Company Registration No. 04088165 (England and Wales)
Mutual Vision Technologies Limited
Annual report and financial statements
for the year ended 31 December 2023
Mutual Vision Technologies Limited
Company information
Directors
Sarah Pierman
Stephen Mitcham
Kevin Mountford
Michael Fisher
Timothy Bowen
(Appointed 13 January 2023)
Katrina Harman
(Appointed 10 April 2024)
Secretary
Katrina Harman
Company number
04088165
Registered office
Unit 7 Bollin Walk
Wilmslow
SK9 1BJ
Independent auditor
Saffery LLP
Trinity
16 John Dalton Street
Manchester
M2 6HY
Mutual Vision Technologies Limited
Contents
Page
Strategic report
1 - 4
Directors' report
5 - 6
Independent auditor's report
7 - 10
Income statement
11
Statement of comprehensive income
12
Statement of financial position
13
Statement of changes in equity
14
Statement of cash flows
15
Notes to the financial statements
16 - 29
Mutual Vision Technologies Limited
Strategic report
For the year ended 31 December 2023
1

The directors present the strategic report for the year ended 31 December 2023.

Business Review

Mutual Vision specialises in delivering core banking and consumer focussed digital banking solutions to Building Societies, banks and other specialist lenders. Mutual Vision has a unique business model where it is wholly owned by its customers, who are fully committed to the long-term sustainable growth of the business, and the on-going development of its products and integrations. To that end, the shareholders are committed to a policy of not taking dividends from the business and instead re-investing profits for the development of the business and its products and services for the benefit of all its customers.

 

As a result, Mutual Vision are wholly focussed on the sector it serves and, as a customer community-owned business that re-invests profits for the benefit of our members. This unique business model affords many benefits including a 100% focus on supporting the sector that it serves without the distraction of having to satisfy potentially conflicting shareholder interests.

 

Mutual Vision behave differently to other technology providers, working as a “client-side” strategic technology partner, adopting a more objective and agnostic approach to selecting the best technology solutions to meet customer needs. This approach enables a truly open and agnostic partner ecosystem where collaboration with the customer community is paramount and enables the selection of solutions that customers require. This openness is unique in the sector and ensures that members of the Mutual Vision community really do have unencumbered choice when selecting the optimal solutions to meet their specific business needs to deliver competitive advantage.

 

The Mutual Vision Core Transformation programme continued in close collaboration with the specialist lending sector as planned throughout 2023 and remained on track to deliver a product suite that and will revolutionise core banking solutions for the specialist lending sector including but not limited to Banks, Building Societies and Credit Unions.

 

When complete in 2026 MV Core Banking (MV Solar) will be well positioned as the market leading core banking solution for the specialist lending sector. The solution will retain the functions and associated configuration in which Mutual Vision have historically excelled whilst delivering enhanced capabilities including intuitive user experience, faster load times, automated processing, dynamic workflows, succinct data views and enhanced analytics allowing customers to meet regulatory requirements and gain insights into their business enabling them to make informed decisions in relation to improved service offerings.

 

MV Solar will realise tangible value to an organisation in terms of time saved allowing them to focus an increased amount of time and effort on associated value-adding services to facilitate growth.

 

The 2023 results reflect the significant investment in MV Solar. While revenue continues to reliably increase for existing products, expenditure has increased due to the business expanding to allow production to commence on MV Solar.

 

 

Year ended

Year ended

 

31-Dec-23

31-Dec-22

 

£

£

Revenue

6,347,206

4,795,108

Gross Profit (£)

5,350,074

4,231,917

Gross Profit (%)

84%

88%

Net loss before tax

(148,843)

(189,503)

 

Mutual Vision Technologies Limited
Strategic report (continued)
For the year ended 31 December 2023
2

The Company achieved turnover for the year of £6.3m (2022: £4.8m) an increase of 32% on prior year. Of the £6.3m, 90% relates to recurring revenue.

 

The Company recorded a loss before taxation of £0.1m (2022: loss of £0.2m) representing the significant ongoing development costs associated with the core transformation programme.

