Registered number: 04529306
BOARD INTELLIGENCE LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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COMPANY INFORMATION
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CLA Evelyn Partners Limited
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Chartered Accountants & Statutory Auditor
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CONTENTS
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Directors' Responsibilities Statement
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Independent Auditor's Report
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Statement of Comprehensive Income
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Statement of Changes in Equity
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Notes to the Financial Statements
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STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present the Strategic Report for Board Intelligence Ltd ("the Company") for the year ended 31 December 2023.
The principal activity of the Company is the provision of Software as a Service (SaaS) products that drive board effectiveness for decision makers and directors within both the private and public sectors.
The core SaaS products include a board portal for simple, secure access to board packs and Lucia, a new AI-powered management report writing tool for customers looking to transform their board and management meetings with high-impact reporting.
Business review
During the 2023 financial year the Company made strong commercial progress with significant increases in revenues and customer numbers for the year. The Company continued to build on the initial success of its next generation, AI-powered, management reporting tool called Lucia by releasing additional functionality. This product, a result of in-house research and development, uses the Board Intelligence Question Driven Insight framework to put the principle of questioning at the heart of management reports enabling report writers to focus on what matters most, and communicate with impact.
We are pleased to report our results for the year ended 31 December 2023 are set out in the Statement of Comprehensive Income on page 11. Total revenue increased by 20% from £13.62m in 2022 to £16.35m in 2023. Recurring revenue increasing by 17% from £13.18m in 2022 to £15.4m in 2023 as a result of new customers and expansion of current customer accounts. Total administrative costs increased by 14% from £14.82m in 2022 to £16.89m in 2023. Net losses decreased slightly in the year, from £0.86m in 2022 to £0.48m in 2023.
For the year ended 31 December 2023 the average number of employees in Board Intelligence Ltd was 113 employees compared to 120 employees in 2022 as the Company prioritised efficient and sustainable growth within the business.
The cash position remained strong and relatively consistent relatively consistent throughout the year. At year end there had been a slight decrease of 0.6% in cash from £15.81m at 31 December 2022 to £15.72m at 31 December 2023.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Principal risks and uncertainties
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The Company considers risk management as integral to the success of the business. As a provider of SaaS products we are exposed to a number of potential risks that may have a material impact on reputation, financial and operational performance which we seek to identify and mitigate where possible.
The Company manages the following risks on an ongoing basis:
Business risks
Product differentiation
The market for software specifically designed for boards of directors, management teams and key decision makers is continuously evolving with new entrants and updated offerings from incumbent providers as well as more generalist software that some customers adapt for these needs. Board Intelligence is differentiated by its focus on the quality of board meetings and decisions, compared to rest of the board software landscape which targets board administration and compliance. Board Intelligence is also uniquely differentiated by its focus on the requirements of large enterprise clients and delivering the concierge service, security and reliability they demand. If the Company does not maintain that differentiation that may result in financial risks. To mitigate this we have dedicated product teams who develop, test and review product roadmaps and alignment to market requirements. We invest in significant research and development thorough our own in-house teams to develop new products and features.
Product availability
The principal activities of the Company relate to the provision of SaaS products for management teams and directors. Our product availability depends on complex, interconnected technology systems and an outage for a material time period could result in reputational and operational risks. To mitigate this our internal processes are designed incorporating industry best practice and we use a small group of trusted third-party sub-processors who have reliability and security at their core.
Financial risks
Credit risk
The Company sells SaaS products in the business-to-business market (B2B) and as part of our commercial model we provide business customers with credit terms. This risk is mitigated through a diverse customer base, strong customer relationships and our dedicated accounts receivable team who review credit risk monthly and employ credit control practices if the need arises.
Liquidity risk
The Company manages cash flow risk by maintaining and reviewing cash flow forecasts on a regular basis. The company has not required cash investment in the 2023 financial year and our cash and cash equivalents balance has remained relatively consistent throughout 2023. The cash balances we have held throughout the year significantly mitigates liquidity risk.
