Evalueserve UK Ltd - Limited company accounts 20.1

REGISTERED NUMBER: 06810791 (England and Wales)

Strategic Report, Report of the Directors and

Audited Financial Statements for the Year Ended 31 December 2019

for

Evalueserve UK Ltd

Page

Company Information

1

Strategic Report

2

Report of the Directors

6

Report of the Independent Auditors

8

Statement of Profit or Loss and Other Comprehensive
Income

10

Statement of Financial Position

11

Statement of Changes in Equity

12

Statement of Cash Flows

13

Notes to the Financial Statements

14

DIRECTORS:

Mr M Vollenweider

Mr P Prabhat

SECRETARY:

Mr P Prabhat

REGISTERED OFFICE:

Lewis House

Great Chesterford Court

Great Chesterford

Essex

CB10 1PF

REGISTERED NUMBER:

06810791 (England and Wales)

INDEPENDENT AUDITORS:

R. M. Chancellor & Company Limited

Chartered Accountants and Statutory Auditors

Lewis House

Great Chesterford Court

Great Chesterford

Essex

CB10 1PF

SOLICITORS:

Browne Jacobson LLP

6 Bevis Marks

London

EC3A 7BA

The directors present their strategic report for the year ended 31 December 2019.

REVIEW OF BUSINESS

Revenues increased by 11.2% (2018 - 6.5%) year-on-year to £15,893,265 (2018 - £14,294,944) and the gross profit margin increased to 35.5% from 30.1% in 2018. During the year the company has reported a profit after taxation of £420,508 (2018 - £338,329). The company's statement of financial position has strengthened with a net increase in reserves of 27.6% to £2,507,431 (2018 - £1,965,741).

The company continues to receive financial support via a loan account with other group undertakings as well as its parent company, Evalueserve Holdings AG. Details of the loan balances are provided further in the notes to the financial statements. The directors do not consider there to be an appropriate target ratio of liabilities to equity for the company in light of the source of the continued financial support provided.

Key Performance Indicators:

The directors consider the key performance indicators of the company to be:

2019

2018

2017

2016

£

Revenue

15,893,265

14,294,944

13,416,228

13,275,002

Gross profit

5,638,061

4,308,165

3,947,622

4,125,906

Gross profit margin

35.5%

30.1%

29.4%

31.1%

Net profit/(loss) before tax

553,617

452,857

296,063

(435,595

)

Net profit/(loss) after tax

420,508

338,329

239,584

(362,678

)

Total equity

22,507,431

1,965,741

1,493,023

1,265,094

Performance:

The company continues to monitor its position to ensure it is able to fund its working capital requirements based on forecasted levels of revenue, combined with customer credit terms. Management also regularly review the amounts owed to its parent, Evalueserve Holdings AG, as well as to other group undertakings. Consideration of these factors is deemed to provide sufficient assurance to ensure the company maintains adequate financial headroom. The directors are pleased to report a healthy position in terms of cash and cash equivalents held as at the balance sheet date of £2,406,758 (2018 - £2,237,803), which they estimate to sufficiently fund at least 60 days expenditure. Total equity held as at 31 December 2019 amounted to £2,507,431 (2018 - £1,965,741) and is a reflection of the company's profitability in prior years and policy of not providing a dividend to its parent in the current or prior financial year.

Overall the consistent gross profit margins and maintained expenditure have caused the profitability in the company's results compared to the prior year. The directors hope for this to continue and reduce future economic outflows of the company and thereby maximise future profits.

PRINCIPAL RISKS AND UNCERTAINTIES

The directors routinely monitor all known risks and uncertainties and appropriate actions are taken to mitigate the risks and their potential outcomes.

Specific risks to the company include its relationships with key customers and fluctuations in foreign exchange rates. The company continues to foster strong relationships with its customers and strives to deliver industry-leading levels of support to ensure customer satisfaction. The directors manage foreign exchange rate fluctuations by careful monitoring, controlling local pricing and exchanging currency holdings as appropriate.

The company is exposed to various common financial risks arising in the normal course of business which are listed below:

Capital Risk Management

The group’s objectives when managing capital are to:

-

safeguard their ability to continue as a going concern, so that they can continue to provide returns for
shareholders and benefits for other stakeholders; and

-

maintain an optimal capital structure to reduce the cost of capital.

Risk Management Objective

The directors are charged with the overall responsibility of establishing and monitoring the company's risk management policies and processes. These are determined in order to identify, analyse and monitor the risks that are faced by the company. The company does not enter into or trade financial instruments for speculative purposes. The principle risks to which the company is exposed are market risk including currency risk and interest rate risk, credit risk and liquidity risk.

Liquidity Risk

Liquidity risk is the risk that the company will encounter difficulty in meeting its short-term obligations associated with financial liabilities.

Liquidity needs are monitored by the group's management, as well as the company's management, to ensure the company and its associated undertakings have sufficient funds to meet its liabilities when due, under normal and unexpected conditions, without incurring unacceptable losses or breaches in borrowing limits or covenants. Liquidity is managed by monitoring forecast and actual cash flows, maintaining sufficient funds to meet expected operational expenses for 120 days, and matching maturity profiles of financial assets and liabilities.

Interest Rate Risk

Interest rate risk is the risk that changes in market interest rates will cause fluctuations to the fair values and cash flows of the company's financial instrument holdings.

The exposure to interest rate risk arises from borrowings issued at variable and fixed interest rates.

