Registered number:
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COMPANY INFORMATION
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DIRECTORS' REPORT
For the Year Ended 31 December 2020
The directors present their report and the financial statements for the year ended 31 December 2020.
The directors who served during the year were:
The directors are responsible for preparing the directors' report and the
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year
. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), 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 for the Company's financial statements and then apply them consistently;
∙
make judgments 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 to 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.
The Company has, as permitted by the Companies Act 2006, maintained insurance on behalf of the Directors and Company Secretary indemnifying them against certain liabilities which may be incurred by them in relation to the Company.
Under section 487(2) of the Companies Act 2006, Blick Rothenberg Audit LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
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DIRECTORS' REPORT (CONTINUED)
For the Year Ended 31 December 2020
In preparing this report, the directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.
This report was approved by the board on
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INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS
OF CELOXICA LIMITED
We have audited the financial statements of Celoxica Limited (the 'Company') for the year ended 31 December 2020, which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity
and the 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).
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 United Kingdom, including the Financial Reporting Council'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.
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.
The other information comprises the information included in the Annual Report other than the financial statements and our auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS
OF CELOXICA LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙
the information given in the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙
the directors' report has been prepared in accordance with applicable legal requirements.
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 directors' report.
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INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS
OF CELOXICA LIMITED (CONTINUED)
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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, and non-compliance with laws and regulations, our procedures included the following: enquiring of management concerning the company’s policies with regards identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance; enquiring of management concerning the company’s policies detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; enquiring of management concerning the company’s policies in relation to the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations; discussing among the engagement team where fraud might occur in the financial statements and any potential indicators of fraud; and obtaining an understanding of the legal and regulatory framework that the company operates in and focusing on those laws and regulations that had a direct effect on the financial statements or that had a fundamental effect on the operations of the company. The key laws and regulations we considered in this context included the UK Companies Act and applicable tax legislation. As a result of performing the above we identified manipulation of revenues, errors in the calculation of tax credit claims, potential understatement of liabilities and the risk of fraud through management override of controls as particular focus areas. Our procedures to respond to risks identified included the following: considering the appropriateness of accounting policies and judgement around revenue recognition; performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; reviewing the bank statements of the company for evidence of any large or unusual activity which may be indicative of fraud; reviewing the post balance sheet period for indication of incompleteness of liabilities; enquiring of management in relation to any potential litigation and claims; reviewing legal expense accounts and board minutes for indications of the same and testing the appropriateness of journal entries and other adjustments.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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.
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INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS
OF CELOXICA LIMITED (CONTINUED)
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.
for and on behalf of
Chartered Accountants
Statutory Auditor
16 Great Queen Street
Covent Garden
WC2B 5AH
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STATEMENT OF COMPREHENSIVE INCOME
For the Year Ended 31 December 2020
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BALANCE SHEET
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 10 to 19 form part of these financial statements.
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STATEMENT OF CHANGES IN EQUITY
For the Year Ended
31 December 2020
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NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 December 2020
1.
ACCOUNTING POLICIES
Celoxica Limited is a private company limited by shares and incorporated in the United Kingdom. The registered address is 20 Craven Terrace, London, W2 3QH. The company's principal activity is the provision of solutions utilizing FPGA-based architectures to support growing demands for ultra-low latency and efficient footprint solutions in the financial services industry and, in particular to the advanced, electronic trading community.
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of
Financial Reporting Standard 102, the Financial Reporting Standard applicable in
the UK and the Companies Act 2006
.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies.
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙
the requirements of Section 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
∙
the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Celoxica Holdings plc as at 31 December 2020 and these financial statements may be obtained from the company secretary.
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NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 December 2020
1.
ACCOUNTING POLICIES (continued)
The company has net current liabilities of £46,847,217 but this includes £46,577,935 of current liabilities due to fellow group members, which the directors have a valid expectation will not be called within twelve months, and £875,903 of deferred income which does not represent a cash outflow.
At the balance sheet date the wider Group (see note 11) of which the Company is part's only debt was a €400,000 government guaranteed loan acquired through the Group’s French subsidiary. While included in current liabilities at the balance sheet date, subsequent to the balance sheet date the term of the loan has been extended such that repayments will only commence in 2022. The directors of the group and the Company have prepared financial projections reflecting current market conditions, the current sales pipeline and the Company's and Group's expected future costs. These projections are based on assumptions regarding sales growth and new business which, by their nature, are subject to uncertainty as to whether and the precise timing of when potential sales will convert. However, the directors consider that the financial projections are achievable. The current forecasts indicate that, taken together with its current liquid resources, this additional financing will enable the Group to withstand any reasonably predictable downside risks in the projections. As an integral part of the Group, the directors have a valid expectation that the Group will continue to provide liquidity, including the extension of the amounts due to fellow subsidiaries described above, to the extent that it is not generated from the Company's operations. Therefore, after making enquiries and considering the uncertainties described above, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future, being not less than twelve months from the date of approval of these financial statements. Consequently, they continue to adopt the going concern assumption in preparing the financial statements.