 

During the year, Mutual Vision received £178k from HMRC in respect of the R&D claim relating to the financial year ended December 2022. The R&D claim for 2023 is still being finalised.

 

Future developments

The development of MV Solar will continue throughout 2024 in close collaboration with the MV customers to deliver a product suite that and will revolutionise core banking solutions for the specialist lending sector including but not limited to Banks, Building Societies and Credit Unions.

 

With full Go Live planned for Q4 of 2026, MV Solar will be well positioned as the market leading core banking solution for the specialist lending sector.

 

MV Solar will retain the functions and associated configuration in which Mutual Vision have historically excelled whilst delivering enhanced capabilities including intuitive user experience, faster load times, automated processing, dynamic workflows, succinct data views and enhanced analytics allowing customers to meet regulatory requirements and gain insights into their business enabling them to make informed decisions in relation to improved service offerings.

Principal Risks and Uncertainties

The risks below are the principal risks that may impact the Company achieving its strategic objectives.

 

Company specific and market

The loss of customers is a risk to Mutual Vision, however the extended duration of a customer leaving MV, both contractually and practically significantly mitigates this risk. In addition, the buy-in by existing and new customers of the Mutual Vision core transformation programme further mitigates this risk.

 

Resources

Reliance on key personnel with specific technological skill sets is a risk to any business but Mutual Vision has continued to monitor this and has put in place mechanisms to enable effective knowledge transfer and succession planning to mitigate this risk.

 

Changes in legislation / regulation

Whilst Mutual Vision provides software solutions for the highly regulated financial services sector it is not a regulated entity. Mutual Vision customers are however regulated by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) and as such all Mutual Vision products and services must be compliant with all regulations. In order to mitigate the risk of products or service being non-compliant the business has a dedicated team who monitor, and horizon scan the financial services sector as well as subscribing to (FCA) legislation and regulatory consultations and updates. This intelligence is then shared with the Mutual Vision customers and internal teams to ensure that products and services continue to be developed in such a way that they meet both customer and regulatory requirements.

 

Liquidity

Inadequate funds are a risk to any business. Mutual Vision uses a rolling five-year forecast to monitor cash flow and ensure sufficient funds are available as required. This five-year plan is updated monthly, and outputs are presented to and discussed at Board.

Mutual Vision Technologies Limited
Strategic report (continued)
For the year ended 31 December 2023
3
Cyber Security
Mutual Vision Technologies Limited
Strategic report (continued)
For the year ended 31 December 2023
4
Headcount

Headcount is monitored as a metric for the growth of the company. Headcount for the year ended 31 December 2023 was 81 (2022: 61). This has increased in readiness for the development of MV Solar.

 

Disabled employees

Mutual Vision provides equal opportunities for disabled employees, except insofar as such opportunities are constrained by the practical limitations of their disability. Where an existing employee becomes disabled, such steps as are practical and reasonable are taken to retain them in their employment.

 

Branches outside of the UK

Mutual Vision has one office which is located at Unit 7 Bollin Walk, Wilmslow, England, SK9 1BJ.

 

Political donations and expenditure

There were no political donations made or expenditure incurred during 2023.

 

Timothy Bowen
Director
13 August 2024
Mutual Vision Technologies Limited
Directors' report
For the year ended 31 December 2023
5

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activities of the company continued to be that of the development, sale and support of software and the provision of associated professional services for the financial services industry.

Results and dividends

The Company recorded a loss before taxation of £0.1m (2022: £0.2m).

The Directors do not recommend the payment of a dividend (2022: nil). This reflects the shareholder policy of re-investing profits for the development of the business and its products and services for the benefit of all customers.

Directors

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

Richard Wainwright
(Resigned 2 October 2023)
Sarah Pierman
Stephen Mitcham
Kevin Mountford
Michael Fisher
Timothy Bowen
(Appointed 13 January 2023)
Katrina Harman
(Appointed 10 April 2024)
Qualifying third party indemnity provisions

The Company holds Directors and Officers Liability insurance.

