Aiimi Limited - Limited company accounts 20.1

REGISTERED NUMBER: 05648705 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

FOR

AIIMI LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Independent Auditors' Report

6

Income Statement

8

Statement of Financial Position

9

Statement of Changes in Equity

10

Notes to the Financial Statements

11

DIRECTORS:

T M P O'Farrell

S P Salvin

D P Sproson

SECRETARY:

L K S Salvin

REGISTERED OFFICE:

100 Avebury Boulevard

Milton Keynes

Buckinghamshire

MK9 1FH

REGISTERED NUMBER:

05648705 (England and Wales)

INDEPENDENT AUDITORS:

Magma Audit LLP

Chartered Accountants

Statutory Auditor

Magma House, 16 Davy Court

Castle Mound Way

Rugby

CV23 0UZ

The directors present their strategic report for the year ended 31 December 2021.

REVIEW OF BUSINESS

The principal activity of the company continued to be the provision of consulting services (Aiimi Services) and software (Aiimi Software) specialising in AI and data.

As reported in the company's income statement, revenue stood at £11.92m (2020; £8.06m), demonstrating 48% year-on-year growth. Throughout the second half of 2020, we experienced a significant increase in our underlying demand for data and digital services. We also generated a strong pipeline of projects with our existing and our new customers for the coming financial year.

Owing to our strong backlog of projects at the start of 2021, we increased the number of billable consultants within our Consulting team. Demand for these services continued throughout 2021, enabling us to grow revenues for Aiimi Services to £11.13m (2020; £7.37m).

Aiimi Software revenue growth was limited in 2021, standing at £790k (2020; £696k). Equating to 13% year-on-year growth, this was lower than anticipated. However, our pipeline build throughout 2021 presents the company with significant revenue opportunities for the Aiimi Insight Engine in the coming financial year.

The directors are pleased with the overall performance of the company and growth achieved, especially within Aiimi Services.

The results for the company show a loss before tax of £496k (2020; -£150k). This rising year-on-year loss represents our investment in additional operational overheads to support the company's overall future growth, and our continued investment in Aiimi Software. The company also hired a new Chief Operating Officer to manage sales and new customer acquisition. And appointed an additional non-executive director (NED) to the board.

The company continued to invest in sales and marketing to grow its pipeline of opportunities for the Aiimi Insight Engine. It also invested in additional headcount for the product development team within Aiimi Software. This was to ensure completion on the committed backlog of features for our existing Aiimi Insight Engine customers. The company also carried out a comprehensive product review of the Aiimi Insight Engine with a third-party specialist, providing valuable feedback on how the product compares to our market competitors, alongside recommended improvements. These investments will support our growth strategy for 2022.

Despite the loss before tax, the company maintains a position of strength with Net Assets and Shareholders' Funds of £2.81m (2020; £2.48m). This strength is underpinned by a healthy cash balance of £3.59m (2020; £2.82m).

STRATEGY

The company's strategy for the coming financial year aims to achieve continued revenue growth in Aiimi Services, and accelerated growth in Aiimi Software. The investment in sales and marketing in 2021 focused on driving growth in our sales pipeline, resulting in the company acquiring new customers in 2022.

In H2 2021, the company's sales and marketing strategy focused on a paid multi-channel media and analyst relationship campaign to drive vertical lead generation. Extending into 2022, and supported by an additional campaign to promote our compliance offering, the company aims to increase its social media and press exposure, alongside more coverage in respected trade publications.

The sales strategy to drive lead generation and growth will focus on a new business development capability, with external agency support for the marketing team, to refine how we articulate the Aiimi Insight Engine's key capabilities. External agencies will support the company's investment in digital, social, and web capabilities to drive further lead generation. The company also plans to develop new relationships with partner companies, such as software resellers and software integrators, to promote and resell the Aiimi Insight Engine across their own customer bases.

Key to our company's success to date, our employees remain a firm priority. By continuing to share our vision of who we are and what we want to achieve with our employees, customers, and partners, the company can carry on working with those who are like-minded. We continue to strive to be a diverse, equity-minded, inclusive, and transparent employer, supplier, and partner to everyone with whom we work and collaborate. This is fundamental to the company's strategy - and remains at the heart of our values and growth plans for 2022. We will continue to support local charities, including MK Act, The Bus Shelter MK, and Winter Night Shelter, as well as food banks in and around the areas our employees reside. We will also stay in partnership with UK Youth, Business in the Community, and the Tech Talent Charter, while fulfilling our commitments on diversity, equity, inclusion, net zero, and giving.

