Company registration number 03574904 (England and Wales)
INTELLECT DESIGN ARENA LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
INTELLECT DESIGN ARENA LIMITED
COMPANY INFORMATION
Directors
Mr Manish Maakan
Mr Andrew Ralph England
Mr Thakur Vikas Sinha
Mr Arun Shekar Aran
Mr Ravichandran Sankaran
(Appointed 5 April 2024)
Company number
03574904
Registered office
Level 5, 50 Bank Street
London
England
E14 5NS
Auditor
Morgan Berkeley Limited
Westgate Chambers
8a Elm Park Road
Pinner
Middlesex
HA5 3LA
Business address
Level 5, 50 Bank Street
London
England
E14 5NS
INTELLECT DESIGN ARENA LIMITED
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5 - 7
Independent auditor's report
8 - 10
Profit and loss account
11
Statement of comprehensive income
12
Balance sheet
13
Statement of changes in equity
14
Notes to the financial statements
15 - 28
INTELLECT DESIGN ARENA LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -
The directors present the strategic report and financial statements for the year ended 31 March 2024.
General overview
Intellect Design Arena Ltd. has the world’s largest cloud-native, API-led microservices-based multi-product platform for Global leaders in Banking, Insurance, and Capital Markets. eMACH.ai, Intellect’s ‘First Principles’ Technology suite, is at the forefront of BankTech Wave 5, a significant phenomenon that enables banks and financial institutions to move from product and process to design and experience to compose their unique “My Signature Solution.” eMACH.ai is a business-impact technology that enables organisations to grow their revenue streams without disrupting the current technology systems.
In February 2024, Intellect launched its ‘First Principles’ Technology suite, eMACH.ai, for Technology-suave Bankers in Europe (London & Paris). eMACH.ai empowers banks with 329 Microservices, 1757 APIs and 535 Events, enabling them to design future-ready technology solutions. This suite of First Principles Technology keeps a bank’s customer in focus, be it Retail, HNI, SME, or Corporate, the events in their financial journey, or events created by bank operations or events generated by regulators and compliance. Financial institutions orchestrate their offerings based on these events to ensure customer satisfaction and regulatory compliance. This orchestration is done using a well-defined set of self-sufficient services referred to as Microservices in the tech community.
With over three decades of deep domain expertise, Intellect is the brand that progressive financial institutions rely on for digital transformation initiatives. It offers a full spectrum of banking and insurance technology products through its four lines of business – Intellect Global Transaction Banking (iGTB), Intellect Global Consumer Banking (iGCB), IntellectAI and Intellect Digital Technology for Commerce. Intellect pioneered Design Thinking to create cutting-edge products and solutions for banking and insurance, with design being the company’s key differentiator in enabling digital transformation. 8012 FinTech Design Center, the World’s first Transformation Center dedicated to Design Thinking Principles, reflects Intellect’s commitment to continuous and impactful innovation, addressing the growing need for digital transformation. Intellect serves over 270 customers through offices in 57 countries and with a diverse workforce of solution architects, and domain and technology experts in major global financial hubs worldwide.
iGTB is the world’s first complete Global Transaction Banking platform from Intellect Design Arena. iGTB’s software products help Corporate Banks prepare for a new era of customer-centric services. With a rich suite of transaction banking products, across Cash Management, Payments, Liquidity Management, Virtual Accounts, Trade Finance and Supply Chain Finance, iGTB is an authority on integrated transaction banking products that enable banks to meet their ambition to be the Principal Banker to their corporate customers. iGTB seamlessly integrates all the transaction banking needs of corporate customers, delighting them with the Contextual Banking experience (CBX), a white label digital transaction banking platform to manage corporates’ Cash and Trade digital channels.
