Acquia Ltd - Limited company accounts 20.1

REGISTERED NUMBER: 07499149 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

FOR

ACQUIA LTD

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Income Statement

10

Other Comprehensive Income

11

Balance Sheet

12

Statement of Changes in Equity

13

Cash Flow Statement

14

Notes to the Cash Flow Statement

15

Notes to the Financial Statements

16

DIRECTORS:

C D Alpers

C B Andersen

S Williamson

REGISTERED OFFICE:

The White Building Floor 3

Kings Road, Reading

England

RG1 3AR

REGISTERED NUMBER:

07499149 (England and Wales)

AUDITORS:

WD Audit Limited

111 Charterhouse Street

London

EC1M 6AW

The directors present their strategic report for the year ended 31 December 2020.

FINANCIAL RISK MANAGEMENT

The company has adopted risk management policies that seek to mitigate the financial risks as follows:

Financial assets and liabilities that expose the company to financial risk consist principally of cash, amounts owed by group undertakings and trade creditors. The credit risk associated with the amounts due by group undertakings is considered minimal and the parent company has confirmed its ongoing support of Acquia Ltd. The financial instruments associated with cash and trade creditors are considered minimal.

The carrying amounts of bank balances and trade creditors approximate their respective fair value due to the relatively short term maturing of these financial instruments.

The Directors are of the view that the company is not exposed to any significant interest rate or inflation rate risks.

The company does not hold any interest rate derivatives.

KEY PERFORMANCE INDICATORS

The Key Performance Indicators presented below reflect the way performance of the company has been measured in 2020.

Revenue: To track the growth in the business. This is a key area of strategic focus for the Board. Revenue has increased by £348,614 to £14,116,957 (2019: £13,768,343).

Profit Before Tax: To track the underlying performance of the business and to ensure sales growth translates into increased profits. Profit before tax has increased by 2.53% to £672,235 (2019: £655,633).

FAIR REVIEW OF BUSINESS

The company was formed in 2011 and its principal activities during the year continued to be sales and marketing activities for the parent company.

2020

2019

Change

£'000

£'000

%

Turnover

14,117

13,768

2.53

Operating Profit

672

656

2.53

Profit after Tax

493

495

Profit and loss reserves

4,351

3,858

12.80

Current assets as % of current liabilities

358%

339%

8

Average number of employees

106

82

24

Turnover and average employees are used to track the growth of the business. This is a key area of strategic focus for the Board.

Operating profit and profit after tax are used to track the underlying performance of the business.

PRINCIPAL RISKS AND UNCERTAINTIES

Operating and Market Risk

The company operates in a sector that is linked to the health of the wider economy. A slowdown in retail activity would have an impact on the company's profitability. The company is global and spreads its risk over many countries and markets. It is therefore limited in its exposure to any one market.

Product Risk

The company's continued success is dependent upon the sales of the products that it designs and manufactures. The company spreads its risk by selling a large range of products. New products are launched in the Spring and Autumn of each calendar year.

Currency Risk

The company transacts in several currencies, principally Great Britain Pounds, United States Dollars and Euros. It is subject to currency risk from movements in exchange rates which affects sales and purchases. The company monitors its exposure to all currencies and implements a currency buying and hedging strategy to minimise this exposure.

Price risk

The Company has no exposure to equity securities price risk, as it holds no listed or other equity investments other than investments in subsidiary companies.

Foreign exchange risk

The Company is exposed to foreign exchange risks in the normal course of business, principally on purchase of product for resale denominated in US Dollars and Euros. In order to limit the Company's risk from currency exposure, the Company's anticipated purchase obligations are hedged in advance.

FUTURE DEVELOPMENT

The company has chosen in accordance with Companies Act 2006, s 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors report. It has done so in respect of Future Developments and Financial Risk Management.

SUBSEQUENT DEVELOPMENTS

There have been no changes to the business activities or risk profile of the company subsequent to the end of the reporting period.

Management don't foresee any significant issues relating to coronavirus and Brexit.

CORPORATE STRATEGY FOR 2021

The strategy for Acquia Ltd is set to continue and will remain a sales and marketing activity for the parent company and there is no change in the foreseeable future.

