D-WISE TECHNOLOGIES UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Company Registration No. 07352898 (England and Wales)
D-WISE TECHNOLOGIES UK LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 8
D-WISE TECHNOLOGIES UK LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2020
31 December 2020
- 1 -
2020
2019
as restated
Notes
£
£
£
£
Fixed assets
Tangible assets
4
27,110
30,436
Current assets
Debtors
5
762,320
288,685
Cash at bank and in hand
40,346
190,323
802,666
479,008
Creditors: amounts falling due within one year
6
(1,294,943)
(1,184,477)
Net current liabilities
(492,277)
(705,469)
Net liabilities
(465,167)
(675,033)
Capital and reserves
Called up share capital
1
1
Profit and loss reserves
(465,168)
(675,034)
Total equity
(465,167)
(675,033)
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.
true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 14 March 2022 and are signed on its behalf by:
Mr F M Whitmeyer
Director
Company Registration No. 07352898
D-WISE TECHNOLOGIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
- 2 -
1
Accounting policies
Company information
D-Wise Technologies UK Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
Diamond Way, Stone Business Park, Stone, Staffordshire, ST15 0SD.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
As at year ended 31 December 2020 the Company had a profit before tax of £155,912 (FY19: loss of £285,939) and net liabilities of £465,167 (FY19: £675,033). The Company intends to fund working capital through existing cash reserves and support from either D-Wise Technologies Inc. or it's ultimate parent Company Instem Plc. A letter of support has been received from Instem Plc. At 31 December 2020 the Company owed D-Wise Technologies Inc c.£750k and both D-Wise Technologies Inc and Instem Plc have confirmed via a letter of support, that they have sufficient cash and debt resources to support the Company for the going concern period and will not call in any outstanding debt until all third party creditors are paid. As such, the financial statements have been prepared on the basis that the Company will continue as a going concern.
true
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue for annual support and maintenance and hosting contracts are recognised on a monthly basis as services are delivered. Software sales and on-going support is billed as and when services are delivered to customers.
Revenue includes recharges of staff time to subsidiary companies for work done on projects. This is billed on a monthly basis in line with the number of hours worked.
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated
.
1.5
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
D-WISE TECHNOLOGIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 3 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Computers
33% on cost and 25% on reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.6
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the
company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
D-WISE TECHNOLOGIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 4 -
Basic financial assets
Basic financial assets, which include
debtors
and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including
creditors
, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities.
Trade creditors
are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the
profit and loss account
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
D-WISE TECHNOLOGIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 5 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the
profit and loss account
, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or
fixed assets
.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
1.14
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the 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.
D-WISE TECHNOLOGIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 6 -
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2020
2019
Number
Number
Total
14
14
4
Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 January 2020
68,249
Additions
9,812
At 31 December 2020
78,061
Depreciation and impairment
At 1 January 2020
37,813
Depreciation charged in the year
13,138
At 31 December 2020
50,951
Carrying amount
At 31 December 2020
27,110
At 31 December 2019
30,436
5
Debtors
2020
2019
as restated
Amounts falling due within one year:
£
£
Trade debtors
312,804
81,167
Corporation tax recoverable
53,954
Amounts owed by group undertakings
330,142
176,097
Other debtors
65,420
31,421
762,320
288,685
D-WISE TECHNOLOGIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 7 -
6
Creditors: amounts falling due within one year
2020
2019
as restated
£
£
Trade creditors
144,175
24,927
Amounts owed to group undertakings
750,597
874,538
Taxation and social security
36,621
40,774
Other creditors
363,550
244,238
1,294,943
1,184,477
7
Audit report information
As the income statement has been omitted from the filing copy of the financial statements
,
the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006
:
The auditor's report was unqualified.
The senior statutory auditor was Andrew Moss BA FCA and the auditor was DSG.
8
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2020
2019
£
£
116,718
166,740
9
Prior year restatement
In the previous year the company took advantage of the audit exemption under s477 of the Companies Act. As part of the 2020 audit, an opening balance review was undertaken and the following adjustments have been made to the accounts:
- VAT was overstated by £125,086 this has been written off to administrative costs;
- R&D tax credits of £35,687 received in 2019, were incorrectly recorded on balance sheet and have been released back to tax in the profit and loss account;
- Holiday pay accrual has been recorded for £9,553 in line with FRS 102 guidance;
- Foreign exchange differences of £13,864 have been debited to the profit and loss account;
- Investment cost related to fees paid on behalf of the parent company for a subsidiary company. The costs have been re-classified to intercompany amounts due on the balance sheet.
The profit and loss account and balance sheet, along with any corresponding notes in the financial statements, have been updated accordingly. The overall impact of the above amendments was to reduce the overall loss in 2019 by £137,356.
D-WISE TECHNOLOGIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 8 -
10
Subsequent Events
On 20 March 2021, the group, D-Wise Technologies, Inc., including D-Wise Technologies UK Limited, exchanged contracts with Instem Plc, to be acquired. The acquisition of the group was completed on 1 April 2021.
11
Parent company
During the financial period, 31 December 2020, the ultimate controlling party was D-Wise Technologies, Inc.
On 1 April 2021, the company was acquired, and the new Ultimate Controlling party, at date of signing the accounts, is Instem Plc.
The registered address of Instem Plc is Diamond Way, Stone Business Park, Stone, Staffordshire, ST15 0SD.