In July 2016, Oxford Business School and iGTB jointly set up the iGTB Oxford School of Transaction Banking and offered their first program to senior bankers. The school has the aim of helping senior transactions bankers to run day-to-day, a successful transaction banking franchise. It is open by invitation only to heads of cash management, payments, liquidity, trade finance, supply chain finance (or equivalents) or above in banks anywhere in the world. It is an intensive course based on Design Thinking, featuring a curriculum based on a three-level maturity model and six design levels, exercises where scholars practice using Design Thinking on real case studies of economics, CEO attitudes and marketing. The school takes place in the prestigious Rhodes House, Oxford, finishing at the exclusive Oxford and Cambridge Club in London, and also features a networking and cultural programme including a private tour of Oxford. Finally, alumni have private access to a site featuring prime content on transaction banking. On 7th February 2020, iGTB Oxford School of Transaction Banking debuted in the Middle East.
iGTB Oxford School of Transaction Banking is designed as a highly participatory executive-level learning event. The course has a series of learning modules covering specific topics and defined learning objectives, namely Growing the Transaction Banking Business, Managing Business at Scale, Building Transaction Banking Technology and Managing the Future. We achieved a record-breaking NPS Score of 96% for the Advanced Programme of the world's only Executive-level Transaction Banking learning experience. So far, we have 300+ senior transaction bankers alumni and 10 in-house bank training cohorts. In May 2024, we are celebrating our 10th Jubilee Edition at iGTB Oxford which will look at the world with a different lens - that of winning in turbulent markets and ever changing demands of customers.
INTELLECT DESIGN ARENA LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
During the Sibos 2022 event, iGTB unveiled the Consumerisation of Commercial Banking (COCB), its 6 key tenets and how an individual consumer's wants, needs and behavior impact the design of commercial banking products and services. In 2023, iGTB put forth a comprehensive design approach for embracing consumerisation. We call this eMACH.ai and this is deeply rooted in harnessing the power of a Microservices architecture, Cloud and AI. This session will unveil a six dimensional holistic technological framework to embrace Consumerisation in Commercial banking in a progressive way. It will cover a range of topics such as APIs and events, composing signature solutions, breaking down legacy data silos, nudges and service amplifiers and Fintech ecosystems.
At Sibos 2023 in Toronto, iGTB launched iGTB Copilot, a suite of AI solutions for Commercial & Corporate Banking. The suite integrates Microsoft Azure OpenAI Service to reinvent customer experiences and revitalise productivity for both commercial banks and their clients. Seamlessly fusing the potential of vast commercial banking data with state-of-the-art AI technologies such as large language models (LLMs), machine learning, deep learning, predictive analytics, and virtual agents, iGTB Copilot maintains an unwavering commitment to data security and privacy within enterprise realms.
Likewise, Global transaction banking has long been described as a bank’s crown jewels because of its steady profit contribution even in the worst of economic times, its reputation as a “sticky” core banking service, and its long history of strong growth. Transaction bankers have a complex set of issues to contend with in order to optimise their management of this changing and challenging business. An important key to success is ensuring that Transaction Banking executive teams are equipped with the appropriate competencies through the development phases towards maturity.
Intellect Design Arena Ltd, UK, continues to invest in Technology, Product design, and execution competence and capacity. During the year, substantial investments have been made in this regard to build and scale up Revenue, even if it means we have to take some hit on profitability in the short term. We are confident that we should reap the benefits of the investments in the years to come.
Principal risks and uncertainties
Intellect has adopted an integrated risk management framework approach in various aspects of its business to prevent and minimise any potential risks. The current challenging economic situation, affecting the financial industry continues to be a risk. The nature of our business is such that it involves a long sales cycle to close a deal. Reluctance amongst some banks to move away from legacy systems, the fear of change, also affects our business.
The Company’s principal foreign currency exposure arises from trading in various currencies other than sterling. Trade debtors are monitored on an ongoing basis and provisions are made for doubtful debts where required. Management also monitors and reviews the documentation process for contracts ensuring compliance and adherence to deliverables and service level agreements.
Development and performance
The company's principal focus during the forthcoming year is to continue to increase sales, concentrating its efforts on achieving maximum growth in its existing market operations and to develop relationship with new clients.
Key performance indicators
The company achieved sales of £52.98 million during the financial year ending 31st March 2024 as against £61.96 million in the previous financial year ending 31 March 2023. The company posted a pre tax profit of £5.75 million in the year ended 31 March 2024, a decrease in pre tax profit by £1.14 million from the previous financial year ended 31 March 2023 (6.89m).