PRINCIPAL RISKS AND UNCERTAINTIES

The board of directors and the wider management team continually monitor the key risks facing the company - and assess the appropriate controls to manage those risks. Effective risk-management is fundamental to delivering the company's strategic objectives. These are the principal risks and uncertainties facing the company:

1.

COVID-19: Concerns around the pandemic have eased, but as we learn to manage and live with the pandemic, the threat of potential new variants causing further disruption is a key concern for the near future.

2.

Recruitment and employee retention: Our people are key to our success. Currently, the increased demand for talent makes attracting and retaining top talent more challenging. It's therefore crucial that the company understands exactly what potential new hires are looking for in a company, beyond competitive packages. Factors such as whether the company is ESG-focused attract new talent and keep current employees motivated and happy.

3.

Market growth and competition: Gartner predicts that 50% of analytical queries will be generated by search, natural language processing, voice, or automation; there will be 1.14bn knowledge workers worldwide by 2023; and 35% of these knowledge workers will use an Insight Engine to power their productivity. Gartner also predicts the insight engine market is expected to grow from an estimated $357m in 2018 to $1.2bn by 2023. This growth will yield opportunities for independent vendors as penetration of this market expands from 15% to 35% over that period. The potential is huge. However, the company anticipates this market will become highly competitive. To counteract this risk factor, the company needs to focus on promoting its value proposition and stake its place on the Gartner Magic Quadrant.

The board of directors and wider management team regularly review key performance indicators for the company. This enables the company to track performance and make necessary changes when needed to ensure we achieve our strategic objectives. Here are our key performance indicators to manage performance:

1.

Consulting revenue by customer

2.

Software recurring subscription revenue

3.

Average charge rate for consulting services

4.

Consulting resource utilisation

5.

Gross margin

6.

EBITDA

7.

PBIT (profit before interest and tax)

8.

Cashflow

9.

Debtor days

10.

Employee engagement

11.

Customer satisfaction

12.

Carbon footprint

13.

Gender and ethnic pay gap

ON BEHALF OF THE BOARD:

S P Salvin - Director

29 April 2022

The directors present their report with the financial statements of the company for the year ended 31 December 2021.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of the provision of Business and IT Consulting services.

DIVIDENDS

No dividends have been declared for the year ended 31 December 2021 (2020 - nil).

RESEARCH AND DEVELOPMENT

The company continues to fund development of existing processes to enhance customer service.

FUTURE DEVELOPMENTS

Information relating to future developments is given in the Strategic Report.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2021 to the date of this report.

T M P O'Farrell

S P Salvin

D P Sproson

FINANCIAL INSTRUMENTS

The principal financial instruments of the company comprise bank balances and borrowings, trade creditors and trade debtors. The main purpose of these instruments is to raise funds for the company's operations and to finance its continuing operations. Liquidity risk is managed by the use of bank balances along with efficient monitoring and forecasting of cash flow to ensure there are sufficient funds to meet liabilities. Trade debtors are managed in respect of credit and cash flow risk by policies monitoring the credit offered to customers and regular monitoring of amounts outstanding for both time and credit limits.

CHARITABLE DONATIONS

During the year the company made £31,388 of charitable donations (2020 - £30,950).

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies 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, Magma Audit LLP, has expressed its willingness to remain in office as auditors.

ON BEHALF OF THE BOARD:

S P Salvin - Director

29 April 2022

Opinion

We have audited the financial statements of Aiimi Limited (the 'company') for the year ended 31 December 2021 which comprise the Income Statement, Statement of Financial Position, Statement of Changes in Equity 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 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 2021 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

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

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

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

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

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

Other information

The 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 Auditors' Report 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 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 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 Statement of Directors' Responsibilities set out on page four, 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 an Auditors' 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Based on our understanding of the company and industry, we identified the principal risks of non-compliance with laws and regulations, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries and management bias in accounting estimates. Audit procedures performed included:

-

discussions with management including consideration of known or suspected instances of non-compliance with laws and regulation and fraud;

-

challenging assumptions made by management in their significant accounting estimates, in particular in relation to the dilapidation provision and judgements formed;

-

identifying and testing journal entries, in particular any journal entries posted with unusual account combinations, journal entries crediting cash and journal entries with specific defined descriptions.

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

A further description of our responsibilities 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 Auditors' Report.

