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Annual Financial
Report
2021
Gresham Technolo
gies plc
Registered Nu
mber 01072032
Contents
Gresham Technologi
es plc
Annual
Financial
Report
202
1
2
SECTION
PAGE
STRATEGIC REPORT
3
Vision
and values
3
Investment case
4
Highlights
5
At a glance
7
Chairman’s st
atement
9
Business model
11
CEO’s statemen
t
13
Electra acquisi
tion
18
Strategy
19
Strategy in ac
tion
21
Key performance in
dicators
22
Stakeholders and
section 172
24
Environmental, so
cial and governan
ce
26
Principal ris
ks and uncertai
nties
31
Financial review
33
CORPORATE GOVERNANCE
41
Chairman’s i
ntroduction
to governa
nce
41
Board of Direct
ors
42
Statement of cor
porate governance
43
Audit committee r
eport
47
Nomination co
mmittee repo
rt
51
Annual statement
from the chair
of the remunerat
ion committee
52
Remuneration
report
54
Directors’
report
65
Statement of Dir
ectors’ respons
ibilities
69
FINANCIAL STATEMENTS
70
Independent au
ditor’s report
70
Consolidated
income stat
ement
79
Consolidated
statement
of comprehensi
ve income
80
Consolidated
statement
of financi
al positi
on
81
Consolidated
statement
of changes i
n equity
82
Consolidated
statement
of cash fl
ow
83
Notes to t
he financi
al statement
s
84
Company balance
sheet
12
8
Company statemen
t of chang
es in equit
y
1
29
Notes to Compa
ny financi
al statement
s
13
0
CORPORATE INFORMATION
13
8
Vision and
values
Gresham Technologi
es plc
Annual
Financial
Report
202
1
3
Our visi
on
Our vi
sion i
s t
o bring
digital
integrity, agility an
d confide
nce to the
world's fina
ncial institu
tions
.
Our valu
es
We Embr
ace
Diff
erence
We
value
diff
erent
backgr
ounds,
experience,
expertise
and
ways
of
thinking.
We
encourage
curiosity
and
respect
every
individual,
recognisin
g
that
everyon
e
has
the
capability
to
bring
something
extraordin
ary
to
the
table.
We
each
apply
our
unique talents with
passion and integrit
y and we are all
committed to making Gresham an exceptional
place to work.
We Cre
ate
Togeth
er
Worki
ng
t
ogeth
er
with
our
col
leag
ues,
cus
tomers
an
d
pa
rtner
s,
we
c
reat
e
en
ergy
and
a
dynami
c
a
pproac
h
t
o
c
hall
enge
the
norm
and
find
innov
ative
ways
to
sol
ve
problems.
Through
open
discussion
and
f
eedback,
healthy
debate
and
continuous
learning,
we
combine
the
virtues
of
experience
and
fresh
thinking.
We
operate
at
pace,
taking
the
lead
where
appropriate,
ensuring that we work t
ogether to seamlessly del
iver outstanding prod
ucts and services.
We Cham
pion
Succe
ss
We
are
pass
ionat
e
abo
ut
d
eliv
ering
succ
essf
ul
ou
tcomes
for
our
cust
omers,
empl
oyees
,
pa
rtner
s
and
shar
ehol
ders.
Our
nimble
approach
means
that
we
can
adapt
to
our
customers’
i
ndividual
ways
of
working,
taking
ownership
for
deli
vering
the
wow factor
, deli
ghting
customers
and enabli
ng our b
usiness a
nd our pe
ople to
grow and f
louris
h.
Investment
case
Gresham Technologi
es plc
Annual
Financial
Report
202
1
4
Reasons to
invest i
n Gresham
Innovative tech
nology
–
Our Cla
reti
platfo
rm is
best
-
in
-
class and sits at the
heart of customer workflows.
Signific
ant opport
unity
–
Our ad
dressabl
e marke
t is
expandi
ng as s
ystemic
data c
hallen
ges inc
rease.
Strong gro
wth
–
our high
-
margin
Clar
eti s
oluti
ons ar
e deli
verin
g prof
itabl
e gro
wth.
Talented people
–
we have an e
xceptional
pool
of tal
ent and we
are commit
ted to
excelle
nce.
Highlights
Gresham Technologi
es plc
Annual
Financial
Report
202
1
5
Financial
•
Forward
-
looking Clareti
Annualised
Recurrin
g
Revenue (“ARR”)
as
at
31
December 2021
up
95%
to
£24.0
m
,
including
£9.2
m
acquired with Electra
(5)
with str
ong underl
ying or
ganic gr
owth of
20%.
•
Group r
evenues
up
49
% to £
3
7.0
m, includ
ing a
contr
ibuti
on of
£5.
6
m
from Electra
(5)
since acquisition.
•
Clareti
revenues
up
65
% to £2
5.
5
m, in
cludi
ng a
contr
ibution of £5.
6
m
from Electra
(5)
since acquisition.
•
Clareti
recurring revenues u
p
63
% to £
18.8m (2020:
£11.
5
m),
including
£
5.
3
m
from
Electra
(6)
since acquisition
.
•
Adjusted EBI
TDA
(1)
up 60
% to
£
7.
2
m
(20
20
: £4.5m)
.
•
Cash adjus
ted EBITDA
(2)
of £2.
5m,
an increase of £2.
2
m
on the prior
year
(20
20
: £0.3m)
.
•
P
rofit
before
tax
as
reported
at
£0.4m
(20
20
:
£
0.3
m)
,
including
expenses
adjusted
in
EBITDA
metrics
above
of
£3.5
m
(2020: £
1.5
m
).
•
Adjusted d
iluted e
arnings per
share
(3)
up 26
%
at
5
.0 pen
ce (20
20
:
4
.0 pe
nce).
•
Cash at 3
1 December
202
1
of £9.1
m
and no
debt
drawn upon
(20
20
: £
8.9
m and
no debt
)
(4)
.
•
Final divi
dend proposed at
0.75
pence per share (2020
: 0.75 pence).
•
Year closed
ahead of market expectations
for revenue, profits and cas
h generation
.
Operati
onal
•
Transformational
acquisiti
on of Elect
ra in June 202
1
providing scale i
n US market
. Integration materially
complete.
•
Customer ba
se expanded
to 270+
Clareti
customers
across
30
countri
es.
•
Strong org
anic underl
ying gro
wth of rec
urring
revenues
and
related
services within the Clareti
business.
•
Net
ARR
rete
ntion
fo
r
the
year
of
106%,
i
ncludin
g
annualis
ed
and
appor
tioned
ra
te
from
Elec
tra
(5)
since
acquisition
,
highlighting growth
within existing c
ustomers and new customer wins
throughout COVID
-
19 pandemic
.
•
Continued
growth
and devel
opment
of
key accounts.
Net ARR ret
ention
rate fo
r top 6
key accou
nts of
121%.
•
Major
deployment
mi
leston
es
wit
h
global bank
s
, with legacy softwar
e vendors bein
g
decommissioned.
Highlights
Gresham Technologi
es plc
Annual
Financial
Report
202
1
6
•
Digital
corpora
te banki
ng
partnership with Austral
ia and New Zealand Banking Group
continuing to
deliver
to plan
.
•
Larger, more resilient Group, with more than £37m of FY22 revenues
under contract
, providing
significant
visibility and
a
robust platform to exe
cute growth strategy
.
•
Managemen
t conf
ident
about
the p
rospect
s for
the
Group
.
(1)
Adjusted
EBITDA
refers to
earnings
before
interest,
tax,
depreciation
and
amortisation,
adjusted
for
one-off
exceptional
charges
and
share-based
payments.
(see
note
5
of
the
Group
financial statements).
(2)
Adjusted EBITDA less capitalised development spend and any IFRS16 lease-related cash payments.
(3)
Diluted
earnings
per
share,
adjusted
to
add
back
share-based
payment
charges,
deferred
tax
charge
on
the
inter-group
sale
of
IP,
exceptional
items
and
amortisation
from
acquired
intangible assets.
(4)
Excludes any IFRS16 lease-related payables.
(5)
The Electra acquisition completed on 22 June 2021.
(6)
Percentage increases stated above are based on rounding to the nearest £’000 as disclosed at detailed level within this repor
t.
At a Glance
Gresham Technologi
es plc
Annual
Financial
Report
202
1
7
Fixing data
and process
integ
rity pro
blems
is o
ne of
the
biggest
challe
nges
in the
world
’s finan
cial m
arkets.
So
we
developed
our technology to del
iver data confidence i
n core areas of our
customers’ business.
What w
e do
Reconcili
ation
Simplify
the
compl
exity
of
buy
-
side
and
sell
-
side
r
econciliations
and
scale
to
growth
with
end
-
to
-
end
automation,
intelligent
matchin
g, and
accel
erated
onboa
rding
.
Regulator
y report
ing
Deliver
accurat
e,
o
n
-
time
reports
through
connectivity
with
multiple
trading
and
reporting
venues,
real
-
time
matching,
and
consolidation across multiple regul
atory regimes
.
Connectivi
ty
Dynamicall
y
connect
t
o
trading
a
nd
regulat
ory
venues,
clients
a
nd
partners
across
the
f
inancia
l
service
s
ecosystem
t
hrough
350+ industry connections
and data transforma
tion services in the
c
loud
.
Data aggre
gation
Acce
ss no
rmalis
ed, v
alida
ted da
ta on
secur
ities,
cash p
ositi
ons, t
ransa
ction
s, and
trade
fail in
vesti
gatio
ns fro
m 150
0+ gl
oba
l
sources to feed reconciliations
and other post
-
trade workflows
.
Our produc
ts
Control
Automate
all
t
he
proce
ss
and
data
v
alidati
on,
re
conciliat
ion
an
d
repor
ting
services
you
need
to
bui
ld
ope
rations
and
dat
a
confidence with speed and ease
.
Connect
Seamlessly mana
ge all you
r connecti
vity, dat
a migrati
on and inte
gration wi
th tradi
ng
partners, venues, cli
ents and regulators
across the financial
services ecosystem
.
Data serv
ices
Acce
ss no
rmalis
ed, v
alida
ted da
ta on
secur
ities,
cash p
ositi
ons, t
ransa
ction
s, and
trade
fail in
vesti
gatio
ns fro
m 150
0+ gl
oba
l
sources to feed reconciliation
an
d other post
-
trade workflows
.
Managed
servi
ces
Reduce
the
strain
on
your
people,
proc
esses
and t
echnology
inf
rastruct
ures
while
achiev
ing
greater
flex
ibili
ty,
effici
ency
an
d
scale.
Our indus
tries
•
Capital mar
kets
•
Banking & paymen
ts
•
Investme
nt
management
•
Energy & commodit
ies
•
Insurance
•
Corporates
At a Glance
Gresham Technologi
es plc
Annual
Financial
Report
202
1
8
We hav
e
•
10
offices
•
200
+
employees
•
270
+
customers
•
106
%
Claret
i
ARR
net
retention
Chairman’s st
atement
Gresham Technologi
es plc
Annual
Financial
Report
202
1
9
Dear share
holder
I am pleased to
present this 20
21 Annual Fina
ncial Report.
Overview
I
am delighted
to be
able
to
report on
a
period of
strong
progress for
Gresham
Technologi
es
.
Our core
products continue to
gain traction
in a vast and gr
owing market and play
an integral rol
e in some of the
world’s largest
financial organi
sations.
We
have
built
a
strong
reputation
and
are
now
benefi
tting
f
rom
the
significant
investment
made
in
our
software
solutions
i
n
line
with
our
strategi
c
roadmap.
Our
success
is
due
to
gr
eat
leadershi
p,
innovativ
e
e
xpanding
solut
ions
and
our
t
alented
and
commit
ted team of e
mployees glo
bally.
Throughout the year, we continued to execute effectively against our growth strategy, securing
16 new
Clareti
customers
and
growing
our
rel
ationships
with
existing
customers,
reflecting
the
invest
ment
in
our
soluti
ons
and
p
eople.
COVID
-
19
has
accelerated
the
rate
in
which
businesses
are
aut
omating
their
service
platforms
and
we
have
t
aken
advantage
of
t
hese
opportunities
by
investing
to
drive
organi
c
growth
in
the
business
as
well
as
int
egrating
careful
ly
selected
complementary
acquisitions.
During
t
he
year,
we
completed
our
largest
acquisi
tion
to
date,
with
the
purchas
e
of
Electra
in
June
2021
for
up
to
USD
$38.6
m
. As
well
as ex
panding
our pr
oduct o
ffering an
d client
base,
it prov
ides us
with
a stro
ng ope
rational fo
othold in
North
Amer
ica,
f
rom
which
we
wil
l
look
to
dr
ive
our
growth
in
this
key
mark
et.
As
part
of
the
acqui
sition
,
we
raised
£21m
(gross)
by
way
of
a
placing
and
wel
comed
a
number
of
new
s
hareholder
s
to
th
e
regist
er
and
I
would
li
ke
to
t
hank
them
and
our existing
shareholders for t
heir support.
Overall
,
our
reve
nue
f
or
th
e
year
was
significantly
up
at
£
37
.0
m
(
2020:
£24.8m)
,
with
adjusted
EBITDA also
significantly
up
at £7.
2
m (2020: £4
.5m). I
n a year th
at was sti
ll af
fected
by COVID
-
19
related
challenges, this is an
excellent achievement for
the Group.
We
enter
the
new
f
inan
cial
y
ear
wi
th
posi
tiv
e
marke
t
tai
lwind
s
and
high l
evels of
confi
dence in
our
business,
our
people
and
our ability t
o continue on our pr
ofitable growth tr
ajectory.
Based o
n
the
overall financial performance
and
the cash
within
the business,
the
Board
will be
reco
mmending
a
fina
l d
ividend
of 0.75 pence per share
(2020: 0.75 pence)
at the
forthcoming AGM.
Delivery
against
our
s
trategic
v
is
ion
2021 saw strong progress agai
ns
t the major strate
gic goals identified b
y the Board, inc
luding:
•
the Electra acq
uisition
has brought
additional sticky
ARR and significantly widens
our addressable market;
•
revenues
from
subscription
s
reached
63
%
of
Group
r
evenue
in
th
e
peri
od,
pr
oviding
high
level
s
of
visibilit
y
and
increased
certainty f
or future ye
ars' reven
ue;
•
we
continued
to invest
in our
u
nderlying business sys
tems and processes
to increase
our scalability.
People and
c
ulture
I
am
delighted
to
report
that
,
once
again
,
we
i
mpro
ved
our
resul
t
i
n
o
ur
annual
empl
oyee
engageme
nt
survey,
sc
oring
78%
overall
(2020:
76%)
,
and
thereby
continuing
our
t
rend
of
annually
increasing
our
engagement
score
since
2017.
This
i
s
the
clear r
esult of
the
investments and
efforts
that
the Company
has
made to
develop
a
brilliant
culture
and
create
opportunities
for our people to
thrive.
On
behalf
of
th
e
B
oard,
I
would
like
to
take
thi
s
opportunity
to
thank
all
members
of
st
aff
for
the
dedication
and
commitment
to mak
ing Gre
sham
what it
is tod
ay. Em
ployees globally have worked extremely hard
to create the right working environment
for Gresham
to succeed in
the future.
Despite
the
ongo
ing
di
sturbance
s
caused
by
COVID
-
19,
our
staff
have
adapted
well
to
a
hybrid
way
of
working
wi
th
littl
e
interruption
.
Although
we
are
a t
echnology
driven
busi
ness,
we are
also
a
people
-
led company and I am proud of the way in
which st
aff at
Gresham have
responded
whilst
also hel
ping t
he busines
s to suc
ceed.
Chairman’s st
atement
Gresham Technologi
es plc
Annual
Financial
Report
202
1
10
ESG
As
Gresham
continues
to
gr
ow,
we
are
commit
ted
t
o
ensuri
ng
we
do
so
responsibly,
to
enhance
the
long
-
term
value
generated
by
our
business.
Fol
lowing
a
review
of
Gresham’s
Envir
onmental,
Social
and
Governance
priorit
ies
in
2021,
we
have
established a three
-
pil
lar ESG strategy as part
of our approach to
continually improve i
n these areas.
Scaling r
esponsibly
is buil
t across
the foll
owing thr
ee pill
ars:
•
Our cust
omers:
levera
ging ou
r growt
h to
improve
customer
outcome
s
•
Our peop
le: f
osteri
ng posi
tive
and pro
duc
tive communities
in our business
and our industr
y
•
Our worl
d: mana
ging ou
r impac
t on t
he envi
ronment
and bei
ng a f
orce f
or goo
d in o
ur worl
d
The
strategy is
under
pinned by
a strong
cul
ture and
good governance
across
the
G
roup
and
we
are
confident
about
exe
cuting
on our strategic v
ision in the coming y
ear and beyond.
Looking ahead
Following a year of
transformation, there is now great
momentum in
the business and I
am
pleased to say
we have
ended the
financial ye
ar as
a more
robust
company.
We
have de
livered
against the strategic priorities the Board approved in December
2020 to strengthen our
position in the market
:
•
c
ontinu
e
to build a glo
bal footprint and re
silient international o
perations
;
•
increase in
vestmen
t in sales a
nd mark
eting;
•
m
ake
sc
alability
and
repeatabil
ity
key
themes
within
product
development
and
profes
sional
services
to
enhance
operating leverage and ac
celerate speed of implementat
ions
;
•
i
ncr
e
as
e
inve
stment in
AI to
support our vision of self
-
learning and s
elf
-
optimising solutions
;
•
i
dentify options
to monetise the IP arising
fr
om the ANZ strategic partners
hip
in the wide
r market
; a
nd
•
s
eek fur
ther
earnings
-
enhancing
acquisiti
ons
which
add
adjacent
technology
capabilit
ies
,
scale,
and
expand
global
reach
.
We e
nter
th
e ne
w f
inan
cial
ye
ar
with
a fo
cus on
expandi
ng our
exist
ing
client
base
and securing
new
customer
wins
through
investme
nts
in
our
technolo
gy
,
and
on
complet
ing
the
integration
of
Electra
into
the
busin
ess.
We
have
£37m
of
2022
revenues
under contract, which gives us confidence
to con
tinue with
our inv
estments,
and w
e
have a
strong pipeline of demand for our
products
as
t
he
digital
transformation
era
continues
to
accelerate
for
many
businesses
.
We
are
excited
about
the
future
opportunities thi
s will create.
Our
management
tea
m
have
built
a
rare
busi
ness
with
a
very
exci
ting
f
uture
in
a
substantial
,
growing
market.
We
have
the
benefit
of
a
track
record
with
an
innovative,
wel
l
invested
product
set
which
has
been
designed
for
today’s
complexiti
es.
I
believe that the s
cale of our opport
unity is as lar
ge as our ambition all
ows.
Peter Simmonds
Non
-
Executive
Chairman
7
March
2022
DocuSign Envelope ID: BB8DFBB0-2E16-4C63-B3F9-138A47D638FF
Busines
s model
Gresham Technologi
es plc
Annual
Financial
Report
202
1
11
Our b
usiness
model
is
to
earn
high
-
margin,
rec
urrin
g re
venues
by
providing
innovative sof
tware solutions
for
reconciliations,
regulatory reportin
g, connectivity and data aggregation s
ervices
.
Our str
engths
Growing,
globa
l marke
t
There
is
a
significant
address
able
market
made
up
of
financial
insti
tutions
and
large
corpo
rates
which
are
grappling
with
increasing
ly comple
x data an
d financial c
ontrol requ
irements
. Structura
l trends ar
e delivering
substant
ial tailwinds
.
Disrupti
ve techn
ology
Our
Cla
reti
platfor
m
is
b
est
-
in
-
class,
versatile
and
scalabl
e
and
sits
at
the
heart
of
customer
workflows.
We
have
an
exceptional
innovation
engine an
d a prove
n track rec
ord of brin
ging disrup
tive solutio
ns to mar
ket.
People and
culture
We ha
ve
an e
xcept
ional
po
ol
of
tale
nt
that
in
corpor
ates
a
vit
al
and
dive
rse
blen
d of
sk
ill
s an
d e
xperi
ence.
We are committed
to a culture of integ
rity and excellen
ce and we ch
allenge ourselv
es to be an aw
esome place
to work.
Our busi
ness
Distri
bution
Our global team
of
sales professi
onals sells directl
y to
c
ustomers
in our
primary
target
market
s. In
additi
on,
our
bank
,
financial
market
in
frastr
uctur
e
and
technology part
ners provide
indirect
sales
channels.
We are
developing a
global
alliances
network
with l
ike
-
minded
firms
to b
uild
distr
ibuti
on capa
city.
Our
regional
sales activities are supported by a glob
al
marketing team.
Charging
model
We
l
icenc
e
o
ur
s
oftw
are
on
a
subscri
ption
basis
,
which
gener
ates
higher
levels
of
recurring
revenue
for
the
Group
than
traditional
licensing
models,
and
also
provides
a
more
reliable
platform
for
growth
and
decision
-
makin
g
.
Implementa
tion
services are charged
on a
time and materials b
asis or at a
fixed fee for
a fixed scope
of works
, an
d we
are
growing
a po
rtfolio
of software related
cloud and managed services char
geable on a recurring
basis
.
Customer su
ccess
Our customer succe
ss team
are focussed
on delivering
the
best
possible
service
and outcome
s for
our
customers
throughout
the
entire
lifecycle,
which
promotes
loyalty
,
advocacy
and
account
growth
.
We
have
professional
services
consultants
in
all
our key locations
. Our
global suppor
t and
manage
d serv
ices t
eam
s
are avail
able 24/7
.
Operati
ons
We
have
a
mature
and
hi
ghly
effective
global
business
platform,
which
supports
our
rapi
d
growth
and
entrepreneurial
decisi
on
-
making wi
thin an
appropr
iate
governance
frame
work.
Our regio
nal go
-
to
-
market
teams ar
e support
ed by
centralised systems
and processes for all
key operational ar
eas such as finance,
people
& culture,
IT, information security
and legal
.
Creating v
alue
For investor
s
Our
model
builds
capital value
based
on
high
levels of
r
ecurri
ng
revenues and
sust
ained growth.