Interest rate risk is minimised by the group's management with a policy aimed at maintaining a portfolio of fixed and variable rate loans and borrowings. Interest rate swaps are used to manage the portfolio balance, where deemed appropriate by the group's management. The company's borrowings are monitored and directed at the group's strategic level, in which the directors of the company participate.

Market Risk

Market risk is the risk that changes in market prices, through foreign exchange rates, interest rates, and equity prices, will cause fluctuations to the fair values and cash flows of financial instrument holdings. Market risk affects loans and borrowings, deposits, available-for-sale investments, and derivative financial investments.

Currency Risk

Currency risk is the risk that changes in foreign exchange rates will cause fluctuations to the fair values and cash flows of the company's financial instrument holdings.

The company and its associated undertakings operate in a global industry and are exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Pound Sterling, the Euro, the Japanese Yen, and the US Dollar. Foreign exchange risk arises when commercial transactions and recognised assets and liabilities are denominated in a currency that is not the entity's functional currency. The exposure to currency risk arises from various currencies relating to the operating activities, recognised assets and liabilities, and net investments in foreign operations.

Currency risk is minimised within the group and the company by monitoring foreign currency cash flows and entering into forward exchange contracts and other hedging transactions. This is monitored and directed at the group's strategic level, in which the directors of the company participate.

Credit Risk

Credit risk is the risk of financial loss to the company if the counter-party fails to meet its obligation. Credit risk arises from the company's operating activities from trade receivables and loan notes and financing activities from cash and cash equivalents, deposits with banks and financial institutions, and derivative financial instruments.

Credit risk from trade and other receivables is minimised by establishing credit policies such as determining and monitoring customer credit limits, requiring credit approvals, and the monitoring of customer credit risks by grouping customers according to their credit characteristics. Other monitoring procedures are in place to recover overdue accounts, to ensure minimal dependencies on a small number of customers, and to assess impairment.

Credit risk from financing activities is minimised by establishing investment policies in liquid securities with high credit ratings and maintaining accounts in reputable financial institutions with high quality credit ratings.

STRATEGY

To achieve our objective, the group is pursuing the following key strategies:

- Offer a diverse portfolio of solutions including the research, analytics, and data management services;

- Recruit and train high-quality staff;

- Provide a superior level of global customer service and support;

- Develop leading digital software in order to improve services to customers;

- Maintain and grow our existing customer base; and

- Work with customers to enhance our products and services.

The directors of the company regularly review the direction and strategy of the business in order to enhance its reactions to changes in the market.

Overall the directors deem the company's strategy to be one of preservation and growth of a leading brand via the recruitment of high-quality staff and a responsive interaction with clients. This is believed to generate regular repeat custom and promote a global image that shall allow enhanced turnover and profitability in the future.

FUTURE DEVELOPMENTS

Since the reporting date further research and development has been undertaken to continue enhancing the support and informatics capabilities of our customers. The initial results of the 2019 financial year have shown the increased growth of the company's profit and turnover in comparison with the 2018 and 2017 financial years.

On 23 June 2016, the UK population voted in a referendum to leave the European Union (EU), and the UK Government has subsequently invoked Article 50 of the 2007 Lisbon Treaty on 29 March 2017. The implications of this event remain uncertain, as does the political landscape in the UK.

While this is clearly a major event, it does not appear that there will be any significant changes to the working of the company, its employees, or customers in the short term.

The medium to long-term consequences of "Brexit" will become clearer once the UK Government negotiations with the EU are furthered, with negotiations expected to be finalised by the end of 2019. The medium-term impact is deemed likely to be identified in the future financial years of the company.

The directors believe the company is well placed to react to any changes in market conditions as they unfold, due to the continued support of the company's parent and group which have lower reliance on the UK market. This is deemed to provide a reasonable expectation that the group shall be able to provide support in the short-term should it be required. Additionally the majority of staff employed by the group are employed within the UK or otherwise outside the EU.

COVID-19

The Directors have assessed the current and future effects of COVID-19 on the Company. The Company has been able to continue to trade during the pandemic, on this basis, the Directors consider it appropriate to prepare the financial statements on a going concern basis.

SUPPLEMENTARY INFORMATION

The strategic report only forms part of the company's annual accounts and reports.

A person entitled to a full copy of the company's accounts and reports can obtain them from the website of Companies House, the UK registrar of companies (www.gov.uk/government/organisations/companies-house).

Both the auditor's report and auditor's statement under section 496 of the Companies Act 2006 included in the financial statements for the year ended 31 December 2019 were unqualified.

ON BEHALF OF THE BOARD:

Mr P Prabhat - Director

17 December 2020

The directors present their report with the financial statements of the company for the year ended 31 December 2019.

PRINCIPAL ACTIVITY

The principal activity of the company during the current and prior financial year was that of custom research and analytics services to companies worldwide including Financial Services, Corporate and Financial Services, Life Sciences and Healthcare.

The company is domiciled and incorporated in the United Kingdom.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2019.

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2019 to the date of this report.

Mr M Vollenweider

Mr P Prabhat

DISCLOSURE IN THE STRATEGIC REPORT

Information required by schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 has been included in the Strategic Report.

DIRECTORS' RESPONSIBILITIES STATEMENT

The directors are responsible for preparing the Strategic Report, the Report of the Directors 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 International Financial Reporting Standards as adopted by the European Union. 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;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial 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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, R. M. Chancellor & Company Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr P Prabhat - Director

17 December 2020

Opinion

We have audited the financial statements of Evalueserve UK Ltd (the 'company') for the year ended 31 December 2019 which comprise the Statement of Profit or Loss and Other Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, the Statement of Cash Flows and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2019 and of its profit for the year then ended;

-	have been properly prepared in accordance with IFRSs as adopted by the European Union; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' 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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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 the audit:

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors 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 the Report of the Directors.