Financial instruments

The Company’s main financial instruments are cash and trade receivables. The Company does not use derivative financial instruments.

 

Going concern

Mutual Vision’s business is underpinned by strong recurring revenue growth. The Board is consciously pursuing an exciting new strategic direction to re-engineer the core banking platform and is heavily investing in this core transformation programme. The Board sees significant growth potential in both the existing and adjacent markets and expects the successful completion of the transformation programme to result in healthy year-on-year profits. As a result, the Board believes that it is appropriate to prepare the financial statements on a going concern basis.

 

Cautionary statement

Any forward-looking statements included in this report and the strategic report have been made by the Directors in good faith based on their knowledge and information available at the time. Such statements should be treated with caution due to the inherent risks and uncertainties relating to such information.

Auditor

Saffery LLP have expressed their willingness to continue in office.

Mutual Vision Technologies Limited
Directors' report (continued)
For the year ended 31 December 2023
6
Statement of directors' responsibilities

The directors are responsible for preparing the annual report and the financial statement 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 statement 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 statement 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 judgement 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 statement 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.

Strategic Review

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 Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of Principal risks and uncertainties and future developments.

Statement of disclosure to auditor

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 company’s auditor is unaware. Additionally, the directors have individually taken all appropriate actions, commensurate with their role as directors, to make themselves aware of all relevant audit information and to establish that the company’s auditor is provided with and made aware of that information.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Timothy Bowen
Director
13 August 2024
Mutual Vision Technologies Limited
Independent auditor's report
To the members of Mutual Vision Technologies Limited
7
Opinion

We have audited the financial statements of Mutual Vision Technologies Limited (the 'company') for the year ended 31 December 2023 which comprise the income statement, the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the 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:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

 

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Mutual Vision Technologies Limited
Independent auditor's report (continued)
To the members of Mutual Vision Technologies Limited
8

Opinions on other matters prescribed by the Companies Act 2006

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

 

Matters on which we are required to report by exception

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

 

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

 

Responsibilities of directors

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 company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Mutual Vision Technologies Limited
Independent auditor's report (continued)
To the members of Mutual Vision Technologies Limited
9

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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.

 

Identifying and assessing risks related to irregularities:

We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and by updating our understanding of the sector in which the company operates.

 

Laws and regulations of direct significance in the context of the company include The Companies Act 2006 and UK Tax legislation.

 

Audit response to risks identified:

We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.

During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

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.

Mutual Vision Technologies Limited
Independent auditor's report (continued)
To the members of Mutual Vision Technologies Limited
10

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.

Diane Petit-Laurent FCA
Senior Statutory Auditor
For and on behalf of Saffery LLP
13 August 2024
Chartered Accountants
Statutory Auditors
Trinity
16 John Dalton Street
Manchester
M2 6HY
Mutual Vision Technologies Limited
Income statement
For the year ended 31 December 2023
11
2023
2022
Notes
£
£
Turnover
3
6,347,206
4,795,108
Cost of sales
(997,132)
(563,191)
Gross profit
5,350,074
4,231,917
Administrative expenses
(5,538,110)
(4,433,674)
Other operating income
136
5,866
Operating loss
5
(187,900)
(195,891)
Interest receivable and similar income
7
39,057
6,388
Loss before taxation
(148,843)
(189,503)
Tax on loss
8
231,634
234,750
Profit for the financial year
82,791
45,247

The income statement has been prepared on the basis that all operations are continuing operations.

