Final Results

RNS Number : 6807H
Cerillion PLC
28 November 2022
 

28 November 2022

AIM: CER 

 

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the company's obligations under Article 17 of MAR.

Cerillion plc

("Cerillion" or "Company" or "Group")

Final results for the year ended 30 September 2022

Record financial performance

Group is well-placed for continued growth

 

Cerillion plc, the billing, charging and customer relationship management software solutions provider, presents its annual results for the 12 months ended 30 September 2022.

Highlights

Year ended 30 September

2022

2021

Change





Revenue

£32.7m

£26.1m

+26%

Annualised recurring revenue 2

£12.4m

£9.9m

+25%

Adjusted EBITDA4

£13.8m

£10.5m

+31%

Adjusted EBITDA margin

42.0%

40.3%

+170bps

Adjusted profit before tax5

£11.9m

£8.5m

+40%

Statutory profit before tax

£10.9m

£7.4m

+47%

Adjusted basic earnings per share6

35.2p

25.5p

+38%

Statutory basic earnings per share

31.7p

21.8p

+45%

Total dividend per share

9.1p

7.1p

+28%

Net cash

£20.2m

£13.2m

+54%

 

Financial:

· Key financial performance measures reached new highs

· Revenue up 26% to a record £32.7m (2021: £26.1m), driven by major new customer implementations and strong demand from existing customers

· Back-order book3 reached a new high of £45.4m at the year-end (30 September 2021: £42.1m)

· Strong balance sheet with net cash up 54% to £20.2m (2021: £13.2m)

· Final dividend of 6.5p per share proposed (2021: 5.0p), bringing the total dividend for the year to 9.1p per share (2021: 7.1p), an increase of 28%  

· New customer sales pipeline up 43% to a record £209m (30 September 2021: £146m)

Operational:

· Continued expansion of new resource centres in Bulgaria and India

· Largest ever contract won in July 2022 (£15m), with Cable & Wireless Seychelles (CWS), a full-service network operator - continued the trend of winning bigger contracts and/or larger customers 

· Gained Gold-level status for flagship BSS/OSS suite in the TM Forum's Open API Conformance Certification program in early November 2022

· Strong pipeline of new business opportunities

· Cerillion well-positioned for further growth over the new financial year and beyond

Louis Hall, CEO of Cerillion, commented:

"It has been another year of very strong growth and development. Reported revenue, pre-tax profit and back-order book all reached new highs. We have maintained our top-line growth rate of c.25% for the second year running, building on the momentum of the last three to four years. We also secured another record-breaking contract win, and continued to expand the business, enlarging our resources, especially in India and Bulgaria, and enhancing our technology.

"We start the new financial year with a very high degree of visibility over our earnings, based on our very strong back-order book and higher level of recurring income.  The new business pipeline is very strong and includes a number of large potential deals.

"The market backdrop remains extremely favourable. The roll-out of 5G and digitisation, and the need to be able to react rapidly to changing market conditions, means that telecom companies continue to drive investment in enterprise software. These tailwinds should help to support Cerillion's continued expansion over the longer term."

For further information please contact:

 

Cerillion plc

Louis Hall, CEO, Andrew Dickson, CFO


c/o KTZ Communications

T: 020 3178 6378




 



Liberum (Nomad and Broker)


T: 020 3100 2000

Bidhi Bhoma, Cameron Duncan, William Hall

 

Singer Capital Markets (Joint Broker)

Rick Thompson, George Tzimas, James Fischer


 

 

T: 020 7496 3000

 



KTZ Communications


T: 020 3178 6378

Katie Tzouliadis, Dan Mahoney



 

About Cerillion

 

Cerillion has a 23-year track record in providing mission-critical software for billing, charging and customer relationship management ("CRM"), mainly to the telecommunications sector but also to other markets, including utilities and financial services. The Company has c. 80 customer installations across c. 45 countries.

 

Headquartered in London, Cerillion has operations in Pune, India, where its Global Solutions Centre is located, as well as operations in Bulgaria, Belgium, Singapore and Australia .

The business was originally part of Logica plc before its management buyout, led by CEO, Louis Hall, in 1999. The Company joined AIM in March 2016.

Notes

 

Note 1  Revenue derived from software licence, support and maintenance, Software-as-a-Service ("SaaS") and third-party sales.

Note 2  Recurring revenue includes support and maintenance, managed service and Skyline revenue.

Note 3  Back order book consists of £37.4m of sales contracted but not yet recognised at the end of the reporting period plus £8.0m of annualised support and maintenance revenue.  It is anticipated that 75% of the £37.4m of sales contracted but not yet recognised as at the end of the reporting period will be recognised within the next 12 to 18 months.

Note 4  Adjusted earnings before interest, tax, depreciation and amortisation ("EBITDA") is calculated by taking operating profit and adding back depreciation & amortisation and share-based payment charge.

Note 5  Adjusted profit before tax is calculated by taking reported profit before tax and adding back amortisation of acquired intangible assets and share-based payment charge.

Note 6  Adjusted earnings per share is calculated by taking profit after tax and adding back amortisation of acquired intangible assets and share-based payment charge and is divided by the weighted average number of shares in issue during the period.



 

CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S REPORT

 

Introduction

 

Cerillion performed very strongly over the financial year, with revenue, profit before tax and the back-order book setting new record highs. Revenue increased by 26% to £32.7m year-on-year (2021: £26.1m), slightly ahead of the 25% growth rate achieved in the last financial year.  Adjusted profit before tax rose by 40% to £11.9m (2021: £8.5m), which was significantly better than consensus market expectations, as we reported in our trading update in October. In addition, the back-order book increased by 8% to £45.4m (2021: £42.1m).

 

New orders over the year stood at £29.4m (2021: £33.3m).  While this is a small year-on-year decrease, the total value of the new customer sales pipeline has increased by 43% to £209.0m (2021: £146.4m) reflecting strong on-going demand for the Company's solutions.  For a second year in a row, we signed the largest initial contract order in the Company's history, securing a major contract worth £15.0m with Cable & Wireless Seychelles.

 

The trend in recent years towards bigger deal sizes with larger customers has multiple benefits. It evidences the quality of our product offering, adds customers that are typically more active and generate higher income over the long-term, and since larger deals frequently have a higher software licence element, they tend to be margin enhancing.

 

The Company's performance was also supported by continuing strong demand from existing customers, with orders from existing accounts at £16.7m.  This compared to £19.2m last year, which was a 105% increase on the prior year.  The continuing strong performance mainly reflected the increased presence of larger customers in the customer base, with commensurately broader and deeper requirements as well as larger budgets.

 

In order to support the significant acceleration of the Company's growth rate, we increased our resource in our main London and Pune operations and expanded our new base in Sofia, Bulgaria, opened in September 2021.  We also established new teams in India at Indore and Ahmedabad.