Foreign exchange risk
The Company is exposed to foreign exchange risk in relation to the significant foreign currency cash balances held. In general, the Company has limited transactions in foreign currencies and mitigates this risk as far as possible by utilising funds which match the required currency.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Economic risk
Downturn in key markets
Challenging macroeconomic conditions and a significant downturn in our core markets could create downward pressure on growth and revenue. Central to the Board Intelligence product offering is effeciency and improved decision making for our customers. Despite increased volatility and tough economic conditions over the last three years, Board Intelligence has continued to deliver strong customer and revenue growth through its proven product suite.
Operational risks
Significant data breach
A significant data breach of our core customer systems would open the business to material reputational and financial risks. A data breach could result in a breach of data protection legislation resulting in certain legal risks. To mitigate these risks our internal processes are designed incorporating industry best practice. We have dedicated teams responsible for cyber security who utilise third party experts to provide a comprehensive review of our cyber security position on a regular basis.
Recruitment and retention of key employees
The Company has a strong cultural framework and has historically been able to attract and retain outstanding talent. Remuneration packages include medium and long-term incentives to aid us in aligning business goals and targets with personal success.
Financial key performance indicators
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The Company's key financial performance indicators during the year were as follows:
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Cash and cash equivalents
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Recurring revenue is revenue relating to long-term SaaS subscriptions, excluding one-off consulting or other non-recurring revenue.
The performance of the business against the above key performance indicators has been considered in the business review above.
This report was approved by the board and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
The loss for the year, after taxation, amounted to £475,555 (2022 - loss £859,879).
No dividends were paid or proposed during the year (2022 - £Nil).
The directors who served during the year were:
The Company will continue to support and enhance its product suite and key markets. To date Board Intelligence has primarily focused on the UK and near-Europe markets but is considering opportunities in overseas markets through both organic and inorganic growth strategies.
Research and development
The directors regard the investment in research and development an integral part of the long-term strategy for the Company. The investment in research and development includes the development of new SaaS products as well as new features for the suite of existing products, both are important to ensure the Company is positioned as a strong player in a competitive market and the continuing success of the business.
The Company continued to build on the initial success of its next generation, AI-powered, management reporting tool called Lucia by releasing additional functionality.
Disclosure of information to auditor
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Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
Post reporting date events
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There have been no significant events affecting the Company since the year end.
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The auditor, CLA Evelyn Partners Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors are responsible for preparing the Strategic Report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent; and
∙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 to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BOARD INTELLIGENCE LTD
Opinion
We have audited the financial statements of Board Intelligence Ltd (the 'Company') for the year ended 31 December 2023 which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity, the Statement of Cash Flows, the Analysis of Net Debt and the 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 FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
∙give a true and fair view of the state of the Company's affairs as at 31 December 2023 and of its loss 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 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.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BOARD INTELLIGENCE LTD
Other information
The other information comprises the information included in the Annual Report and Financial Statements, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the Annual Report and Financial Statements. 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.
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Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the 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.
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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.
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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, or returns adequate for our audit have not been received from branches not visited by us; or
∙the financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of directors’ remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Directors’ Responsibilities Statement set out on page 6, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BOARD INTELLIGENCE LTD
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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We obtained an understanding of the Company’s legal and regulatory framework through enquiry of management concerning their understanding of relevant laws and regulations and the entity’s policies and procedures regarding compliance. We understand that the Company complies with the framework through:
∙Maintaining clear policies;
∙Close oversight by the directors and key management, meaning that any litigation or claims would come to their attention directly; and
∙Engaging external experts as required, including assistance with payroll, tax compliance and statutory accounts preparation.
In the context of the audit, we considered those laws and regulations which determine the form and content of the financial statements and which are central to the Company’s ability to conduct its business and where failure to comply could result in material penalties. We identified the following laws and regulations as being of significance in the context of the Company:
∙The Companies Act 2006 and FRS 102 in respect of the preparation and presentation of the financial statements; and
∙Data protection and information security regulations.
We performed the following procedures to gain evidence about compliance with the significant laws and regulations identified above:
∙We made enquiries of management and reviewed board meeting minutes.
∙We obtained written management representations that they have disclosed to us all known instances of noncompliance or suspected non-compliance with laws and regulations and accounted for and disclosed all known actual or possible litigation and claims in the financial statements.
