EXEL_COMPUTER_SYSTEMS_(HO - Accounts

The directors present the strategic report for the year ended 31 January 2024.

Our policy of continuous product development maintains our competitive status within the manufacturing and service industry sectors and has resulted in excellent rates of both new business and retention of existing customers. The Russian invasion of Ukraine has increased energy prices, impacted on the supply of raw materials and significantly increased the cost of living and general business costs, however, to date we have not seen any impact upon our business. In 2023, we released a new version of our software which we feel will continue to further establish our products in the marketplace. The strong flow of sales orders for the previous year continued during 2023 and exceeded the target set by management and we anticipate good growth going forward.

The Group has now adopted a hybrid working pattern for the past two years and we will continue with this working practice for the foreseeable future as it offers flexibility to our employees, reduces unnecessary travel and has increased productivity and employee retention. The sales and implementation teams will continue to provide on-site services to our prospects and customers

We have had 45 major implementation projects during 2023-2024 and despite global pressures, sales orders increased by 8% from £10.4m last year to £11.2m. We have seen a 17% increase in sales orders over the past 5 years. Turnover, a lagging indicator of sales orders, increased to £9.8m.

This year continued the trend of customers seeking a hosted platform for their software solutions. Our income from Software As A Service (SAAS) and hosting grew by 25% compared to last year and is more than double the value it was three years ago. SAAS sales defer licence revenue recognition, as we only recognise the full software licence value over a number of years rather than in full at the point of installation.

Our Group operating profit was £1.8m. Pre-tax profit was £1,659m. Salary costs have increased during the year to keep in line with market conditions. Despite increases in costs, the group endeavors to reduce overheads and maintain its profitability. Exel will continue to strive to offer the highest levels of customer service and be focused on producing best-of-breed software, which we consider vital prerequisites for success.

Our Group Balance Sheet remains very healthy with net assets increasing to £18.9m (Jan 2023 - £17.7m). Our liquidity is excellent, and we invest our funds in order to achieve a better return than is available from bank deposits, having regard to the Group's need to retain liquidity and manage risk.

Our established web-based products facilitate centralised data processing with worldwide access. Support, training and project management are seamlessly offered to our non-UK customers using internet technologies. EFACS E8 continues to attract business from global and diverse industries. Continuous development of this fully integrated ERP solution allows companies to manage their end-to-end business needs, knowing that EFACS E/8 will properly support their future business requirements. We anticipate healthy new business from the EFACS E/8 business solution this year.

Eagle Field Service, a business management software solution for the field service and facilities management industries, continues to attract significant new business across a number of sectors within the service industry. With full integration of Exel's breadth of software functionality, we anticipate significant sales this year as this product becomes an industry leader for service software.

Exel remains a robust business with stable and rich software products. We continue to develop our business globally by appointing international resellers.

Competitive pressure in the UK is a continuing risk for the Group and the state of health of the UK manufacturing base together with reductions in public sector expenditure greatly influences the willingness of our prospective customers to start new capital projects. The Group manages this risk by providing added value services to its customers, having fast response times not only in supplying products but in handling all customer queries, and by maintaining strong relationships with customers. By having software solutions covering the manufacturing and service sectors, the Group has protected itself from sole reliance on one market.

The Group's sales and purchases are almost exclusively in GBP so there is no significant exposure to currency fluctuations.

The Group's principal financial assets are bank balances, investments, cash, trade and other debtors. The Group's credit risk is primarily attributable to trade debtors. The amounts presented in the Balance Sheet are net of allowances for doubtful debts. The Group has no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers.

The Group holds professional indemnity insurance more than adequate to cover any potential liability.

The Directors consider that the most relevant key performance indicators are as follows:

Sales orders & turnover: The sales order book of the Group at any time indicates the level of future activity secured. The Group aims to grow its order book every year. Sales orders increased by 8% from £10.4m last year to £11.2m. We have seen a 17% increase in sales orders over the past 5 years. Turnover, a lagging indicator of sales orders, increased to £9.8m.