INTELLECT DESIGN ARENA LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
Employee Engagement
Our employees and non-employee workers around the world are treated with dignity and fairness. Intellect Design Arena Limited (Intellect) is also committed to adhering to all labour standards, including without limitation, nondiscrimination in hiring and the workplace, voluntary labour and no child labour, and compliance with fair working hours and applicable wage laws and regulations.
In addition, Intellect is committed to providing its employees with a safe and healthy work environment in compliance with all applicable laws and regulations and appropriate training and information to prevent workplace hazards.
We are committed to driving a sustainable business that is both commercially successful and socially and environmentally responsible. This includes providing our employees in the UK and overseas with a safe and healthy working environment and having an organisational culture which promotes diversity, inclusivity, personal development and respect.
We know it’s our people who make Intellect successful. We want people to enjoy coming to work and for the workplace to be free from discrimination, harassment and victimisation. In order to achieve this we adhere to set policies and principles which ensure outcomes of responsible operations and supportive environments for our colleagues. We promote an environment where employees feel that there are open communication channels in which to ask questions and raise concerns.
Engagement with customers and suppliers
Building relationships and partnerships with both supplier and customers is critical to our success. Our suppliers are fundamental to the quality of our products and services, ensuring we meet the high-quality standards we set for ourselves. We provide open communication lines for suppliers and are in regular communication with them. As a result of the COVID-19 pandemic we have been closely aligned to ensure supply chain and products are unaffected and are working closely with our suppliers at this time.
We have a strong, recurring customer base and are continuing to build on this, delivering high quality products and services to our customers when needed.
S172 (1) Statement
The Directors fulfil their S172 duties through effective governance, open discussion and decisions made at Board meetings. The directors of the company must act in a way that they consider is in good faith and would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:
the likely consequence of any decision in the long term;
the interests of the company’s employees;
the need to foster the company’s business relationships with suppliers, customers and others;
the impact of the company’s operations on the community and the environment;
the desirability of the company maintaining a reputation for high standards of business conduct;
the need to act fairly as between members of the company.
As a wholly owned subsidiary the only other relevant stakeholders are the parent entity. The directors have complied with their duties under S172 of the Companies Act 2006 through the employee, supplier and customer engagement described above.
Award
We are firm believers in the transformative potential of collaboration, which can revolutionise the financial services sector. Working with these valued organisations, we empower our clients to foster innovation and achieve sustained growth.
Some awards and top recognitions of iGTB are:
iGTB won the TFG Trade, Treasury, and Payments Award 2023 due to the innovation of Intellect TLM. This cutting-edge product enhances the treasury and payment sector with its real-time availability checks, precise payment decisions, and robust risk mitigation features, marking a significant advancement in the industry
INTELLECT DESIGN ARENA LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -
iGTB Wins the Global Finance Award for the Best in Class Virtual Accounts Solution for Corporates: iGTB has heavily invested in its technologies; its Virtual Account Manager (VAM) covers 22 banks and ten industry segments in more than 18 countries across five continents. Over the years, the banking-as-a-service platform has morphed into a broad sub-accounting platform that can address escrow and client money use cases
iGTB featured amongst the Leading Vendors in Datos Insights' (formerly Aite-Novarica) report titled 'Virtual Account Management Platforms: Market Overview' and positioned as Leader in IDC MarketScape: Worldwide Trade Finance Systems 2023 Vendor Assessment
iGTB's Cash Management Solution is rated "Leading Contender" in Aite Matrix Report on U.S. Cash Management Technology Providers
iGTB's Supply Chain Finance identified as LEADER in IBSi Supply Chain Finance Platforms, Q4 2023
iGTB's Receivables Management Solution was identified as a 'Technology Standout 2023' in Celent's report titled 'Corporate Receivables Management Platform Review’
iGTB's Cash Flow Forecasting (CFF) was identified as a Breakthrough Innovation and a Tech Provider Frontrunner in the area of data analytics and tools in the Cash Management space that are paving the path to 2030, in Celent's report titled 'Breakthrough AI-innovation in Cash Management: Prediction to Prescription'
Won the PAY360 Awards 2023 for Best Customer Facing Experience
Won the Banking Tech Awards 2023 for Best PayTech Solution Provider for Bank
iGTB featured in IBS Intelligence case study on Vietcombank’s Cashup program: Surpassing Benchmarks in Payments and Cash Management
iGTB has been named a gold winner in the 13th Annual Globee® Business Awards for 3 categories. The categories are Achievement in Best Use of Technology, Achievement in Product or Service Innovation, and Innovation of the Year in Technology (all). iGCB has been awarded these three awards in recognition of its Open Finance powered Retail Banking Platform, built on eMACH.ai
Intellect Global Transaction Banking (iGTB) identified as a leader and ‘Best in Class’ Payment Platform provider in Aite Payments Hub Matrix
Mr Ravichandran Sankaran
Director
7 June 2024
INTELLECT DESIGN ARENA LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 5 -
The directors present their annual report and audited financial statements for the year ended 31 March 2024.
