Wise Technology Group Holdings Limited - Limited company accounts 20.1

REGISTERED NUMBER: 07243673 (England and Wales)

WISE TECHNOLOGY GROUP HOLDINGS LIMITED

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2021

Page

Company Information

1

Group Strategic Report

2

to

3

Report of the Directors

4

to

5

Report of the Independent Auditors

6

to

9

Consolidated Income Statement

10

Consolidated Statement of Financial Position

11

Company Statement of Financial Position

12

Consolidated Statement of Changes in Equity

13

Company Statement of Changes in Equity

14

Consolidated Statement of Cash Flows

15

Notes to the Consolidated Statement of Cash Flows

16

Notes to the Consolidated Financial Statements

17

to

30

DIRECTORS:

Mrs R Hallam

Mr D G Hallam

Mr S C B Ridgley

Mrs L Garner-Jones

REGISTERED OFFICE:

Newton Court, Saxilby Enterprise Park

Skellingthorpe Road

Saxilby

Lincoln

Lincolnshire

LN1 2LR

REGISTERED NUMBER:

07243673 (England and Wales)

SENIOR STATUTORY AUDITOR:

Roberta Newman BA (Hons) ACA

AUDITORS:

Peters Elworthy & Moore

Salisbury House

Station Road

Cambridge

Cambridgeshire

CB1 2LA

The directors present their strategic report of the company and the group for the year ended 31 March 2021.

REVIEW OF BUSINESS

The results for the year and financial position of the group are as shown in the annexed financial statements.

Group turnover has increased by 23.38% from £11,959,149 in 2020 to £14,755,637 in 2021.

Administrative and interest expenses for the group have increased by 0.22% going from £8,598,251 in 2020 to £8,617,173 in 2021 primarily due to the increase in wages. This reflects increased commissions and bonuses paid, and pay rises in line with National Minimum Wage.

Overall group profit before tax has increased from £2,312,025 in 2020 to £5,308,892 in 2021.

The group's operations and assets are well diversified and as such the levels of operational and other risks are considered by the directors to be acceptable. The group does not have any material exposure to any high risk market or geographical areas.

The business has adapted quickly and well to the COVID pandemic with minimal cost increases. Most colleagues work from home with only those who are unable, for whatever reason, to work from home working safely in the office whilst in compliance of guidelines that meet or exceed those set by government. Clients have been converted to remote training and remote go lives where possible and requested by the end client with a small percentage of projects postponed and a smaller number of projects cancelled. Sales activity from new and existing clients has been positive with revenue increases seen.

The Robotics Division have implemented their first two demonstration site solutions which have gone well. Enquires have been received all of which have a long lead to sale timescale and require significant effort to deal with. Currently this enquiry process is being reviewed to ensure it is monetised.

Position at the statement of financial position date

The directors consider the group to be in a solid financial position at the statement of financial position date, with accumulated distributable reserves of approximately £13,100,000.

Management remains mindful of the competitive environment in which the group operates and the need to maintain close control over the group's working capital and financial position.

Borrowings and Risk Management

The group's principal financial instruments comprise bank balances, trade creditors and trade debtors. The main purpose of these instruments is to raise funds for the group operations. The group's approach to managing other risks applicable to the financial instruments minimised the risk to a level that the directors consider acceptable.

Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.

Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

PRINCIPAL RISKS AND UNCERTAINTIES

The group is affected by a number of factors, the principal ones of which are:

- The group is exposed to the risk of negative developments in financial markets and the sectors in which it operates, either directly or through the impact on the group's bankers, suppliers or customers. These developments can result in recession, inflation, deflation, restrictions in the availability of credit, impact on demand from customers, problems in the supplier base, increases in financing costs or in the cost of utilities. Such developments might increase operating costs, reduce revenues, lower asset values or result in the businesses being unable to meet in full its strategic objectives.

- The group operates in a competitive market, and failure to compete effectively in terms of price, product specification and quality can have an adverse effect on demand and / or margins.

The group mitigates risk in several ways:

- The group has in place an organisational structure with clearly defined lines of responsibility and delegation of authority. There are established policies and procedures for the setting of corporate strategies; for information and reporting systems; for systems of operational and financial internal control; for assessment of risk; and for monitoring operations and performance.

- Management and staff at all levels work closely with customers and suppliers to operate as effectively and efficiently as possible, whilst maintaining long term working relationships, innovation and good lines of communication.