 

Looking to the future, demand for billing, charging, customer relationship management ("CRM") and digital customer experience solutions in the Company's core telecommunications market is set to rise further as telecoms businesses continue to invest in 5G and fibre rollouts and in ancillary systems, which are essential to supporting and monetising those investments and to enabling telecoms businesses to adapt to rapidly changing market conditions. Cerillion remains well-placed to benefit from this, and to grow both in Europe and its other international markets. We also expect our growth to benefit from increasing market acceptance of SaaS-based product solutions, which lower total cost of ownership and provide significant commercial and operational benefits.

 

With the pipeline of potential new business opportunities remaining very strong, we expect the Company to make further strong progress in the new financial year.

 

Financial Overview

 

Total revenue for the year to 30 September 2022 rose by 26% to £32.7m (2021: £26.1m). As is typical, existing customers (classified as those acquired before the beginning of the reporting period) accounted for a very high proportion of total revenue, generating 98% of the overall result (2021: 96%).

 

Recurring revenue, which is derived from support and maintenance and managed service contracts, increased by 21% to £10.5m and comprised approximately 32% of total revenue (2021: £8.6m, 33%). At 30 September 2022, recurring revenue on an annualised basis was 25% higher year-on-year at £12.4m (30 September 2021: £9.9m), boosted by a 67% increase in annualised managed service contract revenue (2021: 36%) as more customers contracted for these services.

 

The Group's revenue streams are categorised in three segments: software revenue (including Software-as-a-Service); services revenue; and revenue from other activities.  Software revenue principally comprises software licences and related support and maintenance sales, while services revenue is generated by software implementations, managed services and ongoing account development work.  Revenue from other activities is mainly from the reselling of third-party products.

 

Software (including Software-as-a-Service) revenue decreased by 4% to £12.9m (2021: £13.4m).  This was mainly due to the timing of licence recognition for recent, large new customer wins where recognition will not occur until FY 2023.  Software revenues accounted for 39% of total revenues (2021: 51%).

 

Services revenue increased by 54% to £18.3m (2021: £11.9m). This increase largely reflected concurrent implementation work on new customer projects won in the prior year, as well as a strong flow of services work from live customers. Services revenue comprised 56% of total revenue (2021: 46%).

 

Third-party income doubled to £1.6m (2021: £0.8m) and comprised 5% of total revenue (2021: 3%).

 

Gross margin was in line with the prior year at 77.9% (2021: 78.3%).

 

Operating expenses increased by 2.9% to £13.0m (2021: £12.7m). This included a favourable year-on-year foreign exchange impact of £0.9m due to retranslation of balance sheet items at year end.  Excluding this, operating expenses increased by 9.9%, reflecting strong focus on cost control.  Personnel costs were flat at £7.4m (2021: £7.1m), and accounted for 57% (2021: 56%) of operating expenses.

 

Adjusted EBITDA for the year increased by 31% to £13.8m (2021: £10.5m), driven mainly by higher revenues, and supported by favourable foreign exchange rates and higher resource utilisation.  The Board considers adjusted EBITDA to be a key performance indicator for Cerillion as it adds back exceptional items and key non-cash transactions, being share-based payments, depreciation and amortisation.

 

We continued to invest in our product set, and the charge for amortisation of intangibles was £1.9m (2021: £1.9m). Expenditure on tangible fixed assets was £0.6m (2021: £0.3m). Operating profit increased by 42% to £10.7m (2021: £7.5m) due to the increase in revenue, as well as operational leverage.

 

Adjusted profit before tax rose by 40% to £11.9m (2021: £8.5m) and adjusted earnings per share increased by 38% to 35.2p (2021: 25.5p). On a statutory basis, profit before tax increased by 47% to £10.9m (2021: £7.4m) and earnings per share increased by 45% to 31.7p (2021: 21.8p).

 

Cash Flow and Banking

 

The Group continued to generate strong cash flows, and closed the financial year with net cash up by 54% against the same point last year to £20.2m (30 September 2021: £13.2m). This was after £2.2m of dividend payments (2021: £1.7m). Total debt at the year-end remained £nil (2021: £nil).

 



 

Dividend

 

The Board is pleased to propose a 30% increase in the final dividend to 6.5p per share (2021: 5.0p). Together with the interim dividend of 2.6p per share (2021: 2.1p), this brings the total dividend for the year to 9.1p per share (2021: 7.1p), an increase of 28%.

 

The dividend, which is subject to shareholder approval at the Company's Annual General Meeting to be held on 2 February 2023, will become payable on 8 February 2023 to those shareholders on the Company's register as at the close of business on the record date of 30 December 2022.  The ex-dividend date is 29 December 2022.

 

Operational and Market Overview

 

Whilst the coronavirus pandemic is no longer directly affecting business operations, the global experience of remote-working - still in place in many economies - has continued to emphasise the dependence of the world economy on state-of-the-art telecoms infrastructure.  Over the year, we continued to see high levels of investment in the sector in general, and an acceleration of investment in 5G and fibre rollouts, with spending trickling down from core network improvements to ancillary system upgrades and replacements.  We expect to see these trends continue. 

 

In addition, as the global cost of living crisis begins to bite, we anticipate increasing pressure on telcos to find efficiencies in their digital real-estate.  This is likely to encourage further market take-up of product-based SaaS solutions, which Cerillion offers, rather than the more bespoke solutions available from more traditional vendors.  We therefore fully expect demand for billing, charging, CRM and digital customer experience software in our core telecoms market to continue to grow. 

 

Beyond these broad sector trends, a number of other factors will continue to drive demand for our offerings.  These include:

 

the acceleration of digital investments, initially driven by the pandemic as a necessity to ensure continuity of services, but now increasingly a requirement to improve the customer experience.  This means that Communication Service Providers ("CSPs") are now going beyond their digital front-ends and investing in wider digitalisation and in the transformation of their BSS/OSS systems in order to automate and optimise customer engagement and deliver a seamless experience across all touchpoints;

the rollout of 5G and the evolution to 5G "Standalone" networks, which is driving further investment in convergent charging systems and product catalogue solutions, as CSPs aim to maximise their opportunities in the B2B sector;

the requirement for agility; with CSPs facing the on-going threat from digital services providers and the hyperscalers, agility is more important than ever.  This is driving further investment in BSS/OSS platforms that will allow CSPs to pivot quickly and change business processes to address new market opportunities, from the complexities of B2B/enterprise use cases to the simplest of digital subscription services;

the need for CSPs to be able to respond rapidly to changing conditions in their markets, which fully integrated BSS/OSS product solutions enable, heightened by current inflationary pressures and other macro-economic drivers; and

the trend to 'low-code' / 'no-code', with many CSPs now preferring to invest in products with standardised interfaces (Open Application Programming Interfaces ("API") for interoperability with other systems, and moving away from 'customisation' towards 'configuration'.

