Cellpoint Digital Limited
Annual Report and Financial Statements
For the year ended 31 December 2023
Company Registration No. 07280966 (England and Wales)
Cellpoint Digital Limited
Company Information
Director
K Gjerding
Company number
07280966
Registered office
25 Wilton Road
London
SW1V 1LW
Auditor
Moore Kingston Smith LLP
6th Floor
9 Appold Street
London
EC2A 2AP
Cellpoint Digital Limited
Contents
Page
Director's report
1
Director's responsibilities statement
2
Independent auditor's report
3 - 6
Profit and loss account
7
Balance sheet
8
Notes to the financial statements
9 - 17
Cellpoint Digital Limited
Director's Report
For the year ended 31 December 2023
Page 1
The director presents his annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of providing powerful digital commerce and payment solutions to travel airlines, travel companies and other verticals via the group's payments platform.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
K Gjerding
Auditor
In accordance with the company's articles, a resolution proposing that Moore Kingston Smith LLP be reappointed as auditor of the company will be put at a General Meeting.
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.
Small companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.
On behalf of the board
K Gjerding
Director
23 January 2025
Cellpoint Digital Limited
Director's Responsibilities Statement
For the year ended 31 December 2023
Page 2
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is 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 director is required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is 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. He is 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.
Cellpoint Digital Limited
Independent Auditor's Report
To the Members of Cellpoint Digital Limited
Page 3
Opinion
We have audited the financial statements of Cellpoint Digital Limited (the 'company') for the year ended 31 December 2023 which comprise the Profit and Loss account, the Balance sheet and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the 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.
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.
Material uncertainty in relation to going concern
We draw attention to note 1.2 in the financial statements, which indicates that while the directors of the parent company have received written assurances from an investor of an intention to provide additional financial support to the group, this does not represent a firm commitment. As stated in note 1.2, the company has made a loss for the period of £10,228,414 (2022: £11,833,477), these events or conditions, along with the other matters as set forth in note 1.2 indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Emphasis of matter – intangible assets and recoverability of intercompany balances
We also draw your attention to note 2 in the financial statements which indicates that management assess the carrying value of intangible assets of £11,591,290 (2022: £9,560,711) and the recoverability of intercompany balances of £3,586,601 (2022: £3,034,251) by reference to discounted cash flow projections. These projections require management to make assessments about the probability of revenue generated from both transactional income and fixed contracts coming to fruition across a range of geographies and at various stages of completion in the sales pipeline. While the company continues to grow its business and develop its payments platform the forecasts rely heavily on a sales pipeline which is highly subjective. Our opinion is not modified in respect of this matter.
Cellpoint Digital Limited
Independent Auditor's Report (Continued)
To the Members of Cellpoint Digital Limited
Page 4
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Director's Report has 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 Director's 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 remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
the director was not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the Director's Report and from the requirement to prepare a Strategic Report.
Responsibilities of director
As explained more fully in the Director's Responsibilities Statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
Cellpoint Digital Limited
Independent Auditor's Report (Continued)
To the Members of Cellpoint Digital Limited
Page 5
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.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Cellpoint Digital Limited
Independent Auditor's Report (Continued)
To the Members of Cellpoint Digital Limited
Page 6
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
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.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
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.
Thomas Moore (Senior Statutory Auditor)
for and on behalf of Moore Kingston Smith LLP
23 January 2025
Chartered Accountants
Statutory Auditor
6th Floor
9 Appold Street
London
EC2A 2AP
Cellpoint Digital Limited
Profit and Loss Account
For the year ended 31 December 2023
Page 7
2023
2022
£
£
Turnover
762,566
360,820
Administrative expenses
(11,749,462)
(13,012,052)
Operating loss
(10,986,896)
(12,651,232)
Interest payable and similar expenses
(605)
Loss before taxation
(10,986,896)
(12,651,837)
Tax on loss
758,482
818,360
Loss for the financial year
(10,228,414)
(11,833,477)
The Profit and Loss Account has been prepared on the basis that all operations are continuing operations.
Cellpoint Digital Limited
Balance Sheet
As at 31 December 2023
Page 8
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
4
11,591,290
9,560,711
Tangible assets
5
34,729
31,288
11,626,019
9,591,999
Current assets
Debtors
6
4,860,554
4,396,216
Cash at bank and in hand
392,995
90,998
5,253,549
4,487,214
Creditors: amounts falling due within one year
7
(57,812,156)
(44,783,387)
Net current liabilities
(52,558,607)
(40,296,173)
Net liabilities
(40,932,588)
(30,704,174)
Capital and reserves
Called up share capital
9
1
1
Profit and loss reserves
(40,932,589)
(30,704,175)
Total equity
(40,932,588)
(30,704,174)
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved and signed by the director and authorised for issue on 23 January 2025
K Gjerding
Director
Company Registration No. 07280966
Cellpoint Digital Limited
Notes to the Financial Statements
For the year ended 31 December 2023
Page 9
1
Accounting policies
Company information
Cellpoint Digital Limited is a private company limited by shares incorporated in England and Wales. The registered office is 25 Wilton Road, London, SW1V 1LW.
1.1
Accounting convention
These financial statements have been prepared in accordance with Section 1A of FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime.