- The group operates a recruitment and selection process to ensure employees are experienced and competent in their work. The workforce is trained to be alert, responsive to customer needs, and to operate in line with the group's corporate objectives.

FINANCIAL KEY PERFORMANCE INDICATORS

The group reports on a number of key performance indicators (KPIs) to monitor and manage performance.

In 2020-21 the KPIs were as follows:

- Sales £14.76m v £11.96m

- PBT £5.31m v £2.31m

- Cash £7.13m vs £3.29m

The group also uses certain non- financial indicators, the most significant of which is the number of employees and most importantly their associated skill sets with a strong emphasis wherever possible of developing our people from within the organisation.

FUTURE DEVELOPMENTS

The group's strategy is to continue organic growth using the existing business model.

ON BEHALF OF THE BOARD:

Mr D G Hallam - Director

21 December 2021

The directors present their report with the financial statements of the company and the group for the year ended 31 March 2021.

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of writing and selling computer software systems and the development of robotic technology.

DIVIDENDS

No dividends will be distributed for the year ended 31 March 2021.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 April 2020 to the date of this report.

Mrs R Hallam

Mr D G Hallam

Other changes in directors holding office are as follows:

Mr S C B Ridgley - appointed 1 March 2021

Mrs L Garner-Jones - appointed 1 March 2021

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group 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 the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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 group's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, Peters Elworthy & Moore, were appointed as auditors in the period. They have expressed their willingness to remain in office and will be proposed for re-appointment in accordance with section 485 of the Companies Act 2006.

ON BEHALF OF THE BOARD:

Mr D G Hallam - Director

21 December 2021

Opinion

We have audited the financial statements of Wise Technology Group Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2021 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Statement of Financial Position, Company Statement of Financial Position, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Statement of Cash Flows and Notes to the Consolidated Statement of Cash Flows, 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 group's and of the parent company affairs as at 31 March 2021 and of the group's 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 group 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 group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group 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.

Opinions 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 Group 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 Group 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 group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company 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 group's and the parent 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 group or the parent 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 Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

- Identification of the laws and regulations which were significant in the context of the Group through discussions with management, and from our commercial knowledge and experience of the technology sector;

- We focused on specific laws and regulations which we considered may have a direct material effect on the financial statements, including FRS 102, the Companies Act 2006 and UK taxation legislation, or the Group's operations including data protection, employment and health and safety standards;

- We obtained an understanding of the Group's policies and procedures on compliance with laws and regulations, including documentation of any instances of non-compliance;

- We assessed the extent of compliance with the laws and regulations identified above through making enquiries of the Managing Director; and

- Identified laws and regulations were communicated within the audit engagement team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the Group's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud and considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

We discussed among the audit engagement team regarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements.

In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of fraud through management bias and override of controls. In addressing the risk of fraud through management bias and override of controls we:

- Tested the appropriateness of journal entries and other adjustments;

- Designed procedures to identify unexpected and unusual journal entries and performed testing to confirm the validity of such postings;

- Assessed whether the accounting judgements made in the financial statements were indicative of potential bias; and

- Evaluated the business rationale of any significant transactions that were unusual or outside the normal course of business.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

- Agreeing financial statement disclosures to underlying supporting documentation; and

- Enquiring of management as to actual and potential litigation and claims.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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.

Roberta Newman BA (Hons) ACA (Senior Statutory Auditor)

for and on behalf of Peters Elworthy & Moore

Salisbury House

Station Road

Cambridge

Cambridgeshire

CB1 2LA

21 December 2021

TURNOVER

3

14,755,637

11,959,149

Cost of sales

1,329,364

1,244,178

GROSS PROFIT

13,426,273

10,714,971

Administrative expenses

8,617,173

8,598,251

4,809,100

2,116,720

Other operating income

528,992

239,393

OPERATING PROFIT

5

5,338,092

2,356,113

Interest receivable and similar income

6

7,074

721

5,345,166

2,356,834

Interest payable and similar expenses

7

36,274

44,809

PROFIT BEFORE TAXATION

5,308,892

2,312,025

Tax on profit

8

832,300

458,835

PROFIT FOR THE FINANCIAL YEAR

4,476,592

1,853,190

FIXED ASSETS

Tangible assets

10

4,508,766

4,622,209

Investments

11

-

-

4,508,766

4,622,209

CURRENT ASSETS

Debtors

12

9,233,054

7,125,339

Cash at bank and in hand

7,130,190

3,289,911

16,363,244

10,415,250

CREDITORS

Amounts falling due within one year

13

6,829,103

4,991,302

NET CURRENT ASSETS

9,534,141

5,423,948

TOTAL ASSETS LESS CURRENT LIABILITIES

14,042,907

10,046,157

CREDITORS

Amounts falling due after more than one year

14

(728,065

)