We have nothing to report in respect of the following matters where 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 six, 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 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.

Auditors' 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 a Report of the Auditors 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.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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 a Report of the Auditors 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.

Jonathan Ward ACA FCCA (Senior Statutory Auditor)

for and on behalf of R. M. Chancellor & Company Limited

Chartered Accountants and Statutory Auditors

Lewis House

Great Chesterford Court

Great Chesterford

Essex

CB10 1PF

22 December 2020

CONTINUING OPERATIONS

Revenue

15,893,265

14,294,944

Cost of sales

(10,255,204

)

(9,986,779

)

GROSS PROFIT

5,638,061

4,308,165

Distribution costs

(4,104,084

)

(2,944,410

)

Administrative expenses

(983,139

)

(913,693

)

OPERATING PROFIT

550,838

450,062

Finance income

4

2,779

2,795

PROFIT BEFORE INCOME TAX

5

553,617

452,857

Income tax

6

(133,109

)

(114,528

)

PROFIT FOR THE YEAR

420,508

338,329

OTHER COMPREHENSIVE INCOME

Items that will not be reclassified to profit or loss:

Fair value adjustment from parent

121,182

134,389

Income tax relating to items that will not be reclassified to
profit or loss

-

121,182

134,389

Items that may be reclassified subsequently to profit or loss:

Income tax relating to items that may be reclassified
subsequently to profit or loss

-

OTHER COMPREHENSIVE INCOME
FOR THE YEAR, NET OF INCOME TAX

121,182

134,389

TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

541,690

472,718

ASSETS

NON-CURRENT ASSETS

Intangible assets

7

-

Property, plant and equipment

8

13,135

12,823

13,135

12,823

CURRENT ASSETS

Trade and other receivables

9

2,147,016

1,905,535

Tax receivable

-

31,840

Cash and cash equivalents

10

2,406,758

2,237,803

4,553,774

4,175,178

TOTAL ASSETS

4,566,909

4,188,001

EQUITY

SHAREHOLDERS' EQUITY

Called up share capital

11

25,000

Contributions from parent

12

353,387

232,205

Retained earnings

12

2,129,044

1,708,536

TOTAL EQUITY

2,507,431

1,965,741

LIABILITIES

NON-CURRENT LIABILITIES

Deferred tax

16

2,496

2,436

CURRENT LIABILITIES

Trade and other payables

13

1,294,033

1,779,232

Tax payable

85,765

-

Provisions

15

677,184

440,592

2,056,982

2,219,824

TOTAL LIABILITIES

2,059,478

2,222,260

TOTAL EQUITY AND LIABILITIES

4,566,909

4,188,001

The financial statements were approved by the Board of Directors and authorised for issue on 17 December 2020 and were signed on its behalf by:

Mr P Prabhat - Director

Called up

Contributions

share

Retained

from

Total

capital

earnings

parent

equity

£

Balance at 1 January 2018

25,000

1,370,207

97,816

1,493,023

Changes in equity

Total comprehensive income

-

338,329

134,389

472,718

Balance at 31 December 2018

25,000

1,708,536

232,205

1,965,741

Changes in equity

Total comprehensive income

-

420,508

121,182

541,690

Balance at 31 December 2019

25,000

2,129,044

353,387

2,507,431

Cash flows from operating activities

Cash generated from operations

20

679,705

912,924

Increase in other provisions

236,592

145,313

Tax paid

(15,445

)

-

Net cash from operating activities

900,852

1,058,237

Cash flows from investing activities

Purchase of tangible fixed assets

(7,786

)

(9,123

)

Interest received

2,779

2,795

Net cash from investing activities

(5,007

)

(6,328

)

Cash flows from financing activities

Loan repayments in year

(726,890

)

(1,508,066

)

Loan repayments received in year

-

105,919

Net cash from financing activities

(726,890

)

(1,402,147

)

Increase/(decrease) in cash and cash equivalents

168,955

(350,238

)

Cash and cash equivalents at beginning of
year

21

2,237,803

2,588,041

Cash and cash equivalents at end of year

21

2,406,758

2,237,803

1.	STATUTORY INFORMATION

Evalueserve UK Ltd is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparation

These financial statements have been prepared in accordance with International Financial Reporting Standards and IFRIC interpretations and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention.

At the date which these financial statements have been authorised there have been new accounting standards, amendments, and interpretations to existing accounting standard published by the International Accounting Standards Board which are not yet in effect. These have not been adopted by the company in these financial statements, and are not expected to have a material impact on the financial statements of Evalueserve UK Ltd in the financial period they are applied.

Changes in accounting policies

The company applied for the first time certain Standards, Amendments and Interpretations which are effective for annual periods commencing on or after 1 January 2019. The company has not early adopted any other Stands, Amendments or Interpretations that have been issued but are not effective.

IAS 12 Income Taxes

The Amendments result from the Annual Improvements 2015-2017 cycle and address the income tax consequences of dividends. The Amendments are effective for accounting periods commencing on or after 1 January 2019.

IFRIC 23 Uncertainty over Income Tax Treatments

IFRIC 23 is to be applied in determining the taxable profit or loss, tax bases, unused tax losses, unused tax credits and tax rates. It is to be applied where there is uncertainty over the income tax treatment under IAS 12. The Interpretation is effective for accounting periods commencing on or after 1 January 2019.