The senior statutory auditor led a discussion with senior members of the engagement team regarding the susceptibility of the entity’s financial statements to material misstatement, including how fraud might occur. The key areas identified in this discussion were the manipulation of the financial statements through manual journal entries and incorrect recognition of revenue relating to cut-off at year end.
The procedures we carried out to gain evidence in the above area included:
∙Testing journal entries, selected based on specific risk assessments applied based on the Company’s processes and controls surrounding manual journals.
∙Testing of revenue transactions to underlying documentation.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BOARD INTELLIGENCE LTD
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.
Timothy Adams (Senior Statutory Auditor)
for and on behalf of
CLA Evelyn Partners Limited
Chartered Accountants
Statutory Auditor
45 Gresham Street
London
EC2V 7BG
16 July 2024
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STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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Interest receivable and similar income
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Interest payable and similar expenses
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Loss for the financial year
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There was no other comprehensive income for 2023 (2022 - £Nil).
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The notes on pages 17 to 33 form part of these financial statements.
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BOARD INTELLIGENCE LTD
REGISTERED NUMBER:04529306
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BALANCE SHEET
AS AT 31 DECEMBER 2023
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Share-based payment reserve
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BOARD INTELLIGENCE LTD
REGISTERED NUMBER:04529306
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BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 33 form part of these financial statements.
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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Share-based payment reserve
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Comprehensive income for the year
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Comprehensive income for the year
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Contributions by and distributions to owners
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STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
Cash flows from operating activities
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Loss for the financial year
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Depreciation of tangible assets
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Loss on disposal of tangible assets
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(Increase)/decrease in debtors
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Net cash generated from operating activities
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Cash flows from investing activities
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Purchase of tangible fixed assets
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Net cash used in investing activities
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Cash flows from financing activities
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Repayment of finance leases
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Net cash used in financing activities
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Net (decrease)/increase in cash and cash equivalents
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Cash and cash equivalents at beginning of year
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Cash and cash equivalents at the end of year
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Cash and cash equivalents at the end of year comprise:
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ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023
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Finance leases within 1 year
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Finance lease after 1 year
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Board Intelligence Ltd is a private company, limited by shares, domiciled and incorporated in England and Wales (registered number: 04529306). The registered office address is 24 Cornhill, London, EC3V 3ND.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
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Exemption from preparing consolidated financial statements
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The Company is exempt from the requirement to prepare consolidated financial statements under section 402 of the Companies Act 2006 as all of its subsidiary undertakings can be excluded under section 405 of the Companies Act 2006.
The Company has net assets of £11,213,131 (2022 - £11,460,560) and made a loss during the year of £475,555 (2022 - loss of £859,879). The directors have prepared a mid-term budget covering a period of at least 12 months, which shows that the Company has resources available to continue in business for the foreseeable future.
During 2020, the Company completed a fundraise with Susquehanna Growth Equity Partners, providing the business with additional cash to invest in growth. At 31 December 2023, the Company had an available cash balance of £15,723,463 (2022 - £15,811,310). The Company does not have any debt obligations beyond the normal course of business that require repayment in the coming year. The Company continues to grow through new customer acquisition and growth of existing customer accounts, and management anticipates that this will continue in the foreseeable future.
On the basis of the above, the directors consider it appropriate to apply the going concern basis of accounting and expect the Company to be able to continue in operation for the foreseeable future, being a period of at least twelve months from the date of signing of these financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:
Rendering of services
Turnover from a contract to provide services under licence agreements is recognised in the period in which the services are provided in accordance with the contracted licence term when all of the following conditions are satisfied:
∙the amount of turnover can be measured reliably;
∙it is probable that the Company will receive the consideration due under the contract;
∙the licence term (as stipulated by the contract) at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
Where payments are received from customers in advance of the services being provided, these payments are accounted for as deferred income and included within creditors due within one year.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Research and development expenditure is written off to profit or loss in the year in which it is incurred. The research and development expense incurred during the year ended 31 December 2023 was £1,289,979 (2022 - £1,303,707).