A
progressi
ve
dividen
d
policy
has been in place sinc
e 2018, providing fur
ther shareholder retur
ns.
Total sharehol
der return
over five
years*:
37
%
*Measured by
the share price as at 31 December
2021
plus dividends paid since 1 January 2017
, divided by the share price at the start of the five
-
year period.
For customers
Busines
s model
Gresham Technologi
es plc
Annual
Financial
Report
202
1
12
Our
solu
tions
g
ive
cus
tomers
co
nfidenc
e
in
th
eir
dat
a
in
an
increas
ingly
complex
an
d
regul
ated
environment.
Our
model
enables us to continual
ly invest in i
nnovation and maintain t
he value proposition of
our solutions.
Total customers
:
270
+
For employees
Our
employees
ha
ve
the
opport
unity
to
be
part
o
f
a
f
ast
-
paced,
entrepreneurial
business,
where
individuals
are
valued
and
career aspirations can be fulfi
lled. Corporate success is shared through an al
l
-
staff share scheme.
Total employees:
200
+
CEO’s statement
Gresham Technologi
es plc
Annual
Financial
Report
202
1
13
Dear share
holder
Strategic
review
Introduction
2021
was
a
s
ignifi
cant
yea
r
of
strategi
c,
oper
ational
and
f
inancial
progr
ess
for
Gresham
Technologies
.
We
further
strengthened our position
as the leading player
in reconciliati
ons software to the
financial sector as
a result of
the succes
sful
transformation
al
ac
quisition
of
Elect
ra
in
June
2021,
and
deli
vered
a
strong,
hi
gh
quality
,
underlying
fi
nancial
performance
.
We are
pleased to cl
ose the year ahead of
market
expectations.
Our
Cl
areti
technol
ogy
so
lutio
ns
provide
maj
or
b
anking
and
investme
nt
man
agement
clien
ts
wi
th
the
tools
to
connect,
reconcile
and
control
their
data
enabling
them
to
automate
their
business
processes
and
have
confidence
in
their
digital
operations.
In t
he year
we
signed
16
new
cli
ents to
reach
more
than
270
across
30
countries
by
31
Dece
mber
2021
, adding
to
our
roster
of
long
-
standing relationships
inc
luding
many
the
world’s top
100
investment
banks.
In
addition,
we
have
flagship
customers using our technology in retail
and commercial banking, asset management, insurance, energy and commodities.
We
su
pport
th
e
b
oards
of
some
of
the
largest
companies
i
n
the
world
to
improve
operational
efficiency,
mana
ge
ri
sk
a
nd
regulation,
accel
erate
their
digital
transformation
initiatives,
and
provide
a
key
part
of
the
data
intelligence
platform
that
ensures
they
remain
agil
e,
competiti
ve
and
compliant.
We
sup
ply
miss
ion
-
critical
technology
to
our
cust
omers
and
are
building
a reputation as a t
rusted industry part
ner.
Our
succes
s
reflec
ts
the
in
vestment
an
d
the
effo
rts
of
our
talent
ed
team
in
del
iveri
ng
diff
erenti
ated
solu
tions
t
hat
are
pro
v
en
at scal
e and
backed
by a
high
-
qual
ity
gl
obal serv
ice capabi
lity.
This,
together
with our
product
roadmap,
provides
a plat
form
for
growth
by
expanding
within
our
existing
clients
and
winning
new
ones,
and
delivering
scal
able
high
margin
recurring
revenues.
As a result of st
rong tradi
ng in
the year to
gether with
acquisitive
contribution,
the Group
delivered
a year
of significant
growth
in revenue and profits
as well as cash generation
well
ahead of bot
h 2020 and
market expect
ations. Underpi
nning this
is t
he
Group’s
gr
owing
bas
e
of
subscr
ipti
on
revenue
contributi
ng
to
a
95%
increase
in
Clareti
ARR
to
£24.0m
and
providi
ng
enhanced visi
bility
into
future
periods.
Notwithstanding
strategic
acquisiti
on contri
butions i
n the
year,
the
Group saw
doubl
e-
digit underlying organic growth of 20%
in AR
R dr
iven
by
new
sales mome
ntum
and
ARR
net
retention leve
ls w
ell in
excess of
100%
.
The
global
pandemic
over
the
last
two
years
has
acceler
ated
the
need
for
all
businesses
to
invest
their
core
processing
systems and
data
platforms to
create
more int
elli
gent
a
nd automated solutions that
reduce the need for manual interventions
and
the
risk
of
error
.
Over
the
past
18
months,
we
have
successfully
capitalised
on
this
opport
unity
with
two
important
acquisitions, as
well as
investing to driv
e organic
growth.
Our success refle
cts our research,
planning and focus on deliver
ing value to our clients
. Our significa
nt investmen
ts in peop
le
and infr
astructure
have put
in
place
the
building
blocks
of a
scalable
fintech
platform
with
a
market
-
leading product portfolio,
highly invested cloud architecture, established blue
-
chip global
customer base,
and a
n ambitious, proven
management
team.
The opportunity in front of us
is large and
we are ideally placed to
pursue our growth ambitions
, u
nderpinned
by a rep
eatable,
high margin business model.
Business Revi
ew
-
Bringing di
gital
integrit
y, agili
ty and c
onfidence t
o the worl
d's fina
ncial i
nstituti
ons
The
s
hift
to
digital
wit
hin
the
financial
serv
ices
sector
over
the
past
ten
years
has
bee
n
compounded
by
growing
regulatory
pressures
and
scrutiny
increasing
our
customers’
needs
f
or
timely
and
accurat
e
processing
coupled
with
great
er
transparency
and
accountability. This
means our
customers
need
t
o
have
complete
confidence
in
their data
and p
rocesses
in
order
t
o
make
good
decisions
and
ensur
e
optimal
outcomes,
including
protecting
their
reputations.
Our
software
helps
ma
rket
part
icipa
nts
connect,
reconcil
e
and
control
the
many
disparate
sources
of
transaction,
fi
nance,
risk
and
regulatory
data
that
exist
in
modern
trading ecosys
tems.
Product port
folio:
plat
form
and solutions
During
the
first
half
of
the
year,
we r
e
-
packaged our
Cl
areti
platform capabi
lities
into two product lines, Control and Con
nect
,
and,
in
the
second
half
of
the
year,
we
s
trengthened
the
portfolio
with
complementar
y
offerings
acquired
with
Electra.
Our
products
can
be
combined
to
quickly
deliver
real
-
time
digital
solution
s
for
customers
into
environ
ments
where
gen
eric
solutions
CEO’s statement
Gresham Technologi
es plc
Annual
Financial
Report
202
1
14
are
inadequate
.
They
are
avail
able
in
the
cust
omers’
data
centres
or
in
a
Gresham
hosted
cloud
on
a
software
-
as
-a-
service
basis
along
with
optional
subscript
ions
for
the
collection
and
aggregation
of
external
data
and/or
the
provision
of
managed
services.
Control
Clareti
Control is
an
enterpri
se
-
grade
business
self
-
service p
latform
for
the
reconciliation and
control of
"any
and
all"
transaction
data
in
financial
markets.
Clareti
Control
is
now
well
established
in
the
market
for
“
non
-
standardised
”
problems
such
as
i
nter
-
systems
reconcil
iations
with
dozens
of
successful
implementations.
Our
investment
into
additional
cash
and
securities
processing
functionality
over
the
last
three
years
means
we
are
now
the
only
vendor
in
the
market
that
can
offer
“
standardised
”
and
“
non
-
standardised
”
dat
a
reconcil
iations
and
controls
on
a
single
modern
self
-
service
platform
that
has
been proven at scal
e. This is a
“
holy grail
”
for the operations function
s within large capital m
arkets institutions a
nd we expect
to further
capitalise
on
this
opportunity in the market over the next
few years. Over time, we will bring
Electra's reconciliation
offering
onto
the
same
platf
orm
to
offer
“
out
of
the
box
”
capabiliti
es
for
handling
buy
-
side
nostro/depot
as
well
as
leveraging
their patented ca
pabi
lities fo
r combinin
g cash/st
ock/transa
ction into a
single view
(the NA
V).
Connect
and Data
Our
Connect
and
Data
solutions allow
customers
to participate
in the
complex inter
-
connected global
financial system
wit
hout
needing to be concerned with
third
party
data
access,
integration
risk,
cost a
nd tim
e to
market.
Our Connect sol
utions
enable
customers
to
interact
with
their
bank
partners,
trading
venues,
regulat
ory
reporting
venues,
and
other
industr
y
applications
and
provide
intelligent control
over
complex
data
flows. O
ur
Data
solution
is
focussed
on the
needs
of
the
buy
-
side comm
unity
and is
used by fund
managers and service
pr
oviders alike
to collect
and
aggregate data
fr
om
third parties
such as
custodi
ans.
These
mission
-
critical
servi
ces are
deli
vered i
n
the cloud
from our
secure data
centres and operated
with exceptionally high
levels
of
service
and
support.
In
2021,
we
went
live
with
the
first
customer
on
our
next
generation
cloud
-
native
archi
tecture
Connect 2.0, and we
a
re continuing the migration of cu
stomers
and
,
ultimately,
we plan to bring together the Electra Data
and
Clareti
Connect
services
onto a c
ommon
cloud Connect
platform.
I am
pleased to
say the
developmen
t work
on these
two offerings has
progressed successfully throughout the financial
year
and our new messaging and simplif
ied Clareti product
story and collat
eral have been well recei
ved in the market
.
We
al
so
have
a
t
hird
deve
lopme
nt
t
eam
worki
ng
o
n
Di
gita
l
Ba
nkin
g
pr
oduct
s
dr
iven
by
our
inno
vati
on
p
artne
rshi
p
wi
th
ANZ
which
progressed
extr
emely
wel
l
during
the
year
.
In
December
,
our
software
was
formally
accepted
into
testing
ahead
of
deployment
with
ANZ’s
first
customers
during
2022.
As
a
result
of
achieving
this
import
ant
milestone,
ANZ
increased
their
investme
nt into Clar
eti softwar
e, and a fu
rther incre
ase is exp
ected upo
n custom
er go
-
live in FY2
2
.
Markets
–
Digital t
ransformati
on of fi
nancial s
ervices co
ntinues at
pace
Four
key dr
ivers
continue
to s
upport
growth
in our
mark
et and
the n
eed fo
r our
clients
to inves
t in t
heir sys
tems
and re
porting
Managin
g ris
k and
regula
tion
Every day, we
help
b
oards
of some of the
largest companies in the world
manage their financial, operational and reputational
risk by providing timely insigh
t into their data and proce
sses.
This
is
compounded
by
ever
greater
regulato
ry
press
ures
which
increase
s
their
need
for
over
sight
a
nd
accurat
e
report
ing.
The
global
market
for
regul
atory
r
eporting
solutions
is
expected
to
reach
USD
$
1.16
bn
by
the
end
of
2026,
with
a
CAGR
of
19.5%.
Over
the
last
five
years,
we
have
secured
a
s
ignificant
number
of
sales
in
t
he
r
egulatory
area
and
our
recent
acquisitions have f
urther strengthened our
position
.
Digital
automation
A
ligned
with
the
above
,
we are part of o
ur client
s’ inves
tment to di
gitis
e their pr
ocesses, r
educe thei
r operati
ng costs t
hrough
automation,
and
serve
their
customers
better.
We
are part
of programmes
global
ly
aimed
at
improvi
ng
the
quality,
connectivity
and exploitation of
data to deliver
more intelligent busi
ness outcomes.
Underpinni
ng busine
ss success
CEO’s statement
Gresham Technologi
es plc
Annual
Financial
Report
202
1
15
Our sof
tware
not
only e
nables
busine
sses t
o sur
vive
in th
e moder
n era
,
but importantly
to become more competit
ive through
access
to
information
and
agil
e
decisi
on
-
making,
all
u
nderpi
nning
the
laun
ch
of
new
p
roduct
s
a
nd
innovati
ve
customer
propositions.
Expanding mar
ket
The
o
verall
size
of
the
ad
dressable
market
for
Clareti
software,
and
the
competitiveness
of
our
offerings
is
continuall
y
expanding and we are well
placed to participat
e in a growing market oppor
tunity
.
Growth St
rategy
–
Building block
s to £100m
ARR
The
overall
size
of
the
ad
dressable
market
for
Claret
i
software,
and
the
competi
tiveness
of
our
offerings,
provides
an
opportunity for
us to bui
ld a £100m ARR SaaS
business with
a best
-
in
-
class sales
, cost and delivery model with high
quality,
high growth recurri
ng revenues.
Grow cus
tomer f
ootpri
nt in
core ma
rkets
We remai
n focu
sed on wi
nnin
g a meani
ngful
shar
e of th
e globa
l mark
et for
recon
cili
ati
ons, data integrity
and control software
in financial
services before turning our
attention to
other industries and use
cases. We
are focussed on
winning new names
through
direct
sales
teams
in
the
key
geographies
of
UK,
Europe,
North
America,
Asia
and
Australia.
Our
newly
appoint
ed
sales hires in
Luxembourg
and Asia
Pacific both se
cured new
name
customers during
the course
of the
year giving us
further
confidence in our ability
to scale
.
Highligh
ts duri
ng the y
ear incl
ude:
•
a
new
Clareti
cont
ract
win
wit
h
a
fast
-
growing
global
financial
group
which
is
expected
to
generate
total
software
subscription
fees
of
EUR
1.4m
over
a
committed
five
-
year
ter
m,
with
additional
services
revenues
to
deploy
the
solution
;
•
a
contract
win
with
one
of
the
world’s
largest
professional
services
fi
rms
to
provide
advanced
technology
to
its
financial
services
audit practice
in
the
US.
This
new
contract
is expected
to generate
total
software
subscription fees
of
USD
$
2.8m
over
a
committed
five
-
year
term,
with
the
annual
subscripti
on
fee
starting
at
USD
$
0.25m
and
committed
to
rise
to
USD
$
0.7m from
t
he
third year
of the
t
erm,
in
addition to
services revenue
to
deploy
the
solution
;
•
a
contract
with
a
leading
provider
of
ret
irement
investment
services
in
the
US
to
repl
ace
a
legacy
reconc
iliation
platform with
USD
$
0.6m
software subscriptions over
three years.
Expand engagemen
t across
existing
substantia
l customer
base
We
are
alr
eady
regar
ded
a
s
an
inno
vati
ve
pa
rtner
to
many
of
t
he
wo
rld'
s
la
rgest
fi
nanci
al
i
nsti
tuti
ons
and
w
e
aim
to
deepen
those key account relationships
.
Win
ning
a
nd
gro
wing
l
arge
"
key
a
ccount
"
cus
tomer
s
is
an
impor
tant
aspect
of
ou
r
str
ategy
,
the
success
of
which
is
demonstrated
by
the
Group’s
consistently
strong
customer
retention
levels,
wi
th
ARR
net
retention
incr
easing to
106% on
an
annualised
basis
acr
oss all
customers,
and
even hi
gher for
our
Key
Accounts
.
Notable
successes
in the perio
d include:
•
Australia
and
New
Zealand
Banki
ng Gr
oup,
our
largest
custo
mer,
signed
contract
s t
otallin
g ove
r AUD
$
21
m
, which
combined
with
existing
agreements
provide
cont
ractual
certainty
over
the
r
enewal
of
all
existi
ng
Clareti
and
non
-
Clareti
licences,
as well
as
securing new
incremental revenues from
recurring software, recurring
managed services,
consulting services and con
tracting services
;
•
we
successful
ly
executed
a
fi
ve
-
year
subscri
ption
with
a
global
Tier
1
bank
customer
to
extend
and
upgrade
its
investme
nt in the C
lareti softw
are
;
•
a
five
-
year
subscri
ption
with a
global
Tier
1
bank
customer
to
extend i
ts cur
rent i
nvestment i
n Clareti
sof
tware. The
contract value totals
£2.8m for the ongoing use
of the technology
and
follows the successful m
igration of the bank's
global legacy "core
reconciliations"
to Clareti Contr
ol
;
•
securing
a
multi
-
year
renewal
with
t
he
l
argest
customer
acquired
thro
ugh
Ele
ctra,
providi
ng
grea
ter
c
ertaint
y
over
future years.
CEO’s statement
Gresham Technologi
es plc
Annual
Financial
Report
202
1
16
Provide i
ncremental
growth oppor
tunities
through
focused in
novation p
rogramme
The Board and
manageme
nt team are focused
on fostering a
culture of innovat
ion, supported by
investment in our
products,
people and client relations
hips to ensure we continue to deliver market
-
leading
solutions
to som
e of th
e largest
compa
nies in
the world
. This
commitm
ent is
d
emonstrated by the improved matching results and economic
performance being seen by the
Tier
1 bank
development
partne
r for
our
cash
and
stock
reconciliat
ion o
ffering.
Economic
benefits
are
substanti
ally
ahead of
the
displaced
legacy
transaction
lifecycle
management
produc
t and
p
rovide
s
an indicativ
e
busine
ss case
for other
insti
tutio
ns.
Our
Contro
l
softwar
e
is
now
a
clea
r
leader
i
n
the
market
i
n
terms
of
f
unction
ality
a
nd
scalabi
lity
,
and
the priority
for
our R&D
team
has
shifted
towards
ease
of
adoption
a
nd
provision
of
greater
business
self
-
service
capabili
ty.
Duri
ng
2022
,
we
will
introduce ne
w web
-
based interfaces for
our Control
solutions and progr
essively upgrade
the underlying
architectural
components
such
that
the
Electra
and
Clareti
offerings
ultima
tely
operate
on
a
common
“
micr
o
-
service
”
based
cloud
-
native
Control
2.0 plat
form.
Our
Conne
ct
2.0
platf
orm,
whi
ch
bri
ngs
to
gether
our
dat
a
access
and
tr
ansfor
mation
t
echnolo
gy
asset
s
acro
ss
the
domains
of trading STP,
regulatory, payments and
messaging
,
h
as also
reached a
market level of
functional maturity. We
will continue
to enhance this se
rvice for newer ind
ustry requireme
nts such as ISO
20022,
add
connectivity to additional industry pl
atforms,
and
make
the
technol
ogy
more
accessibl
e
through
adoption
of
natural
l
anguage
processing
(
NLP)
and
enhanced
repor
ting.
Our Connect offerin
g is
a powerful capabili
ty and extremely relevan
t to today’s global financia
l markets and we
intend to ram
p
up our marketing during
the year.
In
addition
to
the
continued
enhance
ment
of
our
produ
ct
portf
olio,
a
p
roport
ion
of
th
e
R
&D
t
eam
is
dedi
cated
to
d
evelopi
ng
and
incubating
new
corporate
banking
and
payments
software
in
partnership
with
ANZ.
After
three
years
of
work
,
the
new
technologies
are
being
deployed
into
production
us
e
cases
and
off
er
a
potential
ly
significant
break
-
out
opportunity
for
the
Group i
n the
coming y
ears.
M&A
Alongside
our stra
tegic pi
llars,
we look
to supple
ment our
organic gr
owth opport
unities
through
strategi
c M&A. We are
proud
of
our
successful
M&A
strategy
which
has
expanded
our
portf
olio
of
product
s,
deepened
our
rel
ationships
with
key
clients,
and
broadened
our
footprint
international
ly.
Whilst
we
continue
to
explore
investment
opportunit
ies
to
further
scale
the
business,
our
pri
ority
is
to
leverage
th
e
combined
assets
and
enlar
ged
global
business
to
sustain
high
level
s
of
profitabl
e
organic growth. With
that in mind,
I am pleased to r
eport that Infor
algo has delivered
a very strong
performance in its
first
full
year
with
the
Group.
The
acquisiti
on
has
brought
additi
onal
sticky
ARR
and
widened
Gresham’s
customer
footprint
in
North
America
.
Electra
The
standout
event
of
th
e
year
was
the
USD
$
38.6
m
acquisiti
on
of
El
ectra
in
June
2021,
which
not
only
reinforc
ed
our
leadership
position
for
reconciliation
software
in
financial
markets
but
also
strengthe
ned
our
market
shar
e
and
portf
olio
of
products
for
the
investment
management
market
.
The
deal
also
ac
celerates
our
opportunity
in
the
major
North
American
market
and
creates a
truly global platform for
the Group from which to deliver str
ong, long
-
term growth.
This trans
formational
acquisiti
on opens th
e door t
o the next
stage
of development
at Gresham.
We
are now
able to l
everage
the com
bined
investments
in product
developmen
t, distribution
and
customer
support
infrastructure to
comp
ete m
ore
effectively and
ultimately to
realise the
high m
argins, strong
cash generation,
and
attractive valuation multiples
t
ypical of large
mature
enter
prise
softwa
re fi
rms.
The acquisition of
El
ectra has
been
a catalyst
fo
r
change
within the
business
. W
e
have reviewed our
proces
ses for
scalabi
lity,
and
made
rapid
progress
with
integration
work
,
enabling
us
to
operate
as
a
s
ingle
global
company
int
ernally
as
well
as
externally in t
he marketplace.
Current Tr
ading and Out
look
As
a
result
of
ou
r
acquisiti
ons
and
the
succes
sful
transi
tion
to
subs
cription
r
evenues
in
the
Cl
areti
busin
ess,
Gresham
now
benefits
from
high
levels
of
recurr
ing
revenues.
We
ended
the
f
inancial
year
as
a
l
arger,
more
r
esilient
company,
with
more
than
£37m
of
2022
Group
revenues
already
under
contract
(which
represents
100%
of
2021
Group
revenue)
in
the
current
year
, providing significa
nt visibility and a ro
bust platform to exec
ute our growth strategy
.
CEO’s statement
Gresham Technologi
es plc
Annual
Financial
Report
202
1
17
Today’s Gresham
has the fi
nancial strength and tr
usted partner client
relationships to dr
ive further expansi
on in the medium
-
term. We are
already regarded as
an
innovative partner to
many of
the world's
largest financial i
nstitutions and
our
aim
is
to
deepen those key account rel
ationships as well
as win new names.