Application of the above Amendments and Interpretations has not resulted in any significant changes in the company's income tax liabilities.

At the date of authorisation of these financial statements, certain new Standards, Amendments and Interpretations to existing Standards have been published but are not yet effective and have not been adopted early by the company.

Management anticipates that all of the pronouncements will be adopted in the accounting policies for the first period after the effective date of the pronouncement. Information on new Standards, Amendments and Interpretations that are expected to be relevant to the financial statements is provided below. Certain other new Standards, Amendments and Interpretations have been issued but are not expected to be relevant to the financial statements.

IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.

The Amendments to IAS 1 and IAS 8 clarify the definition of "material" and align the definition used in the Conceptual Framework and the Standards themselves. The Amendments are effective for accounting periods commencing on or after 1 January 2020.

Revenue recognition

Revenue is measured by reference to the fair value of the consideration received or receivable by the company, exclusive of taxes, net of trade discounts and rebates. Revenue also includes reimbursements of out-of-pocket expenses, with the corresponding out-of-pocket expenses included in cost of sales.

Revenue from contracts with customers

Disaggregation of revenue

The company has disaggregated revenue into various categories in the following table which is intended to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic date

In the following table, revenue is disaggregated by major service lines.

2019

2018

Type of goods/service

Data analytics

321,920

783,519

Investment research

5,785,755

4,980,010

Intellectual property

1,415,599

2,033,033

Other services rendered

1,786,567

1,704,818

Intercompany sales

6,583,424

4,793,564

Total

15,893,265

14,294,944

Geographical Markets

UK

7,913,318

5,169,341

Rest of world

7,979,947

9,125,603

Total

15,893,265

14,294,944

Timing of revenue recognition

Goods transferred at point of sale

-

Services transferred over time

15,893,265

14,294,944

Total

15,893,265

14,294,944

Performance obligations

Fixed price engagements

Revenues performed on fixed-price engagements are recognised on percentage of completion basis. Where the outcome of a transaction can be estimated reliably, revenue associated with the transaction is recognised in the statement of comprehensive income under 'Revenue' by reference to the stage of completion at the reporting date, provided that a right to consideration has been obtained through performance. Consideration accrues as contract activity progresses by reference to the cost of work performed as compared with the budgeted cost, with revisions reflected in the period which changes become known. When the company cannot measure the outcome of a contract reliably, revenue is recognised only to the extent of the contract costs incurred, to the extent that such contract costs are recoverable. Contract costs are recognised in the period in which they are incurred. No revenue is recognised where there are significant uncertainties regarding recovery of the consideration due or where the right to receive payment is contingent on events outside the control of the company. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised immediately in the profit or loss.

Research services:

Revenue is recognised when the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the company, the costs incurred or to be incurred can be measured reliably, and when the criteria for each of the company's different activities has been met. Revenues earned from services billed at agreed hourly/daily charge out rates, are recognised as the services are performed with reference to time spent and agreed charge out rate.

Contract balances

2019

2018

Trade receivables

1,227,757

1,190,127

Contract assets

828,495

590,558

Contract liabilities

73,514

23,300

2,129,766

1,803,985

Trade receivables are non-interest bearing and are generally on terms of 30 to 90 days.

Contract assets are initially recognised for revenue earned from rendering of services as receipt of consideration is conditional on successful completion of the work. Upon completion and acceptance by the customer, the amounts recognised as contract assets are reclassified to trade receivables.

Contract liabilities include short term advances received to render services over a period of time when required.

Intangible assets

Intangible assets are valued at cost less accumulated amortisation. Amortisation is calculated to write off the cost in equal amounts over their estimated useful lives.

Amortisation charges incurred in the financial period are included within "Cost of sales" within the Statement of Profit and Loss and Other Comprehensive Income.

Intangible assets held by the company include the development costs incurred by the company in respect of the development of an online portal.

The asset is considered to have a definitive useful life in its current state, which the directors estimate to be a 36 month period with no residual value. The intangible asset is therefore amortised at a rate of 33% on a straight-line basis on cost.

Property, plant and equipment

Property, plant and equipment are initially recognised at cost. Depreciation is provided at a rate of 100% on cost pro-rata in order to write off the cost of each asset over its estimated useful life.

Financial instruments

Recognitions and measurement

Financial assets and financial liabilities are recognized when the company becomes party to the contractual provisions of the financial instrument.

Financial assets are derecognized when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and all substantial risks and rewards are transferred. A financial liability is derecognized when it is extinguished, discharged, cancelled or expires.

Classification and initial measurement of financial assets

Except for those trade receivables that do not contain a significant financing component and are measured at the transaction price in accordance with IFRS 15, all financial assets are initially measured at fair value adjusted for transaction costs (where applicable).

Financial assets, other than those designated and effective as hedging instruments, are classified into the following categories:

•

amortised cost;

•

fair value through profit or loss (FVTPL); and

•

fair value through other comprehensive income (FVTOCI).

The company only has assets classified as at amortised cost in the periods presented in these financial statements.

The classification is determined by both:

•

the company's business model for managing the financial asset; and

•

the contractual cash flow characteristics of the financial asset.

All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs or finance income, except for the impairment of trade receivables, which is presented within other administration expenses.

Subsequent measurement of financial assets at amortised cost

Financial assets are measured at amortised cost if the assets meet the following conditions:

•

they are held within a business model whose objective is to hold the financial assets and collect its
contractual cash flows; and

•

the contractual terms of the financial assets give rise to cash flows that are solely payments of principal
and interest on the principal amount outstanding.