 

Cerillion's ability to address the market through a range of flexible solutions remains a key strength. As well as our proven ability to support end-to-end transformation projects, the Company can provide individual product modules, or subsets of modules, to implement point solutions that address more specific requirements. The Company's solutions are also able to support a broad range of CSPs, from traditional network operators and virtual network operators ("VNOs") to enterprise connectivity solutions providers.

 

In July 2022, the Company announced a major new contract win with Cable & Wireless Seychelles ("CWS"), the main telecoms provider in the Seychelles. This latest win is the Company's largest initial contract agreement to date, and further enhances the Cerillion brand in the marketplace. We expect the general trend towards signing bigger deals with larger new customers to continue. These contracts normally involve higher recurring revenues and there is a much greater upsell opportunity as well. Therefore they contribute significantly to the ongoing growth of the business. As mentioned previously, these larger contracts typically have a longer sales cycle than smaller ones.

 

The new customer wins, ongoing implementation work with existing customers, and major new deals signed with existing customers, create a strong platform for further growth in the new financial year.  The back-order book at 30 September 2022 was up by 8% to an all-time record of £45.4m (2021: £42.1m). This means that the Company has started the new financial year with far greater visibility of revenues than any previous year.

 

As we grow across the globe, and global labour markets evolve, we will continue to expand our operating locations, recruiting the best talent cost-effectively and supporting our expanding global customer base. We continued to build our teams at our new locations in Sofia, Bulgaria and at Ahmedabad and Indore in India and maintain a mix of remote and office-based working. The competition for technology professionals remained strong during most of the financial year, however, we believe that we have seen a peak in demand at our main operating locations and consequently expect those pressures to ease a little during the new financial year. Nevertheless, we remain focused on potential inflation in people costs and intend to continue to manage carefully the mix and location of resource.

 

We continued to invest in R&D over the year, enhancing our technology and providing two major new releases of our product set as scheduled. The most recent of these releases was Cerillion 22.2, which went live in early November 2022.  The focus of this release was a major upgrade of the 'Wholesale Gateway' module. This module supports the automation of the wholesale operations of network operators ("NetCos"), and the upgraded version speeds up the on-boarding process of new service provider partners ("ServCos"). It also simplifies the integration of business support systems between NetCos and ServCos, whilst providing a high level of security for NetCos through a dedicated authorisation layer and comprehensive API (application programming interfaces) management policies.

 

In early November 2022, we were delighted to gain Gold-level status for the Company's BSS/OSS suite in the TM Forum's Open API Conformance Certification program. Achieving this level underlines Cerillion's commitment to delivering open and standards-based products in accordance with the TM Forum's Open API & Open Digital Architecture Manifesto, and puts Cerillion at the forefront of adoption.

 

Outlook

 

The Company continues to grow strongly, and the Cerillion brand is gaining visibility in what is a huge marketplace.

 

Looking ahead, we are well-placed to deliver another strong performance in the new financial year, supported by a record order book. The new customer sales pipeline is also at a record high and contains large deal opportunities. 

 

Cerillion's financial position is very robust. The Company continues to generate strong cash flows, maintains significant net cash, and recurring income is rising. We are therefore well-placed to support ongoing growth, including taking advantage of any suitable acquisitions opportunities as they arise.

 

The long-term trend of telecoms companies increasing investment in their networks and in digital transformation remains entrenched. This should continue to benefit Cerillion's own long-term growth prospects.

 

 

A M Howarth

L T Hall

Non-executive Chairman

Chief Executive Officer

 



 



 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 30 September 2022




Year to
30 September 2022


Year to
30 September 2021


Notes


£


£




 



Revenue

2

 


32,726,049


26,070,815

 

 


 



 



 



Cost of sales



(7,221,383)


(5,662,228)




 



Gross profit



25,504,666


20,408,587

 



 



Operating expenses

 


(13,030,714)


(12,657,720)

Impairment losses on financial assets

3


(1,770,011)


(226,852)


 


 



Adjusted EBITDA*

 


13,750,055

 

10,515,283

Depreciation and amortisation

 


(2,985,649)

 

(2,880,927)

Share-based payment charge

18


(60,465)

 

(110,341)




 



Operating profit

3


10,703,941


7,524,015




 



Finance income

4


336,986


66,810

Finance costs

5


(145,623)


(163,982)


 


 



Profit before taxation

 


10,895,304

 

7,426,843




 



Taxation

6


(1,551,125)


(999,748)




 



Profit for the year



9,344,179

 

6,427,095

 



 



Other comprehensive income/(expense)



 



Items that will or may be reclassified to profit or loss:



 



Exchange difference on translating foreign



70,238


(120,093)

operations



 





Total comprehensive income for the year

 


 

 

9,414,417


 

 

6,307,002

 

Earnings per share



 



Basic earnings per share - continuing and total operations

8



31.7 pence



21.8 pence

Diluted earnings per share - continuing and total operations

 


 

31.6 pence


 

21.7 pence







All transactions are attributable to the owners of the parent.

The Group has no other recognised gains or losses for the current year.

* Adjusted earnings before interest, tax, depreciation and amortisation ("EBITDA") is calculated by taking operating profit and adding back depreciation & amortisation and share-based payment charge.



CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 September 2022



 

2022

 

2021



Notes


£


£


ASSETS



 




Non-current assets



 




Goodwill

9


2,053,141


2,053,141


Other intangible assets

9


2,653,225


3,571,787


Property, plant and equipment

10


979,880


758,670


Right-of-use assets

11


3,056,997


3,705,723


Trade and other receivables

13


2,171,377


2,015,422


Deferred tax assets

12


259,625


209,211


 



11,174,245


12,313,954


Current assets



 




Trade and other receivables

13


11,204,221


10,178,628


Cash and cash equivalents

16


20,249,100


13,174,471



 


31,453,321


23,353,099



 


 




TOTAL ASSETS

 

 

42,627,566


35,667,053



 


 




LIABILITIES

 


 




Non-current liabilities

 


 




Trade and other payables

14


(934,439)


(394,850)


Lease liabilities

11


(3,049,538)


(3,866,352)


Deferred tax liabilities

12


(718,671)


(861,765)



 


(4,702,648)


(5,122,967)


Current liabilities


 




Trade and other payables

14


(10,216,453)


(9,390,933)


Lease liabilities

11


(976,486)


(947,710)



 


(11,192,939)


(10,338,643)


 

TOTAL LIABILITIES

 


 

(15,895,587)


 

(15,461,610)


 

NET ASSETS

 


 

26,731,979


 

20,205,443


 

 


 




EQUITY ATTRIBUTABLE TO SHAREHOLDERS




Ordinary share capital

17


147,567


147,567


Share premium account

 


13,318,725


13,318,725


Treasury stock

17


(25)


(25)


Share option reserve

 


136,958


128,130


Foreign exchange reserve

 


(96,836)


(167,074)


Retained earnings

 


13,225,590


6,778,120


 



 




TOTAL EQUITY


 

26,731,979


20,205,443








 



 