There
are
now
strong
i
ndications
that
financia
l
firms
are planning
for
greater
investmen
t
in
FY22,
with
digital
transform
ation
and automation remaini
ng a prior
ity. During
2021,
we saw
increa
sing l
evels
of management
ambit
ion and
associ
ated budg
et
allocations
for
change
pr
ojects
in
our
target
markets
and
our
pipeline
is
much
i
mproved
over
the
same
period
last
year.
S
everal
large opportunities are
moving through competitive tender processes and
Gresham is
in
‘proof of
concept’ with
a
number of
new
‘
key accounts
’
.
Given
t
he
cont
inuing
market
d
emand
for
data
a
nd
proce
ss
auto
mation,
connect
ivity
and
con
trol,
we
als
o
have
a
si
gnificant
opportunity
to
grow with
our
existing
install
ed base
of
270+
customers
by
expanding across
their
operational i
nfrastructures
,
resulting in a regular beat rate of upgrade contrac
ts. We believe there is the opportunity to double reven
ues with
our existing
clients as they expand across business li
nes and geographies.
In
addition
to
securing
new
key
accounts
and
growing
with
existing
customers,
we
are
investing
in
the
productisation
and
repeatability
of
our
software
to
accelerate
our
scale
-
up
in
the
mid
-
market
in
or
der
to
at
tack
a
to
tal
addressa
ble
market
comprising over
5
00 banks globally and
more than
1
000 investment managers.
At
the
ti
me
of
writ
ing,
the
devastati
ng
situat
ion
in
Ukr
aine
is
wo
rsening
and
,
as
a
Group, we
condemn the
abhorrent actions
of
t
he
Russian
and
Belarusian
leadership
in
the
strongest
possible
terms
.
Whilst
Gresham
has
limited
direct
exposure
to
Russian
or
Belar
usian
firms,
and
we
have
no
operations
in
the
region,
we
are
committ
ed
to
playing
our
par
t
by
adhering
to
the
gove
rnmental
sanctions,
assessing
our
operations
and
relationships
to
ensure
they
are
legally
and
morally
correct,
and
supporting the relief eff
ort
to
the
extent possible.
With
you
r
suppor
t,
and
th
e
h
ard
work
of
o
ur
tale
nted
gl
obal
te
am,
we
have
cre
at
ed
the
foundations
for
succ
ess
and
benefit
from a focussed strate
gy, strong balance sh
eet and growing mar
ket opportunity. The Bo
ard remains confide
nt in its ambition
to
build a
£100m
ARR
SaaS
business
with
best
-
in
-
class
performance
metri
cs
expected
of a
va
luable
global
financial
technology co
mpany of su
bstantial scale.
Ian Manoc
ha
Chief Exe
cutive
7
March
2022
DocuSign Envelope ID: BB8DFBB0-2E16-4C63-B3F9-138A47D638FF
Electra acquisit
ion
Gresham Technologi
es plc
Annual
Financial
Report
202
1
18
A
strong
deal rationale
and a
significant
step
towards
o
ur strategic goals
Our
transform
ative
ac
quisition of
Electra in
June
2021
was
underpinned by
s
trong investment
case
with both
short
er term
and
strategic benefits
.
It
constitutes a
key
step in
our
ambition
to
deliver
a
£100m ARR global
business
.
The
acquisition
provides
the
enlarged
Group
with
a
highly
comple
mentary
suite
of
products
and
solutions,
as
well
as
significant
opportunity
for
revenue,
investme
nt
and cost synergies
,
which we
a
re
securing
through our
integration
and globa
lisation pro
gramme
.
Electra acquisit
ion
Gresham Technologi
es plc
Annual
Financial
Report
202
1
19
Globali
sing our
combined
business
Since the acquisit
ion completed in June 2021, w
e have been
undertaking a major programm
e of integration and globalisation
work
to create
one company
a
nd
secure
the
expected benefits of
the
acquisition. The
overriding
aim
of
the
programme
is
to
create a global platform for
growth in order to
deliver
on our vision, i
nnovate faster and win i
n the market.
Our glo
balisa
tion b
luepri
nt is
based
on the
foll
owi
ng principles:
Our FY21
prior
ities
for
globali
satio
n incl
uded:
•
Securing our
customers a
nd our peop
le
•
Corporate r
e
-
branding
•
Consolidat
ion of
sales and
marketin
g platf
orms
•
Integration of in
ternal operations
•
First
phase of globali
sation for product
and customer success functions
•
Global g
o
-
to
-
market pl
ans f
or FY2
2
Having
successfully
completed
the
priori
ty
workstreams
referred
t
o
above
in
2021,
our
globali
sation
effor
ts
in
2022
are
focussed on
:
•
Building
out the
glob
al sales plat
form to achieve revenue sy
nergies
•
Offeri
ng our
solut
ions an
d servi
ces i
n all
locat
ions
•
A
ccelerating our innovation
and
delivery
using
common
architectures, technologi
es and processes
•
E
xecuting
our
consolidated cloud strategy
and achievi
ng cost synergies
•
Standardi
si
ng our IT systems and processes
and thereby achieving f
urther cost and operat
ional synergies
Strategy
Gresham Technologi
es plc
Annual
Financial
Report
202
1
20
Our str
ategic
plan
is des
igned t
o dri
ve prof
itabl
e growt
h and
create
long
-
term shareholder v
alue.
Strategy
Key achievement
s in
2021
Key priorit
ies for
2022
Build a high
-
marg
in, rec
urring
revenue stream based on
Clareti so
ftware and
cloud
services.
We
increas
ed
Clareti
annual
ised
recurrin
g
revenues
(ARR)
by
95%
(including
Electra)
(see
KPIs,
page
22
).
Clareti
ARR
now
represent
s
more
than
85%
of
Group
ARR
(2020:
78%
).
Following
the
acquisition
of
Electra
in
June
2021,
57
%
of
our
Clareti
ARR
is
now
generated
from
cloud
solutions
.
We
will
i
nvest
in
sales
and
marketing
capacity
and
globalise
our
distribution
operations
to
capitalise
on
our
expanded
product
offerings
.
We
will
also
expand our
managed servi
ce offeri
ngs
to expand
our
footprint
in
existin
g
and
new
customers
and
grow our share of wallet
.
Create a
valuable
financial
technology busin
ess through
Clareti
-
led growth and
complementary
acquisitions.
We
acquired
Electra
in
June
2021
,
wh
ich
substantially extends our
business, particularly in
North
Amer
ica
.
This
increases
our
target
addressable market and provides m
ore upsell
and cross
-
sell opportunities.
We will
comple
te the
integ
ration
of Electra
to
maximise
the
opportunities
for
revenue
,
cost
and
operational
synergies.
We
w
ill
deliver
organic
Clareti
growt
h
.
W
e
wi
ll
continue
to
explore
appropriate acquisition oppor
tunities.
Establish Claret
i as the
enterprise data integrit
y platform
“category leader”.
We
delivered
demand
generation
campaigns;
thought
leaders
hip,
integrated
go
-
to
-
market
programmes
and customer
events
across
all key
target
marke
ts
via
a host
of
digital
and online
channels
.
We
won
two
key
industry
awards
in
2021:
Chartis
RiskTech
100
category
award
-
winner
for
sell
-
side
reconciliations
and
FTF
be
st
reconciliation provider
.
We are focused on
drivin
g brand awareness and
market
understan
ding
of
our
leading
Control,
Connect,
Data
Services
&
Managed
Services
capabilities
across
our
priority
markets.
We
will
execute
e
nterprise
solution
-
set
campaigns
t
o
cross
-
sell
and
up
-
sell
to
our
enlarged
customer
portfolio.
Focus our product investment
on
innovative
Clareti solutio
ns
for our
chosen markets
.
We
delivered
major new
features
for
market
-
facing
rec
onciliations,
allowing
ke
y
customers
to
go
live
with
our
next
-
generation
solution.
We
enhanced
our
cloud
solutions
and
product
integration
capabilities
to
meet
the
grow
ing
demand
.
We
delivered sophisticated
solution
s
through
combining
Connect
and
Contro
l
to
enable
our customers to innovate t
heir market offerings.
We
will
release
maj
or
new
versions of
our
Control
and
Connect
solution
s
containing
new
features
and capabilities to
enhance
our propositions. We
will
expand
our
managed
service
offerings
and
excite
our
customers
and
prospects
with
a
compelling
innovation
roadmap
.
We
will
further
exploit
the
synergies
in
Connect
and
Control
to
deliver solutions that are beyond the reach of our
competitors
.
Retain str
ategic non
-
Clar
eti
revenues to support Clareti
-
led
growth.
O
ur
non
-
Clareti
revenues
were
ahead
of
our
original
expectations
.
Specifically,
the
contracting
services
business
we
provide
to
ANZ
continues
to
be
productive.
Our
legacy
products
were
managed
effectively
and profitably.
We
will
continu
e
to
provide
contracting
services
to
ANZ.
We
will
re
-
evaluate
the
viability
and
business
risks
of
the
individual
le
gacy products
to
ensure
they
can
rema
in
profitable
and
serviceable
, or discontinue them
if not
.
Strategy
in action
Gresham Technologi
es plc
Annual
Financial
Report
202
1
21
Control
Efficien
tly automat
ing,
validating and
reconciling
,
our customers dat
a,
workflows
and repor
ting
.
•
Enterprise
gra
de
pl
atform
for
matching,
reconcilia
tion,
exception management
and
control of
“
any
and
all
”
transaction
data. Highly flexi
ble and customisable, dat
a agnostic and proven at
massive scale
Connect
Dynamicall
y optimi
sing al
l our
customers
enterpri
se messagin
g and dat
a connecti
vity
•
Technology
and
service
that
enables
firms
to
rapidly
connect
disparate
applications,
access,
control
and
transform
data
and real
-
time process flow
s.
•
Extensive
librar
y
of
supported
servi
ces
inc
luding
banking,
payments,
trading
STP,
accounting,
regulatory
reporting
and
other common industry applicat
ions and data platfor
ms.
D
ata services
Increase bus
iness value and
operational efficie
ncy with timely, h
igh
-
quality data
•
A complet
e source
for
accurate,
reliabl
e data
that
consolida
tes secur
ities,
cash po
sition
and tr
ansaction
informat
ion
for buy
-
side firms and service providers al
ike.
•
Connecting
with mor
e than 4
500 unique
data fe
eds from
over 1500
global
sources
Managed
service
s
Remove the
burden of
managing t
echnology
while a
chieving
greater
flexi
bility
, effi
ciency
and scale
•
Flexible
servi
ce
options,
cloud
depl
oyment,
operations
and
technical
servi
ces
s
upporting
our
Connect
and
Control
solutions,
giving
you
the ability
to simplify,
st
reamline
and
scale multiple
workflows and
platforms
through
one trusted
provider.
Key performance
indicators
Gresham Technologi
es plc
Annual
Financial
Report
202
1
22
Financial K
PIs
The following key performance indicators (“
KPIs
”) have
be
en s
elected
as
the m
ost
appropriate
financial
me
asures of stra
tegy
execution for the Group. Performance of these KPIs has been dis
cussed within the Chairman’s Statement, CEO’s Statement
and
Financial
Review.
KPI
Performance in
20
21
(1)(2)
Description
Why is
it a K
PI?
Group revenue
£37.0
m
(
up
49
%)
Total
revenue
generated
and
recognised
in
the
year
from
all
op
erations,
including
Clareti Sol
utions and
Other Solu
tions.
Measures
the
Group’s
overall
performance
at
revenue
level,
which
is
an
indicator
of
the Group’s over
all size and comple
xity.
Clareti r
evenue
£
25.
5
m
(
up
65%)
Total
revenue
generated
and
recognised
in
the year from Cla
reti Solutions.
Measures
the
Group’s
success
in
winning
and retaining Claret
i revenues, which
is an
indicator
of
the
Group’s
progre
ss
in
its
Clareti
-
led strategy.
Clareti
ARR
£
24.0m
(up
95
%)
Aggregate
value
of
all
recurring
revenues
from
C
lareti
Solu
tions
tha
t
are
either
fully
or
partially
contracted
for
the
next
twelve
months
and/or
are
highly
expe
cted
to
renew
in
the
next
twelve
month
s.
The
value
stated is given
as at 31 December 2021
.
Provides
a
forward
-
looking
view
of
the
minimum expected Clareti revenue
s in
the
next
twelve
months,
which
gives
confidence
to
business
planning
and
investment dec
isions.
Adjusted EBITDA
(3)
£
7.
2
m
(up
60
%)
Group
earnings
bef
ore
interest,
tax,
depreciation
and
amortisation,
adjusted
for
share
-
based
payment
charges
and
exceptional items
.
Key
measure
of
the
Group’s
effectiveness
in
converting
reven
ue
to
earnings,
excluding
the
effects
of
certain
non
-
operational
and/or
except
ional
transactions.
Cash Adjusted
EBITDA
(3)
£
2.
5
m
(
up
£
2.
2m)
Adjusted
EBITDA
less
capitalised
development
spend
and
any
IFRS16
lease
-
related cash pa
yments
.
A reflection of cash generation in the year,
reflecting
the
Grou
p’s
effectiveness
in
converting revenue to cash generation.
Adjusted dilut
ed
earnings per share
(3)
5.0
pence (up
27%)
Earnings
per
individual
share,
taking
into
account
changes
in
capital
st
ructure
and
issued
equity
on
a
fully
diluted
basis,
adjusted
for
share
-
based
payment
charges,
deferred
tax
charge
on
inter
-
group sale
of IP,
exceptional items
and
amortisation
from
acquired
i
ntangible
assets.
Measure
o
f
Group
profita
bility
that
identifies
performance
on
a
per
share
metric
and
enables
comparisons
against
other companies.
Net cash
£
9.1m
(
up
2
%)
Aggregate
net
cash
balance
(including
bank
deposits
/restricted
cas
h
)
as
at
31
December
2021
including bank deposits
after
operational,
investing
and
financing
activities during t
he financial year.
Provides
a
measure
of
the
Group’s
financial
stre
ngth
and
self
-
sufficiency
to
support operations, make investments
and
withstand u
nexpected he
adwinds.
(1)
All KPI data excludes discontinued operations, except for profit before tax which includes discontinued operations and exceptional items.
(2)
Values stated for
2021
include the impact of the acquisition of Electra. See note
23
for details.
(3)
The adjustments to earnings per share and EBITDA have been provided in order to present the underlying performance of the business on a comparable basis (see note 5).
Key performance
indicators
Gresham Technologi
es plc
Annual
Financial
Report
202
1
23
Non
-
financial KPIs
The
following
KPIs
have
been
selected
as
the
most appropr
iate
non
-
financial
measure
s
of
str
ategy
exe
cution
for
the
G
roup.
Performance
of
these
KPIs
has
been
discusse
d
within
th
e
Chairman’s
St
atement,
CEO’s
Statement
and
F
inancial
Re
view.
T
he
Group
tracks
a number
of other
non
-
financial
performanc
e
i
ndicators
operationall
y
that
are
not
considered to
be
individually
relevant
as measure
s
of overall strategy execution succ
ess.
This is re
viewed annually.
KPI
Performance in 2021
Description
Why is
it a K
PI?
Number of Cla
reti
customers
270+
(
2020: 120+
)
Total number
of
Cl
areti
customers
as
at 31
December 2021
Growing
the
customer
base
provides
additional revenue
as well as
opportunities
for future
expansion.
Clareti
ARR net
retention rate
106%
The
rate
of
Clareti
ARR
growth
in
the
previous
twelve
months
based
exclusively
on
contracts
in
place at
the start
of
the
twelve
-
month
period.
Inclu
des
annualised
and apporti
oned rate
from Elect
ra since
acquisition
.
This measure p
rovides
the
Clareti
ARR
growth
rate
of
a
specific
customer
cohort
from
start
to
en
d
of
the ye
ar
,
wh
ich
enables
the
Grou
p
to
analyse
and
address
ca
uses
of
Clareti
ARR
attrition
and
forecas
t
more
reliably
.
People engagement
score
78%
(up 2%)
The
overall
score
derived
from
the Group’
s
annual employee engagement survey.
A
highly
engaged
workforce
tends
to
be
more pro
ductive,
so t
his mea
sure pr
ovides
an assessment of
the overall engagement.
The
detailed
survey
results
enable
the
Group
to
take
targeted
action
to
i
ncrease
engagement
levels as appro
priate.
Stakeholders and sec
tion 172
Gresham Technologi
es plc
Annual
Financial
Report
202
1
24
Section 172(
1) statement
Section
172(1)
of
the
Compa
nies
Act
2006
pro
vides
th
at
a
di
rector
of
a
co
mpany
must
act
in
the
way
he
consi
ders,
i
n
good
faith, would be most likely to promote the success
of the company for the benefit of its members as a whole, and in doing so
have regard (amongst other
matters) to:
(a)
the likely consequences of a
ny decision in the
long term;
(b)
the interests of the company
’s em
ployees;
(c)
the need to foster the
company’s b
usiness relation
ships with supp
liers, custome
rs and others;
(d)
the impact of the company
’s operations on
the commu
nity and the env
ironment;
(e)
the desirability of the company
maintaining a re
putation for high s
tandards
of business conduct; and
(f)
the need to act fairly as b
etween me
mbers of the c
ompany.
This section describes how the Director
s have had regard to the matters set out in section 172(1)(a)
-
(f) of the Co
mpanies
Act
2016
and
forms
the
Directors’
stat
ement
required
under
section
414CZA
of
that
Act.
In
making
this
statement,
t
he
Directors
have focused on matters of
strategic importance
to the Group, having regar
d to the size and complex
ity of its busi
ness.
Stakeholder group
Why engagemen
t is impor
tant
How managemen
t and/or
Directors engage
Strategic decisions
in the year
Investors
For further information,
see
Statement of Corporat
e
Governance, page
43 and ESG,
page 26
.
To communicate our long
-
term
strategic objectives effectively
and promote long
-
term
holdings.
To secure investor support f
or our
strategic objectives and ensure
access to capital to deliver
on our
execution plans.
Use of the AGM,
analyst
presentations, investor
presentations, a bi
-
annual capital
markets day.
Individual investor meetin
gs w
ith
the CEO, CFO, Cha
irman and/or
committee chairs.
We acquire
d
Electra
in
June 2021
which
significantly
enhanced the
Company’s value prop
osition and
provides further growth
opportunities.
We con
sulted wi
th
investors and
gained shareholder
approval for the transaction i
n
general meeting.
We
appointed Alma
PR
to
advise
us on
financial messaging
and
to
develop and deliver a compelling
investor commun
ications
programme
.
We
conducted an ESG review
and
committed to developing an
ESG strategy.
Workforce
For further information,
see
People and Culture, p
age
26
and
share schemes, page
122
.
To deliver our long
-
term strategic
objectives.
To maintain competitive
advantage and deliver market
-
leading solution
s to our
customers.
To promote our culture, purpose
and values, foster a healthy
working environment
for our
workforce, suppor
t their wellbe
ing
and be a responsible business.
To maintain low turnover and
high productivity rates.
Use of transparen
t, anon
ymous
workforce engagement
surveys,
with commitments t
o address
areas of concern.
Ad hoc initiatives
such as mental
health awareness days, charity
fundraisers and social ev
ents.
Use of performance
reviews,
objective setting and formal
policies and procedures.
Board meetings held at
each UK
office and regular management
visits to overseas offices,
although this was not possible
due to COVID
-
19 related travel
restrictions.
We
continued to offer flexible
working in lig
ht of the COVID
-
19
pandemic and operated all our
offices in line
with
governmental
guidelines.
We
introduced a new ben
efits
provider in the UK and we aligned
benefits and terms and conditions
for all US employees follo
wing
the acquisition of Electra.
We
introduced
an additional
birthday leave policy
for all
employees globally.
Stakeholders and sec
tion 172
Gresham Technologi
es plc
Annual
Financial
Report
202
1
25
Customers
For further
information, see
CEO’s statement,
page
13 and
ESG, page
26
.
To ensure we meet or exceed our
customers’ requirements and
maintain comp
etitive ad
vantages.
To build a highly referenceabl
e
customer base with low attrition
rates.
To identify and assess new
ma
rket opportunities and
collaborate with customers on
high
-
value projects.
To promote brand loyalty and
identify sales oppor
tunities for
other Gresham solutions.
Quarterly cust
omer success
meetings, i
nvolving mana
gement
representatives.
Executive sponsorsh
ip
programme for key accounts.
Chairing industr
y roundtables and
customer forums to communicate
and consult on product
development priorities and new
features to address eme
rging
market requi
rements.
Customer satisfac
tion surveys on
support incidents.
We investe
d heavily
in
developing new features and
capabilities for cash and stock
reconciliations, directly aligned to
customer requirements.
We
conducted an ESG review
and
committed to developing an
ESG strategy.
Suppliers
To ensure that we
operate our
business effectively and without
disruption.
To act fairly and responsi
bly with
respect to our suppliers.
To adhere to our contractual
obligations to suppliers.
We nominate
senior b
usiness
contacts to manage our key
supplier relationships. They are
supported by operations staff as
required to manage supplier risks
and requirements.
We partic
ipate in
Business
in the
Community (“BITC”)
which
promotes responsible business.
We did not
make any
strategi
c
decisions in the year affecti
ng
suppliers.
Environment, social
and governance
Gresham Technologi
es plc
Annual
Financial
Report
202
1
26
Scaling up
responsibly
Gresham i
s growi
ng and
global
ising.
As we
do, we
are c
ommitted
to ens
uring
that
we’re
“
Scali
ng up res
ponsibly
”
.
Having comple
ted a review of
environment
, social an
d governance
(“ESG”) considerations
in 2021,
we are
now deve
loping a
strategic
direction
to
sustainabil
ity.
During
the
review,
we
l
earned
a
great
deal
about
the
macrotrends,
i
ndustry
t
rends,
regulatory
and
policy d
irections, an
d em
ployee
and
senior
team
member
t
houghts
and perceptions of
ESG
and sustainability.
These
ins
ights
h
ave
enable
d
us
to
devel
op
a
three
-
pillar
ESG
strategi
c
directi
on
for
Gresham
Tech,
under
the
umbrella
proposition of
Scal
ing up re
sponsibly
.