After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Impairment of financial assets

IFRS 9's impairment requirements use more forward-looking information to recognise expected credit losses - the "expected credit loss (ECL) model." This replaces IAS 39's "incurred loss model." Instruments within the scope of the new requirements include loans and other debt-type financial assets measured at amortised cost and FVOCI, trade receivables, contract assets recognised and measured under IFRS 15 and loan commitments and some financial guarantee contracts (for the issuer) that are not measured at fair value through profit or loss.

Recognition of credit losses is no longer dependent on the company first identifying a credit loss event. Instead, the company considers a broader range of information when assessing credit risk and measuring credit losses, including past events, current conditions and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.

In applying this forward-looking approach, a distinction is made between:

•

financial instruments that have not deteriorated significantly in credit quality since initial recognition or that have a low credit risk ("Stage 1"); and

•

financial instruments that have deteriorated significantly in credit quality since initial recognition and whose credit risk is not low ("Stage 2").

"Stage 3" would cover financial assets that have objective evidence of impairment at the reporting date.

"12 month expected credit losses" are recognised for the first category while "lifetime expected credit losses" are recognised for the second category.

Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the expected life of the financial instrument.

Previous financial asset impairment under IAS 39

In the prior year, the impairment of trade receivables was based on the incurred loss model. Individually significant trade receivables were considered for impairment when they were past due or when other objective evidence was received that a specific counterparty will default. Trade receivables that were not considered to be individually impaired were reviewed for impairment in groups, which are determined by reference to the industry and region of the counterparty and other shared credit risk characteristics. The impairment loss estimate was then based on recent historical counterparty default rates for each identified group.

Trade and other receivables and contract assets

The company makes use of a simplified approach in accounting for trade and other receivables as well as contract assets and records the loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument. In calculating, the company uses its historical experience, external indicators and forward-looking information to calculate the expected credit losses using a provision matrix.

The company assesses impairment of trade receivables on a collective basis as they possess shared credit risk characteristics and they have been grouped based on the days past due.

Classification and measurement of financial liabilities

As the accounting for financial liabilities remains the same under IFRS 9 compared to IAS 39, the company's financial liabilities were not impacted by the adoption of IFRS 9. However, for completeness, the accounting policy is disclosed below.

The company's principal financial liabilities are trade and other payables and amounts owed to group undertakings.

Financial liabilities are initially measured at fair value and, where applicable, adjusted for transaction costs unless the company designated a financial liability at fair value through profit or loss.

Subsequently, the company's financial liabilities are measured at amortised cost using the effective interest method. All interest-related charges and, if applicable, changes in an instrument's fair value that are reported in profit or loss are included within finance costs or finance income.

Financial instruments risk

Risk management objectives and policies

The company is exposed to various risks in relation to financial instruments. The company's financial assets and liabilities by category are summarised in Note 14. The main types of risks are market risk, currency risk and liquidity risk.

The directors are charged with the overall responsibility of establishing and monitoring the company's risk management policies and processes. These are determined in order to identify, analyse and monitor the risks that are faced by the company. The company does not enter into or trade financial instruments for speculative purposes.

Credit risk analysis

Credit risk is the risk that a counterparty fails to discharge an obligation to the company. The company is exposed to credit risk from financial assets, including cash and cash equivalents held at banks, trade and other receivables.

Credit risk management

The credit risk is managed in accordance with the company's credit risk management policies and procedures.

The credit risk in respect of cash balances held with banks and deposits with banks is managed via diversification of bank deposits in various currencies and are only with major reputable financial institutions.

Credit risk from trade and other receivables is minimised by establishing credit policies such as determining and monitoring customer credit limits, requiring credit approvals and the monitoring of customer credit risks by grouping customers according to their credit characteristics. Other monitoring procedures are in place to recover overdue accounts, to ensure minimal dependencies on a small number of customers and to assess impairment.

Trade receivables

The company applies the IFRS 9 simplified model of recognising lifetime expected credit losses for all trade receivables as these items do not have a significant financing component.

In measuring the expected credit losses, the trade receivables have been assessed on a collective basis as they possess shard credit risk characteristics. They have been grouped primarily based on the days past due.

The expected loss rates are based on the payment profile for sales over the last48months before 31 December 2019 and 1 January respectively, as well as the corresponding historical credit losses during that period. The historical rates are adjusted to reflect current and forward looking macroeconomic factors affecting the customer's ability to settle the amount outstanding. The company adjusts historical loss rates for expected changes relevant factors. However, given the short period exposed to credit risk, the impact of these macroeconomic factors has not been considered significant within the reporting period.

Trade receivables are written off (ie, derecognised) when there is no reasonable expectation of recovery. Failure to make payments within 180 days from the invoice date and failure to engage with reasonable expectation of recovery.