ON BEHALF OF THE BOARD:

C B Andersen - Director

16 August 2021

The directors present their report with the financial statements of the company for the year ended 31 December 2020.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of sales and marketing activities for the parent company specialised in technical support for the open-source web content management platform Drupal.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2020.

DIRECTORS

The directors who have held office during the period from 1 January 2020 to the date of this report are as follows:

M P Sullivan - resigned 2 November 2020

D Buytaert - resigned 9 January 2020

C D Alpers - appointed 28 January 2020

C B Andersen - appointed 28 January 2020

S Williamson - appointed 10 November 2020

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors 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 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:

- select suitable accounting policies 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 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.

In the case of each director in office at the date the Directors' Report is approved:

- so far as the director is aware, there is no relevant audit information of which the company's auditors are unaware; and

- they have taken all the steps that they ought to have taken as a director in order to make themselves aware of

any relevant audit information and to establish that the company's auditors are aware of that.

SUBSEQUENT EVENT

The extent to which the COVID-19 pandemic continues to impact the Company's operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence; however, the Company continues to closely monitor and formulate appropriate responses to manage its operations in the midst of the current economic and business climate.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, WD Audit Limited, were appointed as auditor to the company and in accordance with the section 485 of the Companies Act 2006,and will be proposed for re-appointment under section 487(2) of the Companies Act 2006.

ON BEHALF OF THE BOARD:

C B Andersen - Director

16 August 2021

Opinion

We have audited the financial statements of Acquia Ltd (the 'company') for the year ended 31 December 2020 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, 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:

-	give a true and fair view of the state of the company's affairs as at 31 December 2020 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 Auditors' 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

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 directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors 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 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.

Opinion on other matter 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 Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors 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 Report of the Directors.

We have nothing to report in respect of the following matters where 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.

Responsibilities of directors

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

Auditors' 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.

The extent to which the audit was considered capable of detecting irregularities, including fraud Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain sufficient appropriate audit evidence regarding compliance with laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements, to perform audit procedures to help identify instances of non-compliance with other laws and regulations that may have a material effect on the financial statements, and to respond appropriately to identified or suspected non-compliance with laws and regulations identified during the audit.

In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatement of the financial statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud through designing and implementing appropriate responses and to respond appropriately to fraud or suspected fraud identified during the audit.

However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:

- obtained an understanding of the nature of the industry and sector, including the legal and regulatory framework that the company operates in and how the company is complying with the legal and regulatory framework;

- inquired of management, and those charged with governance, about their own identification and assessment of the risks of irregularities, including any known actual, suspected or alleged instances of fraud;

- discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the financial statements may be susceptible to fraud.

As a result of these procedures we consider the most significant laws and regulations that have a direct impact on the financial statements are FRS 102, the Companies Act 2006 and tax compliance regulations. We performed audit procedures to detect non-compliances which may have a material impact on the financial statements which included reviewing financial statement disclosures, inspecting correspondence with local tax authorities and evaluating advice received from external tax advisors.

The most significant laws and regulations that have an indirect impact on the financial statements are those in relation to employment laws and regulations. We performed audit procedures to inquire of management and those charged with governance whether the company is in compliance with these laws and regulations and inspected correspondence with regulatory authorities.

The audit engagement team identified the risk of management override of controls as the area where the financial statements were most susceptible to material misstatement due to fraud. Audit procedures performed included but were not limited to testing manual journal entries and other adjustments and evaluating the business rationale in relation to significant, unusual transactions and transactions entered into outside the normal course of business.

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 Report of the Auditors.

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 a Report of the Auditors 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.