Scaling up
responsib
ly is bu
ilt acro
ss
the following
t
hree interwoven pillars
:
•
Our Cust
omers
–
leveraging our
growth to
improve
sustainable customer outcomes
.
•
Our Peopl
e
–
fostering positive, in
clusive
and productive communities in our busi
ness and our industry
.
•
Our Worl
d
–
managing
our
impact
on th
e envi
ronment
and being a force for good
in our world
.
The strategy
is underpinned
by culture
and governance as
the existi
ng foundation
s for our
success.
We are
excited about
developing and executing our ESG str
ategy over the coming months and
years.
People and cu
lture
Our
aim
is
to
be
a
high
ly
valu
ed,
engagi
ng
and
res
ponsibl
e
employer
across
t
he
Group,
wh
ere
our
peo
ple
uphol
d
our
cor
e
values and
are encouraged to excel
. We challenge ourselves
to be an inclusive
and collaborative pl
ace to be successful.
We
kno
w
that
our
peopl
e
ar
e
key
to
our
c
olle
ctiv
e
expe
rti
se
and
grow
th
pl
ans.
Our
b
usin
ess
mo
del
i
s
to
att
ract
,
re
tain
and
develop
talented
individuals
to
help
us
deliver
our
long
-
term
objective
of
becoming
one
of
the
world’s
leading
providers
of
enterprise financial technology
solutions. We
seek to
foster a
c
ulture of
innovation and
empowerment where
talent, enterprise
and collaboration ar
e recogni
sed and rewarded.
Our core
values
We Embr
ace
Diff
erence
We
value
diff
erent
backgr
ounds,
exper
ience
,
exper
tise
and
ways
of
thin
king.
We
encour
age
cur
iosi
ty
and
r
espec
t
ever
y
individual,
recognis
ing
that
everyone
has
the
potential
to
bring
something
extraor
dinary
to
the table.
We
each
apply our
unique
talents with pas
sion and integrity a
nd we are all co
mmitted to m
aking Gresh
am an exce
ptional place to w
ork.
We Cre
ate
Togeth
er
Worki
ng
t
ogeth
er
with
our
col
leag
ues,
cus
tomers
an
d
pa
rtner
s,
we
c
reat
e
en
ergy
and
a
dynamic
approach
to
challenge
the
norm
and
find
innov
ative
ways
to
sol
ve
problems.
Through
open
discussion
and
f
eedback,
healthy
debate
and
continuous
learning,
we
combine
the
virtues
of
experience
and
fresh
thinking.
We
operate
at
pace,
taking
the
lead
where
appropr
iate,
ensuring that we work t
ogether to seamlessly del
iver outstanding produc
ts and services.
We Cham
pion
Succe
ss
We
are
passi
onat
e
abou
t
del
iver
ing
s
ucces
sful
outc
omes
f
or
our
cust
omers
and
e
mploy
ees,
as
wel
l
as
our
i
ndust
ry
an
d
our
community
.
Our
nimble
approach
means
that
we
can
adapt
to
our
customers’
individual
ways
of
working,
taking
ownership
for delivering the w
ow factor, de
lighting custome
rs and enabling
our business
and our people
to grow and flou
rish.
Attracti
ng, retai
ning and d
evelo
ping our t
alent
We i
mpleme
nt G
roup
-
wide
strat
egies d
esigned
to att
ract,
retain
and dev
elop our
people
that
reflec
t the
local
geographi
c and
industry
econo
mic
climate.
These
strateg
ies
include
competitiv
e
terms
and
conditions,
a
defined
contribution
pension
scheme,
Environment, social
and governance
Gresham Technologi
es plc
Annual
Financial
Report
202
1
27
consideration
of
family
and
personal
needs,
traini
ng
and
career
development
coaching,
and
a
wide
range
of
other
flexible
benefits designed to reflect the Group’s
culture and values. Our
performance
-
related pay
structures
i
nclude
an Ann
ual Bon
us
Sc
heme,
which is
linked
to
personal
objec
tives
and
wider
team
and Group
objectives.
The
Annual Bonus
Scheme
is
complemented
by
our
employee
share
scheme,
which
is
designed
to
align
employee
incentives
with
shareholder
interests
through the aw
ard of shares
.
Our
hiri
ng
model
is
bas
ed
on
creat
ing
an
agil
e,
highl
y
motivat
ed
and
coll
aborati
ve
inte
rnatio
nal
teams.
Our
streng
th
comes
from
collaboration
between
seasoned
professio
nals
with
deep
client
industry
experience
and
some
of
the b
rightest
technology
talent on
the m
arket.
We al
so “h
ire
for
atti
tude
”, p
laci
ng gr
eat
impor
tance
on
our v
alues
, ef
fect
ive
team
worki
ng a
nd cu
stomer
suc
cess.
We
op
erat
e
ou
r
o
wn
b
espoke
l
eaders
hip
deve
lopmen
t
p
rogra
mme.
This
pr
ogramme
i
s
de
signe
d
t
o
e
quip
all
of
o
ur
p
eople
leaders
with
the
fundamental
tools, techniques
an
d
resources
to co
ach
and
mentor
their team
s
to delive
r a
w
inning
performance. Alongside this
we support personal and profes
sional growth, encouraging
our people to develop their
technical
competency as well as
interperso
nal
skills and
those relat
ed to our
values
-
based behaviour
s. We
create space t
o do this
by
encouraging our people to
spend 5% of their ti
me on professional development.
Engaging with
our people
We
lis
ten
t
o
our
pe
ople.
We
have
an
“al
ways
on
”
approach
to
employee
engagement
and communicati
ons i
ncluding
regular
meeting
s
w
ithin
in
divid
ual
teams
throu
ghout the
Grou
p,
regular
Gr
oup
-
wide
communicatio
ns
and
conf
identia
l
f
eedback
mechani
sms
an
d
eng
agement
sur
veys.
Perfo
rmance
apprai
sals
happe
n
fo
rmall
y
at
mid
and
full
year,
but
we
encourage
ongoing
dialogue
and
continuous
performance
management
coac
hing
conversations
t
hroughout
the
year
to
ensure
that
our
people are getting suppor
t and feedback in order
to be successful i
n their roles and
to continu
e g
rowing at Gresham
.
Trust
is
vital
in
order
to
support
and
promote
the
exc
eptional
l
evels
of
empl
oyee
engagement
we
enjoy
and
hel
ps
to
ensur
e
that
the w
orking
environment
balances
wellbeing,
provides
motivating
opportunities
for
growth
and
operates
with
com
passion.
Early
c
areers programme
Our early
career entr
y programme is
one of the ways tha
t we attrac
t promisi
ng new coll
eagues to the
business.
Our graduate
and
apprenticeship
paths
within
our
professi
onal
services,
development
and
IT
teams
have
been
running
for
several
years
with min
imal att
ritio
n.
Community
As a company
that u
ses the p
ower of t
echnology
to improv
e the way
organisat
ions oper
ate, we a
re committ
ed to sup
porting,
developing and helping t
o educate the future wor
kforce about this sec
tor.
We
are
proud
to
be
Business
Class
members
of
and
advi
sers
to
The
Prince’s
Responsi
ble
Business
Network,
through
our
partnership
wit
h
!
Business
i
n
the
Community
(“BITC”).
BITC’s
vis
ion
i
s
to
make
the
UK
the
world
le
ader
at
responsi
ble
business, through inspi
ring, engaging and chal
lenging businesses to
tackle some of global
society’s biggest i
ssues.
Charity
We
believe
we
have
an
importa
nt
role
to
play
i
n
supporti
ng
the
work
of
chari
ties
,
both
corporately
and
individually.
We
encourage
our
people
to
support
charit
ab
le causes and
,
as a
company, we
of
ten
provide
assistance
(such
as
guidance
and
insights)
or resources (such as surplus IT equipment)
to charities.
Every
year,
we
pl
edge
to
donate £1
to charity
f
or
every
customer
who
completes our
si
ngle
-
click
customer
sat
isfaction
survey.
Since inception
of
this scheme
sev
eral years
ag
o,
we
have
collected £3,316
and
will be
donating this
sum to
chariti
es
selected
by ballot of our
global customer success t
eam
.
We
also
operate
a
pol
icy
whereby
employees
can
purchase
their
corporate
device
(laptop
or
mobile
phone)
from
Gresham
when
it
i
s
due
for
upgrade,
with
100%
of
proceeds
d
onated
to
charity.
Not
only
does
this
raise
fu
nds
for
ch
arity,
but
it
also
Environment, social
and governance
Gresham Technologi
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202
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28
promotes recycling and device
longevity. We
are
pleased to have raised £3,200
for charity fr
om our em
ployees fro
m the sa
le
of used
corporate devices
in 2021.
Ethical bus
iness pract
ices
We are
commi
tte
d to
corp
orate
sust
aina
bili
ty
and t
o an
ethi
cal
and p
rinc
iple
d app
roach
of doing business.
Human rights
This
incl
udes
recognisi
ng
and
suppor
ting
the
protection
of
human
rights
ar
ound
the
wor
ld.
Gresham
i
s
guided
by
international
l
y
proclaimed
fundamental
principles
such
as
those
set
out
in
the
United
Nations
Universal
Declarat
ion
of
Human
Rights.
Gresham’s
key p
rincip
les i
n rela
tion t
o human
right
s are
guided
by the
Ten Pri
ncipl
es of
the UN
Global
Compact.
Modern s
lavery
Modern slavery is
a
crime and
a
violati
on of
f
undament
al human
rights.
We
have a
zer
o
-
tolerance
approach
to
mo
dern slavery
and we are committed to acting et
hically and with i
ntegrity in all
our business dealings and r
elationships and to i
mplementing
and
enforcing
effective
systems
and
control
s
to
ensure
modern s
lavery
is
not
taking
place
anywhere
in
our
own
bus
iness or
in any of o
ur supply c
hains.
We are als
o commit
ted to
ensuri
ng ther
e is tr
anspar
ency i
n our own bu
sines
s and in ou
r appro
ach to ta
ckli
ng moder
n slave
ry
throughout our supply
chains, consistent
with our
disclosure obligations
under the
Modern Slav
ery Act
2015.
We
expect
the
same high standards from all
of our contract
ors, suppliers and ot
her business partners and,
wherever possible as part
of our
contracting
processes,
we
include
specific
prohi
bitions
against
the
use
of
forced,
compulsory
or
traffi
cked
labour,
or
anyone
held
in
slavery
or
servitude,
whether
adults
or
children,
and
we
expect
that
our
suppl
iers
will
hold
their
own
suppliers
to
t
he
same high standards.
Anti
-
corruption and bribery
The
Company
is
co
mmitted
to
appl
ying
the
hi
ghest
standar
ds
of
ethical
c
onduct
and
integrity
to
its
business
activities
i
n
the
UK
and
overse
as.
The
Company
does
not
toler
ate
any
f
orm
of
bri
bery,
whether
dire
ct
or
in
direct,
by,
or
of,
its
employe
es,
officers,
agents
or
consultants
or
any
persons
or
companies
acting
for
it
or
on
its
behalf.
The
Directors
and
senior
management
are
committed
to
implementing
and
enforcing
effect
ive
systems
throughout
the
Company
to
prevent,
monitor
and
el
iminate
bribery, in accor
dance with its obli
gations under the Bri
bery Act 2010 and equiv
alent legislati
on overseas.
Equal opportun
ity
The
Company
i
s
an
equal
opportunity employer;
we celebrate
diversity and
are dedicated
to
cr
eating an
inclusiv
e
environment
for
all
employees.
We
are
committed
to
ensuring
that
our
workplac
es
are
free
fr
om
unl
awful
or
unfair
discrimination
in
accordance with
applicable
legislation
and our
values.
We ar
e determined
to ensure
that no
applicant
or employee
receives
less favoura
ble treatme
nt on the groun
ds of gender,
age, disability, re
ligion, belief, sex
ual
orientation, marital s
tatus, or r
ace,
or
i
s
di
sadvantaged
by
condit
ions
or
requi
rements
whi
ch
cannot
be
shown
to
be
justi
fiable.
This
includes
upholding
the
following principle
s:
•
recruitment an
d employme
nt decisions are ma
de on the basis of fair and
objec
tive criteria;
•
person and
job specifications are limited to those
requirements which are necessary
for the effective performance of
the job;
•
interview
s
are
conducted
on
an
objective
basis;
persona
l
or
home
commitme
nts
will
not
form
the
basis
of
employme
nt
decisions except where neces
sary and relevant; and
•
all employees have a
right to equality of opportunity. Our policies and practices aim to promote an
environment that
is
free
from
all
forms
of
unlawful
or
unfair
discrimination and
values the
diversity of
al
l
peopl
e.
We
seek
to
tr
eat
all
applicants and employees fai
rly and with digni
ty and respect.
Gender ana
lysis
At 31 December
2021
, the Group had
the following split of g
ender of staff:
Environment, social
and governance
Gresham Technologi
es plc
Annual
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202
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29
Female
Male
Total
Executive Direct
ors
-
2
2
Senior
manager
s
2
6
8
Staff
42
156
198
44
164
2
08
Non
-
Executive Direct
ors
2
2
4
Environment
Policy sta
tement
Whils
t
the
nat
ure
of
o
ur
act
ivit
ies
i
s
such
tha
t
the
Gr
oup
does
n
ot
have
a
si
gnif
ican
t
impac
t
on
the
en
viro
nment
re
lati
ve
to
other
industries,
we
recognise
that
we
have
a
duty
to
manage
our
business
affairs
and
operations
in
a
sustainable
and
responsible manner.
This
i
ncludes minimising
the
impact
of
our
activities
on
the
environment
and
supporting
environmenta
l
initiatives re
levant t
o our industry. To achieve this,
Gresham’s environmental strat
egy consists of the
following:
•
minimi
sing wa
ste;
•
minimi
sing t
oxic
emissio
ns;
•
actively promoting r
ecycling in all
of its locati
ons;
•
meeting
or e
xceedi
ng all
appl
icable
envi
ronment
al le
gislat
ion t
hat relates to
Gresham;
•
supporting,
adopting
and/or
promoting
industr
y
init
iatives
designed
to
address
environmental
issues
specific
t
o
Gresham’s
secto
r;
•
seeking
to
influence
its
supply
chain
by
preferring
suppliers
who
uphol
d
industry
-
leading
environm
ental
standards
over those who do not.
Climate Cha
nge
The
Board
is
respons
ible
for
the
Group’s
climate
change
policy,
and
the
matter
is
discussed
at B
oard
meetin
gs
as
appropr
iate
.
The
Board
has
c
ommissioned
a
review
of
the
Group’s
ESG
cr
edentials
and
has
deter
mined
a
high
-
level
strategic
di
rection
under the theme of “scal
ing up responsibly”
(see page
26
fo
r further details).
The
Group
does
not
consider
that
there
are
any
significant
risks
associa
ted
with
climate
change
impacting
the
Gresham
Group.
As Gresham is
currently defini
ng
its
climate change strategy
as part of
its broader
ESG strategy
,
no significant climate
targets
have
been
identified
to
date.
The
risk
managemen
t
process
for
identifying,
assessing
and
managing
climate
-
related
risks
is
currently
being
defined
as
part
of
the
wider
review
of
our
ESG
strategy
.
Theref
ore
we
are
currently
not
in
full
compliance
with th
e TCFD guid
ance
.
Carbon emissi
ons
This
sect
ion
inc
ludes
Gresha
m’s
mandatory
reporting
of
greenho
use
gas
emissions
pur
suant
to
the
Companies
Act
2006
(Strategic Report an
d Directors’ Report) Re
gulations 2013 (the
“Regulations”).
Gresham’s
reporti
ng
year
is
th
e
same
as
its
fi
scal
year
,
being
the
year
ended
31
Decembe
r
2021
.
This
greenhouse
gas
reporting year has b
een established to align
with our fi
nancial reporting year.
Gresham
report
s
e
mission
s
dat
a
u
sing
an
operati
onal
contr
ol
approach
to
defi
ne
o
rganisa
tional
bou
ndary,
whic
h
meet
s
t
he
definitional
r
equirements
of
the
Regulat
ions
in
respect
of
those
emissions
for
which
it
is
r
esponsible.
Gresham
has
reported
on all
material
emission
sources
which it
deems
itself
to be
responsible
for.
These s
ources ali
gn with
Gresham’s
operational
control and financial
control boundaries. Gresham does not have responsibi
lity for any emissi
on sources that are beyon
d the
boundary
of
Gresham’s
oper
ational
control
.
For
example,
busi
ness
travel
other
than
by
car
(including,
for
example,
commercial
Environment, social
and governance
Gresham Technologi
es plc
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Report
202
1
30
flights or railways) and fully managed offices
are not within Gresham’s operatio
nal control and, therefore, are not consider
ed
to be its respons
ibility.
The
methodolog
y
used
to
calcul
ate
Gresham’s
emissions
is
based
on
the
“Environmental
Reporting
Gui
delines:
including
mandator
y gr
eenhouse
gas
emissi
ons r
eporti
ng gu
idance”
(Ju
ne 201
3) and
“The
Compani
es (
Direct
ors’
Report
) and
Limited
Liability
Partnerships
(Energy
and
Carbon
Report
)
Regulations
2018”
issued
by
the
Department
for
Environment,
Food
and
Rural Af
fairs
(“Defra”
). Gresham
has also
utili
sed Defr
a’s 2016
conversio
n factor
s withi
n the r
eporting
methodolog
y.
For the purp
oses of global greenhouse gas emissions data for the year ended 31 December 2021
, the followin
g disclosure
is
made:
UK
Group
Emissions from
31
December
2021
31
December
2020
31
December
2021
31
December
2020
Electricity,
heat, steam an
d cooling
purchased for
own use
–
tonnes of CO
2
e
19
24
40
37
Group’s chose
n intensit
y measurement
Emissions reporte
d above normalised
to tonnes of
CO
2
e per total £1,000,000 rev
enue
1.8
2.
3
1.1
1
.5
The Group’s tot
al energy co
nsumption for
the year ended
31 December
2021
was
186,
000
kWh
(2020:
158,000 kWh
).
Emissions
data
has
b
een
reported
for
Gr
esham’s
operati
ons
in
the
UK,
USA,
Luxembourg
and
Austral
ia,
with
locations
in
Malaysi
a and
Singap
ore con
sider
ed not
materi
al t
o the
scope
of th
is re
porti
ng.
In order to express Gresham
’s annual emissions in relation to a quantifiable factor asso
ciated with the Group’s activities, t
he
Dire
ctors have used revenue as
Gresham’s intensity ratio as this is the m
ost relevant indication of its growth and p
rovides for
the best com
parative meas
ure over time.
Principal risks
and uncertainties
Gresham Technologi
es plc
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Financial
Report
202
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31
Our aim
is t
o recog
nise an
d a
ddress the key
risks and uncertaint
ies facing Gresham at al
l levels of the
business.
There are a number
of risk f
actors that
could adversel
y affect the
Group’s executi
on of its
strategic pl
an and, more gener
all
y,
the
Group’s
operations,
business
model,
fin
ancial results, future
performance, solvency,
or
the
value or
l
iquidity of
its
equities.
The
Boar
d
is committed
to
addressing
these
risks
by implementing
syst
ems
for
eff
ective
risk
management
and
internal
control.
A
report on
the Board’s
review of
t
he effe
ctiveness
of
the
Group’s
risk
management
and internal
control
systems
can
be
f
ound
in the
A
udit
C
omm
ittee
R
eport on page 47
.
The
Board
has
performed
a
rob
ust
assessment
of
the
prin
cipal
ri
sks
and
uncer
tainties
that
could
th
reaten
Gresham’s
business,
busine
ss
model,
strategies,
financial
results,
future
performance,
solvency
or
l
iquidity.
The
it
ems
listed
in
the
tabl
e
below
represent the known princ
ipal risks and uncertainties, but the table does not list all known or potential risks and unce
rtain
ties
exhaus
tively. Where p
ossible, mitigation
steps are taken
to safeguard a
gainst materialis
ed risks.
Failure to win new Clareti
business in line with pl
an
Description
Commentary
Winning n
ew Claret
i busines
s is cent
ral to our
strate
gic growt
h plan.
Failure
to
do
so
would
directly
impact
our
achievement
of
overall
objectives
or
lengthen
the
period
taken to
achieve
them.
Specifically,
failure to win n
ew Clareti con
tracts early enou
gh
in the yea
r
reduces
the
revenue
recognisable from
new
contract
s
in
the year,
and
would
potentially
je
opardise
o
ur
ability
to
deliver
the
implem
entations
an
d
recognise the associated reve
nues in the year.
We
continue
to
see
strong
market demand
for
Clareti
solutions
,
but
sales
cycles
become
and
remain
more
unpredictable
as
a
result
of
the ongoing COV
ID
-
19 pandemic
. This
presents unquantifiable
risks
to
achieving
ou
r
short
-
term
g
rowth
aspiration
s
and
business
plan.
Nevertheless
, we are
pleased wi
th the Gr
oup
’s
performance
in
2021
and
the
notable
sales
successes
achieved,
despite
the
challenging
market co
nditions
.
Misdirect
ed product,
operati
onal or s
trategic
investment
s
Description
Commentary
Our
model
is
to
invest
in
product
development
and
other
areas
to
support
Clareti
-
led
org
anic
growth.
Strategic
inves
tments
such
as
acquisitions
present
opportunity
for
accelerated
growth.
Failing
to
achieve
meaningful
returns
on
investments
would hinder
the
Group’s
strategic growth plan and po
tentially jeopardise the Group’s position
in the market and
its prospects.
Our ongoing investments
in product innovation are an essential part
of our
strategy. In
2021
, we
continued
our
significant investments
in
deli
vering
production
-
ready
mar
ket
-
differentiati
ng
features for
key
customers
to
enable
us
to
targe
t
th
e
large
mark
et
currently
dominated
by
legacy
reconciliation
provid
ers
.
We
also
continue
d
to
invest
in
our
strategic
cash
m
anagement
s
olution
with
AN
Z,
which
we
believe
has
strong
growth
prospects
over
the
medium
to
long
-
term.