On the above basis, the expected credit loss for trade receivables as at 31 December 2019 and 1 January 2019 was determined as follows:

31 December 2019

Trade receivable days past due

Current

More than 30
days

More than 60
days

More than 90
days

Total

Expected credit loss rate

-

Gross carrying amount

661,713

275,184

260,068

30,792

1,227,757

Lifetime expected credit loss

-

1 January 2019

Trade receivable days past due

Current

More than 30
days

More than 60
days

More than 90
days

Total

Expected credit loss rate

-

Gross carrying amount

718,829

307,432

144,728

19,138

1,190,127

Lifetime expected credit loss

-

The closing balance of the trade receivables loss allowance at 31 December 2019 reconciles with the trade receivables loss allowance opening balance as follows:

2019

2018

Loss allowance as at 1 January calculated under IAS 39

-

Loss allowance recognised during the year

12,718

3,805

Receivables written off during the year

(12,718

)

(3,805

)

Loss allowance unused and reversed during the year

-

Loss allowance at 31 December

-

The loss allowance as calculated under IFRS 9 and IAS 39 are the same and accordingly, the opening loss allowance at 1 January 2019 has not been restated on transition to IFRS 9.

Amounts owed by group undertakings

Amounts owed by group undertakings are classified as financial assets at amortised cost and are considered to have low credit risk. The loss allowance is based on the 12 months expected loss, however, this has resulted in no loss allowance being recognised in these financial statements as the amounts are estimated to be fully recoverable.

Taxation

Income taxes

Tax expense recognised in the Statement of Comprehensive Income comprises the sum of deferred tax and current tax.

Current tax

Calculation of current tax is based on tax rates applicable for the respective years. Current income tax assets and/or liabilities comprise those obligations to, or claims from, fiscal authorities relating to the current or prior reporting periods, that are unpaid/un-recovered at the reporting date. Current tax is payable on taxable profit, which differs from the profit or loss in the financial statements.

Deferred tax

Deferred income taxes are calculated, without discounting using the balance sheet liability method on temporary differences between the carrying amounts of assets and liabilities and their tax bases using the tax laws that have been enacted or substantively enacted by the reporting date. However, deferred tax is not provided on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit.

Deferred tax liabilities are always provided for in full. Deferred tax assets are recognised to the extent that it is probable that they will be able to be utilised against future taxable income.

Foreign currencies

The financial statements are presented in Great Britain Pound (GBP), which is also the functional currency of the Company. A currency other than the functional currency is a foreign currency. Foreign currency transactions are translated into GBP, using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the reporting date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the re-measurement of monetary items at year-end exchange rates are recognized in profit or loss. Non-monetary items measured at historical cost are translated using the exchange rates at the date of the transaction.

Employee benefit costs

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to the income statement in the period to which they relate.

Cash and cash equivalents

All cash and short-term investments with original maturities of three months or less are considered cash and cash equivalents, since they are readily convertible to cash. These short-term investments are stated at cost, which approximates fair value.

Equity, reserves, and dividends

Share capital represents the nominal value of shares that have been issued.

Share premium includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related tax benefits.

Retained earnings include all current and prior period profit and losses.

Dividend distributions payable to equity shareholders are included in 'other liabilities' when the dividends have been approved in a general meeting prior to the reporting date.

The contributions from parent reserve includes the fair value of equity-settled share-based payments to the company's employees which are granted by the parent company, but which are not recharged by the parent company to the company.

Provisions

Provisions are recognised when the company has a present legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made. If the effect is material, provisions are determined by discounting the expected future cash flows using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability.

Critical accounting judgements and key sources of estimation uncertainty

In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amounts 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 of the revision and future periods if the revision affects both current and future periods.

Share based payments

Where the parent company has granted rights to its equity instruments to the employees of the company, such arrangements are accounted for as equity-settled share-based payment arrangements. In such instances, an amount is included within the "contributions from parent reserve" to the extent the company is not recharged by its parent company.

Where employees are rewarded using share-based payments, the fair value of employees' services are determined by reference to the fair value at the grants date of equity instruments issued by the parent company. The fair value of these instruments (share options) is determined using the Black-Scholes valuation model. The share-based payment is recognised as an expense within the Statement of Profit or Loss and Other Comprehensive Income over the vesting period.

3.	EMPLOYEES AND DIRECTORS

2019

2018

£

Wages and salaries

4,107,824

3,169,960

Social security costs

462,052

343,292

Other pension costs

124,012

85,957

4,693,888

3,599,209

The average number of employees during the year was as follows:

2019

2018

Research (cost of sales)

14

9

Sales & marketing

18

11

Administration

2

3

Management

5

4

39

27

2019

2018

£

Directors' remuneration

260,748

212,790

Directors' pension contributions to money purchase schemes

8,334

6,265

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

1

Information regarding the highest paid director is as follows:

2019

2018

£

Emoluments etc

260,748

212,790

Pension contributions to money purchase schemes

8,334

6,265

4.	NET FINANCE INCOME

2019

2018

£

Finance income:

Deposit account interest

2,779

2,795

5.	PROFIT BEFORE INCOME TAX

The profit before income tax is stated after charging:

2019

2018

£

Depreciation - owned assets

7,474

5,583

Auditors' remuneration

9,800

6,625

Other non- audit services

14,879

13,439

Foreign exchange differences

37,751

22,213

6.	INCOME TAX

Analysis of tax expense

2019

2018

£

Current tax:

Tax

133,050

113,855

Deferred tax

59

673

Total tax expense in statement of profit or loss and other comprehensive
income

133,109

114,528

Factors affecting the tax expense

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2019

2018

£

Profit before income tax

553,617

452,857

Profit multiplied by the standard rate of corporation tax in the UK of 19%
(2018 - 19%)

105,187

86,043

Effects of:

Expenses not deductible for tax purposes

27,466

28,928

Depreciation in excess of capital allowances

(59

)