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 Auditors' 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.

Victoria Craig (Senior Statutory Auditor)

for and on behalf of Magma Audit LLP

Chartered Accountants

Statutory Auditor

Magma House, 16 Davy Court

Castle Mound Way

Rugby

CV23 0UZ

9 May 2022

TURNOVER

4

11,922,437

8,063,969

Cost of sales

(6,435,568

)

(3,214,494

)

GROSS PROFIT

5,486,869

4,849,475

Administrative expenses

(6,045,423

)

(5,030,636

)

(558,554

)

(181,161

)

Other operating income

5

74,271

41,024

OPERATING LOSS

7

(484,283

)

(140,137

)

Interest payable and similar expenses

8

(11,843

)

(10,118

)

LOSS BEFORE TAXATION

(496,126

)

(150,255

)

Tax on loss

9

807,064

523,921

PROFIT FOR THE FINANCIAL YEAR

310,938

373,666

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

310,938

373,666

FIXED ASSETS

Intangible assets

10

27,545

42,887

Tangible assets

11

866,668

927,631

894,213

970,518

CURRENT ASSETS

Debtors

12

2,997,989

1,996,142

Cash at bank

3,591,910

2,820,920

6,589,899

4,817,062

CREDITORS

Amounts falling due within one year

13

(3,470,644

)

(2,622,963

)

NET CURRENT ASSETS

3,119,255

2,194,099

TOTAL ASSETS LESS CURRENT LIABILITIES

4,013,468

3,164,617

CREDITORS

Amounts falling due after more than one year

14

(1,031,112

)

(475,609

)

PROVISIONS FOR LIABILITIES

18

(174,105

)

(191,695

)

NET ASSETS

2,808,251

2,497,313

CAPITAL AND RESERVES

Called up share capital

19

1

1

Retained earnings

2,808,250

2,497,312

SHAREHOLDERS' FUNDS

2,808,251

2,497,313

The financial statements were approved by the Board of Directors and authorised for issue on 29 April 2022 and were signed on its behalf by:

S P Salvin - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2020

1

2,123,646

2,123,647

Changes in equity

Total comprehensive income

-

373,666

373,666

Balance at 31 December 2020

1

2,497,312

2,497,313

Changes in equity

Total comprehensive income

-

310,938

310,938

Balance at 31 December 2021

1

2,808,250

2,808,251

1.	STATUTORY INFORMATION

Aiimi Limited is a private company, limited by shares, registered in England and Wales. The company's registered number is 05648705 and its registered office is 100 Avebury Boulevard, Milton Keynes, Buckinghamshire, MK9 1FH.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The principal accounting policies applied in the preparation of these financial statements are set out below.

These policies have been consistently applied to all years presented, unless otherwise stated.

The financial statements are presented in £ sterling.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);

•

the requirement of paragraph 33.7.

Turnover

Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:

- the amount of revenue can be measured reliably;

- it is probable that the Company will receive the consideration due under the contract;

- the stage of completion of the contract at the end of the reporting period can be measured reliably; and

- the costs incurred and the costs to complete the contract can be measured reliably.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Development costs are being amortised evenly over their estimated useful life of three years.

Tangible fixed assets

Tangible fixed assets are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using either a straight line or reducing balance method, as indicated below.

Depreciation is provided on the following basis:

Fixtures & Fittings

-

20% to 33% straight line

Computer Equipment

-

33% straight line

Leasehold Property

-

10% straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the profit and loss account.

Financial instruments

(i) Financial assets

Basic financial assets, including trade and other debtors, cash and bank balances are initially recognised at transaction price, 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.

Such assets are subsequently carried at amortised cost using the effective interest rate method.

(ii) Financial liabilities

Basic financial liabilities, including trade and other creditors 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.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Taxation

The tax expense for the year comprises current and deferred tax.

Tax is recognised in the profit and loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance Sheet date, except that:

- The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and

- Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Both current and deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Research and development

Research expenditure is written off to the profit and loss account in the year in which it is incurred. Development expenditure is written off in the same way unless the directors are satisfied as to the technical, commercial and financial viability of individual projects. In this situation, the expenditure is deferred and amortised over the period during which the company is expected to benefit.

Foreign currencies

Monetary assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the statement of financial position date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Operating leases

Leases that do not transfer all the risks and rewards of ownership are classified as operating leases. Payments under operating leases are charged to the profit or loss on a straight line basis over the period of the lease.