The
Electra
business,
acquired
in
June
2021
,
ha
s
bee
n
material
ly
integrated and is perfo
rming as expec
ted
.
Product and servic
e delivery fai
lures
Description
Commentary
Issues
or
failures
with
our
software
pr
oducts
or
services
could
lead
to
failed
implementations,
project
delays,
cost
overruns,
data
loss,
security
issues,
custome
r
dissatisfaction,
early
termination,
service
level
breach
es
and
co
ntractual
claim
s,
all
of
which
co
uld
adversely
impact the Grou
p’s revenues, ea
rnings and reputa
tion.
We
successful
ly
complete
d
several
projects
in
the
year
.
Often
,
our
enterprise
customers
have
complex
data
requirements
,
wh
ich
can
render
implemen
tation
projects
particularly
challenging
.
We
operate
a
clear
methodology
to
align
expectations
from
the
outset
,
manage
projects
effectively
and
minimise
issues
or
delays,
but
this
is
not
always
possible.
Where
necessary,
we
invest
time
and
resource
to
rectify errors
and
minimise
contractual, commercial and repu
tational
risks
.
Accelerated d
ecline in
non
-
Clareti reve
nues
Description
Commentary
Non
-
Clareti r
evenues provi
de a stron
g contribut
ion to r
evenues,
earnings
and
cash
flow
and
are
key
to
short
-
term
financial
success
and ongoing
investments
in
Clareti.
Whilst t
he
Group
expects these
contributions
to
decline
over
time,
a
n
unexpected
or
accelerated
decline could
have
an
immediate
and
significant impact
on
financial
KPIs
due to short
-
term planning
assumptions
.
Risks in the non
-
Claret
i
portfolio have remained stable
this year
and
we
broadly
expect
this
to
remain
the
case
in
2022
.
However,
w
e
regularly
review
in
dividual
po
rtfolio
risks
and
will
consider
strategic
options
such as
discontinuations
or
disposals
in
mitiga
tion
whe
re
risk
reaches
u
nacceptable
lev
els
.
Specifically,
our
ability
to
support
the
EDT
portfolio
is
beco
ming
increas
ingly
challenging
and
,
given
it’s
Principal risks
and uncertainties
Gresham Technologi
es plc
Annual
Financial
Report
202
1
32
steady decline over the last few years, we are actively considering
a
discontinuation of thi
s portfolio in the
short
-
term.
Economic, internat
ional trade and
market conditions
Description
Commentary
The Group is
generally
exposed to
political,
economic, trade,
market
and
public
health
risk
factors,
such
as
global
or
localised
economic
downturn,
changing
international
trade
relationships,
foreign
exchange fluctuations, consoli
dation or insolvency of ex
isting or
prospective
customers
or
competitor
products,
all
of
which
could
significantly threaten Gresham’s performance and prospects.
In
light
of
the
ongoing
COVID
-
19 pandemic,
we
continued
to manage
our
business
prudently and
in accordance
with our
incident
response
plans
. Having
adjusted to
this situation
in 2020,
we did
not suffer
any
business
interruption
during
2021
,
and
trading
conditions
were
generally
settled
during
2021,
although
the
pandem
ic
continues
to
hinder
sales
efforts
as
customers
are
more
difficult
to
engage
and
their
budge
ts
are
un
der
greater
scrutiny.
We
expect
these
risks
to
continue
in
2022.
Furthermore,
Russian’
s
invasion
of
the
Ukraine
and
the
sanctions imposed upon
Russia
by the UK, the EU and the
USA
(amongst
others)
could
have
a
significant
detrimental
effect
on
the
global economy and trading condit
ions generally.
People risks
Description
Commentary
A
loss
or
material
issue
with
key
m
embers
of
staff
could
cause
material
disruptio
n and a skills shor
tage. Compet
itor poachi
ng could
result
in
intellectual
prope
rty
leakage.
Staff
misc
onduct,
negligence
or
fraud
could
cause
Gresham
significant
reputational
damage
and
potential financial l
oss.
People
risks
were
generally
stable
in the
year
, although
market
factors
are
driving
salary
inflation
and
we
are
experiencing
higher
staff turnover
than normal.
This is
particularly affecting
the technical
departments,
such as product developm
ent, where there appears
to
be
a ski
lls
shortage
in
the
UK
.
Consequent
ly,
we
are
focussing
significantly
on
people
retention
strategies
,
as well
as
using our
expanded
global
footprint
to
re
cruit
in
to
the
mo
st
suita
ble
and
cost
-
effective
geographi
es
.
These
risks ar
e expected
to cont
inue in
2022.
IP, data and cyb
er risks
Description
Commentary
A
significant
IP
loss,
third
party
IP
challenge,
data
loss,
security
breach or
cyber attack
could significantly
threaten
Gre
sham’s
ability
to
do
busine
ss,
particularly
in
the
short
term
,
and
could
result
in
significant financial loss.
Like
all
businesses,
Gresham
is
exposed
to
an
increasing
range
of
cyber
attacks
but
there
were
n
o
material
incidents
in
the
year.
We
made
considera
ble
investmen
ts
in
2021
to
enhance
the
security
of
our
systems
and
processes
.
We
believe
these
are
necessary
investments
for
our
customers
and
intend
to
mak
e
furth
er
investments
in 2022.
Specifically, we are working
towards
achieving
internationally
reco
gnised
security
acc
reditations
during
2022
and
2023
.
At
the
time
of
writing,
w
e
are
on
a
heightened
state
of
alert
regarding
cyber
attacks
fro
m
bad actors
as
a result
of
the
sanctions
imposed
by
the
U
K
and
other
states
in
relation
to
the
situation
in
Ukraine
.
Governance, r
egulatory a
nd compliance
risks
Description
Commentary
The
Group
is
subject
to
rules
,
laws
and
reg
ulations
pertaining
to
its
business
operations
in
th
e
various
terr
itories
in
which
it
operates
(particularly
the
U
K,
the
EU
and
the
US
)
,
and
also
in
relation
to
its
status
as
a
premium
-
listed
publicly
trade
d
company
on
the
London
Stock
Exchange.
A breach
of these
rules,
laws
and
regulations
could
lead
to
public
censure
,
fines,
or
other
enforcement
action
by
governmental or
regulatory authorities
, all of which cou
ld
cause
reputational and/or
financial loss,
and could
significantly
threaten
the
Group’s perf
ormance and
prospects
.
This risk
was
introduced in
the
course of
2021
in
order
to
recognise
the
Group’s
key
role
in
supporting
fina
ncial
services
firms
in
their
o
perational
resilience
and affirm
its commitment
to do
so
, particularly
in
light
o
f
the
Gro
up’s
expan
ded
global
footprint
and
more
diverse
customer
base
following
the
acquisition
of
Electra
in
2021
.
Governance,
regulat
ory
and
compliance
risks
are
generally
overseen
and
managed
by
the
Group’s
internal
legal
function.
This
risk
is
considered stable
.
Financial review
Gresham Technologi
es plc
Annual
Financial
Report
202
1
33
Transformative acqui
sition of El
ectra
We
were
deli
ghte
d
to
complete
the
transformative
acquis
ition
of
Electra
on
22
June
2021
and
are
grat
eful
for
the
support
provided
by
our new
and
existing
sharehol
ders
for
the t
ransaction.
We
ar
e
als
o
plea
se
d
to
confirm that
since the
ac
quisition
Electra
has
been
integrated to bec
ome part
o
f the Clareti
business segment
, thus w
ill be reported as s
uch.
Electra was
acquired on
a debt
f
ree, cash
free basis
with an
upfront consideration of U
SD
$
28.95m
.
Subject to
the
achievement
of
perf
ormance
cri
teria
based
on
the
retention
of
acquired
custome
r
recurring
revenues,
a
maximum
of
USD
$
9.65m
(£7
.2m
)
in
contingent
consideration will be
due, payable in two
instalments after the first and second
anniversaries of
completion.
Upon
acquisit
ion, Electra ha
d
£9.
2m
of
f
orward
-
looking
ARR
and the
following significant balance
sheet items
:
intangible
fixed
assets
consisting
of
customer
relationships
with
a
fair
val
ue
of
£11.8m
and
software
of
£5.0m;
right
of
use
assets
of
£0.3m
;
trade
and
other
receivables
of
£1.6m
;
cash
and
cash
equivalent
s
of
£0.
1m
;
trade,
lease
and
other
liabilities
of
£2.3m
and
a
deferred tax liabi
lity (generated
on a
cquisition) of £4.1m.
Sub
sequent
to
the
acquisition
,
we
are
als
o
pl
eased
to
report
that
El
ectra
as
a
standalone
bus
iness
has
performed
sl
ightly
ahead of
ma
nagement’s
plans.
Forward
-
looking ann
ualised recu
rring revenue
“ARR”
Our ARR
i
s
an aggregat
ed
value
of
al
l
recurring
revenues
t
hat
are
either
fully
or
partially
contracted
for
the
next twelve
months
and/or
are
highly
expected
to
renew
in
the
next
twelve
month
s
.
F
uture
upl
ifts
in
variable
usage or
contingent
recurring
fees
are not included
in ARR
un
less
they are
contractually certain with
all deliverables having
already been met.
2021
2020
Variance
%
Clareti
ARR
Clareti ARR
at start
of year
£m
12.3
9.5
N/a
Acquired with El
ectra/Inforal
go
£m
9.2
1.2
N/a
Organic inc
rease in ARR
£m
2.5
1.6
0.9
56%
Clareti ARR a
t end of y
ear
KPI
£m
24.0
12.3
11.7
95%
Other ARR
Other ARR
£m
4.1
3.5
0.6
17%
Group ARR
Group ARR
£m
2
8.1
15.8
12.3
78%
Our ARR from
our strategi
c growth business,
Clareti, is a critical
KPI for
the Group as i
t
provides a forward
-
look
ing
view
of the
minimum expecte
d revenues in the
next twelve months
which gives confidence to
business planning and
investment
decisions. Whilst the Electra acquisition, completed
in June
2021, was
transformative to our Clareti AR
R,
it
is p
leasing
to
also
have
seen
strong
organic
growth
of
£2.5m
or
20%
on
the
ARR
brought
f
orward
at
the
start
of
the
year.
Ou
r
r
etenti
on
and
upsell
measures
remain
strong,
wi
th
the
trailing
t
welve
month
net
Clar
eti
ARR
ret
ention
rat
e
being
106%,
including
the
annualised Electra rate
since acquisition.
We calculat
e our net ARR rete
ntio
n rate as ARR from end of per
iod fro
m customer
s
existing
at
the
start
of
the
period
divided
by
ARR at
t
he
start
of
the
per
iod.
There
remai
ns
a s
ignific
ant
market
opport
unity
to
both upsell and cross
-
sell to our continually growing exi
sting customer base
that we’re strategically inve
sting in
capturing
.
ARR fro
m our
Other
busines
ses ha
s als
o gro
wn
by
£0.6m to
£4.1m
in
2021, although it should be noted that the growth has
come from increased end custome
r usage in the lower margin software reselling business as A
RR from our own
high
-
margin
legacy
solution
s co
ntinues
to
decline
as planned.
It remains
encou
raging
to
see
the
ongoing
longevity
of these bu
siness
lines
continuing to provide predictabil
ity and further abili
ty
to
invest
with
confidence in the Clareti business.
In addition to Group ARR
of £2
8.1
m, expe
cted
revenue
s fr
om non
-
recurring contracts in place as at 31 D
ecember 2021 total
£9.1m,
thus
giving
near
contractual
certaint
y
over
£37.2m
of
revenue
for
2022
before
any
new
or
i
ncremental
contrac
ts
are
won
.
Income St
atement
Revenues
Financial review
Gresham Technologi
es plc
Annual
Financial
Report
202
1
34
Our
i
ncome
i
s
ana
lysed
between
revenu
es
fr
om
Cla
reti
Soluti
ons
a
nd
fr
om
our
‘Other’
non
-
strategic
solutions
and
services,
revenues from e
ach business of the
se business segm
ents are then bro
ken into:
-
Recurring
r
evenues
–
which are
gener
ated
for
software and
soft
ware
-
related
services
such
as
support,
maintenance,
and other ongoing managed servi
ces all of which ar
e contracted or expect
ed to continue for t
he foreseeable future.
-
Non
-
recurring
revenues
–
include
professional
service
s, c
ontracting
, tra
ining
and
other
services t
hat
are
expecte
d to
be one
-
off or periodic
in nature.
Give
n the transformational nature of the Electra acquisition, we
have also broken
out
the
Clareti
business
to
show
the
Electra
revenues
(
and gross margin
in the Ea
rnings sec
tion below
)
as individual line i
tems within the Claret
i business.
2021
2020
Va
riance
%
Clareti
s
olutions
Recurring
£m
13.
5
11.5
2.
0
18%
Recurring
–
Electr
a
£m
5.
3
-
N/a
N/a
Recurring
–
Claret
i total
KPI
£m
18.
8
11.5
7.
3
63%
Non
-
recurring
6.
4
4.0
2.
4
60
%
Non
-
recurring
–
Electra
0.
3
-
N/a
N/a
Non
-
recurring
–
Clareti total
£m
6.
7
4.0
2.
7
68%
Total Clareti revenues
KPI
£m
25.
5
15.5
10.0
65%
Other solut
ions &
services
Recurring
£m
4.6
3.7
0.9
24
%
Non
-
recurring
£m
6.
9
5.6
1.3
23
%
Total
£m
11.
5
9.3
2.
2
23%
Group
Total
KPI
£m
37.0
24.8
1
2.
2
49%
Clareti
Soluti
ons
Clareti
recurr
ing re
venues i
ncreased
by 63%,
up £7.3
m on 2020
, thi
s incl
uded a
contrib
ution o
f £5.
3
m
from Electra since the
acquisition
l
ate
in
June
202
1
.
Excluding the
impact
of
Electra, Clareti
recurring
revenues
increased by
18%,
or
£2.
0
m
since
the prior
year.
These increases were
as
a
result of
new
recurring
revenue
sales,
increased
consumption
of
Clareti
solutions
from our existin
g customers
and a full year’s co
ntribution from o
ur 2020 acqu
isition, Inforalgo.
Clareti
non
-
recurring
revenues
increased
by
68
%, up
£2
.
7
m
on
the
pri
or
year,
with
a
rel
atively small
services contribution
from
Electra
.
E
xcluding
the
impact
of
Electra
the
increase
was
60
%.
This
in
crease
is
bein
g
drive
n
by
new
imp
lement
a
tions
associated
with
the
increase
in
Claret
i
recurring
revenues,
step
ups
in
ongoing
cl
ient
support
that
was
delayed
during
the
2020
lock
-
down,
and
a
significant
pull
through
of
additi
onal
servi
ces
with
key
customer
ANZ.
ANZ
are
transitioning
towards
go
-l
ive
with
our
new
digital
banking
products
and
we
are
building
out
the
ongoing
support
and
managed
service
capability,
part of which will
begin being recognised
as a recurring rev
enue.
Other S
olutio
ns & Se
rvices
Total
r
evenues
from
Other
solutions
and
serv
ices
increased
by
23
%
to
£11.
5m
,
exceed
ing
our
or
i
ginal
expectations
.
This
business line includes
revenues from:
a
legacy
p
artner
relation
ship
where
w
e
act
as
a
reseller
of third party
software
;
our
sole
remaining
,
own IP
,
leg
acy
softwar
e p
roduct
;
and
our contracting
services busine
ss w
here
we
provide
fixed
margin
ser
vices
at
a margin of 13% under twelve
-
month co
ntract
ual t
erms.
Recurring
revenues within the
Other
solutions and servi
c
es
portfolio
increased
by
24
% to £
4.6m
as
a result of increased
end
-
user
consumption
fees
from
existing
customers
of
our
res
eller
arr
angement
.
As
expected
we
saw
lower
revenue
s
from
our
own
-
IP
software,
how
ever,
th
ese
r
evenue
reductions
w
ere
more
tha
n
offset
by
increases
in
resell
ing
and
contracting
revenue
s
,
albeit
at
lower
mar
gins
.
T
he
mix
of
revenue
s
within
the
Other
so
lution
s
and
services
portfoli
o
continues
to
evolv
e
,
and
we
continue to manage the portfolio careful
ly benefitting from
good vi
sibility of
customer
intentions
.
Financial review
Gresham Technologi
es plc
Annual
Financial
Report
202
1
35
Earnings
2021
2020
Variance
%
Clareti Sol
utions
Gross margin
£m
1
6.
6
14.
3
2.3
16
%
Gross margin
–
Electra
£m
4.
9
-
N/a
N/a
Gross margin
–
Clareti tot
al
£m
21.5
14
.3
7.2
50
%
Gross margin
%
83
%
92%
(9
%)
N/a
Gross margin
–
Electra
%
88
%
-
N/a
N/a
Gross
margi
n
–
Clareti t
otal
%
84%
92%
(8
%)
N/a
Other solut
ions &
services
Gross margin
(*)
£m
3.
7
3.4
0.
3
9%
Gross margin
(*)
%
32%
37%
(5
%)
N/a
Group
Gross margin
(*)
£m
2
5.
2
17.7
7.5
42%
Gross margin
(*)
%
68
%
71%
(3%)
N/a
Adjusted EBIT
DA
KPI
£m
7.
2
4.5
2.
7
60
%
Adjusted EBIT
DA
KPI
%
19%
18%
1%
N/a
Cash Adjusted
EBITDA
KPI
£m
2.
5
0.3
2.
2
733
%
Cash Adjusted
EBITDA
KPI
%
7%
1%
6%
N/a
Statutory prof
it/(loss) a
fter tax
£m
(1.0)
1.3
(2.3)
(177%)
Adjusted dil
uted EPS
KPI
pence
5.02
3.96
1.
06
27%
Gross mar
gin an
d repor
ting r
eclass
ifica
tion (
*)
Across
al
l
bus
iness
se
gments,
t
he
major
ity
o
f
our
cost
of
sales
is
made
up
of:
(i)
t
he
cust
omer
-
specific
third
party
costs
incurred
in providing ou
r hosted clou
d solutions; (ii) thir
d party contra
ctor costs inc
urred by our co
ntracting se
rvices busin
ess;
and
(iii)
In this
report we
have reclassified fixed
-
term payrolled employees that provide
fixed margin contracting/recruitment
services
to
ANZ
from
operating
expenses
to
cost
of
sales
as
we
consider
this
a
better
reflection
of
our
gross
margin
.
T
he
2020
comp
arative has also been
restated
, the value of this reclassific
ation in the curren
t year is £
2.
6
m (2020: £
3.
1m
).
The
acquisi
tion
of
Electra
has
accelerated
the
growth
of
our
hi
gh
gross
margin
Clareti
business,
whi
ch
in
line
with
long
standing
G
roup strategy
, offse
ts the continued and expe
cted decline in gross ma
rgin being generated
from the legacy Other solutio
ns
and services
businesses. At
a group level,
including the
i
mpact of
the Electra acquisition, gross
margi
ns have
reduced sligh
tly
from 71% to
68%, th
is is
as a result
of an incre
ased usa
ge of cont
ractors thr
oughout a
ll areas of th
e busines
s.
T
he
gross
margin
within
the
existi
ng
Clareti
business
has
reduced
f
rom
9
2
%
to
83
%,
this
is
due
to
an
increased
use
of
contractors
to
assist
with p
roject
delivery
and
an
increasing proportion
of
business
being
hosted
in one
of our
cloud
infrastructu
res
.
The
ac
quired
Electr
a
business
i
s
carrying
another
ver
y
high
gross
margin
of
88%
.
The
combination
of
these
is driving a
gross ma
rgin of
8
4
% for
2021.
As
planned
and
de
scribed in
the revenue
sect
ion
above,
the
Other
s
olutions and
servi
ces
business
mix
has
con
tinued to
move
in ba
lance
toward
s the
low
er m
argin
softwa
re re
selling
and
cont
racting se
rvices bu
siness
lines
from
our
higher
margin lega
cy
owned IP
which r
emains i
n struct
ural dec
line.
Adjusted EBI
TDA
Adjusted
EBI
TDA
(earnings
before
inter
est,
tax,
depreciati
on
and
amort
isation)
is
analysed
ex
cluding
exc
eptional
i
tems,
share
-
based payment
charges,
amortisat
ion
from acqui
red
intangible
assets
and
impairment
of
development
costs,
which
is
consistent
with
the way
in which the
Board reviews the
financial results
of the
Group. We also
consider this
to be
consistent
with
the
manner
in
whi
ch
s
imilar
small
-
cap
LSE
(or
AIM)
listed
companies
present
their
result
s
and
how
we
understand
t
he
global
investment
communi
ty
assesses
performan
ce,
with
this
particularly
being
the
case
for
growth
shares
i
n
which
the
recurring
cash
performance
is
considered
important.
However,
whilst
we
consider
them
consistent
and
appropriate
,
this
EBITDA measure and the cash adjusted EBITDA
measure bel
ow are not neces
saril
y direct
ly compara
ble to othe
r compani
es
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36
as they
are not
strictly governed IFRS
accounting measures, nor
should they
be considered as
a substitute for, or superior to
,
any IFRS measures.
Group adjusted EBITDA has improved by
£2.
7
m
or
60
% since the prior
year with the margin improvin
g by
1% to
19% in 2021.
This
i
s
as
a
result
of
the
existing
higher
margi
n
Clare
ti
busi
ness
cont
inuing
t
o
grow
and
beginni
ng
to
drive
i
mproved
operat
i
onal
leverage
as it scales along with the impact
of the Elect
ra acquisition, which off
set the continued reducing margin of the Other
solutions
and
services
business
lines.
Whilst
we
will
ensure
that
we
maximise
the
current
market
opportunity
through
appropriate
strategic
investme
nts, we do
expect to
con
tinue to
see improve
ments to these
margins in futu
re years.