The
Company
, and the
Group
headed by it, qualify as small as set out in
section 383 of the Companies Act 2006
and the parent and
Group
are considered eligible for the exemption to prepare consolidated accounts.
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NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 December 2020
1.
ACCOUNTING POLICIES (continued)
Due to the fast-moving environment in which the company operates, licences typically include an embedded agreement to supply on-going maintenance services. A key judgement is whether the initial licence and the on-going maintenance are separable performance conditions. Management is of the opinion that, due to the specialised nature of the product and the maintenance being critical to the on-going utility of the underlying product, the licence and maintenance are not separable performance conditions. Accordingly, both the licence and the maintenance services are recognised on a straight-line basis over the contractual period. Additionally, contracts will often include on-going support services, which are delivered by both e-mail and telephonic support, and may include initial training services. The revenue from support services is recognised over the contractual term; revenue from support services are recognised as the training is delivered. The attribution of revenue to support and training is based on the underlying cost of delivery plus an estimated profit margin. To date the amount of revenue attributable to such services has not been significant and, as it does not alter the revenue profile of the underlying contracts, is not separately disclosed. Revenue is typically invoiced either monthly or quarterly in advance for amounts agreed in contracts at the start of the service period. The contracts have no significant financing components. The excess of fees invoiced over revenue recognised in respect of such fees is recorded as deferred income. Cancellation terms are set out in the contracts and vary by customer however refunds are typically not permitted once the service period has commenced. Revenue from hardware development boards is recognised when obligations under the relevant purchase agreement have been met and delivery has taken place
Research and development expenditure is written off as incurred.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term.
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NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 December 2020
1.
ACCOUNTING POLICIES (continued)
The company operates a defined contribution pension scheme and the pension charge represents the amounts payable by the company to the fund in respect of the year.
The Company's functional and presentational currency is pounds sterling.
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of transactions. At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical costs are translated using the exchange rate when fair value was determined. Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account. The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computations of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences, and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary differences arise from goodwill (or any discount on acquisition) or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.
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NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 December 2020
1.
ACCOUNTING POLICIES (continued)
Investments in subsidiary companies held as fixed assets are shown at cost less provision for impairment.
Celoxica Holdings plc (the parent company) issues share options to employees of Celoxica Limited. The options are measured at fair value at the date of grant, using a Black Scholes pricing model. The fair value is then expensed on a straight-line basis over the vesting period, based on the Company's estimate of the number of shares that will eventually vest, updated at each balance sheet date. The options issued to employees are treated as a capital contribution from the parent company and recognised as a separate reserve.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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 profit or loss.
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NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 December 2020
1.
ACCOUNTING POLICIES (continued)
Financial assets are recognised in the balance sheet when the Company becomes a party to the contractual provisions of the instrument and are recognised in the balance sheet at the lower of cost and net realisable value.
Provision is made for diminution in value where appropriate. Income and expenditure arising on financial instruments is recognised on the accruals basis, and credited or charged to the statement of comprehensive income in the financial period to which it relates. Trade receivables do not carry any interest and are initially recognised at fair value, subsequently reduced by appropriate allowances for estimated irrecoverable amounts.
Financial liabilities are obligations to pay cash or other financial instruments and are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities are classified according to the substance of the contractual arrangements entered into. All interest related charges are recognised as an expense in the income statement.
Loans raised for support of long-term funding of the Company's operations are recognised at fair value, net of direct issue costs. Finance charges, including premiums payable on settlement or redemption, and direct issues costs are charged to the income statement on an accruals basis using the effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arose. Trade payables are non-interest bearing and are recorded initially at fair value net of transactions costs and thereafter at amortised cost using the effective interest rate method.
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NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 December 2020
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NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 December 2020
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NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 December 2020
The redeemable deferred ordinary shares have no right to any dividends or participation in the profits or the company. They do not entitle the holders thereof to attend or vote at any General Meeting of the company. The shares may be redeemed in their entirety at any time at the option of all the holders thereof for an aggregate price of £1. The holders of the redeemable deferred shares may at any time and from time to time in tranches of not less than 1,000 or, if such holder at any time holds less than 1,000 redeemable deferred shares, in respect of all or the balance of shares held by him in one tranche, convert all or any of their convertible deferred shares into a like number of ordinary shares of 1p each. The ordinary shares resulting from the conversion shall rate pari passu in all respects with the other ordinary shares in issue at the time of conversion.
The Board of the Company's parent undertaking has authority to grant share options over up to 15% of the number of the parent undertaking's shares in issue.
No options were granted or exercised during the year. The total number of outstanding options, all of which are equity-settled, in issue at the 31 December 2020 is 133,781,184 (2019: 133,781,184), all of which were exercisable at the balance sheet date at 0.3p per share.
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NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 December 2020
The company's immediate and ultimate parent company and controlling party is Celoxica Holdings plc, a company incorporated in the United Kingdom. Celoxica Holdings plc heads the smallest and largest group which produces consolidated accounts including the company's position and results. Copies of the group financial statements of Celoxica Holdings plc can be obtained from The Secretary, 20 Craven Terrace, London, W2 3QH.
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