

Notes to the Financial Statements for the Year Ended 31 December 2019

The analysis of the company's revenue for the year from continuing operations is as follows:

The analysis of the company's turnover for the year by market is as follows:

Arrived at after charging/(crediting)

Sword IT Solutions Limited

Notes to the Financial Statements for the Year Ended 31 December 2019

The aggregate payroll costs (including directors' remuneration) were as follows:

The average number of persons employed by the company during the year, analysed by category was as follows:

The directors' remuneration for the year was as follows:

In respect of the highest paid director:

Sword IT Solutions Limited

Notes to the Financial Statements for the Year Ended 31 December 2019

Tax charged/(credited) in the income statement

The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2018 - the same as the standard rate of corporation tax in the UK) of 19% (2018 - 19%).

The differences are reconciled below:

Sword IT Solutions Limited

Notes to the Financial Statements for the Year Ended 31 December 2019

Deferred tax

Deferred tax assets and liabilities

Sword IT Solutions Limited

Notes to the Financial Statements for the Year Ended 31 December 2019

Sword IT Solutions Limited

Notes to the Financial Statements for the Year Ended 31 December 2019

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £376,199 (2018 - £327,185).

Included within the balance sheet are pension commitments amounting to £59,086 (2018 - £46,020).

Allotted, called up and fully paid shares

The share premium account contains the premium arising on the issue of equity shares, net of issue expenses.

The profit and loss account includes all current and prior retained earnings and accumulated losses.

Operating leases

The total of future minimum lease payments is as follows:

The amount of non-cancellable operating lease payments recognised as an expense during the year was £276,244 (2018 - £251,577).

Sword IT Solutions Limited

Notes to the Financial Statements for the Year Ended 31 December 2019

Amounts due to and from group undertakings at 31st December 2019 are aggregated as permitted by FRS 102 and shown separately in debtors and creditors.

In accordance with FRS 102 paragraph 33.1A, exemption is taken not to disclose transactions in the year between wholly owned group undertakings.

During the year management charges payable to other group undertakings amounted to £139,793 (2018: £15,122), to Sword SA.

The company's immediate parent is Sword Charteris Limited, incorporated in England and Wales.

 Ultimate control vests with Sword Group SE. Sword Group SE produces financial statements available for public use.

Sword Group SE, whose registered office is situated at Route d'Arlon 2-4, L-8399 Windhof, Luxembourg, is the parent of the largest and smallest group preparing consolidated financial statements incorporating the results of the company.