Cash Adjus
ted EBITDA
Cash
adjusted
EBIT
DA, r
efers
to
adjus
ted
EBITDA
reduced
by
the
val
ue of
c
apitali
sed
development
spe
nd a
nd an
y I
FRS16
lease
-
related
cash
expenses
classified a
s deprecia
tion a
nd interest
. We
conside
r this a
good
measure
of c
ash profita
bility for
modern
SaaS bus
iness
who con
tinue
to i
nvest
in pr
oduct
develop
ment t
o ensur
e the
y remai
n mark
et le
ading.
Group
cash
adjust
ed
EBITDA
has
also
i
mproved
si
nce
the
p
rior
ye
ar,
wit
h
£2.2m
of
the
£2.7m
improvem
ent
in
adjusted
EBITDA
(ment
ioned
above)
dropp
ing
th
rough
to
improvement
cash
EBITD
A.
The
£0.5m
difference
betw
een
the
improvemen
ts
in
the
two
EBITDA
measures
is
as
a
result
of
capitalised
developme
nt
spend
and
IFRS
-
16
lease
-
related
c
ash
expenses
in
the
acquired
Electra
business.
This
has
resulted
in
a
cash
adjusted
EBITDA
mar
gin
of
7
%
,
an
improvement
of
6%
from
a
margin
of
1%
in
t
he
prior
year.
Like
adjusted
EBITDA,
we
expect
to
see
continued
improvements
in
these
margins
in
future
ye
ars.
Statutory
profit/
(loss) a
fter tax
and Adjust
ed dilut
ed EPS
There
has
been
a
reduction
in
statutory profit
after tax
to
a
loss
of
£1.0m
from
a
prior
year
profit
of
£1.3m.
This
reduc
tion
of
£2.3m
is
due
to
the
combination
of:
improved
adjusted
operat
ing
profit
of
£2.2m
as
a
resul
t
of
the
growth
and
improved
profitabilit
y
of
the
Group;
offset
by;
increased
exceptional
expenses
of
£1.1m
(see
below);
increased
share
-
based
payment
charges
of
£0.2m
;
increased
amortisation
on
acquired
intangibles
largely
due
to
the
Elect
ra
acqui
sition
of
£0.8m
;
and
an
increased
tax charg
e of £2.4m
(see be
low).
Adjusted
diluted
EPS
has
improved
by
27
%
to
5.02
pence
per
share.
Adjuste
d
earnin
gs
used
in
this
calculation
adjust
the
statutory result
after t
ax
for: exceptional items; amortisation of acquired intangib
les, share
-
based payments and the
deferred
tax charge in re
lation to the sale of th
e IP acquired w
ith Electra from
the US to the U
K business
(see taxation
below).
Exceptional
items
During the year, the Group recogni
sed exceptional
costs of £1.8m, of which: (i) £1.3m were acquisit
ion costs in relati
on to t
he
acquisition
of
Electra
Information
Systems
,
Inc
on
22
June
2021;
and
(ii)
£0.5m
related
to
various
integration
expenses
in
relation
to
the
same
acquisition.
The
prior
year
exceptional
costs
of
£0.4m
were
in
relation
to
the
July
2020
acquisition
of
Inforalgo and va
rious restructuring
costs upon the
July 2020 expiry
of the earn
-
out period rela
ting to the acquisition of th
e B2
Group
in
J
uly
2018.
Offset
ting
the
exceptional
cost
s
in
the
year
was
exceptional
income
of
£0.3m,
which
occurred
from
currency
hedging
activi
ties
taking
place
t
o
fund
the
USD
den
ominated
Elec
tra
acquis
ition
.
T
here
was
no
such
exceptional
income in
the prior y
ear.
Taxation
For
the
year
ended
31
December
202
1
,
the
Group
has
recorded
a
net
tax
charge
of
£1.
4
m
(
20
20
:
c
redit
of
£1.0m
).
The
materi
al drive
rs for the var
iance fr
om the prior
year being:
an increase in
overseas current tax charges
of £0.5m as
a result of
the
increased
profits
from
our
US
and
Australian
operations
a
s
those
businesses
conti
nue
to
grow,
with
US
taxes
also
increasing
as
a
result
of the
Elec
tra ac
quisition
;
a
one
-
off deferred
US
tax cha
rge of
£1.
4m has also
been incurred in the year
as
a
result
of
the
Group’s
long
-
ter
m
global
tax
pl
anning,
par
t
of
which
included
the
sale
of
the
IP
acquired
in
the
Electra
acquisition
from
our
US
business
to
our
UK
busi
ness
to
ensure
the
UK
remains
the
centralis
ed
IP
generating
entrepreneur
within th
e Group
; and the
surrender
of tax
losses
in relatio
n to
UK R&D activit
ies being £
0.3m lower than the prior year which
included th
e surrend
er of two
years worth of qualifying R&D.
Cash flow
The Group’s
financial position remained very
strong througho
ut 202
1
, at a
headline level the c
ash balance
at the year end of
£9.1m
remained
fairly
consistent
with
th
at
of
the
prior
year
end
of
£8.9m
,
however
there
were
a
number
of
significant
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37
movements
beneat
h
the
hea
dline
balanc
es
which
are
described
below.
There
continues
to
be
no
debt
i
n
the
business
,
the
USD
$15
m
re
volvin
g
c
redit
fa
cili
ty
,
put
in
place
at
the
t
ime
of
the
Elect
ra
acquisi
tion
as
an
i
nsurance
poli
cy
to
fund
the
contingent
consideration
payments
whic
h
coincide with the annual l
ow point in cash,
has not
been drawn upon.
Operati
ng cash fl
ow excl
uding work
ing capi
tal
and exceptional
items has
increase
d by
£3.
0
m
to £
7.
5
m in the year
as a result
of
the
improve
d
cash EBITDA of the
Group in
exist
ence pri
or to
the El
ectra
acquisi
tion
and
the
cash generative impact of the
operations of Electr
a post acquisition.
Operati
ng cash
out
flow from
exce
ptional item
s
has
increased by £1.4m
since the prior year
to £1.8m. This
increase is one
-
off
in nature w
ith the sign
ificant ma
jority
being advisory and integration
fees
in respect of t
he Electra
acquisition
.
The
movement
in
working
capital
has
i
ncreased
by
£0.
7
m
to
£1.
3
m
at
t
he
end
of
the
year
.
The
increase in the movement in
working capital
is
as a
result of
the
inclusion
of
El
ectra working capital in
t
he Group
balance sheet
since acquisition
which was
offset
by
a
reduction
relating
to
the
unwinding
of
an
init
ial
three
-
year
prepayment
of
£3.0m
from
a
£1.0m
per
annum
subscription licence that be
came non
-
contingent in March 2019.
Net
tax
payments
of
£
1.
1m were
made
during
the year
(2020:
net tax
receipts of
£0.8m).
Gr
oss
t
ax
payments
were
made in
the
year
of
£1.1m
(2020:
£0.5m
)
,
the
increase
on
the
prior
year
largely
as
a
result
of
increased
prof
itability
in
the
US
and
Australia
.
In
the
prior
year
th
e
Group
also
received
gross
tax
receipts
of
£1.3m
in
the
year
as
a
result
of
research
and
development activities performed
duri
ng
2018 and
2019 where
enhanced
relief
was
available
,
an
equiv
alent gross
tax
reclaim
was made dur
ing 2021
totalling £1.1m,
however, this was not recei
ved
from HM
RC until Janua
ry 2022
.
The
capi
talised
development
expenditure
of
£
4.2
m
h
as
i
ncrea
sed
by
£
0.
7
m
f
rom
the
prior
yea
r
,
the
vast
majority
of
the
increase b
eing in re
lation to
such expenditure within the acquired Electra business.
During the year t
he
Group paid
£0.9m
of
contingent
consideration in
relation to
the July
2020 Inforalgo acquisition, in
the
prior
year
the
initi
al
consideration
of
£1.9m
was
paid.
The
Group
is
delighted to
report that
the
contingent
consideration
payment
of £0.9m was paid in full
shortly after the first anniversary of the acquisiti
on
as the
target metric
s agreed
with the
sellers were
met
in
ful
l.
Subsequent
to
the
year
end,
t
he
final
continge
nt
consideration
payment
of
£0.
4
m
was
also
paid
in
full
during
February 2022.
The
G
roup
paid
£19.6m
(
net
of
c
ash
acqui
red)
of
initial
consideration
during
the
year
to
acquire
Electra
in
June
2021.
This
was funded
through the cap
ital raised
of £20.2m (net of costs) in June 2021.
The Group recei
ved £0.
1
m upon
the
exerci
se of
share
optio
ns duri
ng th
e year
(20
20
: £0.
5
m).
As was
t
he case
in the
p
rior year, with
increasing Clareti sales
(now
including Ele
ctra)
from
the growing
annuity
base and
n
ew
customer
wins,
coupled
with
carefully
selected
and
control
led
investmen
ts,
we
expect
the
cash
-
generation
capaci
ty
of
the
business
to
continue
and
ar
e
looking
at
opportunities
to
best
ut
ilise
the
excess
cash
gener
ated.
In
order
to
maximise
our
returns,
w
e
plan to
increase levels
of investment
in
distribution and customer
success, whilst
continuing to
invest excess
cash
efficiently i
n bank deposits and givi
ng appropriate consider
ation to M&A opportunities.
2021
2020
Variance
%
Opening cash
& cash equi
valents at
1 January
£m
8.9
9.6
(0.7)
(7%)
Operating c
ash flow
excluding ex
ceptional items
£m
7.
2
4.
5
2.7
60%
Operating c
ash flow
from exceptional items
£m
(1.
5)
(0.4)
(1.
1)
(
275
%)
Total operating cash fl
ow
excluding
working
capital
£m
5.
7
4.1
1.
6
39
%
Movement i
n working
capital
£m
1.
3
0.6
0.
7
117
%
Cash inflow
from operat
ions
£m
7.0
4.7
2.3
49%
Net tax (p
ayments)/rece
ipts
£m
(
1.1
)
0.8
(1.9)
(
239
%)
Capital
expendit
ure
-
development costs
£m
(4.
2)
(3.5)
(0.7)
19
%
Capital exp
enditure
-
other
£m
(0.1)
(0.1)
-
-
Principal paid
on lease liabi
lities
£m
(0.6)
(0.6)
-
-
Inforalgo acquisitio
n (net of cash acquir
ed)
£m
(0.9)
(1.9)
1.0
51%
Financial review
Gresham Technologi
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Electra
acquisiti
on (net of cash acquired)
£m
(1
9.6
)
-
(19.6)
-
Shares issued
–
Electr
a acquisition
(net of costs
)
£m
20.2
-
20.2
-
Shares issued
-
upon option
exercises
£m
0.1
0.5
(0.4)
(80
%)
Dividend
£m
(0.5)
(0.5)
-
-
Other
£m
(0.1)
(0.1)
-
-
Net increase
/(decrease)
in cash and
cash
equivalents
£m
0.2
(0.7)
0.9
12
9%
Closing cash
& cash equi
valents at
31 December
KPI
£m
9.1
8.9
0.2
2%
Consolidated
statement
of fina
ncial posi
tion
Intangible fixed as
sets have incr
eased from £
31.1m
to
£62.3m, large
ly as a result of the
Electra ac
quisitio
n in June
202
1
.
Trade
r
eceivables
in
creased
from
£2.5
m
t
o
£
3.
8
m
and
accrued
income
(a
contract
asset)
have
increased
from
£0.4m
to
£1.2m
both
of
these
increases
are
aligned
with
the
proportioned
increase
in
revenues
from
the
Electra
acquis
ition
and
associ
ated
billing cycles
.
Income
tax receivable
has increased from nil
to £1.1m
due
to a
ti
ming difference
in the
receipt of
funds from
HMRC
in relation
to R&D credits,
in which
the cash f
rom the 2021 claim in relation to 2020 activity was receiv
ed
in January 202
2,
whereas
the
cash from the
equivalent cl
aim made in 2020, in rel
ation to 2018 and 2019 was r
eceived in December 2020.
Called up equit
y share capital
increased by £0.7m to £4.2
m a
nd the
s
hare premium account
increased by £19.6m to
£23.9m.
These are both
as a result
of the capi
tal raise
in June 2021
that funded t
he Electra ac
quisition.
Deferred
tax
l
iabili
ties
have
inc
reased
by
£5.
5
m
to
£6.
8
m
as
a
result
of
£1.4m deferr
ed tax
charge
in
the
year on
the
IP
sale
from
the
US
to
the
UK
(see
tax
section),
£3.8m
deferred
tax
generated upon
the
acquisition
of
intangibles
upon
the
Electra
acquisition
(net
of
subsequent
amortisati
on)
and
£0.4m
in
relat
ion
to
the
expected
increase
in
futur
e
UK
tax rates
from
19%
to 25%.
Non
-
current
c
ontingent
consideration
has
increased
by
£3.3m
t
o
£3.6m
and
current
contingent
consideration
has
increased
by
£3.0m
to
£3.9m
.
Within
non
-
current conti
ngent
consideration
during
the
year,
£3.6m
was
generated
on
the
acquisition
of
Electra,
wit
h
the
second contingent
consideration
payment
of
£0.
4
m in
r
elati
on
to
the
I
nforal
go
acqui
sitio
n
moving
fr
om
non
-
current to
current con
tingent
consideration
since
the prior
year.
Within current
contingent
consideration
during the
year £3.6m
was generated on the
acquisiti
on of Electr
a,
the first
contingent
considera
tion paym
ent of
£0.9m was paid
upon targets being
met
on
t
he
fir
st
ann
iversa
ry
of
the Inforalgo
acquisition and the
aforementioned £0.
4
m in
relat
ion
to
the
In
foral
go
acqui
siti
on
mov
ed
from non
-
current to current contingent
consideration since the prior
year.
Trade
payables
i
ncrease
d
from
£0.9m
to
£1.
1m
,
which
is
largely
aligned
with
the
increased
size
of
the
combined
business
subsequent
to
the
Electr
a
acquisiti
on.
Other
payables
have
increased
fr
om
£3.3m
t
o
£
6.5m
as
a
result
of
various
other
payables
related
to
the
Electr
a
acquisition,
other
payabl
es
in
relation
to
regul
ar
Electra
business
activi
ty
(e
.
g.
sales
tax)
and
an
increase
in
the
bonus
provision
to
all
employees
and
executives
reflecting
the
performance
agains
t
annual
targets.
Contra
ct
liabilities
have incr
eased
from £11
.0m
to £12.0m
,
the
increase
is
as
a
result of
the
proportion
ed
inc
rease in
revenues
from the
Electra
acquisit
ion an
d associ
ated bi
lling
cycles
; offset by to
the unwinding of an initial three
-
year prepayment of £3.0m from
a £1.0m per annum subscription
licence that became non
-
conti
ngent in March 2019.
Financial outl
ook
M
anagement
are
ve
ry
pleased with
the
financial
performance
for
the
year,
particularly
given that
the
Group
en
tered
2021
with
a
weaker
pi
peline
than
desir
ed
as a
result
of
the
COVID
-
10 challenges
of
2020.
It
is
a
testament
to
the
Group
that
we
achieved
a
20
%
o
rgani
c
growt
h
rate
i
n
Clar
eti
ARR,
bolst
ered
t
o
95
%
including
the
Electra
acquisition.
The
Group
plans
to
at
least
maintai
n
this level of organic
Clareti
ARR
growth
going forward
.
The other
(
non
-
Clareti)
software portfol
io continues to
sur
pass
expectations
.
P
arts
of
the
portfolio
are
in
long
-
term
decline
and
since
the general trend
is
towar
ds the lower margin pro
ducts and service
s, w
e continue to
plan for
a
decli
n
ing
contribution to
Group
earnings
. We expect our contrac
ting services bu
siness to rem
ain
relatively
stable in
202
2
.
Financial review
Gresham Technologi
es plc
Annual
Financial
Report
202
1
39
Overall
,
through
continued
organ
ic
growth
and
the
E
lectra
acquisition
we
have
f
urther
increased
levels
of
revenue
predictabi
lity
throughout
the
Group.
In
addition
to
the
significantly
increased
Clareti
recurring
revenue
base,
high
levels
of
contracted
backlog of C
lareti services for ongoing
implementations and
innovation services and
a high
portion of the
non
-
Clareti
portfolio
already
is
already
under
contract
for
202
2
.
This
was
the
case
as
we
entered
2020
and
2021 and
is the
case to
an even
greater
degree
as
we
enter
202
2
.
With
this
in
mind,
we
continue
to
invest
for
growth,
including
the
re
-
invest
ment
of
cost
synergies
generated
through
the
scale
that
the
combined
Claret
i
and
Electra
provide
s
the
Group
. This
net investment will
be
focussed
on
distri
bution,
product
and customer
success,
to
drive
revenue
synergies
to
ensure
that
we
are
best
placed
to
take
advantage
of the signifi
cant market opportuniti
es.
Tom Mullan
Chief Fi
nancial
Officer
7
March 2022
DocuSign Envelope ID: BB8DFBB0-2E16-4C63-B3F9-138A47D638FF
Gresham Technologi
es plc
Annual
Financial
Report
202
1
40
The Strategic
Report was appr
oved by the Boar
d of Directo
rs on
7
March
2022
.
On behal
f of
the Boa
rd
Ian Manoc
ha
Tom Mullan
Chief Exe
cutive
Chi
ef Fin
ancial Of
ficer
7
March
2022
7
March
2022
DocuSign Envelope ID: BB8DFBB0-2E16-4C63-B3F9-138A47D638FF
Chairman’s i
ntroduction
to governance
Gresham Technologi
es plc
Annual
Financial
Report
202
1
41
The
Board
is
committed
to
upholdi
ng
high
standards of
corporate governance
throughout the
Group. As
part of
that, the
Board
acknowledges
its
role
in
setti
ng
the
culture,
values
and
ethics
of
the
Group,
and
its
collective
res
ponsibility
in
developi
ng
a
healthy corporate
culture and del
ivering long
-
term success to th
e Group.
Specifical
ly,
t
he
Board
acknowledges
it
s
role
in
leading
and
overseeing
the
Group’s
envi
ronmental,
social
and
governance
(“ESG”)
strategy
.
To this
end,
the Board
commissioned
a review
of the
Group’s
ESG
credential
s
in 2021
and has
formulated
a
high
-
level
ESG
strategy
(see page
26
)
, which will be
refined and implem
ented over the c
oming months
and years.
The Board’s aim
is to operate as
effectively as possible, in line with the
governing principles of the UK
Corporate Governanc
e
Code.
A
descri
ption
of
the
Group’
s
application
of
the
pr
inciples set
out therein
for 2021
is
set
out
in
the
S
tateme
nt
of
C
orporate
G
overnance
, and I am pleased
to report that the Company has com
plied with all relevant provisions of the Code in 2021. .
A
Board effecti
veness evaluat
ion was carried out in the
year with construct
ive input from all
directors and produ
ctive outcomes
.
Bo
ard discussions are conducted openly
and transparently, which creates an
environment for sustainable and
robust debate.
In the year, the Board has
constructively and proactive
ly challenged manageme
nt on Group strategies, proposals, operating
performance and key
decisions, as part of
its ongoing work
to assess
and safeguard the
position and prospects of
the Group.
Key
risks
a
nd
uncertai
nties
af
fecting
t
he
business
are
regul
arly
asses
sed
and
updat
ed.
The
Boar
d
has
complet
ed
a
full
,
specific review
of the
Gro
up’s key
ris
ks
and
uncertainties (see
page 31
),
in ligh
t
of
the new
and
emerging
ri
sks
or unce
rtainties
arising
from
the
Group’s
st
rategic
growth
plans
and
the
economic,
political
and
market
conditions.
The
Board
c
hallenges
managemen
t
to
ensu
re
appr
opria
te
ri
sk mitigation
measures are in
place
and
is
planning
to
formalise certain aspects
of risk
managemen
t and
report
ing i
n 2022
.
T
he Board
continues
to engage
with
shareholders
and welcomes
ongoing
dialogue
throughout
the year,
although
the formal
shareholde
r events
such as the A
nnual General Meeting
have been
severely
restricted
due to COVID
-
19
. We
will con
t
inue to
engage with shareholders as
effectively as
possible, taking ac
count of any
necessary
COVID
-
19
precautions.
Peter Simmonds
Non
-
Executive
Chairman
7
March
2022
DocuSign Envelope ID: BB8DFBB0-2E16-4C63-B3F9-138A47D638FF
Board of Dir
ectors
Gresham Technologi
es plc
Annual
Financial
Report
202
1
42
Peter Simmonds
, Non
-
Executive Cha
irman
Peter
was
app
ointed
to
the
Board
as
a
Non
-
Executive
Di
rector
i
n
August
2020
and
became
Non
-
Executive
Chairman
i
n
September
2020.
Pet
er
was
previousl
y
CEO
of
dotDig
ital
Group
plc
for
eight
years
unt
il
h
is
ret
irement
in
2015
,
he
then
remained on
the board as
a non
-
executive director
until 2018. Peter has been
n
on
-e
xecutive
c
hairman of D4T4 Solutions plc
since
2015
and,
until
January
2022,
of
Cloudcall
plc
.
Peter
is
FCCA
qualified
and
has
more
than
40
years
of
seni
or
managemen
t
and
boa
rd
-
level
experience,
principally
in
software,
banking,
insurance
,
finance
and
outsourcin
g.
Peter
is
an
advocate
of
hi
gh
st
andards
of
corporate
governance
,
and
has
been
deputy
chair
of
the
Quoted
Companies
Alliance
since
2019
.
Committees:
Nominati
on (chai
r), Remunera
tion (membe
r).
Andy Balchin
, Senior
Independent
Non
-
Executive Dire
ctor
Andy was
appoint
ed to
the
Board
as
a Non
-
Execut
ive Di
rector
in May 2017
and became Senior
Independent Non
-
Execu
tive
Director
i
n
Oc
tober
2020
.
He
has
over
30
years
of
financial
exper
ience
i
n
high
-
growth software
companies,
including
Smartstream,
SeeBeyond,
Documentum
and
Clearswift.
Unt
il
Dece
mber
2018,
he
was
chief
f
inancial
offi
cer
of
the
cybe
r
division of
RUAG Holding
AG, a major
Swiss organisati
on.