(673

)

losses arising in the year

Movement in unprovided deferred taxation relief on pension creditor

456

(443

)

periods

Deferred taxation charges

59

673

Tax expense

133,109

114,528

7.	INTANGIBLE ASSETS

Website

portal

development

£

COST

At 1 January 2019

133,909

Disposals

(133,909

)

At 31 December 2019

-

AMORTISATION

At 1 January 2019

133,909

Eliminated on disposal

(133,909

)

At 31 December 2019

-

NET BOOK VALUE

At 31 December 2019

-

At 31 December 2018

-

8.	PROPERTY, PLANT AND EQUIPMENT

Computer

equipment

£

COST

At 1 January 2019

32,522

Additions

7,786

At 31 December 2019

40,308

DEPRECIATION

At 1 January 2019

19,699

Charge for year

7,474

At 31 December 2019

27,173

NET BOOK VALUE

At 31 December 2019

13,135

At 31 December 2018

12,823

9.	TRADE AND OTHER RECEIVABLES

2019

2018

£

Current:

Trade debtors

1,227,757

1,190,127

Amounts owed by group undertakings

20,962

Other debtors

29,954

40,516

Prepayments and accrued income

868,343

653,930

2,147,016

1,905,535

Included within prepayments and accrued income are contract assets valued at £828,495 (2018 - £590,558).

10.	CASH AND CASH EQUIVALENTS

2019

2018

£

Bank accounts

2,406,758

2,237,803

For the purpose of the cash flow statements, cash and cash equivalents includes cash on hand and in banks and accrued interest on bank deposits.

11.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2019

2018

value:

£

25,000

Ordinary

£1

25,000

12.

RESERVES

Contributions

Retained

from

earnings

parent

Totals

£

At 1 January 2019

1,708,536

232,205

1,940,741

Profit for the year

420,508

Fair value adjustment

-

121,182

At 31 December 2019

2,129,044

353,387

2,482,431

13.	TRADE AND OTHER PAYABLES

2019

2018

£

Current:

Trade creditors

154,299

118,754

Amounts owed to group undertakings

338,186

1,065,077

Social security and other taxes

130,958

123,971

Accruals and deferred income

73,514

23,300

VAT

597,076

448,130

1,294,033

1,779,232

Included within accruals and deferred income are contract liabilities valued at £73,514 (2018 - £23,300).

14.	FINANCIAL INSTRUMENTS

The company's principle financial instruments are cash, trade and other receivables, trade and other payables, and amounts due to its parent undertaking and other parent controlled entities. The main purpose of these financial instruments is to finance the company's ongoing operational requirements.

The company does not currently trade in derivative financial instruments. The principle risks faced by the company are credit risk, liquidity risk, and foreign currency risk. Policies for management of these and other risks, which have been consistently applied throughout the period, are detailed in the strategic report.

The company has the financial assets and liabilities as at the balance sheet date:

Financial assets:

2019

2018

Loans and receivables

£

- Trade and other receivables

1,278,673

1,251,605

- Cash and cash equivalents

2,406,758

2,237,803

Total financial assets

3,685,431

3,489,408

Financial liabilities:

2019

2018

Financial liabilities measured at amortised cost

£

- Trade and other payables

154,302

118,754

- Amounts due to parent entity and parent controlled entities

338,185

1,065,077

Total financial assets

492,487

1,183,831

Fair values

The directors consider that the carrying values of all the company's financial assets and liabilities approximate their fair values as at the balance sheet date in both the current and prior years.

15.	PROVISIONS

2019

2018

£

Other provisions

677,184

440,592

Analysed as follows:

Current

677,184

440,592

2019

2018

As at 1 January

£

Brought forward provisions relating to employee benefits

364,432

194,005

Brought forward expenses provision

76,160

101,274

Total provision brought forward

440,592

295,279

2019

2018

Movements in the year

£

Prior year provision paid in year

(440,592

)

(295,279

)

Amounts recognised in the year

677,184

440,592

Total provision movements

236,592

145,312

2019

2018

As at 31 December

£

Carried forward provisions relating to employee benefits

463,982

364,432

Carried forward expenses provision

213,202

76,160

Total provision carried forward

677,184

440,592

Provisions relating to employee benefits are in respect of accrued commission due to employees and expenses payments due. Commission is paid to employees once payment has been received from clients and this is generally within 3-4 months of the year end. Expenses payments are made in the month following that in which they were incurred.

16.	DEFERRED TAX

2019

2018

£

Balance at 1 January

2,436

1,764

Deferred tax

60

672

Balance at 31 December

2,496

2,436

There is a deferred tax liability of £2,496 (2018 - £2,436) comprising temporary differences arising from tax relief claimed on fixed asset expenditure within the United Kingdom. This has been provided for at a tax rate of 19% (2018 - 19%).

As at the balance sheet date the company had outstanding pension contribution liabilities amounting to £10,635 (2018 - £8,237). The directors have elected not to provide for the potential deferred UK taxation relief available to the company on its future profits. At the current main rate of 19% (2018 - 19%) in the UK these losses would provide tax relief to the company amounting to £2,021 (2018 - £1,565).

As at the balance sheet date the company had a potential deferred tax asset arising from the corporation tax relief obtainable upon the exercising of employee share options granted in previous accounting periods. The relief will be based on the amounts included in the company's current Statements of Changes in Equity amounting to £353,387, or in the prior year which is reflected in retained earnings amounting to £232,205.

The directors have elected not to provide for the potential deferred UK taxation relief available to the company on its future profits due to the uncertainty of whether and at what date the company's employees shall exercise the share options. At the current main rate of 19% (2018 - 19%) in the UK these losses would provide tax relief to the company amounting to £67,144 (2018 - £44,119).