(1,194,784

)

PROVISIONS FOR LIABILITIES

18

(189,880

)

(203,003

)

NET ASSETS

13,124,962

8,648,370

CAPITAL AND RESERVES

Called up share capital

19

100

100

Retained earnings

20

13,124,862

8,648,270

SHAREHOLDERS' FUNDS

13,124,962

8,648,370

The financial statements were approved by the Board of Directors and authorised for issue on 21 December 2021 and were signed on its behalf by:

Mr D G Hallam - Director

FIXED ASSETS

Tangible assets

10

2,414,655

2,479,281

Investments

11

200

100

2,414,855

2,479,381

CURRENT ASSETS

Debtors

12

5,899,219

2,975,793

Cash at bank

1,986,706

71,934

7,885,925

3,047,727

CREDITORS

Amounts falling due within one year

13

4,521,688

1,374,717

NET CURRENT ASSETS

3,364,237

1,673,010

TOTAL ASSETS LESS CURRENT LIABILITIES

5,779,092

4,152,391

CREDITORS

Amounts falling due after more than one year

14

-

(422,396

)

PROVISIONS FOR LIABILITIES

18

(37,451

)

(35,148

)

NET ASSETS

5,741,641

3,694,847

CAPITAL AND RESERVES

Called up share capital

19

100

100

Retained earnings

5,741,541

3,694,747

SHAREHOLDERS' FUNDS

5,741,641

3,694,847

Company's profit for the financial year

2,046,794

40,587

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

The financial statements were approved the Board of Directors and authorised for issue on 21 December 2021 and were signed on its behalf by:

Mr D G Hallam - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 April 2019

100

6,795,080

6,795,180

Changes in equity

Total comprehensive income

-

1,853,190

1,853,190

Balance at 31 March 2020

100

8,648,270

8,648,370

Changes in equity

Total comprehensive income

-

4,476,592

4,476,592

Balance at 31 March 2021

100

13,124,862

13,124,962

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 April 2019

100

3,654,160

3,654,260

Changes in equity

Total comprehensive income

-

40,587

40,587

Balance at 31 March 2020

100

3,694,747

3,694,847

Changes in equity

Total comprehensive income

-

2,046,794

2,046,794

Balance at 31 March 2021

100

5,741,541

5,741,641

Cash flows from operating activities

Cash generated from operations

1

3,850,111

112,200

Interest paid

(35,978

)

(42,634

)

Interest element of hire purchase payments paid

(296

)

(2,175

)

Government grants

454,885

216,306

Tax paid

(15,218

)

(332,798

)

Net cash from operating activities

4,253,504

(49,101

)

Cash flows from investing activities

Purchase of tangible fixed assets

(115,046

)

(755,980

)

Interest received

7,074

721

Net cash from investing activities

(107,972

)

(755,259

)

Cash flows from financing activities

Loan repayments in year

(134,521

)

(273,255

)

Capital repayments in year

(9,924

)

(33,483

)

Amount introduced by directors

126,887

-

Amount withdrawn by directors

(287,695

)

(124,368

)

Net cash from financing activities

(305,253

)

(431,106

)

Increase/(decrease) in cash and cash equivalents

3,840,279

(1,235,466

)

Cash and cash equivalents at beginning of year

2

3,289,911

4,525,377

Cash and cash equivalents at end of year

2

7,130,190

3,289,911

1.	RECONCILIATION OF PROFIT FOR THE FINANCIAL YEAR TO CASH GENERATED FROM OPERATIONS

2021

2020

£

£

Profit for the financial year

4,476,592

1,853,190

Depreciation charges

228,489

174,143

Government grants

(454,885

)

(216,306

)

Finance costs

36,274

44,809

Finance income

(7,074

)

(721

)