Andy i
s a
Chartered
Account
ant
and has exper
ience working
in a
private equity environment, in
M&A and
I
PO transactions, as
well as
in external audit during
his early career.
As well as being
a Non
-
Executive Di
rector,
he also ment
ors a number
of CFOs and
prospecti
ve CFOs.
Committees:
Audit (chai
r), Remuner
ation (member
), Nominati
on (member).
Jenny Knott, Non
-
Executive Di
rector
Jenny
was
appointed
to
t
he
Board
in
October
2020.
Jenny
brings
unparalleled
experi
ence
from
an
executive
career
in
financial
services including CEO of Standard
Bank Intl, a
nd
,
prior to that
,
senior roles at Nomura Securities and UBS
,
and was named
one of the top 100 infl
uencers by Financial Technol
ogist in 2018. Jenny is
a non
-
executive director
for Simply Health and the
British Busi
ness Bank, and a trust
ee for Ovarian Cancer
Action. As well as a bei
ng a fellow for Be
-
The
-
Busines
s, Je
nny is an
adviser to many leaders,
Fintechs and other young
businesses
.
Committees
: Remuneration (chair),
Audit (member), Nomin
ation (member
)
Ruth Wandhöfer,
Non
-
Executive
Director
Ruth was
app
ointed to
the Board
i
n
October 2020.
Ruth is
a
Global Fintech
50
Influencer
and
i
s
currently chair
of the
Payment
S
ystems Regulator
Panel
and a partner at Gauss
Ventures
, as well
as holdin
g non
-
executive director positions at
Permanent
TSB (Ireland) and Digital Ident
ity Net
. Her prior
roles h
ave inclu
ded spe
arheading
regulatory
and m
arket strateg
y for
t
reasury
and
t
rade
s
olutions at Citi,
advising the European
Banking Federation on pol
icy making for
s
ecurities
s
ervices
and
p
ayments
and serving as a NED of t
he London Stock Exchange
Group
.
Committees:
Audit
(
member
),
Nomination
(member)
I
an Manocha, Chief Executive Officer
Ian
was
appointed
to
the
Board
in
June
2015.
Ian
has
extensive
experience
in
the
business
technology
sector.
He
joined
Gresham from
SAS where
he
worked for
nearly 20
years, most recently as
vice
presi
dent
of
the
EMEA and
AP
business
units.
Ian
has
worked
extensively
with
many
of
the
world’s
leading
financial
institutions
and
has
been
successful
in
growing
companies to significant scale t
hrough securing and delivering high
-
value enter
prise sof
tware deals.
Tom Mullan, Chief Fi
nancial Office
r
Tom
joined
Gr
esham
on
1
March
2018
and
was
appointed
t
o
the
Board
on
13
March
2018.
Tom
is
a
Chartered
Accountant
having
trained
and
qual
ified
at
Ernst
&
Young.
Prior
to
joining
Gresham,
Tom
was
most
recentl
y
chief
financial
officer
at
Fadata, a PE back
ed software bus
iness, and bef
ore that was
divisional
finance dir
ector for
Guidewire in
EMEA.
Statement of corporat
e governance
Gresham Technologi
es plc
Annual
Financial
Report
202
1
43
This
statement
explains
how
the
Company
h
as
applied
the
main
and
su
pporting
pri
nciples
of
cor
porate
governance
and
describes
the
Company’s
compli
ance
with
the
provi
sions
of
the
UK
Corporate
Governance
Code,
as
published
in
July
2018
by
the
Financial
Reporting
Council
and
available
at
www.frc.org.uk.
All
references
to
the
Compa
ny
are
in
respe
ct
of
the
statutory entity Gresham Technologies plc, which
is the ultimate parent undertaki
ng of the Gresham Group of companies.
Statement by
the Directo
rs on complia
nce with the
UK Corporate
Governance Code
The
Company
has
complied
with
the
relevant
provisions
set
out
in
t
he
UK
Corporate
Governance
Code
2018
(the
“Code”)
throughout the
year.
Board leader
ship and c
ompany purpose
The Board recognises its
role in promoting the long
-
term
sustainable su
ccess
of
the Co
mpany,
gene
rating
v
alue
for
shareholders
and
contributing
to
wider
society,
and
in
establishing
t
he
Company’s
purpose,
values
and
strategy.
In
t
he
performance
of
its
duties,
the
Board
considers
the
interests
of
stakeholders
and
the
matters
set
out
in
section
172
of
the
Companies Ac
t 2006.
Details
of thes
e matters
are set
out i
n the St
rategic
Report.
The Gro
up has
devel
oped a
Clar
eti
-
led strategy designed to drive profitable growth and create long
-
term shareholder
value.
The
Boar
d
consi
ders
and
address
es
the
opport
uni
ties
and
risks
to
the
success
of
the
business
through
a
combination
of
monthly
repor
ts
fr
om
manag
ement,
operati
onal,
stra
tegic
and
ri
sk
rev
iews,
and
key
perfo
rmance
indicat
ors.
The
Grou
p’s
established business
model and governance st
ructures ensure t
hat al
location of reso
urces and
investme
nt decision
s directly
support the strategic objecti
ves.
The
Board
i
s
committed
to
maintaining
a
healthy
cor
porate
cul
ture
and
r
ecognises
t
he
importance
of
investin
g
in
and
rewarding
its
workforce.
As
part
of
this,
the
Gro
up
has
establi
shed
cl
ear
values,
has
systems
i
n
pl
ace
t
o
pr
omote
well
being
at
wor
k,
seeks
to
create
an
envir
onment
where
individual
s
are
f
ulfilled,
and
operates
a
share
incentive
plan
that
ensures
our
people
share in the success of the Group
.
Dialogue wi
t
h institut
ional shareholders
The
Boar
d
as
a
whole
i
s
r
esponsible
for
ensuring
that
a
d
ialogue
is
maintained
with
shareholders
based
on
t
he
mutual
understanding of object
ives.
Members of
the
Board meet
with
maj
or
sharehol
ders
on
a
re
gular basis,
i
nclud
ing
p
resentations
after
the
Company’s
announcement of the year
-
end resul
ts and at the half
year.
The Board is kept informed of t
he views of shareholders
at
Board meeting
s following investor meetings
through a rep
ort from
the
Chief
Executive
,
together w
ith
form
al
feedback
on
shareholders’ views
gathered
and
supplied by
the Company’s
advisers.
The
views
of
p
rivate
and
smaller
sharehol
ders,
t
ypically
arising
from
t
he
AGM
or
from
direct
contact
with
the
Company,
are
also communicated to the Board
on a regular basis
.
Mr
A
Balchin
,
the
Senior
Independent
Non
-
Executive
Director,
and
Mr
P
Simmonds
,
the
Non
-
Executive
Chair
man,
are
available
to
shar
eholders
if
they
have
concerns
where
cont
act
through
the
nor
mal
channel
of
Chief
Executive
has
fai
led
to
resolve or for which
such contact is inappropriate.
Constructiv
e use of
the AGM
The
Board
normally
uses
the
AGM
to
communicate
with
privat
e
and
insti
tutional
i
nvestors
and
wel
comes
their
par
ticipation.
However,
due
t
o
COVID
-
19
restrictions,
shareholders
were
requested
not
to
attend
the
2021
AGM
.
Subject
to
COVID
-
19
precautions
, t
he Chairman
will
aim to
ensure that
all members
of the
Board will be
avai
lable at the
forthcoming AGM
,
whether
it
is
operated as
a
n in
-
person or
electronic
me
eting
.
Details of resolutio
ns to
be proposed at
the AGM
can be
found in
the Notice of the
Meeting. A separate resolution is proposed
for each subs
tantially separate is
sue including a s
eparate resolu
tion relating to the A
nnual Financia
l Report
2021
.
Division
of re
sponsibiliti
es
Board membershi
p, roles
and responsi
biliti
es
Statement of corporat
e governance
Gresham Technologi
es plc
Annual
Financial
Report
202
1
44
The
Boa
rd
is
curr
ently
comprised
of
the
Non
-
Executi
ve
Chairman,
two
Executive
Directors and
three
Non
-
Execut
ive
Directors,
details of which ar
e set out on page 42
. All Non
-
Executiv
e Director
s are
considered to be
independent.
The
roles
of
Chairman
and
Chief
Executive
are
dist
inct,
set
out
in
writing
and
agr
eed
by
the
Board.
The
Chairman
is
responsible
for
the
effectiveness
of
the
Board
and
ensuring
communica
tion
with
shareholders,
and
the
Chief
Ex
ecutive
is
accountable for the management of
the Group.
Non
-
Executive Di
rectors c
onstructi
vely chall
enge and as
sist in
the develo
pment of st
rategy. The
y scrutin
ise the pe
rformance
of management in meeting agreed goals
and objectives and monitor
the reporti
ng of performance.
The
Senior
Independent
Non
-
Executive
Director,
Mr
A
Balc
hin
,
is
available
to
shareholders
if
they
have
concerns
which
contact
through
the
normal
channels
of
Chairman
or
Chief
Executive
has
failed
to
resolve
or
for
which
such
contact
is
inappropr
iate.
The Company Secretary is Mr J Cathie,
who was appointed to the role on 21 March 2014. Mr J Cathi
e is not a Director of th
e
Company. The
appointment
and re
moval of
the Company
Secretary
is a
matter f
or the
Board as a
whole.
Operatio
n of t
he B
oard
The Board is r
esponsible t
o shareholders
for the pr
oper management of
the Group.
The
Board
normall
y
meets
once
a
month
and
has
a
f
ormal
schedule
o
f
matters
spec
ifically
reserved
to
it.
Other
mat
ters
are
delegated to the Executi
ve Directors, support
ed
by policies for
reporting to the Boar
d.
The
Company
Secr
etary
is
responsible to
the Board
for ensuring
that
Boa
rd
procedures
are
followed, and
that applicable
rules
and regul
ations ar
e complied
with
and
for
advising
the Board,
through
the
Chairman,
on co
rporate governance matters. The
Company maintains appropriate insurance cover in
respect of
legal action against the
Company’s Directors and the
Co
mpany
Secretary,
but no c
over exist
s in the
event th
at the Di
rector i
s found t
o have acte
d fraudul
ently or
di
shonestly.
The
Non
-
Executi
ve
Chai
rman
and
the
Non
-
Executive
Dir
ectors
are
abl
e
to
meet
wit
hout
Executives
present
p
rior
to
each
Board mee
ting.
The ag
enda and
rele
vant br
iefing
papers
for
each
Board mee
ting
are di
stribute
d by
the
Company Sec
retary,
usually
several days
in advance of e
ach Boar
d meeting
.
Where
D
irec
tors
have
co
ncern
s
whic
h
cann
ot
be
resol
ved
a
bout
the
ru
nning
of
t
he
Comp
any
or
a
pro
posed
actio
n,
th
ese
concerns are recorded in
Board minutes. On resignati
on, a Non
-
Execut
ive Dir
ector i
s requi
red
to provide a written statement
to the Chairm
an for circulation to
the Board if there
are any such
concerns.
The Board
has formed
certain committees, namely an
audit committee, a
remuneration committee and
a nomination
committee,
to
deal
wit
h
the
specifi
c
aspects
of
the
Group’s
affairs.
Details
of
the
committees’
constituent
members
and
the
roles, respon
sibilities and
activities of e
ach of
the comm
ittees are
described
in more
detail in
the individu
al comm
ittee rep
orts
commencing
on page 47
.
Meeting
s and
at
tendance
The
fol
lowing
t
able
summari
ses
the
number
of
Board
,
audit
committee,
remunerat
ion
commit
tee
and
nomination
committee
meeting
s hel
d duri
ng the
year
and t
he att
endance
recor
d of
indiv
idual
Direc
tors
at tho
se meet
ings.
Number of meeti
ngs
attended
Board
Audit
Remuneration
Nomination
P Simmonds
12/12
-
5/5
1/1
A Balchin
11
/12
3/3
4/5
1/1
J Knott
12/12
3/3
5/5
1/1
R Wandhöfer
12/12
3/3
-
1/1
I Manocha
12/12
-
-
-
T Mullan
12/12
-
-
-
Composition,
succession
and evaluat
ion
Nomination c
ommittee
A report
from the c
hair of
the nominat
ion committ
ee is set
out on
page
51
.
Statement of corporat
e governance
Gresham Technologi
es plc
Annual
Financial
Report
202
1
45
Induction an
d training
New Directors receive a thorough and tailored induction on their appointment to the Board covering the activities of the Grou
p
and
its
key
business
and
financial
risks,
the
ter
ms
of
ref
erence
of
the
Board
and
its
committees
and
t
he
latest
financial
informatio
n about the
Group.
The Chair
man ensures
that
Directors
update
their
skill
s, knowl
edge and
familiar
ity wi
th the
Group
required
to
ful
fil their roles
on the Board and committees. Ongoing training is provi
ded as necessary and includes updates from the Company Secretary
on
relevant
legislative
or
regulatory
changes.
Directors
may
consul
t
with
the
Company
Secretary
at
any
time
on
matters
re
lated
to
their
role
on
the
Board.
All
Directors
have
access
to
independent
professional
advice
at
the
Company’s
expense
where
they judge it nec
essary to disch
arge their duties.
Evaluation
of the Board’
s performance
The Board has
undertaken a formal review encompassing the performance of
the Board as a
whole, its committees and each
Director
.
In
performing
these
reviews,
criteria
that
are
taken
into
account
i
nclude
the
ability
of
the
Director
to
take
the
perspective
o
f
creating
shareholder value;
to
contribute
to
the
development
of
strategy
and
identification of
risks;
to
provide
clarity
of
direction
to
management;
to
be
a
source
of
wise
counsel;
to
bring
a
broad
perspective
to
discussions
and
an
understanding
of
k
ey
i
ssues;
to
commit
the
ti
me
required
to
fulfil
the
rol
e;
and
to
listen
to
and
respect
the
ideas
of
other
Director
s and
management.
This
review
in
cluded
a Board
effectiveness
survey
,
with re
sponses
collected
anonymou
sly
by
the
Company Secre
tar
y
and
compared a
gainst the result
s of the previous
Board effectiveness
survey
.
The
Chairman
has
f
ormally
revi
ewed
the
perfor
mance
of
the
Non
-
Executive
Di
rectors
and
satisf
ied
himself
that
they remain
committed
to
the
role
and
their
performanc
e
continues
to
be
effectiv
e.
M
r
A
Balchin
has
evaluated
the
performance
of
the
Chairman
taki
ng
into
accoun
t
the
views
of
other
Directors
and
is
satisf
ied
that
he
remains
committed
to
the
role
and
his
performance continues to be
effective.
Retirement
and re
-
election
All
Directors
are
s
ubject
to
election
by
shareholders
at
t
he
first
AGM
i
mmediately
foll
owing
their
appointment.
Thereafter,
Director
s
ar
e
subj
ect
to
an
nual
re
-
election.
Al
l
Non
-
Executi
ve
Di
rectors
are
appointed
for
fixed
terms
in
line
with
corporate
governance requirements,
subject
to re
-
election.
Audit, r
isk and i
nternal
control
Audit commit
tee
A report
from the c
hair of
the audit
committee
is set o
ut on page
47
.
Financial report
ing
The
Board
is
responsibl
e
for
presenting
a
balanced
and
un
derstandable
assessment
of
the
Company’s
pos
ition
and
prospects,
extending
to
interim
reports
and
other
pr
ice
-
sensitive
public
reports
and
reports to
regulators as
well as
to information
required
to
be presented by statutory
requirements. A statement of
the Directors’
responsibilities
is set out on page
69
.
Managemen
t and
s
pecial
ists within the Group’s finance department
are
responsib
le for
ensuri
ng the
appropri
ate maintenan
ce
of financial
records
and
processes t
hat ensure
all financi
al informati
on is
relevant, r
eliable, i
n accordance
with the
applicable
laws
and
regulations,
and
distribute
d
both
internally
and
externally
in
a
timely
manner.
A
review
of
the
consolidation
and
financial
statements
is
com
pleted by
management to
ensure that the
financial position and results of
the Group
are
appropriately report
ed. All financial
information publi
shed by the Group is subjec
t to the approval of
the audit committee.
Principal
risks
A report
on the pr
incipal
ri
sks and uncertainties affect
ing the Company is set out on page
31
.
Going conc
ern
Statement of corporat
e governance
Gresham Technologi
es plc
Annual
Financial
Report
202
1
46
The
Directors
are
require
d
to
report
that
the
busi
ness
is
a
g
oing
concern,
with
supporti
ng
assumptions
a
nd
qualifica
tions
as
necessary.
The
Directors
have
concluded
that
the
business
is
a
going
concern
as
further
explained
in
the
Directors’
Report
on page 65
.
Viability
statement
The
Directo
rs
confir
m
that
t
hey
have
assessed
the
prospects
of
the
Group
over
a
three
-
year
peri
od
commencing
1
January
2022
and
that
they
have
a rea
sonable
expectation
that
the
Group will
be
able
to conti
nue in
operation
and meet
its
liabili
ties
as they fall due
for that period.
The
Directors
have
selec
ted
a
period
of
three
years
as
they
cons
ider
this
to
be
a
reasonable
and
appr
opriate
durati
on
on
wh
ich
to
make
the
assessment,
based
on
the
following
two
factors:
firstly,
the
Group
operates
rolling
financial
projections
which ext
end for
the cur
rent f
inancial
year a
nd up to
two sub
sequent f
inancial
years;
and
, secondly,
the Dire
ctors’ evaluation
of
the
forward
-
loo
king
order
book,
with
Clar
eti
software
contracts
t
ypically
bei
ng
signed
for
three
-
year
mini
mum
contract
terms,
balanced against the l
ikely attrit
ion rate of ot
her, non
-
Clareti
,
revenues.
In making this state
ment, the Directo
rs have conside
red t
he Group’s current positi
on and the potential
impact of the
principal
risks a
nd
uncertainties
described
on
pa
ge
31
on the
Group’s business
model,
future performance, solvency
or liquidity, taking
account
of
severe
but
reasonable
scenarios
and
the
effectiveness
of
any
mitigating
ac
tions,
and
have
perfor
med
stress
test
analyses based on likel
y outcomes.
Control env
ironment
The
Group
operat
es
within
a
control
f
ramework
developed
and
strengthene
d
over
a
number
of
years
and
communicated
as
appropriate by
a
serie
s
of
written
procedures.
These lay
down
accounting
policies
and
fi
nancial
control
procedures,
in addition
to
controls
of
a
more
operational
nature.
The
key
procedures
that
the
Directors
have
established
with
a
view
to
providing
internal co
ntrol are as
foll
ows:
•
the establishm
ent of the organ
isational structure
and the delega
ted responsibilities
of operational m
anagemen
t;
•
the definition of auth
orisation limits, inclu
ding matters re
served for the B
oard;
•
regular site visits by the Exec
utive Directors, with
th
e results reporte
d to Board m
eetings;
•
the establishm
ent of detailed op
erational plans an
d financial budg
ets for each finan
cial year;
•
mainten
ance o
f a r
isk r
egiste
r whi
ch is
revie
wed and
update
d at
every
Board me
eting
;
•
review
of
regular,
detailed
monthly
manag
ement
repo
rting
p
rovide
d
for
ever
y
B
oard
meeti
ng
which
en
compasse
s
both a review of operat
ional activiti
es and entries ari
sing on consolidation;
•
reporting and mo
nitoring performanc
e against budgets
and rolling forecasts;
•
the security of ph
ysical prope
rty a
nd computer inform
ation; and
•
detailed due dili
gence on all acquisit
ions.
Remuneration
A report
from the c
hair of
the remunera
tion commit
tee is s
et out on
page
52
.
Audit committe
e report
Gresham Technologi
es plc
Annual
Financial
Report
202
1
47
Dear
shareholder
As
c
hair
of
the
a
udit
c
ommittee
,
I
am pleased
to present
the
c
ommittee’s
repor
t
for
the
year
ended
31
December
2021
.
The
c
ommittee’s
main
role
remains
unchanged
–
to mo
nitor
the inte
grity
of the
Group’s
financial
reporting,
to a
ssess
the
effect
iveness
of
its
internal
controls
and
risk
manage
ment
processes
and
to
ensure
that
our
external
auditor,
BDO
LLP,
delivers
a
high
-
quality
effective
audit.
The
a
udit
c
ommittee
members
hip
consists
of
me
,
as
c
hair
,
Ms
J
Knott
and
Ms
R
Wandhöf
er
as
member
s
.
The
Board
consi
ders
t
hat
t
he
c
ommittee
has
r
ecent
and
relevant
financial
experience,
including
competence
in
account
ing,
relevant
to
the
sector
in
which
we
operate,
as
well
as
operational
skills.
I
am
satisfied
t
hat
the
c
ommittee
has
appropriately
discharged
its
duties
i
n
the
year
in
accordance
with
its
t
erms
of
reference,
which
are
revi
ewed annual
ly
and
are
available
at
www.greshamte
ch.com/inv
estors.
In
order
for
the
c
ommittee
to
pr
operly
discharge
its
role,
it
is
critical
that
we
have
the
opportunity
to
openly
discuss
with
managemen
t any mat
ter wh
ich fa
lls wi
thin
our re
mit and
probe a
nd chal
lenge
where ne
cessary
. The Ch
ief Ex
ecutiv
e and t
he
Chief
Fina
ncial
Off
icer
att
end
our
meeti
ngs
by
invi
tation,
and
other
s
en
ior
managers
(including
the
Director
of
Financial
Operati
ons and Cont
rol)
are invited to attend to provide fi
nancial, technical or business infor
mation as necessary. In addition,
our
meetings
relevant
to
audit
are
attended
by
the lead
audi
t
partner
from
the
external auditor
and other
repr
esentatives. Their
attendance
is
important
as
it
gives
us
the
opport
unity
to
seek
their
independent
and
objective
vi
ews
on
matters
which
they
encounter
dur
ing
thei
r
audit.
At
least
once
a
year,
we
meet
separately
with
the
e
xternal
audi
tor
to
discuss
matters
without
executive
management
being
present.
On
a
more
frequent
basis,
I
meet
with
the
Chief
Financial
Officer
and
other
senior
managemen
t.