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 30 September 2022






2022


2021


Notes

£


£

Cash flows from operating activities


 



Profit for the year


9,344,179


6,427,095

Adjustments for:


 



Taxation

6

1,551,125


999,748

Finance income

4

(336,986)


(66,810)

Finance costs

5

145,623


163,982

Share option charge

18

60,465


110,341

Depreciation

10,11

1,084,581


1,007,265

Amortisation

9

1,901,068


1,873,661



13,750,055


10,515,282

Increase in trade and other receivables


(1,181,548)


(238,364)

Increase/(decrease) in trade and other payables


1,323,530


(84,435)

Cash generated from operations


13,892,037


10,192,483

Finance costs

5

(145,623)


(163,982)

Finance income

4

336,986


66,810

Tax paid


(1,745,872)


(293,076)

NET CASH GENERATED FROM OPERATING ACTIVITIES


12,337,528


9,802,235



 



Cash flows from investing activities


 



Capitalisation of intangible assets

9

(982,506)


(970,212)

Purchase of property, plant and equipment

10

(626,206)


(301,686)

NET CASH USED IN INVESTING ACTIVITIES


(1,608,712)


(1,271,898)

 


 



Cash flows from financing activities


 



Borrowings repaid


-


(609,359)

Purchase of treasury stock


(827,424)


(512,500)

Receipts from exercise of share options


122,102


1,249

Principal elements of finance leases

11

(806,706)


(764,416)

Dividends paid

7

(2,243,024)


(1,726,538)

 


 



NET CASH USED IN FINANCING ACTIVITIES


(3,755,052)


(3,611,564)



 



NET INCREASE IN CASH AND CASH EQUIVALENTS


6,973,764


4,918,773

Translation differences


100,865


(56,169)

Cash and cash equivalents at beginning of year


13,174,471


8,311,867



 



CASH AND CASH EQUIVALENTS AT END OF YEAR


 

20,249,100


 

13,174,471






 






 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 30 September 2022

 

Ordinary share capital

 

Share premium account

 

Treasury stock

 

Share option reserve

 

Foreign exchange reserve

 

Retained earnings

 

Total


£


£


£


£


£


£


£















Balance at 1 October 2020

147,567


13,318,725


(375,025)


151,619


(46,981)


2,829,984


16,025,889















Profit for the year

-


-


-


-


-


6,427,095


6,427,095

Other comprehensive income:













Exchange differences on translating foreign operations

-


-


-


-


(120,093)


-


(120,093)

Total comprehensive income

-


-


-


-


(120,093)


6,427,095


6,307,002

Transactions with owners:














Share option charge

-


-


-


110,341


-


-


110,341

Purchase of treasury stock

-


-


(512,500)


-


-


-


(512,500)

Exercise of share options

-


-


887,500


(133,830)


-


(752,421)


1,249

Dividends

-


-


-


-


-


(1,726,538)


(1,726,538)

Total transactions with owners

-


-


375,000


(23,489)


-


(2,478,959)


(2,127,448)

Balance as at 30 September 2021

147,567

 

13,318,725

 

 

(25)

 

 

128,130

 

 

(167,074)

 

6,778,120

 

20,205,443

 

 

 

 

 

Ordinary share capital

 

 

 

 

Share premium account

 

 

 

 

Treasury stock

 

 

 

 

Share option reserve

 

 

 

 

Foreign exchange reserve

 

 

 

 

Retained earnings

 

 

 

 

Total


£


£


£


£


£


£


£















Balance at 1 October 2021

147,567


13,318,725


(25)


128,130


(167,074)


6,778,120


20,205,443















Profit for the year

-


-


-


-


-


9,344,179


9,344,179

Other comprehensive income:













Exchange differences on translating foreign operations

-


-


-


-


70,238


-


70,238

Total comprehensive income

-


-


-


-


70,238


9,344,179


9,414,417

Transactions with owners:














Share option charge

-


-


-


60,465


-


-


60,465

Purchase of treasury stock

-


-


(827,424)


-


-


-


(827,424)

Exercise of share options

-


-


827,424


(51,637)


-


(653,685)


122,102

Dividends

-


-


-


-


-


(2,243,024)


(2,243,024)

Total transactions with owners

-


-


-


8,828


-


(2,896,709)


(2,887,881)

Balance as at 30 September 2022

147,567

 

13,318,725

 

 

(25)

 

 

136,958

 

 

(96,836)

 

13,225,590

 

26,731,979



 

NOTES TO THE ACCOUNTS

 

Critical accounting estimates and judgements and other sources of estimation uncertainty

1 (a) Critical accounting estimates and judgements

The preparation of Financial Statements under IFRS requires the use of certain critical accounting assumptions, and requires management to exercise its judgement and to make estimates in the process of applying Cerillion's accounting policies.

 

Judgements

(i) Capitalisation of development costs

Development costs are capitalised only after the technical and commercial feasibility of the asset for sale or use have been established. This is determined by our intention to complete and/or use the intangible asset. The future economic benefits of the asset are reviewed using detailed cash flow projections. The key judgement is whether there will be a market for the products once they are available for sale.

 

(ii) Revenue recognition

The Group assesses the products and services promised in its contracts with customers and identifies a performance obligation for each promise to transfer to the customer a product or service (or bundle of products and services) that is distinct. This assessment is performed on a contract by contract basis and involves significant judgement. The determination of whether performance obligations are distinct or not affects the timing and quantum of revenue and profit recognised in each period.

 

Estimates

(i) Revenue recognition

For contracts where goods or services are transferred over time, revenue is recognised in line with the percentage completed in terms of effort to date as a percentage of total forecast effort. Total forecast effort is prepared by project managers on a monthly basis and reviewed by the project office and senior management team on a monthly basis. The forecast requires management to be able to accurately estimate the effort required to complete the project and affects the timing and quantum of revenue and profit recognised on these contracts in each period.

 

(ii) Impairment of non-financial assets

All non-current assets are tested for impairment whenever events or circumstances indicate that their carrying value may be impaired. Additionally, goodwill is subject to an annual impairment test. An impairment loss is recognised in the Group statement of comprehensive income to the extent that an asset's carrying value exceeds its recoverable amount, which represents the higher of the asset's net realisable value and its value in use.

 

(iii) Depreciation and amortisation

Depreciation and amortisation rates are based on estimates of the useful economic lives and residual values of the assets involved. The assessment of these useful economic lives is made by projecting the economic lifecycle of the asset. The key judgement is estimating the useful economic life of the development costs capitalised, a review is conducted annually by project. Depreciation and amortisation rates are changed where economic lives are re-assessed and technically obsolete items written off where necessary.

 

 

 



 

(iv) Calculation of future minimum lease payments

The calculation of lease liabilities requires the Group to determine an incremental borrowing rate ("IBR") to discount future minimum lease payments. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group 'would have to pay', which requires estimation when no observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease.