Earnings (or profit) before interest, tax and depreciation ("EBITDA"): A measure of cash generation and value creation. EBITDA for the year was £2.0m (Jan 2023: £2.8m).

Net assets: An indicator of a strong, stable and growing Group is healthy at £18.9m (Jan 2023 - £17.7m).

Employee turnover: Experienced and qualified staff improve the quality of the service and software delivered to our customers. Being able to retain experienced and qualified staff is therefore a core objective of the Group. The Group measures this objective by recording the number of unplanned leavers. During 2023-2024 there were 3 unplanned leavers and 2 retirements (2022-2023: 2 unplanned leavers).

Whilst we do very little business directly with the EU, many of our customers are in industries that will be negatively affected by then war. Despite this, our customers and prospects are continuing to discuss investing in IT solutions, and we have not seen any dip in sales activity or order levels.

Trading updates

The Directors considered trading performance from across the Group's operations, discussed operational issues, sales, margin and business performance.

Financial updates

The Directors discussed performance against budget with particular focus on underperforming parts of the business, reviewed the monthly rolling forecast, reviewed liquidity position and considered payment of shareholder dividends. In addition they discussed preparations, scenario planning and impact assessments for the war in Ukraine.

The Directors consider that the decisions they have made during the financial year and the way they have acted have promoted the success of the Group for the benefit of its members as a whole (having regard to the stakeholders and matters set out in s172(1)(a-f) of the Act). The Directors meet on a monthly basis and the agenda typically includes reports on current trading and financial performance from the Managing Director and Finance Director, legal and governance updates, a review of the strategic plan and more detailed discussions of areas of particular importance. The Directors consider the Group's key stakeholders to include employees, shareholders, customers and suppliers.

(1) Long-term decisions

The Directors discussed proposals for new business opportunities, capital expenditure and business improvement initiatives. Whilst financial benefit and shareholder return is one of the key decision criteria, the long-term effect on the Group's going concern, the environment, job security for our employees, value and service for our customers and fair-trading terms with our suppliers were all considered too. The Directors recognise their responsibility to act fairly between all the stakeholders.

(2) Employees

Our employees are fundamental to the Group's success. The Directors aim to be a responsible employer and ensure that pay and benefits are fair and competitive. The health, safety and well-being of the Group's employees is the Directors' primary consideration. Our management teams identify career paths and encourage employees to maximise their potential through internal and external training, coaching and regular performance appraisal.

(3) Customers, suppliers and others

Our engagement with customers and suppliers continues to evolve and improve and the Directors recognise that fostering these relationships along with maintaining the Group's reputation for high standards of business conduct is essential for the Group's long-term success. We have key account managers for all customers and their focus is 100% customer satisfaction and continual innovation. Our purchasing professionals regularly communicate with our suppliers to maintain competitive but fair prices and drive innovation in recycled material.

(4) Community and environmental matters

The Group recognises the importance of its community and environmental responsibilities, and whilst its normal office-based activities have a very low impact, the Group aims to minimise the amount of business travel by its sales staff and consultants by online working wherever possible. The Group will seek to minimise adverse impacts on the environment from its activities, whilst continuing to address health, safety and economic issues. The Group has complied with all applicable legislation and regulations.

(5) High standards of business conduct

The Directors review the Group's internal and external policies to ensure they are aligned to best practice and enshrine recent statutory improvements around Anti Bribery, Modern Slavery and Data Protection (GDPR). The Directors implement processes to ensure a culture of passion, independence, character and innovation underpinned by robust business ethics and standards.

(6) Act fairly between shareholders

The majority shareholder is also a Director of the Group and is actively involved in key business decisions ensuring that they are aligned with the shareholders as a whole.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 January 2024.