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.
Depreciation is provided on the following basis:
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Fixtures, fittings and equipment
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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Leased assets: the Company as lessee
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Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the Company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to profit or loss so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.
Investments in subsidiaries are measured at cost less accumulated impairment.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.
Financial assets and financial liabilities are recognised in the Balance Sheet when the Company becomes a party to the contractual provisions of the instrument.
Trade and other debtors and creditors are classified as basic financial instruments and measured on initial recognition at transaction price. A provision is established when there is objective evidence that the Company will not be able to collect all amounts due.
Cash and cash equivalents are classified as basic financial instruments and comprise cash in hand and at bank, short-term bank deposits with an original maturity of three months or less and bank overdrafts which are an integral part of the Company’s cash management.
Financial liabilities and equity instruments issued by the Company are classified in accordance with the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
Interest bearing bank loans, overdrafts and other loans which meet the criteria to be classified as basic financial instruments are initially recorded at the present value of cash payable to the bank, which is ordinarily equal to the proceeds received net of direct issue costs. These liabilities are subsequently measured at amortised cost, using the effective interest rate method.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Where share options are awarded to employees, the fair value of the options at the date of grant is charged to profit or loss over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Company keeping the scheme open or the employee maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.
Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services received.
Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Judgements in applying accounting policies and key sources of estimation uncertainty
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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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The key judgements and sources of estimation uncertainty that have a significant effect on the amounts recognised in the financial statements are described below:
Share Options
The Company has an EMI share option scheme in place. The valuation of these are estimated with the equity value of the Company applying an EV/Revenue multiple and EV/Book Value based on listed peer group data. This estimate was used to produce an option pricing method (“OPM”) for valuing the Company’s different classes of equity. The OPM is based on similar Black-Scholes principles but is able to allocate a total equity value between the different share classes considering liquidation preferences and the estimated time to a liquidity event.
Recoverability of trade debtors
The directors assess trade debtors for recoverability on a regular basis and provide for balances which are significantly overdue where there is sufficient doubt over their recoverability. The bad debt expense recognised during the year is shown in note 5. At the year end, a provision of £266,850 (2022 - £216,625) is included within trade debtors.
The whole of the turnover is attributable to the rendering of services.
Analysis of turnover by country of destination:
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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The operating loss is stated after charging/(crediting):
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Foreign exchange gain/(loss)
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During the year, the Company obtained the following services from the Company's auditor:
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Fees payable to the Company's auditor for the audit of the Company's financial statements
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Fees payable to the Company's auditor and its associates in respect of:
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Taxation compliance services
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the year was as follows:
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Customer support & delivery
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Company contributions to defined contribution pension schemes
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During the year retirement benefits were accruing to 2 directors (2022 - 2) in respect of defined contribution pension schemes.
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The highest paid director received remuneration of £177,840 (2022 - £180,808).
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The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £5,940 (2022 - £5,730).
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During the year no director exercised share options (2022 - Nil).
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Interest receivable and similar income
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Interest payable and similar expenses
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Adjustments in respect of previous periods relating to R&D claims
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Taxation on profit/(loss) on ordinary activities
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Factors affecting tax charge/(credit) for the year
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The tax assessed for the year is higher than (2022 - lower than) the standard rate of corporation tax in the UK of 23.5% (2022 -19%). The differences are explained below:
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Loss on ordinary activities before tax
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Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.5% (2022 - 19%)
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Expenses not deductible for tax purposes
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Other permanent differences
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Deferred tax not recognised
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Adjustments to tax charge in respect of prior periods
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Total tax charge for the year
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Factors that may affect future tax charges
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Finance Act 2021 includes legislation to increase the main rate of corporation tax from 19% to 25% from 1 April 2023. The full anticipated effect of these changes is reflected in the above deferred tax balances.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Fixtures, fittings and equipment
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Charge for the year on owned assets
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The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
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Fixtures, fittings and equipment
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Investments in subsidiary companies
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The following was a subsidiary undertaking of the Company:
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Board Intelligence (HK) Limited
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Suite 1106-8, 11/F, Tai Yau Building, No.181 Johnston Road, Wanchai, Hong Kong
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As stated in note 2.2, consolidated financial statements have not been prepared to include the subsidiary undertaking as its inclusion is not material for the purpose of giving a true and fair view, in line with Section 405 of the Companies Act.