Mutual Vision Technologies Limited
Statement of comprehensive income
For the year ended 31 December 2023
12
2023
2022
£
£
Profit for the year
82,791
45,247
Other comprehensive income
-
-
Total comprehensive income for the year
82,791
45,247
Mutual Vision Technologies Limited
Statement of financial position
As at 31 December 2023
13
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
9
2,000,484
1,844,358
Tangible assets
10
152,701
114,640
2,153,185
1,958,998
Current assets
Debtors
11
1,322,054
2,256,371
Cash at bank and in hand
5,655,756
4,115,756
6,977,810
6,372,127
Creditors: amounts falling due within one year
12
(1,532,907)
(1,340,837)
Net current assets
5,444,903
5,031,290
Total assets less current liabilities
7,598,088
6,990,288
Creditors: amounts falling due after more than one year
13
-
0
(25,519)
Provisions for liabilities
Provisions
14
35,000
30,000
Deferred tax liability
15
151,552
166,170
(186,552)
(196,170)
Deferred Income
16
(5,482,314)
(4,980,498)
Net assets
1,929,222
1,788,101
Capital and reserves
Called up share capital
19
1,397
1,397
Share premium account
982,579
982,579
Profit and loss reserves
20
945,246
804,125
Total equity
1,929,222
1,788,101
The financial statements were approved by the board of directors and authorised for issue on 13 August 2024 and are signed on its behalf by:
Timothy Bowen
Director
Company Registration No. 04088165
Mutual Vision Technologies Limited
Statement of changes in equity
For the year ended 31 December 2023
14
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
1,397
982,579
767,992
1,751,968
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
45,247
45,247
Credit to equity for equity settled share-based payments
18
-
-
(9,114)
(9,114)
Balance at 31 December 2022
1,397
982,579
804,125
1,788,101
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
82,791
82,791
Credit to equity for equity settled share-based payments
18
-
-
58,330
58,330
Balance at 31 December 2023
1,397
982,579
945,246
1,929,222
Mutual Vision Technologies Limited
Statement of cash flows
For the year ended 31 December 2023
15
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
24
2,141,967
2,493,499
Income taxes refunded
217,016
183,885
Net cash inflow from operating activities
2,358,983
2,677,384
Investing activities
Purchase of intangible assets
(750,884)
(634,902)
Purchase of tangible fixed assets
(107,185)
(59,323)
Proceeds from disposal of tangible fixed assets
29
65
Interest received
39,057
6,388
Net cash used in investing activities
(818,983)
(687,772)
Net increase in cash and cash equivalents
1,540,000
1,989,612
Cash and cash equivalents at beginning of year
4,115,756
2,126,144
Cash and cash equivalents at end of year
5,655,756
4,115,756
Mutual Vision Technologies Limited
Statement of cash flows (continued)
For the year ended 31 December 2023
16
1
Critical accounting 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.

Capitalisation of development costs

Management capitalises a percentage of salary costs related to development of their software intangible asset. The percentage capitalised is based on a combination of management estimate and, for those teams where timesheets have been used, timesheet data.

Impairment of intangible assets

Management has calculated the impairment losses for its software intangible asset when a product no longer has value in use. The calculation is based on a proportion of the total capitalised development cost based on the number of employees working on the development of the product for the period in which the development has taken place, compared to the total number of employees working on development.

2
Accounting policies
Company information

Mutual Vision Technologies Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 7 Bollin Walk, Wilmslow, SK9 1BJ.

2.1
Accounting convention

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 revaluation of share options granted at fair value. The principal accounting policies adopted are set out below.

2.2
Going concern

Atruet 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.

Mutual Vision Technologies Limited
Notes to the financial statements
For the year ended 31 December 2023
2
Accounting policies (continued)
17
2.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

Training sales - turnover is recognised as the service is provided.

 

Licence and maintenance sales - sales are invoiced for the duration of the contract. The sales invoice is initially released as deferred income and then recognised in the profit and loss account on a monthly straight line basis.

 

Project/professional services - sales are recognised on a percentage completion or time spent basis.

2.4
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

2.5
Intangible fixed assets other than goodwill

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 in relation to development of software are recognised at the date incurred 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:

Internally generated software
5- 7 years
2.6
Tangible fixed assets

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

Depreciation 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:

Office fitout
10 years
Fixtures and fittings
3 to 5 years
Equipment
3 years
Software
3 years

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 credited or charged to profit or loss.

Mutual Vision Technologies Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
2
Accounting policies (continued)
18
2.7
Impairment of fixed assets

At each reporting period end date, the company 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.

2.8
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

2.9
Financial instruments

The company 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 company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with 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

Basic financial assets, which include debtors, 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

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.