Roy Davis (Senior Statutory Auditor)

for and on behalf of WD Audit Limited

111 Charterhouse Street

London

EC1M 6AW

20 August 2021

TURNOVER

3

14,116,957

13,768,343

Administrative expenses

(13,444,722

)

(13,112,710

)

OPERATING PROFIT and

PROFIT BEFORE TAXATION

672,235

655,633

Tax on profit

6

(178,454

)

(160,507

)

PROFIT FOR THE FINANCIAL YEAR

493,781

495,126

PROFIT FOR THE YEAR

493,781

495,126

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

493,781

495,126

FIXED ASSETS

Tangible assets

7

276,415

414,631

Investments

8

15,157

15,157

291,572

429,788

CURRENT ASSETS

Debtors

9

5,422,514

2,858,207

Cash at bank

221,205

2,023,720

5,643,719

4,881,927

CREDITORS

Amounts falling due within one year

10

(1,578,270

)

(1,439,954

)

NET CURRENT ASSETS

4,065,449

3,441,973

TOTAL ASSETS LESS CURRENT LIABILITIES

4,357,021

3,871,761

PROVISIONS FOR LIABILITIES

13

(5,560

)

(14,081

)

NET ASSETS

4,351,461

3,857,680

CAPITAL AND RESERVES

Called up share capital

14

100

100

Retained earnings

4,351,361

3,857,580

SHAREHOLDERS' FUNDS

4,351,461

3,857,680

The financial statements were approved by the Board of Directors and authorised for issue on 16 August 2021 and were signed on its behalf by:

C B Andersen - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2019

100

3,362,454

3,362,554

Changes in equity

Total comprehensive income

-

495,126

495,126

Balance at 31 December 2019

100

3,857,580

3,857,680

Changes in equity

Total comprehensive income

-

493,781

493,781

Balance at 31 December 2020

100

4,351,361

4,351,461

Cash flows from operating activities

Cash generated from operations

1

(1,671,084

)

1,801,809

Tax paid

(126,363

)

(261,161

)

Net cash from operating activities

(1,797,447

)

1,540,648

Cash flows from investing activities

Purchase of tangible fixed assets

(5,068

)

(32,306

)

Net cash from investing activities

(5,068

)

(32,306

)

(Decrease)/increase in cash and cash equivalents

(1,802,515

)

1,508,342

Cash and cash equivalents at beginning of year

2

2,023,720

515,378

Cash and cash equivalents at end of year

2

221,205

2,023,720

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2020

2019

£

£

Profit before taxation

672,235

655,633

Depreciation charges

143,284

132,347

815,519

787,980

(Increase)/decrease in trade and other debtors

(2,580,494

)

664,200

Increase in trade and other creditors

93,891

349,629

Cash generated from operations

(1,671,084

)

1,801,809

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2020

31.12.20

1.1.20

£

£

Cash and cash equivalents

221,205

2,023,720

Year ended 31 December 2019

31.12.19

1.1.19

£

£

Cash and cash equivalents

2,023,720

515,378

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.1.20

Cash flow

At 31.12.20

£

£

£

Net cash

Cash at bank

2,023,720

(1,802,515

)

221,205

2,023,720

(1,802,515

)

221,205

Total

2,023,720

(1,802,515

)

221,205

1.	STATUTORY INFORMATION

Acquia Ltd is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

These policies have been consistently applied to all the years presented, unless otherwise stated. The company has adopted FRS 102 in these financial statements.

The preparation of financial statements in conformity with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the company's accounting policies. The directors have not identified any areas which involve a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements.

Preparation of consolidated financial statements

The financial statements contain information about Acquia Ltd as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under Section 401 of the Companies Act 2006 from the requirements to prepare consolidated financial statements as it and its subsidiary undertaking are included by full consolidation in the consolidated financial statements of its parent.

Turnover

Turnover is derived from recharged expenses to the parent company and is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Tangible fixed assets

Tangible assets are stated at cost (or deemed cost) less accumulated depreciation and accumulated impairment losses. Cost includes the original purchase price, costs directly attributable to bringing the asset to its working condition for its intended use, dismantling and restoration costs and borrowing costs capitalised.

Depreciation is provided at the following annual rates on a straight-line basis in order to write off each asset over its estimated useful life.

Fixtures & Fittings - 33% on cost

Building improvement - 20% on cost

The assets' residual values and useful lives are reviewed, and adjusted, if appropriate, at the end of each reporting period. The effect of any change is accounted for prospectively.

Repairs, maintenance and minor inspection costs are expensed as incurred.

Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost less any provision for impairment.

Financial instruments

The company has chosen to adopt the Sections 11 and 12 of FRS 102 in respect of financial instruments.