Principal activities
The principal activity of the company continued to be that of computer software development, software engineering and Iinformation Technology consultancy.
Results and dividends
The results for the year are set out on page 11.
The directors do not propose payment of an ordinary dividend (2023: £Nil).
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr Manish Maakan
Mr Andrew Ralph England
Mr Thakur Vikas Sinha
Mr Arun Shekar Aran
Mr Ravichandran Sankaran
(Appointed 5 April 2024)
Directors' insurance
The company has indemnified the directors of the company for costs incurred, in their capacity as a director, for which they may be held personally liable, except where there is a lack of good faith.
Auditor
Morgan Berkeley Limited were appointed as an auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Energy and carbon report
2024
Energy consumption
kWh
Aggregate of energy consumption in the year
51,703
2024
Emissions of CO2 equivalent
metric tonnes
Scope 1 - direct emissions
- Gas combustion
-
- Fuel consumed for owned transport
-
-
Scope 2 - indirect emissions
- Electricity purchased
10.71
Scope 3 - other indirect emissions
- Fuel consumed for transport not owned by the company
0.19
Total gross emissions
10.90
INTELLECT DESIGN ARENA LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 6 -
Intensity ratio
Total tonnes of CO2e per employee
0.07
Quantification and reporting methodology
We have applied the 5 principles of carbon accounting to this SECR report: Accuracy, Transparency, Completeness, Relevance, and Consistency. Data has been gathered across all relevant emission sources and applied the UK Government’s Department for Energy Security and Net-Zero (DESNZ) emission factors for global warming potential for the year 2023. These emission factors have been used for activities within 2023 and 2024, in the absence of published 2024 emission factors (as of 14th May 2024).
Intensity measurement
The intensity metrics chosen are tonnes of carbon dioxide equivalent per total floor space (tCO2e/m2), per company turnover (tCO2e/£M GBP) and per employee (tCO2e/employee).
Measures taken to improve energy efficiency
The new premises is part of Floor 5 at 50 Bank Street, Canary Wharf. This is a rented office space and therefore we have little governance over the energy efficiency of the built environment in-which we operate. We have taken measures to improve energy efficiency in areas we do have control over (e.g. reducing operational energy demand, purchasing energy-efficient technology, and behavioural changes for conserving energy).
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with Financial Reporting Standard FRS 102. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
present information, including accounting policies, in a manner that provides relevant, reliable,comparable and understandable information;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business;
provide additional disclosures when compliance with the specific requirements in FRS 102 is insufficient to enable users to understand the impact of particular transactions,other events and conditions on the company financial position and financial performance.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Under applicable law and regulations, the directors are also responsible for preparing a strategic report, directors' report that comply with that law and those regulations. The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website.
INTELLECT DESIGN ARENA LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 7 -
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 individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Going Concern
The financial statements of Intellect Design Arena Limited (the Company) have been prepared on a going concern basis as the Directors have concluded that the Company will continue in operational existence and meet its liabilities as they fall due for the period of their assessment which is to 30 June 2025. The Company has net current assets of £5.7m as at 31 March 2024. The Company does not have any bank debt or other external borrowings or facilities. The Directors have received written confirmation from the ultimate parent entity, Intellect Design Arena Limited, India, that the Company will be provided financial support for the period until 30 June 2025. The Directors have made suitable enquiries to satisfy themselves that the ultimate parent company is capable of providing the stated support.