 

Management has considered the above areas of estimation and concluded that there are no deemed material changes arising from changes in underlying assumptions.

 

 

1 (b) Other sources of estimation uncertainty

(i) Recoverability of trade debtors and accrued income

Management use their judgement when determining whether trade debtors and accrued income are considered recoverable or where a provision for impairment is considered necessary. The assessment of recoverability will include consideration of whether the balance is with a long-standing client, whether the customer is experiencing financial difficulties, the fact that balances are recognised under contract and that the products sold are mission-critical to the customer's business. Refer to notes 13 and 16.

 

Segment information

The Group continues to be organised into four main business segments for revenue purposes.

 

Under IFRS 8 there is a requirement to show the profit or loss for each reportable segment and the total assets and total liabilities for each reportable segment if such amounts are regularly provided to the chief operating decision-maker. There are no other material items that are separately presented to the chief operating decision-maker.

 

In respect of the profit or loss for each reportable segment the expenses are not reported by segment and cannot be allocated on a reasonable basis and, as a result, the analysis is limited to the Group revenue.

 

Assets and liabilities are used or incurred across all segments and therefore are not split between segments.

 


 

2022


 

2021


£


£

Revenue




Services

18,271,756


11,863,628

Software

9,853,954


11,340,625

Software-as-a-Service

3,005,913


2,057,655

Third-party

1,594,426


808,907

Total revenue

32,726,049


26,070,815





 

The following table provides a reconciliation of the revenue by segment to the revenue recognition accounting policy. Revenue recognised on performance obligations partially satisfied in previous periods was £19,928,729 (2021: £12,703,901).

 

 

 

 

 





Accounting policies

 



Year ended 30 September 2022

(i)

(ii)

(iii)

(iv)

 

Total

 


£


£

£

£

£


£











Services

 18,271,756









 implementation fees

 


6,597,495

-

-

-


6,597,495


 ongoing account development work

 


-

-

11,674,261

-


11,674,261

Software

9,853,954







 


initial licence fees

 


 764,858

-

-

-


 764,858


sale of additional licences

 


-

1,611,694

-

-


1,611,694


ongoing maintenance and support fees

 


7,477,402

-

-

-


7,477,402

Software-as-a-Service

3,005,913


3,005,913

-

-

-


3,005,913


 

 








Third-Party

 1,594,426


-

-

-

 1,594,426


 1,594,426



 








Total

32,726,049


17,845,668

1,611,694

11,674,261

 1,594,426


32,726,049



 








 





Accounting policies

 


 

Year ended 30 September 2021


(i)

(ii)

(iii)

(iv)

 

Total

 

 


£


£

£

£

£


£

 











 

Services

 11,863,628








 


 implementation fees

 


5,386,613

-

-

-


5,386,613

 


 ongoing account development work

 


-

-

6,477,015

-


6,477,015

 

Software

11,340,625








 


initial licence fees

 


 3,839,508

-

-

-


3,839,508

 


sale of additional licences

 


-

910,787

-

-


910,787

 


ongoing maintenance and support fees

 


6,590,330

-

-

-


6,590,330

 

Software-as-a-Service

2,057,655


2,057,655

-

-


2,057,655

 



 








 

Third-Party

 808,907


-

-

-

808,907


 808,907

 



 








 

Total

26,070,815


17,874,106

910,787

6,477,015

808,907


26,070,815

 











(a) Geographical information

As noted above, the internal reporting of the Group's performance does not require that the statement of financial position information is gathered on the basis of the business streams. However, the Group operates within discrete geographical markets such that capital expenditure, total assets and net assets of the Group are split between these locations as follows:



 

 


UK & Europe


MEA


Americas


Asia Pacific


£


£


£


£

Year ended/As at 30 September 2022







Revenue - by customer location

20,389,431


3,165,818


7,937,599


1,233,201

Capital expenditure

1,548,273


-


-


60,439

Non-current assets

10,496,433


-


-


677,812

Total assets

41,099,603


-


-


1,527,963

Net assets

26,519,367


-


-


212,612

 


UK & Europe


MEA


Americas


Asia Pacific


£


£


£


£

Year ended/As at 30 September 2021







Revenue - by customer location

18,729,415


2,052,625


3,478,079


1,810,696

Capital expenditure

1,218,040


-


-


53,858

Non-current assets

11,371,807


-


-


942,147

Total assets

34,104,087


-


-


1,562,966

Net assets

20,250,312


-


-


(44,869)

 

All revenue is contracted within the UK subsidiary Cerillion Technologies Limited and therefore all revenue is domiciled in the Europe segment.

 

Cerillion receives greater than 10% of revenue from individual customers in the following geographical regions:

 




Operating


2022

 

2021




segment


£


£

Customer








No. 1



Europe


4,817,806


2,708,264

No. 2



Americas


3,417,612


555,716

No. 3



UK


3,400,054


5,195,842



 

 

Operating profit


2022


2021


£


£

Operating profit is stated after (crediting)/charging:

 



Employee benefits expenses

13,943,441


12,602,628

Depreciation

1,084,581


1,007,265

Amortisation of intangibles

1,901,068


1,873,662

Research and development costs

385,449


395,731

Bad debt expense

1,770,011


226,852

Foreign exchange (gains)/losses

(366,693)


494,903

Operating leases

157,089


125,834

Fees payable to Cerillion's principal auditors:

 



- Audit of Cerillion plc's annual financial statements

14,300


13,000

- Audit of subsidiaries

80,300


73,000

- Non-audit services - tax services

81,474


38,430

- Non-audit services - other services

4,278


-

Fees payable to associates of principal auditors:

 



- Audit of subsidiaries

9,000


7,500

Other costs

2,957,810


1,687,995

Total cost of sales, operating expenses and impairment losses on financial assets

22,022,108


18,546,800





 

The bad debt expense relates to the provisions made against the risk of non-recovery of receivables. The increase during the year is predominantly due to an assessment over certain implementation work that may not be fully recoverable.