17.	ULTIMATE PARENT COMPANY

Up until the 18th December 2019 the company was a wholly-owned subsidiary of Evalueserve Ltd, a company registered in the Islands of Bermuda under the registration number 29413.

On this date, all assets, liabilities and equity of Evalueserve Ltd were transferred to Evalueserve Holdings AG, a new company registered in Switzerland under the registration CHE-229.673.474..

Evalueserve Holdings AG is the ultimate parent company of the group at the year end.

Evalueserve Holdings AG does not have an ultimate controlling party and therefore is considered by the directors to be the ultimate controlling party of Evalueserve UK Ltd.

Evalueserve Holdings AG does not produce consolidated financial statements available for public use.

18.	RELATED PARTY DISCLOSURES

Key management personnel remuneration and amounts of transactions with parent entity and enterprises under common control have been summarised below:

2019

2018

Key management personnel

£

Short-term employee benefits

260,748

212,790

Post-employment benefits

8,334

6,265

269,082

219,055

During the current and prior year the company engaged to provide sales to, make purchases from, and hold loan accounts with group undertakings, as detailed below.

2019

2018

Amounts owed from/(to) the parent entity and parent controlled entities

£

Amounts due from parent entity - Evalueserve Holdings AG (previously
Evalueserve Ltd)

20,962

Amounts due to parent controlled entity - Evalueserve AG

(338,185

)

(1,065,077

)

(317,223

)

(1,044,115

)

2019

2018

Sales to parent entity and parent controlled entities

£

Sales made to parent controlled entity - Evalueserve AG

6,583,424

4,793,564

6,583,424

4,793,564

2019

2018

Purchases from parent entity and parent controlled entities

£

Purchases from parent controlled entity - Evalueserve AG

8,231,473

8,544,212

8,237,473

8,544,212

No interest is accruing on balances owed to/from group undertakings (2018 - £nil). No guarantees have been provided on the above loan balances, which are repayable on demand, in either the current or prior year.

19.	EVENTS AFTER THE REPORTING PERIOD

After the financial year end, from February 2020, like all entities in the country, the company has been and will continue to be impacted by the COVID-19 pandemic. The company has mitigated the financial impact as optimally as it reasonably can. The directors have considered the likely financial impact on the company will and have determined that there is unlikely to be a negative financial impact due to the services offered by the company.

20.	RECONCILIATION OF PROFIT BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS

2019

2018

£

Profit before income tax

553,617

452,857

Depreciation charges

7,474

5,583

Fair value adjustment on share options

121,182

134,389

Finance income

(2,779

)

(2,795

)

679,494

590,034

(Increase)/decrease in trade and other receivables

(241,481

)

279,842

Increase in trade and other payables

241,692

43,048

Cash generated from operations

679,705

912,924

21.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 31 December 2019

31/12/19

1/1/19

£

Cash and cash equivalents

2,406,758

2,237,803

Year ended 31 December 2018

31/12/18

1/1/18

£

Cash and cash equivalents

2,237,803

2,588,041

22.	CAPITAL MANAGEMENT

The company's key management personnel, being the directors of the company, manage the capital via monthly reviews of the trade receivable, trade payable, bank and loan balances held by the company.

Capital is maintained within the confines of the group's overall structure, and changes in capital requirements are determined by the board of the company's ultimate controlling party, Evalueserve Holdings AG.

The most significant liabilities of the company are the loan balances owed to group undertakings. There were no externally imposed capital requirements upon the company other than that of the group.

Due to the main capital requirements being that of the group and the main liabilities owed to group undertakings, the company's directors therefore consider that once these are accounted for within the group's considerations Evalueserve UK Ltd contributes a positive capital structure that requires minimal maintenance.

The company aims to have a negative debt to equity ratio, which it achieved at the year ended 31 December 2018 and has continued this year.

2019

2018

£

Cash and cash equivalents

2,406,758

2,237,803

Loans due from parent (Evalueserve Holdings AG - Previously Evalueserve
Ltd)

20,962

Loans due to parent controlled entity (Evalueserve AG)

(338,185

)

(1,065,077

)

Net equity

2,089,535

1,193,688

Total equity

2,507,431

1,965,741

Net debt to equity

(83%

)

(61%

)

There has been no changes in the capital management of the company since the prior accounting period.

23.	SHARE-BASED PAYMENTS

Evalueserve UK Limited operates an equity-settled share based remuneration scheme for employees. Employees are eligible to participate in the long term incentive scheme, the only vesting condition being that the individual remains an employee of the group over the three year vesting period.

Equity Settled

2019

2018

Number

Outstanding at the beginning of the year

140,304

70,080

Granted during the year

-

70,224

Expired during the year

(22,080

)

-

Exercised during the year

(118,224

)

-

Outstanding at the end of the year

-

140,304

2019

2018

Weighted average share price at the date of exercise

$10.13

$5.56

Weighted average exercise price of options outstanding

-

$5.56

Range of exercise prices for options outstanding

-

$5.56

Weighted average remaining contractual life, years

0

3.38

The Black Scholes valuation inputs for equity settled options were as follows:

2019

2018

Share price

$10.13

$5.56

Exercise price

$10.13

$5.56

Expected volatility

38.45%

Expected option life, years

10

Expected dividend yield

0.00%

Risk free interest rate

2.90%

The share based payment charge associated with the options is calculated using the Black Scholes Model, and totals £121,182 (2018 - £134,389).