In view of the assessment performed, the Directors are satisfied that sufficient financial resources will be generated by the Company or received from its ultimate parent entity to enable the Company to continue in operation and meet its liabilities as they fall due for the period to 30 June 2025. Accordingly, the Directors of the Company believe that it is appropriate to adopt the going concern basis in preparing the financial statements.
Branches outside the United Kingdom
The company's principal activities during the year continued to be that of computer software development, software engineering and I.T. consultancy in UK and through branches in Germany, Spain, Sweden, Austria and France.
On behalf of the board
Mr Ravichandran Sankaran
Director
7 June 2024
INTELLECT DESIGN ARENA LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF INTELLECT DESIGN ARENA LIMITED
- 8 -
Opinion
We have audited the financial statements of Intellect Design Arena Limited for the year ended 31 March 2024 which comprise the Profit and Loss Account, the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and the related notes 1 to 28, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards 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 March 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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 the review period to 30 June 2025.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the company’s ability to continue as a going concern.
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 this 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 the other information, we are required to report that fact.
We have nothing to report in this regard.
INTELLECT DESIGN ARENA LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF INTELLECT DESIGN ARENA LIMITED (CONTINUED)
- 9 -
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 directors’ report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept 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.
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. We also considered laws and regulations that have a direct impact on the preparation of the financial statements, such as the Companies Act 2006.
We evaluated the directors’ and management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to posting manual journal entries to manipulate financial performance.
Our audit procedures were designed to respond to those identified risks, including non-compliance with laws and regulations (irregularities) and fraud that are material to the financial statements. Our audit procedures included but were not limited to:
Discussing with the directors and management their policies and procedures regarding compliance with laws and regulations;
Communicating identified laws and regulations throughout our engagement team and remaining alert to any indications of non-compliance throughout our audit; and
Considering the risk of acts by the company which were contrary to applicable laws and regulations, including fraud.
INTELLECT DESIGN ARENA LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF INTELLECT DESIGN ARENA LIMITED (CONTINUED)
- 10 -
Our audit procedures in relation to fraud included but were not limited to:
Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
Gaining an understanding of the internal controls established to mitigate risks related to fraud;
Discussing amongst the engagement team the risks of fraud; and
Addressing the risks of fraud through management override of controls by performing journal entry testing.
There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.
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.
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.
Pierre Yat Keung Leong
Senior Statutory Auditor
For and on behalf of Morgan Berkeley Limited
8 June 2024
Chartered Certified Accountants
Statutory Auditor
Westgate Chambers
8a Elm Park Road
Pinner
Middlesex
HA5 3LA
INTELLECT DESIGN ARENA LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2024
- 11 -
2024
2023
Notes
£
£
Turnover
3
52,981,887
61,967,480
Cost of sales
(41,036,107)
(49,919,667)
Gross profit
11,945,780
12,047,813
Administrative expenses
(6,975,812)
(5,667,879)
Other operating income
445,777
427,000
Operating profit
4
5,415,745
6,806,934
Interest receivable and similar income
7
347,592
85,200
Interest payable and similar expenses
8
(6,980)
(1,466)
Profit before taxation
5,756,357
6,890,668
Tax on profit
9
(1,297,790)
(1,317,249)
Profit for the financial year
4,458,567
5,573,419
The profit and loss account has been prepared on the basis that all operations are continuing operations.
The notes on pages 15 to 28 are an integral part of these financial statements.