Incentives received to enter into an operating lease are credited to the profit and loss account, to reduce the lease expense, on a straight-line basis over the period of the lease.

Pension costs and other post-retirement benefits

The company contributes to a define contribution plan for the benefit of its employees. Contributions are recognised in profit or loss as they become payable.

Share capital

Ordinary shares are classified as equity.

Lease incentives

Incentives provided in consideration of the agreement for new or renewed leases are recognised over the period of the lease term.

Dilapidation provision

Provision is made for the net present value of the estimated future costs at the end of the rental agreement. The provision is calculated using estimated costs, and these estimates have been arrived at by consideration of the expected costs of contracts to remove the installed fixtures and fittings. The estimates are discounted at a rate that reflects current market assessments of the time value of money. A corresponding asset is recognised and included within the short leasehold land & buildings and is depreciated over the life of the lease. The estimated future costs are regularly reviewed and adjusted as appropriate for new circumstances.

3.	CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

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:

Provisions

Accruals are made for dilapidations and contingencies. These provisions require management's best estimate of the costs that will be incurred based on legislative and contractual requirements. In addition, the timing of the cash flows and the discount rates used to establish net present value of the obligations require management's judgement.

4.

TURNOVER

The turnover and loss before taxation are attributable to the one principal activity of the company.

An analysis of turnover by class of business is given below:

2021

2020

£

£

Software

789,690

695,993

Services

11,132,747

7,367,976

11,922,437

8,063,969

An analysis of turnover by geographical market is given below:

2021

2020

£

£

United Kingdom

11,182,158

7,530,743

Europe

740,279

533,226

11,922,437

8,063,969

5.	OTHER OPERATING INCOME

2021

2020

£

£

Rents received

33,333

-

Lease incentives

40,938

41,024

74,271

41,024

6.	EMPLOYEES AND DIRECTORS

2021

2020

£

£

Wages and salaries

7,093,233

4,554,978

Social security costs

376,052

593,646

Other pension costs

466,049

295,328

7,935,334

5,443,952

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

2021

2020

Staff

96

73

Directors

3

3

99

76

2021

2020

£

£

Directors' remuneration

444,692

477,911

Directors' pension contributions to money purchase schemes

23,850

21,740

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

Money purchase schemes

2

2

Information regarding the highest paid director is as follows:

2021

2020

£

£

Emoluments etc

169,331

185,323

Pension contributions to money purchase schemes

14,850

13,801

Key management personnel

Key management includes the directors. The compensation paid or payable to key management for employee services was £524,900 (2020 - £560,545).

7.	OPERATING LOSS

The operating loss is stated after charging:

2021

2020

£

£

Other operating leases

279,821

307,528

Depreciation - owned assets

191,967

140,338

Loss on disposal of fixed assets

364

41

Development costs amortisation

23,317

21,362

Foreign exchange differences

36,865

19,434

Auditors remuneration

9,650

9,000

8.

INTEREST PAYABLE AND SIMILAR EXPENSES

2021

2020

£

£

Bank loan interest

11,449

10,118

Other interest

394

-

11,843

10,118

9.

TAXATION

Analysis of the tax credit

The tax credit on the loss for the year was as follows:

2021

2020

£

£

Current tax:

Adjustment to prior years

76

6,380

R&D Tax credit

(789,550

)

(586,996

)

Total current tax

(789,474

)

(580,616

)

Deferred tax

(17,590

)

56,695

Tax on loss

(807,064

)

(523,921

)

Reconciliation of total tax credit included in profit and loss

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

2021

2020

£

£

Loss before tax

(496,126

)

(150,255

)

Loss multiplied by the standard rate of corporation tax in the UK of 19% (2020 - 14.500%)

(94,264

)

(21,787

)

Effects of:

Expenses not deductible for tax purposes

3,197

(2,656

)

Income not taxable for tax purposes

(7,778

)

-

Capital allowances in excess of depreciation

(5,453

)

(33,226

)

Adjustments to tax charge in respect of previous periods

(10,141

)

6,380

Research and development

(704,462

)

(529,327

)

Changes in tax rates

11,837

-

Deferred tax

-

56,695

Total tax credit

(807,064

)

(523,921

)

Tax rate changes

In the Spring Budget 2021, it was announced that the main rate of corporation tax will increase to 25% from 1 April 2023. This new law was substantively enacted on 24 May 2021. Deferred taxes at the balance sheet date have been measured using these enacted tax rates and reflected in these financial statements.