 

Finance income


2022


2021


£


£

Finance income:

 



Bank interest receivable

74,922


1,855

Unwinding discount of contracts with significant financing component

262,064


64,955


336,986


66,810


 




 



Finance costs


2022


2021


£


£

Finance costs:

 



Interest payable in respect of loans

-


(5,347)

Interest and finance charges for lease liabilities

(133,944)


(158,341)

Other interest payable

(11,679)


(294)


(145,623)


(163,982)



 

Taxation

a) Analysis of tax charge for the year

The tax charge for the Group is based on the profit for the year and represents:


2022

2021

 


£

£

 

Current tax expense - UK

1,524,372

799,160

 

Current tax - adjustment in respect of prior year

1,159

-

 

Current tax expense - overseas

197,158

293,076

 

Current tax expense - total

1,722,689

1,092,236

 

Deferred tax credit

(153,541)

(92,336)

 

Deferred tax - adjustment in respect of prior year

(18,023)

(152)

 

Deferred tax credit - total

(171,564)

(92,488)

 

Total tax charge

1,551,125

999,748

 


 


 

(b) Factors affecting total tax for the year

 


The tax assessed for the year is lower (2021: lower) than the standard rate of corporation tax in the United Kingdom 19.0% (2021: 19.0%). The differences are explained as follows:


 



 


Profit on ordinary activities before tax

10,895,304

7,426,843


 


Profit on ordinary activities multiplied by standard rate of corporation tax in the United Kingdom of 19.0% (2021: 19.0%)

2,070,108

1,411,100


 


Effect of:

 


Expenses not deductible for tax purposes

257,001

219,344

Non-taxable income for tax purposes

-

(180,158)

Difference in tax rates

15,256

64,625

Other temporary differences

(51,606)

28,310

Foreign tax - other

(8,434)

78,760

Prior year tax adjustment

1,159

-

Prior year tax adjustment - deferred tax

(18,023)

(152)

Other permanent differences - relating to share options

(134,604)

(168,464)

Enhanced relief for research and development

(579,732)

(453,617)

Total tax charge

1,551,125

999,748


 


There are currently no recognised or unrecognised deferred tax assets or liabilities within the Parent Company financial statements. In the Spring Budget 2021, the Government announced that from 1 April 2023 the main rate of UK corporation tax rate will increase from 19% to 25%. This new rate was substantively enacted on 24 May 2021 and therefore its impact has been reflected in the measurement of deferred taxes in the financial statements.

Dividends

(a)  Dividends paid during the reporting period

The Board paid the final dividend in respect of 2021 of 5.0p per share, on 8 February 2022, and declared and paid an interim 2022 dividend of 2.6p (2021: 2.1p) per share on 17 June 2022. Total dividends paid during the reporting period were £2,243,024 (2021: £1,726,538).

 

(b)  Dividends not recognised at the end of the reporting period

Since the year end the Directors have proposed the payment of a dividend in respect of the full financial year of 6.50p per fully paid Ordinary Share (2021: 5.00p). The aggregate amount of the proposed dividend expected to be paid out of retained earnings at 30 September 2022, but not recognised as a liability at the year end is £1,918,377 (2021: £1,475,674). Since the year end the Directors of Cerillion Technologies Limited have approved a £3.0 million dividend to Cerillion plc.

 

 

Earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of Ordinary Shares in issue during the year.

 


 

2022

 

2021






Profit attributable to equity holders of the Company (£)


9,344,179


6,427,095



 



Weighted average number of Ordinary Shares in issue (number)


29,513,486


29,513,486

Less weighted average number of shares held in Treasury


(10,627)


(30,149)

Weighted average number of Ordinary Shares in issue (number)


29,502,859


29,483,337

Effect of share options in issue


56,858


105,886

Weighted average shares for diluted earnings per share


29,559,717


29,589,223



 



Basic earnings per share (pence per share)


31.7


21.8

Diluted earnings per share (pence per share)


31.6


21.7

 



 

Intangible assets

Group

 

Goodwill

 

Purchased customer contracts

 

Intellectual property rights

 

Software development costs

 

External
software licences

 

Total


 

£

 

£

 

£

 

£

 

£

 

£

Cost













At 1 October 2020


 2,053,141


4,382,654


2,567,160 


4,305,792


230,453


13,539,200 

Additions


-


-


-


948,198


22,014


970,212

At 30 September 2021


 2,053,141


4,382,654


2,567,160 


5,253,990


252,467


14,509,412 














Additions


-


-


-


965,427


17,079


982,506

At 30 September 2022


 2,053,141


4,382,654


2,567,160 


6,219,417


269,546


15,491,918 














Amortisation













At 1 October 2020


-


2,817,419 


 1,650,317


2,346,529 


196,558 


7,010,823

Provided in the year


-


626,093 


366,737


856,530


24,301


1,873,661

At 30 September 2021


 - 


3,443,512 


 2,017,054


3,203,059 


220,859 


8,884,484














Provided in the year


-


626,093 


366,737


884,620


23,618


1,901,068

At 30 September 2022


 - 

 

4,069,605 

 

 2,383,791

 

4,087,679 

 

244,477 

 

10,785,552














Net book amount at 30 September 2022

 

2,053,141

 

313,049

 

183,369

 

2,131,738 

 

25,069 

 

4,706,366

 

 

 

 

 

 

 

 

 

 

 

 

Net book amount at
30 September 2021


2,053,141


939,142


550,106


2,050,931 


31,608 


5,624,928














 

Amortisation has been included in operating expenses in the consolidated statement of comprehensive income.

 

The carrying value of goodwill included within the Cerillion plc consolidated statement of financial position is £2,053,141 (2021: £2,053,141), which is allocated to the cash-generating unit ("CGU") of Cerillion Technologies Limited Group. The CGU's recoverable amount has been determined based on its fair value less costs to sell. As Cerillion plc was established to purchase the CTL Group the fair value less costs to sell has been calculated based on the market capitalisation of Cerillion plc less the estimated costs to sell the CTL Group.

 

Using an average market share price of Cerillion plc for the year ended 30 September 2022, less an estimate of costs to sell, there is significant headroom above the carrying value of the cash-generating unit and therefore no impairment exists. The calculations show that a reasonably possible change, as assessed by the Directors, would not cause the carrying amount of the CGU to exceed its recoverable amount.





 

10  Property plant and equipment

Group

 

Leasehold  improvements

 

Computer  equipment

 

Fixtures  and fittings

 

Total

 


 

£

 

£

 

£

 

£

 

Cost









 

At 1 October 2020


712,748


1,456,378


294,651


2,463,777

 

Additions


33,040


263,611


5,035


301,686

 

Disposals


-


(105,325)


-


(105,325)

 

Exchange difference


(14,932)


(9,944)


(5,558)


(30,434)

 

At 30 September 2021


 730,856


 1,604,720


 294,128


 2,629,704

 










 

Additions


-


623,708


2,498


626,206

 

Disposals


-


(58,724)


-


(58,724)

 

Exchange difference


27,628


23,795


10,283


61,706

 

At 30 September 2022

 

 758,484

 

 2,193,499

 

 306,909

 

 3,258,892

 










 

Accumulated Depreciation







 

At 1 October 2020


318,543


1,089,257


268,092


1,675,892

 

Provided in the year


67,344


232,232


24,237


323,813

 

Disposals


-


(105,325)


-


(105,325)

 

Exchange difference


(10,058)


(7,999)


(5,289)


(23,346)

 

At 30 September 2021


375,829


1,208,165


 287,040


 1,871,034

 










 

Provided in the year


71,653


335,121


5,003


411,777

 

Disposals


-


(58,724)


-


(58,724)

 

Exchange difference


23,430


21,252


10,243


54,925

 

At 30 September 2022


470,912

 

1,505,814

 

 302,286

 

 2,279,012

 










 

Net book amount at 30 September 2022

 

287,572

 

687,685

 

 4,623

 

 979,880

 

 

 








 

Net book amount at

30 September 2021


 355,027


396,555


 7,088


 758,670

 

 









 










All depreciation charges are included within operating expenses and no impairment has been charged.