INTELLECT DESIGN ARENA LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 12 -
2024
2023
£
£
Profit for the year
4,458,567
5,573,419
Other comprehensive income
-
-
Total comprehensive income for the year
4,458,567
5,573,419
INTELLECT DESIGN ARENA LIMITED
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 13 -
2024
2023
Notes
£
£
£
£
Fixed assets
Intangible assets
10
11,387,920
10,467,792
Intangible assets - CWIP
12
9,161,602
9,781,472
Tangible assets
11
433,511
75,647
Investments
13
666,088
666,088
21,649,121
20,990,999
Current assets
Debtors
15
35,524,770
25,569,117
Investments
16
75,310
651,872
Cash at bank and in hand
958,180
377,858
36,558,260
26,598,847
Creditors: amounts falling due within one year
17
(30,831,371)
(24,710,267)
Net current assets
5,726,889
1,888,580
Total assets less current liabilities
27,376,010
22,879,579
Provisions for liabilities
Deferred tax liability
19
53,167
15,303
(53,167)
(15,303)
Net assets
27,322,843
22,864,276
Capital and reserves
Called up share capital
21
889,000
889,000
Profit and loss reserves
22
26,433,843
21,975,276
Total equity
27,322,843
22,864,276
The financial statements were approved by the board of directors and authorised for issue on 7 June 2024 and are signed on its behalf by:
Mr Ravichandran Sankaran
Director
Company registration number 03574904 (England and Wales)
INTELLECT DESIGN ARENA LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 14 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 April 2022
889,000
16,401,857
17,290,857
Year ended 31 March 2023:
Profit and total comprehensive income
-
5,573,419
5,573,419
Balance at 31 March 2023
889,000
21,975,276
22,864,276
Year ended 31 March 2024:
Profit and total comprehensive income
-
4,458,567
4,458,567
Balance at 31 March 2024
889,000
26,433,843
27,322,843
INTELLECT DESIGN ARENA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 15 -
1
Accounting policies
Company information
Intellect Design Arena Limited is a private company limited by shares incorporated and domiciled in England and Wales. The registered office is Level 5, 50 Bank Street, London, England, E14 5NS.
1.1
Accounting convention
These financial statements have been prepared in compliance with United Kingdom Accounting Standard including 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. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’ – Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
The company has taken advantage of the exemption under section 401 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
Intellect Design Arena Limited is a wholly owned subsidiary of Intellect Design Arena Limited, a company incorporated in India, and the results of Intellect Design Arena Limited are included in the consolidated financial statements of Intellect Design Arena Limited which can be obtained from Intellect Design Arena Limited, Polaris House, 244, Anna Salai, Chennai 600006, India.
INTELLECT DESIGN ARENA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 16 -
1.2
Going concern
The financial statements of Intellect Design Arena Limited (the Company) have been prepared on a going concern basis as the Directors have concluded that the Company will continue in operational existence and meet its liabilities as they fall due for the period of their assessment which is to 30 June 2025. The Company has net current assets of £5.7m as at 31 March 2024. The Company does not have any bank debt or other external borrowings or facilities. The Directors have received written confirmation from the ultimate parent entity, Intellect Design Arena Limited, India, that the Company will be provided financial support for the period until 30 June 2025. The Directors have made suitable enquiries to satisfy themselves that the ultimate parent company is capable of providing the stated support. true
In view of the assessment performed, the Directors are satisfied that sufficient financial resources will be generated by the Company or received from its ultimate parent entity to enable the Company to continue in operation and meet its liabilities as they fall due for the period to 30 June 2025. Accordingly, the Directors of the Company believe that it is appropriate to adopt the going concern basis in preparing the financial statements.
1.3
Turnover
Turnover represents amounts receivable for software engineering products and services net of VAT and trade discounts.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods) , the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
1.4
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 acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Software licence
20% straight line basis per annum
1.5
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.
INTELLECT DESIGN ARENA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 17 -
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:
Leasehold improvements
Over the period of the lease
Fixtures, fittings & equipment
25% reducing balance per annum
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.
1.6
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.7
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.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
1.8
Software work in progress
Research and development expenditure is written off as incurred, except that development expenditure incurred on an individual project is capitalised as an intangible asset when the company can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the asset and the ability to measure reliably the expenditure during development.
Following initial recognition of the development expenditure as an asset, the cost model is applied requiring the asset to be carried at cost less any accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when development is complete and the asset is available for use. It is amortised evenly over the period of expected future benefit. During the period of development the asset is tested for impairment annually.
INTELLECT DESIGN ARENA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 18 -
1.9
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.10
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 balance sheet 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 and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
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.