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The aggregate of the share capital and reserves as at 31 December 2023 and the profit or loss for the year ended on that date for the subsidiary undertaking were as follows:
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Aggregate of share capital and reserves
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Board Intelligence (HK) Limited
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Due after more than one year
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Amounts owed by group undertakings
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Prepayments and accrued income
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Other taxation and social security
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Obligations under finance lease and hire purchase contracts
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Accruals and deferred income
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Creditors: Amounts falling due after more than one year
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Net obligations under finance leases and hire purchase contracts
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Hire purchase and finance leases
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Minimum lease payments under hire purchase fall due as follows:
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Finance lease payments represent rentals payable by the Company for certain items of fixtures, fittings and equipment. The lease transfers ownership of the leased assets at the end of the lease term. The lease is on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
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The dilapidations provision has been recognised for repair works upon expiry of the property lease held by the Company.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Allotted, called up and fully paid
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905,137 A Ordinary shares of £0.01 each
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1,000 B Ordinary shares of £0.01 each
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70,000 D Ordinary shares of £0.01 each
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690,927 A Preference shares of £0.01 each
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11,777 Deferred shares of £0.01 each
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Rights, preferences and restrictions
The A ordinary shares confer on the holder the right to vote and the right to participate in dividends. The A ordinary shareholders are entitled to participate on a winding up or distribution of capital.
The B ordinary shares do not confer on the holder the right to vote or participate in dividends. The B ordinary shareholders are entitled to participate on a winding up or distribution of capital.
The D ordinary shares confer on the holder the right to vote and participate in dividends. The D ordinary shareholders are entitled to participate in the distribution of any surplus exceeding £30m due on a winding-up or return of capital.
The A preference shares confer on the holder the right to vote and to participate in dividends. The A preference shareholders are entitled to participate with priority on a distribution of capital or winding up. The A preference shares are not redeemable.
The deferred shares do not confer on the holder the right to vote or to participate in dividends. The deferred shareholders are entitled to £1 for the entire class of deferred shares following the settlement of liquidation and capital return rights pertaining to A preference shares.
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Share premium account
The share premium account is used to record the aggregate amount or value of premiums paid when the Company's shares are issued at an amount in excess of nominal value.
Share-based payment reserve
This reserve relates to the fair value of the options granted which has been charged to profit or loss over the vesting period of the options.
Profit and loss account
This reserve relates to the cumulative retained earnings less amounts distributed to shareholders.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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The Company operates an Enterprise Management Incentive (EMI) share option scheme, which is an equity-settled share-based payment arrangement.
All share options outstanding are options over B-Ordinary shares which do not carry voting rights. There have been various tranches of options issued, of the options that currently remain outstanding these have vesting start dates between 2017 and 2022. The majority of these options carry time based vesting criteria, others are only exercisable in the event of a ‘liquidity event’ such as an exit or a fundraise by the Company.
During the year, 17,551 options lapsed. The remaining options vest over various periods up to October 2026 or in a 'liquidity event'. A charge of £228,126 has been recognised in respect of share options in the year (2022 - £190,961).
A reconciliation of share option movements over the period to 31 December 2023 is shown below:
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Weighted average exercise price (pence)
2023
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Weighted average exercise price
(pence)
2022
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Outstanding at the beginning of the year
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Outstanding at the end of the year
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The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £313,503 (2022 - £310,126). Contributions totalling £226 (2022 - £273) were payable to the fund at the reporting date.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Commitments under operating leases
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At 31 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Related party transactions
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The Company has taken advantage of the exemption in FRS 102 Section 33.1A to not disclose transactions with wholly owned group entities.
The aggregate compensation for key management personnel during the year was £849,535 (2022 - £953,471).
During the year, £102,250 was paid to a company owned 100% by one of the directors in relation to software development costs (2022 - £112,250).
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The directors do not consider there to be an ultimate controlling party.
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