 

There were no property, plant and equipment assets owned by the Parent Company.




11  Leases

Group

This note provides information for leases where the Group is a lessee. The Group leases offices in London and India, along with some IT equipment.

 

(i) Amounts recognised in the consolidated and company statements of financial position

The consolidated and company statements of financial position shows the following amounts relating to leases:

 

 

 

Group

 

Company

 

Right-of-use assets


30 September 2022

£

 

30 September 2021

£

 

30 September 2022

£

 

30 September 2021

£

Properties


3,043,937


3,705,723


2,656,147


3,162,079

IT Equipment


13,060


-


-


-

 

 

3,056,997

 

3,705,723

 

2,656,147

 

3,162,079

 

 


Group

 

Company

 

 

Lease liabilities


30 September 2022

£

 

30 September 2021

£

 

30 September 2022

£

 

30 September

2021

£

Current


976,486


947,710


731,000


731,000

Non-current


3,049,538


3,866,352


2,803,234


3,416,663

 

 

4,026,024

 

4,814,062

 

3,534,234

 

4,147,663

 

Additions to the right-of-use assets during the 2022 financial year were £130,538 (2021: £nil). There were lease disposals during the year with net book value totalling £106,460 (2021: £nil).

 

(ii) Amounts recognised in the consolidated statement of comprehensive income

The consolidated statement of comprehensive income shows the following amounts relating to leases:

 

 

Depreciation charge of right-of-use assets


30 September 2022

£

30 September 2021

£

Properties


672,431

677,604

IT Equipment


373

5,848

 

 

672,804

683,452



 


Interest expense (included in finance cost)


133,944

158,341

Expense relating to short-term leases (included in operating expenses)


156,681

120,674

Expenses relating to low value assets that are not shown above as short-term leases (included in operating expenses)


408

5,160



 




 


 

The total cash outflow for leases in 2022 was £ 940,650 (2021: £ 922,757 ).

 

The property within the Company had a depreciation charge for the year of £505,932 (2021: £505,932).

 

 

12  Deferred tax

Deferred tax asset

 

Group

Accelerated capital allowances

Other temporary differences

Total


£

£

£





1 October 2020

18,402

126,658

145,060

Foreign exchange movement on opening deferred tax asset

833

(7,112)

(6,279)

Credited to statement of comprehensive income

1,755

68,675

70,430

30 September 2021

20,990

188,221

209,211

 

Group

Accelerated capital allowances

Other temporary differences

Total


£

£

£





1 October 2021

20,990

188,221

209,211

Foreign exchange movement on opening deferred tax asset

2,683

19,261

21,944

Credited to statement of comprehensive income

1,742

26,728

28,470

30 September 2022

25,415

234,210

259,625

 

Deferred tax liability

 

Group

The deferred tax liability arose in respect of the fair value uplift of intangible assets, with £1,320,465 arising on the acquisition of Cerillion Technologies Limited in March 2016 and £70,660 relating to the acquisition of "Net Solutions Services" by Cerillion Technologies Limited in 2015.


2022


2021


£


£

 

 



At 1 October

861,765


883,823

Debited to statement of comprehensive income in respect of net ACAs & other temporary differences

45,544


166,580

Credited to statement of comprehensive income in respect of acquisitions

(188,638)


(188,638)

As at 30 September

718,671


861,765

 

There are no deferred tax assets or deferred tax liabilities recognised within the Parent Company as at 30 September 2022 (2021: £nil).

 



 

13  Trade and other receivables and other contract balances

Contract balances

The following table provides information about receivables, contract assets and contract liabilities from contracts with customers.

 

Group


2022

2021


£

£

 

 



 


Trade receivables

2,502,608

1,697,958

Contract assets

9,853,285

9,709,419

Contract liabilities

4,612,511

4,775,174

 

Contract assets, which are included in 'Accrued income' within trade and other receivables and are composed of the current and non-current balances. Contract liabilities, which are included in 'Deferred income' within trade and other payables.

 

Payment terms and conditions in customer contracts may vary. In some cases, customers pay in advance of the delivery of solutions or services; in other cases, payment is due as services are performed or in arrears following the delivery of the solutions or services. Differences in timing between revenue recognition and invoicing result in trade receivables, contract assets or contract liabilities in the statement of financial position.

 

Contract assets refer to accrued income and arise when revenue is recognised, but invoicing is contingent on performance of other performance obligations or on completion of contractual milestones. Contract assets are transferred to receivables when the rights become unconditional, typically upon invoicing of the related performance obligations in the contract or upon achieving the requisite project milestone.

 

Contract liabilities refer to deferred income and result from customer payments in advance of the satisfaction of the associated performance obligations and relate primarily to prepaid support or other recurring services. Deferred income is released as revenue is recognised.

 

Significant changes in the contract assets and contract liabilities balances during the period are driven by the timing of income recognition and when associated invoices are raised. Specifically, revenue recognised in the year in relation to deferred income brought forward from prior years of £4,104,520 (2021: £4,700,894).

 

When certain costs to acquire a contract meet defined criteria, those costs are deferred as contract assets. The total amount of deferred contract assets (commission fees recognised in prepaid assets) are £225,869 (2021: £209,762). The total amount of accrued costs to acquire a contract are £304,597 (2021: £242,916).

 

The total amount of revenue allocated to unsatisfied performance obligations is £37,420,003 (2021: £34,853,478). It is estimated that 75% will be recognised over the next 18 months, the remainder over the following years thereafter.

 

There are no contract balances within the Parent Company (2021: £nil).



 

Current receivables

Group

Company


2022

2021

2022

2021


£

£

£

£

 

 


 



 


 


Trade receivables

2,502,608

1,697,958

-

-

Accrued income

7,758,649

7,763,748

-

-

Amounts owed by Group undertakings

-

-

2,058,502

2,079,936

Other receivables

311,229

235,981

-

-

Prepayments

631,735

480,941

7,726

7,811


11,204,221

10,178,628

2,066,228

2,087,747






Non-current receivables

Group

Company


2022

2021

2022

2021


£

£

£

£

 

 


 


 

 


 


Accrued income

2,094,636

1,945,671

-

-

Other receivables

76,741

69,751

-

-


2,171,377

2,015,422

-

-






 

The amounts owed by Group undertakings are unsecured, interest free and repayable on demand.

 

Credit quality of receivables

A detailed review of the credit quality of each client is completed before an engagement commences. The credit risk relating to trade receivables is analysed as follows:


2022


2021

 


£


£

 

Group

 



 

Trade receivables

2,744,317


2,121,287

 

Specific provision

(193,501)


(201,827)

 

ECL reserve

(231,841)


(221,502)

 


2,318,975


1,697,958

 





The ECL Provision above includes an amount relating to accrued income of £183,633 (2021: nil).