Financial assets

Basic financial assets, including trade and other receivables, cash at bank and investments in commercial paper, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Such assets are subsequently carried at amortised cost using the effective interest method.

At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset if impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in profit or loss.

If there is decrease in the impairment loss arising from an event occurring after the impairment was recognised the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised when (a) the contractual rights to the cashflows from the asset expire or are settled or, (b) substantially all the risks and rewards of ownership of the asset are transferred to another party or (c) control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.

Financial liabilities

Basic financial liabilities, including trade and other payables, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest.

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Offsetting

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

The company's functional and presentation currency is the pound sterling.

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.

Hire purchase and leasing commitments

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

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Fixed asset investments

Fixed asset investments are stated at cost less provision for impairment. The impairment charge reflects the historical rate of the share capital at the time of acquisition.

Provisions

Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation.

Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision in measured at present value the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.

Share capital

Ordinary share are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Critical accounting judgements and estimation uncertainty

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Judgements and key sources of estimation uncertainty

In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Taxation

The Company establishes provisions based on reasonable estimates, for possible consequences of audits by the tax authorities of the consequences of audits by the tax authorities of the respective countries in which it operates. The amount of such provisions is based on various factors, such as experience with previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Management estimation is required to determine the amount of deferred tax assets that can be recognised based upon likely timing and level of future taxable profits together with an assessment of the effect of future tax planning strategies. Further details are contained in note 6.

Depreciation

The difference between the purchase price or production cost (or revalued amount) and estimated residual value of a fixed asset which has a limited useful economic life should be allocated on a systematic basis to each accounting period during the useful life of the asset. The depreciation charge for each period should be recognised as an expense in the profit and loss account unless it is permitted to be included in the carrying amount of another asset.

Accruals

The Company accounts for all costs incurred during the year, and the estimated liability for expenses incurred with no supporting evidence is included in the accruals balance. These are estimated using prior year experience, known contractual obligations and business performance during the year. The majority of the accruals balance at year end relates to staff based costs, including holiday pay accruals and accrued commission.

Stock option expense

Judgement and estimation are required in determining the fair value of shares at the date of award. The fair value is estimated using valuation techniques which take into account the award's term, the risk-free interest rate and the expected volatility of the market price of the Parent Company's shares. Judgement and estimation are also required to assess the number of options expected to vest.

3.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by class of business is given below:

2020

2019

£

£

Sales and marketing services

14,116,957

13,768,343

14,116,957

13,768,343

An analysis of turnover by geographical market is given below:

2020

2019

£

£

United States of America

14,116,957

13,768,343

14,116,957

13,768,343

4.	EMPLOYEES AND DIRECTORS

2020

2019

£

£

Wages and salaries

9,396,595

7,855,589

Social security costs

1,186,144

999,131

Other pension costs

321,017

237,773

10,903,756

9,092,493

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

2020

2019

Directors and Management

14

10

Admin and Finance

11

12

Operational Staff

81

60

106

82

2020

2019

£

£

Directors' remuneration

30,833

-

Information regarding the highest paid director is as follows:

2020

2019

£

£

Emoluments etc

30,833

-

30,833

-

No employee or director received a remuneration equal or above £200,000.

5.	OPERATING PROFIT

The operating profit is stated after charging:

2020

2019

£

£

Other operating leases

307,589

282,569

Depreciation - owned assets

143,284

132,347

Auditors' remuneration

8,650

8,750

Foreign exchange differences

16,330

6,817

6.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2020

2019

£

£

Current tax:

UK corporation tax

186,975

159,430

Prior year overprovision

-

2,291

Total current tax

186,975

161,721

Deferred tax

(8,521

)

(1,214

)

Tax on profit

178,454

160,507

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2020

2019

£

£

Profit before tax

672,235

655,633

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2019 - 19%)

127,725

124,570

Effects of:

Expenses not deductible for tax purposes

19,584

15,204

Adjustments to tax charge in respect of previous periods

(3,260

)

2,291

Deferred tax

-

142

Transfer pricing adjustment

12,315

-

the year

Fixed asset differences

20,817

18,300

Remeasurement of deferred tax for changes

1,273

-

Total tax charge

178,454

160,507