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.
INTELLECT DESIGN ARENA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 19 -
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.
1.11
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.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
INTELLECT DESIGN ARENA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 20 -
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. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset 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.
1.13
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 stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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.
1.16
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
INTELLECT DESIGN ARENA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 21 -
2
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Development expenditure is capitalised in accordance with the accounting policy given above. Initial capitalisation of costs is based on management’s judgement that technical and economic feasibility is confirmed, usually when a product development project has reached a defined milestone according to an established project management model. In determining the amounts to be capitalised management makes assumptions regarding the expected future cash generation of the assets, discount rates to be applied and the expected period of benefits.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Revenue recognition
The key areas requiring critical judgment include:
Percentage of Completion: Revenue and profit are recognised based on the estimated progress of each project. This involves estimating the total costs and the proportion of costs incurred to date.
Cost to Complete: Future costs are projected based on historical data and current conditions. Accurate estimation is crucial to reflect the true financial position.
Revenue Recognition: Revenue is recognised according to project progress, with adjustments made for contract variations and claims.
Provision for Expected Losses: Provisions are made for projects expected to incur losses, based on total cost forecasts and potential risks.
Management regularly reviews and updates these estimates to ensure accuracy. Changes in these estimates can significantly impact the financial statements.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2024
2023
£
£
Turnover analysed by class of business
Sale of software products licences and services
52,981,887
61,967,480
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom and Europe, African, Indian and Amercian Sub-continent
52,981,887
61,967,480
The turnover of the company during the year, derived from its principal activity, attributable to the various geographies are 75% (2023: 79%) from the UK, 19% (2023: 13%) from Europe and the remaining 6% (2023: 8%) predominantly from the African, Indian and American subcontinent.
.
INTELLECT DESIGN ARENA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
256,487
(228,049)
Fees payable to the company's auditor for the audit of the company's financial statements
40,000
40,000
Depreciation of owned tangible fixed assets
82,713
90,528
Amortisation of intangible assets
3,280,402
2,869,099
Operating lease charges
359,935
371,833
5
Employees
2024
2023
Number
Number
Software engineers, IT Consultants and Management
149
145
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
14,033,837
12,262,806
Social security costs
1,899,167
1,636,113
Pension costs
242,331
286,281
16,175,335
14,185,200
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
816,722
831,667
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023: 1).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
816,722
831,667
Company pension contributions to defined contribution schemes
24,502
24,950
INTELLECT DESIGN ARENA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 23 -
7
Interest receivable and similar income
2024
2023
£
£
Other interest income
347,592
85,200
8
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest payable to group undertakings
6,980
1,466
9
Tax on profit
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
1,373,851
1,322,546
Adjustments in respect of prior periods
(113,925)
(5,297)
Total current tax
1,259,926
1,317,249
Deferred tax
Origination and reversal of timing differences
37,864
Total tax charge
1,297,790
1,317,249
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit before taxation
5,756,357
6,890,668
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
1,439,089
1,309,227
Tax effect of expenses that are not deductible in determining taxable profit
2,000
1,527
Tax effect of income not taxable in determining taxable profit
(68,886)
Adjustments in respect of prior years
(11,516)
(5,297)
Permanent capital allowances in excess of depreciation
(62,897)
11,657
Under/(over) provision
135
Taxation charge for the year
1,297,790
1,317,249
INTELLECT DESIGN ARENA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
9
Tax on profit
(Continued)
- 24 -
Factors that may affect future tax charges.
As a step to rebuild its finance after Covid 19 Pandemic, the Government increased the main Corporation Tax rate to 25% from 1 April 2023 on profits over £250,000.