Taxation

832,300

458,835

5,111,696

2,313,950

Increase in trade and other debtors

(1,895,168

)

(2,938,464

)

Increase in trade and other creditors

633,583

736,714

Cash generated from operations

3,850,111

112,200

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 31 March 2021

31.3.21

1.4.20

£

£

Cash and cash equivalents

7,130,190

3,289,911

Year ended 31 March 2020

31.3.20

1.4.19

£

£

Cash and cash equivalents

3,289,911

4,525,377

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.4.20

Cash flow

At 31.3.21

£

£

£

Net cash

Cash at bank and in hand

3,289,911

3,840,279

7,130,190

3,289,911

3,840,279

7,130,190

Debt

Finance leases

(9,924

)

9,924

-

Debts falling due within 1 year

(274,962

)

(332,198

)

(607,160

)

Debts falling due after 1 year

(1,194,784

)

466,719

(728,065

)

(1,479,670

)

144,445

(1,335,225

)

Total

1,810,241

3,984,724

5,794,965

1.	STATUTORY INFORMATION

Wise Technology Group Holdings Limited 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 General 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.

Basis of consolidation

The group financial statements consolidate the financial statements of Evolution Business Software Limited and all its subsidiary undertakings drawn up to 31 March each year.

A subsidiary is an entity controlled by the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Where the Group owns less than 50% of the voting powers of an entity but controls the entity by virtue of an agreement with other investors which give it control of the financial and operating policies of the entity it accounts for that entity as a subsidiary.

Any subsidiary undertakings or associates sold or acquired during the year are included up to, or from, the dates of change of control or change of significant influence respectively.

All intra-Group transactions, balances, income and expenses are eliminated on consolidation. Adjustments are made to eliminate the profit or loss arising on transactions with associates to the extent of the Group’s interest in the entity.

The parent company has taken advantage of section 408 of the Companies Act 2006 and has not included its own Income Statement in these financial statements.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.

Significant judgements and estimates

In the application of the group's accounting policies, management is required to make judgements, estimates and assumptions about the carrying value of assets and liabilities that are not readily apparent from other sources. The estimates and underlying 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 and are covered within the accounting policies:

(i) The group makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, ageing profile of debtors and historical experience. See note 11 for the net carrying amount of the debtors and associated impairment provision.

Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Software licence fee income is recognised at key stages during the process of the delivery of the product. Support and maintenance income is deferred at the date of invoicing and released to the statement of income and retained earnings over the duration of the maintenance contract. The balance of software licence fee and maintenance income not released to the statement of income and retained earnings is carried in the statement of financial position as deferred income.

Robotics' income is recognised at the point at which the company has fulfilled its contractual obligations and the risks and rewards attaching to the product and service have been transferred to the customer.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Freehold property

-

2% on cost

Improvements to property

-

10% on cost

Plant and machinery

-

50% on reducing balance and 20% on reducing balance

Motor vehicles

-

25% on reducing balance

Robots

-

25% on cost

Tangible fixed assets are stated at cost (or deemed cost) or valuation less accumulated depreciation and accumulated impairment losses. Cost includes costs directly attributable to making the asset capable of operating as intended.

Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the company will comply with conditions attaching to them and the grants will be received using the accrual model.

Financial instruments

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

Basic financial assets, including trade and other debtors and cash and bank balances are initially recognised at transaction price, unless the arrangement constitute 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 is 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 the income statement.

Basic financial liabilities, including trade and other creditors, 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.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors 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 creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Debtors and creditors receivable / payable within one year

Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the income statement in other administrative expenses.

Loans and borrowings

Loans and borrowings are initially recognised at the transaction price including transaction costs. Subsequently, they are measured at amortised cost using the effective interest rate method, less impairment. If an arrangement constitutes a finance transaction it is measured at present value.

Impairment

Assets not measured at fair value are reviewed for any indication that the asset may be impaired at each balance sheet date. If such indication exists, the recoverable amount of the asset, or the asset’s cash generating unit, is estimated and compared to the carrying amount. Where the carrying amount exceeds its recoverable amount, an impairment loss is recognised in the income statement unless the asset is carried at a revalued amount where the impairment loss is a revaluation decrease.

Provisions

Provisions are recognised when the company has an obligation at the balance sheet date as a result of a past event, it is probable that an outflow of economic benefits will be required in settlement and the amount can be reliably estimated.