 

The Parent Company had no trade receivables in either period. The other classes of assets within trade and other receivables do not contain impaired assets. The net carrying value is judged to be a reasonable approximation of fair value.

 

Movements in the provision for the impairment of trade receivables were as follows:


Specific Provision

ECL provision


£

£


 

 

Balance at the beginning of the year

201,827

221,502

Charged/(released) for the year

149,165

48,208

Utilised for the year

(157,491)

(221,502)

Balance at the end of the year

193,501

48,208

 

The following is an ageing analysis of those trade receivables that were not past due and those that were past due but not impaired. These relate to a number of independent customers for whom there is no recent history of default.


2022


2021


£


£

Group

 



Not past due

1,713,716


1,104,013

Up to 3 months

734,637


463,995

3 to 6 months

5,994


102,174

Older than 6 months

48,261


27,776


2,502,608


1,697,958





 

Of the trade debt older than 6 months as at 30 September 2022, being £48,261 (2021: £27,776), cash of £7,689 (2021: £nil) has been received since the year end.

 

The following is an ageing analysis of those trade receivables that were individually considered to be impaired:

 


2022


2021


£


£

Group

 



Not past due

33,011


141,696

Up to 3 months

14,152


219,203

3 to 6 months

150,259


29,574

Older than 6 months

44,287


32,856


241,709


423,329


14  Trade and other payables

Current trade and other payables

  Group

  Company


2022

2021

2022

2021


£

£

£

£


 


 


Trade payables

1,154,204

490,055

96,657

59,081

Taxation

775,977

799,160

919

446

Other taxation and social security

494,638

421,847

64,254

74,227

Pension contributions

46,263

46,383

-

-

Other payables

381,669

519,171

-

-

Accruals

3,118,656

2,339,143

74,340

65,951

Deferred income

4,245,046

4,775,174

-

-


10,216,453

9,390,933

236,170

199,705

 

Movements in the provisions, which are included within accruals above, were as follows:

 


Dilapidations Provision


£


 

Balance at the beginning of the year

94,310

Charged/(released) for the year

23,579

Balance at the end of the year

117,889

 

The dilapidations provision relates to the full expected cost of dilapidations across the Group's properties.

 

Non-current trade and other payables

Group

Company

 


2022

2021

2022

2021

 


£

£

£

£

 






 

Other payables

566,974

394,850

-

-

Deferred income

367,465

-

-

-


934,439

394,850

-

-






 

The Directors consider that the carrying amount of trade and other payables approximates to their fair values.

 

The non-current other payable above relates to provisions for gratuity and long-term bonuses within the Indian subsidiary.

 

Gratuity  - The Indian subsidiary, Cerillion Technologies India Private Limited, provides for gratuity, a defined benefit plan (the "Gratuity Plan") covering eligible employees in accordance with the Payment of Gratuity Act, 1972 . The unfunded plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment. There is a vesting condition of five years of service for benefit payment.

 

Long-term bonus  - The employees (Band II, III and IV only) are eligible for a loyalty bonus at 20% of annual total fixed pay as at the end of the third year, 10% of annual total fixed pay as at the end of four and half years and 10% of annual total fixed pay as at the end of the sixth year provided they are employed with the Indian subsidiary, Cerillion Technologies India Private Limited, for at least three years/four and half years/six years, as the case maybe, after completion of probationary period. The Group's liability is actuarially determined at the end of each year. Actuarial losses/gains are recognised in the Statement of Comprehensive Income in the year in which they arise.

 

The actuarial assumptions relating to the above provisions are outlined below:


  Gratuity

  Long-term bonus


2022

2021

2022

2021

Discount rate

7.50%

6.20%

7.50%

5.10%

Salary increment rate

15.00%

15.00%

15.00%

15.00%

Withdrawal rate

15.00%

15.00%

15.00%

15.00%

The mortality rates assumed in the calculation for the Gratuity and Long-term bonus are based on the Indian Assured Lives Mortality (2012-14) ultimate ("IALM ult).

 

Management have considered sensitivities to changes in the key assumptions above and concluded that there are unlikely to be any material impacts arising from reasonable changes in these assumptions.

 

15  Borrowings and financial liabilities


  Group

  Company


2022

2021

2022

2021


£

£

£

£


 


 


Current liabilities:

 


 


Secured loans

-

-

-

-

Lease liabilities

976,486

947,710

731,000

731,000


 


 


Non-current liabilities:

 


 


Lease liabilities

3,049,538

3,866,352

2,803,234

3,416,663


4,026,024

4,814,062

3,534,234

4,147,663

Terms and repayment schedule

The Facility Agreement between the Company and HSBC Bank plc made available a loan of up to £5 million (the "Loan") for the purpose of assisting with the payment of the cash element of the acquisition of Cerillion Technologies Limited. The loan was fully repaid during the prior year.

 

Group and Company

Non-current Borrowings


Current Borrowings

 

 

Total


£


£

 

£

 

 





1 October 2021

-


-


-

Cash-flows:

 

 

 

 

 

Repayment

-


-


-

30 September 2022

-


-


-







 


Non-current Borrowings


Current Borrowings

 

 

Total

Group and Company

£


£

 

£

 

 





1 October 2020

-


609,359


609,359

Cash-flows:






Repayment

-


(609,359)


(609,359)

30 September 2021

-

 

-

 

-







 

Group

Non-current Lease liabilities


Current Lease liabilities

 

 

 

Total

 

£


£

 

£

 

 





1 October 2021

3,866,352


947,710


4,814,062

Cash-flows:






Repayment

-


(940,650)


(940,650)

Accrued interest

-


133,944


133,944

Non-cash:






Additions

-


125,128


125,128

Foreign exchange revaluation

-


(106,460)


(106,460)

Reclassification

(816,814)


816,814


-

30 September 2022

3,049,538


976,486


4,026,024







1 October 2020

4,655,772


922,706


5,578,478

Cash-flows:

 

 

 

 

 

Repayment

-


(922,757)


(922,757)

Accrued interest

-


158,341


158,341

Non-cash:






Reclassification

(789,420)


789,420


-

30 September 2021

3,866,352


947,710


4,814,062

 

 






 

Company

Non-current Lease liabilities


Current Lease liabilities

 

 

 

Total

 

£


£

 

£

 

 





1 October 2021

3,416,663


731,000


4,147,663

Cash-flows:






Repayment

-


(731,002)


(731,002)

Accrued interest

-


117,573


117,573

Non-cash:






Reclassification

(613,429)


613,429


-

30 September 2022

2,803,234


731,000


3,534,234







1 October 2020

4,012,028


731,000


4,743,028

Cash-flows:

 

 

 

 

 

Repayment

-


(731,004)


(731,004)

Accrued interest

-


135,639


135,639

Non-cash:






Reclassification

(595,365)


595,365


-