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 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: Interest income/expense and net gains/losses for financial instruments not measured at fair value; 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 financial statements of the company are consolidated in the financial statements of Cellpoint Digital Holdings Limited. These consolidated financial statements are available from its registered office, 25 Wilton Road, London, England, SW1V 1LW.
Cellpoint Digital Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 10
1.2
Going concern
The company has made a loss for the period of £10,228,414 (2022: £11,833,477). At 31 December 2023 the company had net liabilities of £40,932,588 (2022: £30,704,174) of which £56,547,932 (2022: £43,899,327) relates to loans payable to the parent company or companies under its control. Further losses are budgeted for 2024, though with the addition of new clients in travel and other verticals, the company has seen an increase in revenue from 2022 to 2023, with further increases forecast for 2024.
The director has received written reassurances of forbearance on the loans payable to fellow group companies, and of continued financial support for the foreseeable future, being at least one year from the date of approval of the financial statements, so not to jeopardise the going concern status of the company nor to prejudice the interests of creditors. The director has also received written assurances from an investor that they are supportive of the company and intend to provide additional financial and other support. For these reasons the director has prepared the accounts on a going concern basis.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from platform implementation work is recognised upon completion of the software installation. Transactional revenue is recognised monthly in arrears, based on the level of transactions processed through the platform during that month. Fixed price contracts delivered over a period of time are deferred over the length of the underlying contract.
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
1.5
Intangible fixed assets other than goodwill
Development expenditure in respect of software is written off, except where the director is satisfied as to the technical, commercial and financial viability of the project. In this case, the expenditure is capitalised and amortised over the period during which the company is expected to benefit. The amortisation method used is the straight line method, which is amortised to nil by equal annual instalments over the period. Full amortisation is charged in the year of addition.
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:
Development costs
5 years
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Office equipment
5 years
Computer equipment
3 years
Cellpoint Digital Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 11
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.
1.7
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.
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
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.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's 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.
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.
Cellpoint Digital Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 12
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.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
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.
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.
Cellpoint Digital Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 13
1.12
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.15
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.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Cellpoint Digital Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
Page 14
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Intangible assets impairment review
Management assess the carrying value of intangible assets by carrying out annual impairment reviews. Amongst other things, the reviews require management to make assessments about the probability of revenue streams from existing and prospective clients, the likelihood of further contracts being won, the scaling of revenue streams, changes to the cost base of the entity, and applying a suitable discount factor in calculating the discounted cash flows over a period.
Recoverability of intercompany balances
Management assess the recoverability of intercompany debtors by considering the discounted cash flows the associated entity is expected to generate over a period from existing and prospective clients. The calculation requires management to make assessments about the probability of revenue streams coming to fruition, changes to the cost base of the entity and applying a suitable discount factor.
Bad debt provisions
Trade debtors are periodically reviewed by management and a judgement is made in determining the provision for doubtful debts. Management have adopted a policy of providing for any trade debtor balances falling greater than six months due unless certain factors suggest otherwise.
Research and development tax relief claim
Research and development expenditure is periodically reviewed by management and a judgement is made in determining the amount of qualifying expenditure applicable for tax reclaim. The company works in tandem with a third party expert to assess the amount of qualifying R&D expenditure, a detailed analysis was undertaken to identify and exclude from the claim, any activities which did not meet the definition of R&D as defined by BEIS Guidelines on the Meaning of Research and Development for Tax Purposes.
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
17
16
Cellpoint Digital Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 15
4
Intangible fixed assets
Software development
£
Cost
At 1 January 2023
24,435,973
Additions
8,647,219
At 31 December 2023
33,083,192
Amortisation and impairment
At 1 January 2023
14,875,262
Amortisation charged for the year
6,616,640
At 31 December 2023
21,491,902
Carrying amount
At 31 December 2023
11,591,290
At 31 December 2022
9,560,711
5
Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 January 2023
75,074
Additions
20,505
At 31 December 2023
95,579
Depreciation and impairment
At 1 January 2023
43,786
Depreciation charged in the year
17,064
At 31 December 2023
60,850
Carrying amount
At 31 December 2023
34,729
At 31 December 2022
31,288
Cellpoint Digital Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 16
6
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
258,782
243,042
Amounts owed by group undertakings
3,586,601
3,034,251
Other debtors
1,015,171
1,118,923
4,860,554
4,396,216
7
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
975,578
570,667
Amounts owed to group undertakings
56,547,932
43,899,327
Taxation and social security
58,786
60,164
Other creditors
229,860
253,229
57,812,156
44,783,387
8
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
93,826
78,372
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £93,826 (2022: £78,372). Contributions totalling £15,714 (2022: £14,131) were payable to the fund at the balance sheet date and are included in creditors.
9
Called up share capital
2023
2022
£
£
Ordinary share capital
Issued and fully paid
1 Ordinary share of £1
1
1
1
1
Cellpoint Digital Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 17
10
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2023
2022
£
£
Within one year
1,422
7,925
Between two and five years
1,422
7,925
11
Related party transactions
The company has taken the exemption under Section 33 Related Party Disclosures paragraph 33.1A from disclosing transactions with other members of a wholly owned group.
12
Parent company
The immediate parent company is Cellpoint Digital Holdings Limited, a company incorporated in England and Wales. The ultimate parent company is Tosca Penta CPM Limited, a company incorporated in Jersey. Tosca Penta CPM Limited is controlled by Penta Capital LLP, incorporated in the Scotland.
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