10
Intangible fixed assets
Software licence
£
Cost
At 1 April 2023
17,436,936
Additions
4,200,530
At 31 March 2024
21,637,466
Amortisation and impairment
At 1 April 2023
6,969,144
Amortisation charged for the year
3,280,402
At 31 March 2024
10,249,546
Carrying amount
At 31 March 2024
11,387,920
At 31 March 2023
10,467,792
11
Tangible fixed assets
Leasehold improvements
Fixtures, fittings & equipment
Total
£
£
£
Cost
At 1 April 2023
249,625
272,858
522,483
Additions
405,084
35,493
440,577
At 31 March 2024
654,709
308,351
963,060
Accumulated depreciation and impairment
At 1 April 2023
217,367
229,469
446,836
Depreciation charged in the year
57,390
25,323
82,713
At 31 March 2024
274,757
254,792
529,549
Carrying amount
At 31 March 2024
379,952
53,559
433,511
At 31 March 2023
32,257
43,390
75,647
INTELLECT DESIGN ARENA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 25 -
12
Intangible assets - CWIP
2024
2023
£
£
Software work in porgress
9,161,602
9,781,472
13
Investments
2024
2023
Notes
£
£
Investments in subsidiaries
14
666,088
666,088
Fixed asset investments not carried at market value
The investments in the subsidiaries are stated at cost.
14
Subsidiaries
Details of the company's subsidiaries at 31 March 2024 are as follows:
Nature of Business: Computer Software Development, Software Engineering and I.T. Consultancy
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Intellect Design Arena Chile Limitada
Chile
Ordinary
90.00
Intellect Design Arena Inc
Canada
Ordinary
100.00
Chile Registered Office Address : Monsefior Sotero Sanz N° 161, Piso 8,Providencia, Santiago, Chile
Canada Registered Office Address : Suite 400, 181 University Avenue, Toronto, ON M5H 3M7, Canada
15
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
30,517,372
23,811,664
Amounts owed by group undertakings
849,406
1,018,732
Other debtors
3,578,396
272,164
Prepayments and accrued income
579,596
466,557
35,524,770
25,569,117
Amounts owed by group undertakings are unsecured, interest free and repayable on demand.
16
Current asset investments
2024
2023
£
£
Unlisted investments
75,310
651,872
Group Company Loan bear interest rate of 3.25% p.a. and repayable on demand.
INTELLECT DESIGN ARENA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 26 -
17
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
6,963
36,605
Amounts owed to group undertakings
20,615,518
15,870,101
Corporation tax
224,980
513,861
Other taxation and social security
1,759,407
1,914,820
Other creditors
1,096,022
963,038
Accruals and deferred income
7,128,480
5,411,842
30,831,370
24,710,267
Amounts owed to group undertakings are unsecured, interest free and repayable on demand.
18
Provisions for liabilities
2024
2023
£
£
Deferred tax liabilities
19
53,167
15,303
53,167
15,303
19
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated Capital Allowances
53,167
15,303
2024
Movements in the year:
£
Liability at 1 April 2023
15,303
Charge to profit or loss
37,864
Liability at 31 March 2024
53,167
INTELLECT DESIGN ARENA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 27 -
20
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
242,331
286,281
21
Share capital
2024
2023
2024
2023
Ordinary share capital
No of shares
No of shares
£
£
Issued and fully paid
Ordinary shares of £1 each
889,000
889,000
889,000
889,000
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the company
22
Profit and loss reserves
2024
2023
£
£
At the beginning of the year
21,975,276
16,401,857
Profit for the year
4,458,567
5,573,419
At the end of the year
26,433,843
21,975,276
23
Operating lease commitments
Lessee
Operating lease payments represent rentals payable by the company for one of its properties. The lease has been negotiated for a term of two years and rentals are fixed for the same term.
At the reporting end date the company had commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
126,000
41,353
Between two and five years
396,641
522,641
41,353
INTELLECT DESIGN ARENA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 28 -
24
Directors' transactions
Advances or credits have been granted by the company to its directors as follows:
During the year, consultancy fees amounting to £104,919 (2023: £207,586) were payable to ONYX Global Consulting Limited, a company in which Mr Andrew Ralph England is a director.
25
Ultimate parent company
The ultimate parent company is Intellect Design Arena Limited, a company registered in India and listed in BSE Limited (Bombay Stock Exchange) and National Stock Exchange of India Limited (NSE). This is the only consolidated financial statements, that Intellect Design Arena Limited, UK is included in. The Consolidated financial statements can be obtained from Polaris House, 244, Anna Salai, Chennai - 600 006, India.
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