Impairment of financial assets

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.

Mutual Vision Technologies Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
2
Accounting policies (continued)
19
Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company 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.

Classification of financial liabilities

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 company after deducting all of its liabilities.

Basic financial 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.

Other financial liabilities

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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

2.10
Equity instruments

Equity instruments issued by the company 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 company.

2.11
Taxation

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

Mutual Vision Technologies Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
2
Accounting policies (continued)
20
Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

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. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. Deferred tax assets and liabilities are offset when the company has 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.

2.12
Provisions

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

2.13
Employee benefits

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 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.

2.14
Retirement benefits

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

2.15
Share-based payments

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Monte Carlo Simulation model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

Mutual Vision Technologies Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
2
Accounting policies (continued)
21

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

 

Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

2.16
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

3
Turnover and other revenue
2023
2022
£
£
Other revenue
Interest income
39,057
6,388
4
Employees

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

2023
2022
Number
Number
Employees
74
68

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
3,779,741
2,939,365
Social security costs
348,553
337,713
Pension costs
203,652
145,011
4,331,946
3,422,089
Mutual Vision Technologies Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
22
5
Operating loss
2023
2022
Operating loss for the year is stated after charging/(crediting):
£
£
Research and development costs
(750,884)
(634,902)
Fees payable to the company's auditor for the audit of the company's financial statements
19,440
18,000
Depreciation of owned tangible fixed assets
69,095
43,016
Fees payable for non-audit services
3,332
3,085
Amortisation of intangible assets
594,758
524,229
Operating lease charges
81,102
67,153
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
478,532
476,423
Company pension contributions to defined contribution schemes
60,354
23,518
538,886
499,941
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
265,595
201,439
Company pension contributions to defined contribution schemes
55,104
16,444
320,699
217,883
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
39,057
6,388
8
Taxation
2023
2022
£
£
Current tax
Adjustments in respect of prior periods
(217,016)
(183,885)
Deferred tax
Origination and reversal of timing differences
(14,618)
(50,865)
Total tax credit
(231,634)
(234,750)
Mutual Vision Technologies Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
8
Taxation (continued)
23

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

2023
2022
£
£
Loss before taxation
(148,843)
(189,503)
Expected tax credit based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
(35,008)
(36,006)
Tax effect of expenses that are not deductible in determining taxable profit
20,667
842
Permanent capital allowances in excess of depreciation
-
0
(2,703)
Research and development tax credit
(217,016)
(183,885)
Deferred tax adjustments in respect of prior years
625
(790)
Remeasurement of deferred tax for changes in tax rates
(902)
(12,208)
Taxation credit for the year
(231,634)
(234,750)

The Chancellor confirmed in the Spring Budget on 15 March 2023 that the rate of corporation tax will increase from 19% to 25% from 1 April 2023, as originally planned in the 2021 Budget. From the same date a small companies’ rate of 19% will be introduced for companies’ with profits of £50,000 or less. The main rate applies to companies' with profits over £250,000 and marginal relief will apply to for profits in between the thresholds.

 

In 2023 the research and development claim for December 2022 and 2023 has not been finalised or submitted to HMRC. Therefore these have not been provided for.