The Group's principal activity is the development, support and sale of a suite of software programs which are marketed directly in the UK and through overseas distributors. Our solutions include EFACS, an integrated ERP and financial business package and Eagle Field Service, a comprehensive field service and facilities management system.

The Company's principal activity is that of a Holding Company; it holds investments in subsidiaries and current asset investments.

The results for the year are set out on page 9.

Ordinary dividends were paid amounting to £180,000. The directors do not recommend payment of a further dividend.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.

The Group's current policy concerning the payment of trade creditors is to:

• settle the terms of payment when agreeing the terms of each transaction;

• ensure suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and

• pay in accordance with the Group's contractual and other legal obligations.

The Company’s policy is continually to develop its existing software and, where relevant, to enhance functionality and deliver new modules. The Company continues to research available architectures to keep pace with the marketplace and to create innovative solutions to deliver this program.

The Directors are acutely aware of their responsibility to safeguard the environment.

The auditor, Moore, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with 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 group and company, 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;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the ;

• prepare the on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Information as required by schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 with regards to future developments of the Group, financial risk management, environmental matters, employee engagement and how the Directors have had regard to the business relationships with suppliers, customers and others and the effect this regard has had, including on the principal decisions made in the year have been included in the Group Strategic Report.true

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

We have audited the financial statements of Exel Computer Systems (Holdings) Plc (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 January 2024 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including 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 the parent company's affairs as at 31 January 2024 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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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 group's and 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 other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

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

• adequate accounting records have not been kept 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.

As explained more fully in the directors' responsibilities statement, 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 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 parent company or to cease operations, or have no realistic alternative but to do so.

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 our procedures are capable of detecting irregularities, including fraud, is detailed below.

The objectives of our audit in respect of fraud, are; to identify and assess the risks 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 to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.

We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, UK taxation legislation and GDPR.

We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.

We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.

We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.

Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://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.

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £1,256,630 (2023 - £1,913,897 profit).

Exel Computer Systems (Holdings) Plc (“the company”) is a public limited company domiciled and incorporated in England and Wales. The registered office is Bothe Hall, Tamworth Road, Long Eaton, Nottingham, NG10 3XL.

The group consists of Exel Computer Systems (Holdings) Plc and all of its subsidiaries.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

The consolidated group financial statements consist of the financial statements of the parent company Exel Computer Systems (Holdings) Plc together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

All financial statements are made up to 31 January 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding value added tax and other sales taxes.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue for support contracts is spread straight line over the contract term on the basis that the customer will utilise the software support function throughout the contract. Invoices are usually raised in advance and deferred. The deferred income liability will be released to sales as the contract progresses.

Revenue relating to software licences is recognised when the customer’s obligation to pay becomes unconditional. This is when the software is installed onto the client's server and is operational.

Consultancy is invoiced and revenue is recognised as consumed, based on weekly timesheets of employees. Where consultancy is invoiced in advance this is recognised as deferred income and taken as revenue at the point when the service is provided.

Income for hardware and third party software is recognised when it is delivered to the customer.

The following criteria must also be met before revenue is recognised:

• the amount of revenue can be measured reliably;

• it is probable that the Group will receive the consideration due under the contract; and

• the stage of completion of the contract at the end of the reporting period can be measured reliably.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

In the Company’s individual financial statements investment properties rented to other Group Companies are classified as investment properties. Investment property is carried at fair value determined annually by the senior management team at Exel. To assist in this assessment, they obtain and review an independent, professional valuation from a RICS registered surveyor. No depreciation is provided. Changes in fair value are recognised in the profit and loss account.

In the Group's financial statements, investment properties rented to other Group Companies are classified as property, plant and equipment (land and buildings) and held at historical cost less depreciation and impairment. Depreciation is charged on a straight line basis over the estimated useful life of 50 years.

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

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

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

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.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. 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 profit or loss.

If there is a 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 only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Basic financial liabilities, including 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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

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. Amounts 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.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research is recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured.