Mutual Vision Technologies Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
24
9
Intangible fixed assets
Internally generated software
£
Cost
At 1 January 2023
7,163,744
Additions
750,884
At 31 December 2023
7,914,628
Amortisation and impairment
At 1 January 2023
5,319,386
Amortisation charged for the year
594,758
At 31 December 2023
5,914,144
Carrying amount
At 31 December 2023
2,000,484
At 31 December 2022
1,844,358
10
Tangible fixed assets
Office            fittout
Fixtures           and Fittings
Equipment
Software
Total
£
£
£
£
£
Cost
At 1 January 2023
37,160
84,646
280,339
69,783
471,928
Additions
-
0
83
107,102
-
0
107,185
Disposals
-
0
-
0
(149)
-
0
(149)
At 31 December 2023
37,160
84,729
387,292
69,783
578,964
Depreciation and impairment
At 1 January 2023
22,574
66,096
198,835
69,783
357,288
Depreciation charged in the year
3,716
6,166
59,213
-
0
69,095
Eliminated in respect of disposals
-
0
-
0
(120)
-
0
(120)
At 31 December 2023
26,290
72,262
257,928
69,783
426,263
Carrying amount
At 31 December 2023
10,870
12,467
129,364
-
0
152,701
At 31 December 2022
14,586
18,550
81,504
-
0
114,640
Mutual Vision Technologies Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
25
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
982,913
2,087,302
Prepayments and accrued income
339,141
169,069
1,322,054
2,256,371
12
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
14,701
174,429
Taxation and social security
1,197,736
1,007,311
Other creditors
9,322
12,048
Accruals and deferred income
311,148
147,049
1,532,907
1,340,837
13
Creditors: amounts falling due after more than one year
2023
2022
£
£
Liability for share based payments
-
25,519
14
Provisions for liabilities
2023
2022
£
£
Dilapidations provision
35,000
30,000
Movements on provisions:
Dilapidations provision
£
At 1 January 2023
30,000
Additional provisions in the year
5,000
At 31 December 2023
35,000
Mutual Vision Technologies Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
26
15
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
483,950
271,365
Tax losses
(319,786)
(105,195)
Short term timing differences
(12,612)
-
151,552
166,170
2023
Movements in the year:
£
Liability at 1 January 2023
166,170
Credit to profit or loss
(14,618)
Liability at 31 December 2023
151,552

The deferred tax credit set out above is not expected to reverse within 12 months and relates to the utilisation of tax losses against future expected profits of the same period.

 

The deferred tax liability set out above and £149,654 is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

 

16
Deferred income
2023
2022
£
£
Deferred income
5,482,314
4,980,498
17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
203,652
145,011

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

Mutual Vision Technologies Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
27
18
Share-based payment transactions
Number of share options
Weighted average exercise price
2023
2022
2023
2022
Number
Number
£
£
Outstanding at 1 January 2023
10,866
13,970
1.00
1.00
Expired
(1,552)
(3,104)
1.00
1.00
Outstanding at 31 December 2023
9,314
10,866
1.00
1.00
Exercisable at 31 December 2023
-
0
-
0
-
0
-
0

The options outstanding at 31 December 2023 had an exercise price of £1, and a remaining contractual life of 8 years.

Liabilities and expenses

During the year, the company recognised total share-based payment expenses of £32,811 which related to equity settled share based payment transactions.

19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
A Ordinary shares of 1p each
139,713
139,713
1,397
1,397
20
Profit and loss reserves

Profit and loss reserves represents profits to date, share based payment transactions less dividends paid.

 

Share premium account represents consideration paid for share in excess of nominal value.

21
Operating lease commitments
Lessee

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

2023
2022
£
£
Within one year
84,454
69,457
Between two and five years
160,621
202,583
245,075
272,040
Mutual Vision Technologies Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
28
22
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Sales
Sales
2023
2022
£
£
Entities with control, joint control or significant influence over the company
588,377
481,373
Other related parties
2,021,555
1,719,601

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due to related parties
£
£
Entities with control, joint control or significant influence over the company
11,437
468,119
Other related parties
-
1,856,881

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due from related parties
£
£
Entities over which the entity has control, joint control or significant influence
726
583,256
Other related parties
443,349
902,380
23
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
4,115,756
1,540,000
5,655,756
Mutual Vision Technologies Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
29
24
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
82,791
45,247
Adjustments for:
Taxation credited
(231,634)
(234,750)
Investment income
(39,057)
(6,388)
Amortisation and impairment of intangible assets
594,758
524,229
Depreciation and impairment of tangible fixed assets
69,095
43,016
Equity settled share based payment expense
32,811
-
Increase in provisions
5,000
5,000
Movement in share based payments
25,519
(9,114)
Movements in working capital:
Decrease in debtors
934,317
711,807
Increase in creditors
166,551
73,540
Increase in deferred income
501,816
1,340,912
Cash generated from operations
2,141,967
2,493,499
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