If it is not possible to distinguish between the research phase and the development phase of an internal project the expenditure is treated as if it were all incurred in the research phase only.

In the application of the group’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.

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

Investment property is carried at fair value determined annually by the senior management team at Exel. In order to assist in their assessment management obtain and review an open market valuation for the property from an independent, RICS registered valuer.

The debtors ledger is reviewed and specific provisions are made against customer balances that the senior management team believe may not be recovered in full. The level of provision is based on management's knowledge of the circumstances surrounding the non payment of the receivable and the likelihood of receiving future payment.

The Directors review the likely future cashflows that will be derived from the intangible asset in order to estimate the useful economic life of the asset. The amortisation rate is set according to the expected life of the asset.

The fair value of the unlisted investment is determined by the Directors based on the net asset value of the investment company uplifted by premium paid on shares when sold, less expected sales costs.

Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.

Listed investments

Listed investments are valued at the quoted bid price at the reporting date.

Impairment of assets

The Directors determine whether there are indicators of impairment of the Group’s tangible and intangible assets, including goodwill. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset and where it is a component of a larger cash-generating unit, the viability and expected future performance of that unit.

The average monthly number of persons (including directors) employed by the group and company during the year was:

Their aggregate remuneration comprised:

During the year retirement benefits were accruing to 3 Directors (2023 - 3) in respect of defined contribution pension schemes.

From 1 April 2023, the UK tax rate increased from 19% to 25%. This has had a consequential effect on the company's tax charge. The deferred tax balance and expected tax charge have therefore been calculated at 25%.

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

The Company's intangible asset entirely consists of intellectual property it purchased from a subsidiary undertaking.

Included within the net book value of land and buildings is land with a value of £372,714 (2023 - £372,714) which is not depreciated.

The 2024 valuations were made by the Directors, on an open market value for existing use basis.

An open market value determined as at 31 January 2024 by the Chartered Surveyors, Spencer Birch during March 2024. In light of this valuation, the Directors consider the valuation of the investment property to be materially appropriate.

Within the historic cost of £1,252,500 is £429,500 (2023 - £429,500) of land, which is not depreciated.

Details of the company's subsidiaries at 31 January 2024 are as follows:

At the time of finalising the accounts, the Directors were in the process of striking off Exel Computer Systems (China) Limited and Loudil Investments Limited.

The impairment charge recognised in administrative expenses in respect of bad and doubtful debts was £50,914 (2023 - £37,020).

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

The deferred tax liability set out above is not expected to change significantly within the next 12 months.

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

Contributions totalling £27,685 (2023 - £46,264) were payable to these funds at the balance sheet date all of which are recognised in the Balance Sheet.

Equal voting rights are attached to each category of ordinary shares. All shares within the class have equal rights to dividends. Dividends per share are set separately for each class of share and may vary between classes.

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

The land and buildings commitment is a deemed rent commitment of 3 months based on a rolling rental agreement.

At the reporting end date the group had contracted with tenants for the following minimum lease payments:

Key management personnel include the Directors and other senior management across the Group who together have authority and responsibility for planning, directing and controlling the activities of the Group. The remuneration of key management personnel is as follows.

Group

During the year other related parties were advanced amounts totalling £313,332 (2023 - £169,877). Amounts repaid during the year totalled £9,995 (2023 - £nil). At 31 January 2024, other related parties owed the Group £452,758 (2023 - £149,421).

Company

During the year other related parties were advanced amounts totalling £300,000 (2023 - £150,000). Amounts repaid during the year totalled £nil (2023 - £nil). At 31 January 2024, other related parties owed Exel Computer Systems (Holdings) plc £450,000 (2023 - £150,000).

Under FRS 102 paragraph 33.1A the Company has taken advantage of the exemption available from disclosing any transactions with other wholly owned subsidiaries.

Advances or credits have been granted by the company to its directors as follows:

The loan is repayable upon demand and is unsecured.

The ultimate controlling entity is T W Ellis.