Th
is
ens
ures
any
is
sues
o
r
conc
erns
c
an
be
raise
d
at
an
ear
ly
s
tage
a
nd
al
lows
s
uf
ficient
time to
be
devoted
to
them
at
subsequent
meetings.
There
is
an
open
and
constructive
communication
between
the
c
ommittee,
management
and external auditor.
In the year,
t
he committee
specifically
considered and
challenged
management on the
impact and potential risks associated
with
the
financing,
acquisiti
on and int
egration of
Electra
Information Systems,
Inc
.,
ensuri
ng a robust
approach t
o the
related
processes
,
including
due d
iligence,
risk
mana
gement,
i
nternal
control
s
and financial
r
eporting
.
This
included
paying
significant
attention
to
KPI’s
and segmental
repor
ting
including
alternative
performance
measures
of
the
enlarged
Group
,
ensuri
ng
that
reporting was reflective o
f the
continued weighting of
Group
toward
s that
of a
subscri
ption
softw
are busi
ness.
The
committee
has
continued t
o pay
special
attention t
o
the
potential
impact
and risks
to the
Group aris
ing from
the COVID
-
19 pandemic and
Brexit
.
These matters are discussed
in the Strategic Report
on pages
13
and 31
.
Whilst Br
exit
-
related risks
appear
to
have
reduced,
the
c
ommittee
intends
to
continue
monitor
ing
the
risks
associated
wi
th
t
he
COVID
-
19
si
tuation
closely
at
least
throughout
2
022
,
as well
as
the impact of
the
geopolitical
and
economic
instabi
lity
caused
by
the
deplorable
actions
of the Russian and Belarus
ian leadership in Ukr
aine
.
Responsibil
ities
Our pr
incipa
l rol
e is
to
assist
the
Board
in p
erformi
ng it
s res
ponsibi
liti
es i
n rel
ation
to f
inanci
al r
eporti
ng, i
nternal
con
trols and
risk
management
and
i
n
maintaining
an
appropriate
relationship
with
our
external
auditor.
The
work
of
the
c
ommittee
in
di
scharging its responsibil
ities includes:
•
monitor
ing th
e integ
rity o
f the re
ported
financ
ial st
atement
s of the Gr
oup, an
d any for
mal annou
ncement
s relat
ing to
the Group’s fina
ncial performa
nce, and review
ing significant fina
ncial issues and
judgements
conta
ine
d in them
•
challeng
ing
and monitoring the appropriat
eness, relevance
and
integrity
the G
roup’s
alternative performance
measures
(APM
s), i
ncluding
their selection, m
easuremen
t and presentatio
n
.
•
reviewing
and
assessing
the
process
which
manage
ment
has
put
in
place
to
support
the
Board
when
giving
its
assurance
that
the
Annual
Financi
al
Report
2021
,
taken
as
a
whole,
is
fair,
balanced
and
understandable
and
provides
the
i
nformation
necessary
f
or
shareholders
to
assess
the
Company’s
pos
ition
and
perfor
mance,
busi
ness
model a
nd str
ategy;
•
reviewing
the
Group’s
internal
financial
controls
and
reviewing
the
Group’s
internal
control
and
risk
manageme
nt
systems;
•
reviewing the Grou
p’s speak
-
up (whistle
-
blowing) arrangements;
Audit committe
e report
Gresham Technologi
es plc
Annual
Financial
Report
202
1
48
•
reviewing the need
for a separate interna
l audit funct
ion;
•
making
reco
mmendati
ons t
o t
he Boa
rd,
for
it
to
put
to
shareho
lders
for
the
ir
approva
l i
n gen
eral
meeti
ng,
in r
elati
on
to the
appointment, reappointment and
removal of
the
external auditor
and
to approve
the remuneration and
terms
of engagement of the exter
nal auditor;
•
ensuring an appropriate r
elationship with the ext
ernal auditor to incl
ude the reviewing and monitori
ng of its
independ
ence
and o
bjectivity,
and
the
effectiveness
of the
audit
proces
s,
based
on
a soun
d
plan
to en
sure
it delive
rs
a high
-
quality effect
ive audit;
•
developing and
implementing pol
icy on
engagement of
the external
auditor
to supply
non
-
audit serv
ices, taki
ng into
account relevant ethi
cal guidance regarding
the provision of non
-
audit services by t
he external audit f
irm
; and
•
reporting
t
o
the
Board,
identifying
any
matters
for
which
it
considers
that
action
or
i
mprovem
ent
is
needed
and
making
recommen
dations as to the steps to
be taken.
Significant
judgements i
n relati
on to finan
cial stat
ements
Set
o
ut
be
low
a
re
what
th
e
committee
considers
to
be
the
most
signifi
cant
accounti
ng
areas
which
required
t
he
exercise
of
judgeme
nt
or a
high
degree of
estimation during
the
year, together
with details
of
how these
were addressed. These
are
all
considered to be recurring issues.
S
ignificant issu
e and explanatio
n
Work unde
rtaken
by the
committee
in fo
rming an
opinion
Capitalised
development
costs
Development
costs
are
accounted
for
in
accordance
with
IAS
38
“Intangible
A
ssets”,
an
d
costs
that
meet
the
qualifying
criteria
are
capitalised
and
systematically
amortised
over
the
useful
economic
life o
f the
intan
gible
asset.
Determining
whe
ther
development
costs
qualify
for
capitalisation
as
intangible
assets
requires
judgement,
including
es
timates
of
the
technica
l
and
co
mmercial
v
i
ability
of
the
asset
created
and
its
applicable
useful
economic
life.
These
estimates
are
continually
reviewed
and
updated
by
management
based
on
past
experience
and
reviews
of
competitor
products
available in the market.
The
committee
has
reviewed
reports
from
manag
ement
identifying
the
deve
lopment
costs
capitalise
d,
the
technical
a
nd
comm
ercial
feasibility
of
the
product
bein
g
produced
and
whether
further
costs
continue to
fulfil the
required IAS 38
criteria. The
committee’s
review
encompasses
dire
ct
discussion
with
e
xecutive
and
operational
management,
in
addition
to
reviewing
monthly
formal
reporting
to
the
Board
on
development
and
associated
sales
and
implementation
activity. The
treatment
of
development
costs
is
an
area
of
focus
for
the external
auditor, which
reported its
findings t
o us. We
concluded
that
mana
gement’s
k
ey
assum
ptions,
judge
ments,
estim
ates
and
disclosures were reasonable and appr
opriate.
Revenue and pr
ofit reco
gnition
Revenue
and the
associated
profit
are
recognised
from
sale
of
software
licences,
rendering
of
services,
subscriptions
and
maintenanc
e
and solution sales.
Whilst in
most cases
performance
obligations
clearly
follow
the
commercial
and
contractual
arrangement agreed
with the
customer, in
some cases
the revenue
s
treams
are
combined
within
an
overall
commercial
arrangeme
nt.
Such
bundling
requires
judgement
to
assess
performance
obligations
associated
with
each
revenue
stream
and
further
judgement
as
to
when
an
d
how
such
performan
ce
obligations
have
been discharged
in ord
er to
recogn
ise th
e ass
ociated
revenue.
The
estimation
of
the
stage
of
completion,
along
with
the
unbundling
of
multi
-
element
solution
sales,
represents
a
risk
of
incorrect
revenue
recognition.
The
committee
has
reviewed
management’s
descriptions and
status
reports
on material
new
deals
and on
project
work
-
in
-
progress
through
the
year,
bo
th
through
direct
discus
sion
and
formal
mo
nth
-
end
reporting
to
the
Board.
The
comm
ittee
has
furthermore
considered management’s
assessments made
on percentage
of
comp
letion of
material work
-
in
-
progress,
and
other
judgements
such
as
bundling
or
unbundling
of
revenue
streams,
and
the
resulting
impact on revenue and
profit recognition. Revenu
e recognition is an
area
of
focus
for
the
external
auditor,
which
reported
its
findings
to
us.
We
considered
whether
the
accounting
treatment
for
revenue
and
profit recognition
was
in
accordance w
ith agreed
methodology,
the
Group’s
accounting
policies
and
IFRS
15
“
Revenue
fro
m
Contracts
with
Customers”
and
concurred
with
management’s
o
pinion that it was.
Impairment revie
ws
The
Group
is
required
to
perform
impairment
reviews
of
goodwill
annually at the reporting
date and, in addition,
performs impairment
reviews
of
ca
pitalised
de
velopment
costs
to
identify
any
intangible
assets
that
have
a
carrying
value
that
is
in
excess
of
their
recoverable
value.
Determining
the
recoverability
of
an
intan
gible
asset
requires
judgement
in
both
the
methodology
applied
and
the
key
variables
within
that
methodology.
Where
it
is
determined
an
The
committee
has
considered
management’s
assessments
of
value
in us
e of
cash
-
generating units
of intangible assets (principally
goodwill
and
capitalised
development
costs)
at
the
reporting
date.
This
included
specifically
considering
and
subsequently
approving
business plans prepared
by management
supporting the future
performance
expectations us
ed
in
the
calculation
of t
he
value in
use.
Impai
rment reviews
were
also
an
area
of focus
for the
external
Audit committe
e report
Gresham Technologi
es plc
Annual
Financial
Report
202
1
49
intangible
ass
et
is
impaired
,
its
carrying
value
will
be
reduced
to
its
recoverable
value
with
the
difference
recorded
as
an
impairment
charge in the income statement.
auditor,
which report
ed
its findi
ngs
to
us.
We
considered
whether
the
accounting
treatment
performing
impairment
reviews
was
in
accordance
with
agreed
methodology,
the
Group’s
accounting
policies
and
IAS 36
“Impairment of
Assets”. We
concluded
that
management’
s key ass
umptions
were reaso
nable.
Acquisition acc
ounting and cont
ingent considerat
ion
In
determ
ining
th
e
fair
value
of
intangible
asse
ts
arising
on
acquisition, management
is
required to make
judgements rega
rding
the
timing
and
amount
of
future
cash
flows
ap
plicable
to
the
businesses
being
acquired,
discounted
using
an
appropriate
discount
rate.
Such
judgem
ents
are
based
on
current
budgets
and
forecasts, extrapolated for an appropria
te period taking into account
growth
rates
and
expected
changes
to
selling
prices
and
operating
costs.
Managem
ent
estimate
s
the
appropriate
discount
rate
using
p
re
-
tax
rates
that
r
eflect
c
urrent
market
assessments
of
the
time
value of money and the risks
specific to the businesses being
acquired.
Contingent
consideration
relating
to
acquisitions
is
included
based
on management’s estimates
of the most likely outcome.
Those
judgements
include
the
forecastin
g
of
a
nu
mber
of
different
outcomes
against
the
performance
targets
and
estimating
a
probability
and
risk
of
each
outcome
before
arriving
at
a
risk
weighted val
ue of cont
ingent consi
deration.
The
committee
has
cons
ide
red
managem
ent’s
assess
ments
of
the
fair
va
lue
o
f
the consideration
and
value
s
attribu
ted
to
the assets
and
liabilities ac
quired on
acquisition
as at the
reporting date
. This
included
spec
ifically
considering
and
subsequ
ently
reviewing
and
approving
the
sale
and
purchase
agreement, assessing
the
estimate
of contingent considerat
ion against business pl
ans prepared by
management
support
ing
the
future
performance
expect
ations.
Acquisition
accounting,
contingent
consideration
and
fair
value
reviews
were
also
an
area
of
focus
for
the
external
auditor,
which
reported i
ts
findings
to
us.
The
committee
has
concluded that
the fair
values
attributed
to
both
the
acquisition
and
contingent
consideration
are
in line with IFRS 3.
Risk management
and inte
rnal
control systems
The
Board
is
responsi
ble
for
maintai
ning
a
sound
risk
management
and
internal
control
system
t
o
safeguard
sharehol
ders’
investme
nt
and
the
Company
’s
assets.
The
Directors
acknowle
dge
their
ultimate
responsibility
for
ensuring
that
the
Group
has
in
place
system
s
of
controls,
fi
nancial
and
otherwise,
and
for
managing
risk,
that
are
appr
opriate
to
the
business
environment in which it
operates and the ri
sks to which it i
s exposed and for monitori
ng those systems.
The
Board
and
co
mmittee
hav
e
rev
iewed
the
effectiveness
of
the
Group’s
risk
managemen
t
and
internal
control
systems
during
the
year.
This
review
cov
ered
all
material
controls,
i
ncluding
financial
,
operational
and
compliance
controls
,
and
took
into accou
nt the
risks an
d potential impact arising
from COVID
-
19 and Brexit.
The
Group’s
risk
management
and
internal
control
systems
are
desi
gned
to
manage
rat
her
than
eliminate
the
r
isk
of
failur
e
of
business
objectives
and
can
only
provi
de
reasonable
but
not
absolute
assurance
against
material
m
isstateme
nt
or
loss.
The
Board
continues
to
dis
cuss
with
management
f
urther
enhancements
i
n
financi
al
and
other
controls
commensurate
wi
th
the growth of the Group. In addition, steps are continuing to be taken to further embed internal control and risk man
agement
processes
into
the
operati
ons
of
the
business
and
to
deal
wi
th
areas
of
improvement
which
come
to
management’s
and
the
Board’s at
tention.
An
e
mbedded
ongoing
proces
s
f
or
identif
ying,
evaluat
ing
and
managing
the
pri
ncipal
risks
fa
ced
by
t
he
Group
ha
s
been
in
place
throughout
the
year
and
is
regul
arly
reviewed
by
the
Boar
d.
It
r
emains
in
pl
ace
up
to
the
date
of
the
approval
of
the
financial statem
ents.
Speak
-
up (whistle
-
blowing)
arrangements
The
committee
has
revi
ewed
arrangements
by
whic
h
staff
of
th
e
Group
may,
in
confidence,
rai
se
concerns
about
possible
improprie
ties in matt
ers of finan
cial reportin
g or any o
ther matte
rs of conc
ern and c
oncluded
that they r
emain ap
propriate.
Internal audit
function
During the
year, the
committee c
onsidered t
he need
for a separate
internal audit
function and
its impact o
n the exter
nal audit
and
concluded
that,
based
on
the
size
of
the
Group,
a
separate
internal
audit
function
is
not
necessary
at
thi
s
s
tage
of
the
Group’s
maturi
ty. Th
e need
for an
inter
nal au
dit f
unct
ion is reviewed
at least an
nually.
External au
ditor
Audit committe
e report
Gresham Technologi
es plc
Annual
Financial
Report
202
1
50
The committee reviews
and makes recommendations wit
h regard to the app
ointment of the ext
ernal auditor
. In making these
recommen
dations,
the
committee
considers
auditor
effectiveness
and
independence
,
partner
rotation
and
any
other
factors
which may
impact t
he extern
al audit
or’s ap
pointment.
As
r
eported
last
year,
BDO
LLP
was
reappointed
as
the
Company’s
auditor
in
2020,
notwiths
tanding
its
previous
ten
-
year
tenure,
and
remain
s
the
Company
’s
auditor
for
the
current
year.
Refer
to
l
ast
year’s
report
and
the
Independent
Auditor’s
Report on
page
70
for further information.
In considering the effec
tiveness of the externa
l auditor, the committe
e discussed and ap
proved the scope
of and the fees for
the
external
audit
plan
and
reviewed
the
external
auditor’s
approach
to
the
external
audit,
its
assessment
of
the
significant
risks
in
the
Group’s
fi
nancial
statemen
ts a
nd
materiality
levels,
and its
associated
work. In
addition, the
committee con
side
r
ed
the
commerc
ial
experience
and exper
tise
of
the
auditor,
particularly in
the Group’s
industry se
ctor;
the
fulfilment
of the
ag
reed
audit
plan
and
any
variations
from
this
plan;
and
t
he r
obustness
of
the
external
auditor
in
it
s
handling
of
key
accounting
and
audit judgements.
In relation
to independence, the
committee reviews and controls the
manner in
which non
-
audit servi
ces
are
awarded t
o the
external
audi
tor
on
at
least
an
annual
basis.
All
signi
ficant
non
-
audit
work,
and
any
work
of
a
non
-
compliance
c
onsultancy
nature, commissioned
from the
external
auditor requir
es audit
committee approval.
In the
year,
there were no
non
-
audit fees
paid to the external
auditor
1
(2020: nil)
.
The committee is
satisfied
with the ef
fectiveness
and independence of
the ex
ternal auditor.
Andy Balchin
Chair of
the aud
it commit
tee
7
March
2022
1
This
excludes
fees
for
th
e
historical
financial
audit
carried
out
by
BDO
LLP
in
connection
w
ith
the
acquisition
o
f
Electra
Informatio
n
Systems
Inc,
which are exempt.
DocuSign Envelope ID: BB8DFBB0-2E16-4C63-B3F9-138A47D638FF
Nomination commi
ttee report
Gresham Technologi
es plc
Annual
Financial
Report
202
1
51
Dear share
holder
I am pleased to
present the rep
ort of the nomin
ation comm
ittee for the year en
ded 31 Dec
ember
2021
.
As Chairman of
the Board
, I also
chair th
e nominati
on committee.
All of t
he other No
n
-
Executive Dir
ectors are
also members
of
the
committee.
Following
t
he
Board
trans
itions
i
n
2020,
there
wer
e
no
changes
t
o
the
Boar
d
and
this
gave
the
commi
ttee
the opportunity to
focus on
other priorities such as
succession planning and di
versity and inclusion.
Regarding
succession
planning,
the
nomination
committee
keeps
u
nder
review,
and
takes
appropriate
action
to
ensure,
orderly
succ
ession
for
appointments
to
the
Board
and
to
senior
management,
so
as
to
maintain
an
appropriate
balance
of
skills
and
experience
within
the
Group
and
on
the
Board.
As
regards
Non
-
Executive
Di
rectors,
t
he
committee
considers,
amongst
other
factors,
their
other
signifi
cant
outside
commitments
pri
or
to
making
recommendations,
which
is
designed
to
ensure
that
they
have
sufficient
time
to
meet
what
is
expected
of
them.
The
committee
keeps
any
changes
to
these
commitments
under
review.
The
committee
has
not
approved
any
external
appointment
where
such
appointment
i
s
considered
to be significant.
The Board’s pol
icy is to
ensure that al
l appointments
are merit
-
based and based
on objective criter
ia, gi
ving all
due regard to
equality
of
opportunity,
and
to
promote
inclusion
and
diversity.
The
Board
notes
that
achi
eving
diversity
in
the
technology
sector
is
challenging,
having
regard
to
the
available
pool
of
i
ndividuals
with
the
r
ight
skills,
experience
a
nd
talent.
Given
t
he
relatively
small
size
of
the
Board
and
the
Group,
the
committee
does
not
currently
set
any
measurable
objectives
for
impleme
nting
a
diversity
policy
but
it
acknowledges
the
role
of
the
Board
in
promoting
diversity,
including
gender
div
ersity,
throughout the
Group.
Currently
there
are
two
female member
s
of
the
Board,
represent
ing
33
%
of
Board
member
ship.
See
page 29
for gender
balance data across the Group
.
In
accordance with
the
UK
Corporate Governance Code
2018,
all
Directors are
subject
to
el
ection
or
annual
re
-
elect
ion
(as
the
case
may
be).
Having
considered
the
contribution
of
each
Director
in
the
relatively
short
time
that
we
have
operated
together as
a
Board
, it is
apparent
to me
that each
Director b
rings individua
l and spe
cific expertise
to the B
oard and
makes
a
valuable contribution to the
Company’s long
-
term succe
ss. I have no he
sitation in recom
mending
them to share
holders
.
I am
satisfied
that the
c
ommittee has
appropriately discharged its duties in the year in accordance with its terms
of reference.
Terms of refer
ence are revi
ewed annually
and are avail
able at
www.
greshamtech
.com/inve
stors
.
Peter
Simmonds
Chair of
the nomi
nation
committee
7
March
2022
Annual statemen
t from the
chair of t
he remuneratio
n committee
Gresham Technologi
es plc
Annual
Financial
Report
202
1
52
Dear share
holder
I am pleased to
introduce the D
irectors’ Rem
uneration Re
port for the year e
nded 31 Dec
ember
2021
.
The
remuneration
c
ommittee
has
met
several
times
during
the
fi
nancial
y
ear
to
formally
oversee
the
compensation matters
for
the
Company.
The
committee
con
sist
s
of
me,
as
chai
r,
and
Mr
P
Simmonds
and
Mr
A
Balchin
as
members.
All
of
these
meeting
s
were
at
tended,
at
t
he
committee’
s
i
nvitation,
by
the
Executive
Directors,
except
that
they
were
not
present
i
n
any
discussions affecti
ng their own remuneration.
F
or
202
1
,
the
committee
has
continued
to
operate
a
remuneration
structure
made
up
of
basic
salary,
performance
-
related
bonuses,
share
options,
benefits
and
pensions.
As
in
previous
years,
a
signif
icant
proportion
of
executive
remuneration
is
based on performance,
designed to al
ign executive pay wit
h shareholder interes
ts.
The committee too
k the foll
owing key deci
sions in
relation to
the year
reported
:
•
impleme
nted a
one
-
off
“
acquisiti
on
suc
cess
”
bonus
in
relat
ion
t
o
t
he
acqui
sition
of
Electra.
The
committee
recom
mended that this
be
awarded
in stages
; th
e first
award made
is
to re
flect the
long
lead
-
time of
significant effort
invested over
many
years
to
deliver
the
transaction
and
t
o
successfull
y
secure
the
strong
fi
nancial
perf
ormance
of
the
acquired
business
in
t
he
critical
first
six
months
of
ownership
;
the
second,
and
smaller
component,
is
to
carry
forward
into
financial
year
2022
to
ensure
certain
success
criteria
are
achieved
relating
to
the re
tention
and
integration
of clients, staff and
technology
. Details o
f this
“
acquisition success
”
bonus in rel
ation to 2021,
and how
it
was calcu
lated,
are set
out in
the fol
lowing
pages;
•
a
ssessed
that Chief
Executi
ve
and Chief
Fi
nancial O
fficer basic
pay
should increase
by
1.25%
for the
year
commencing 1 April 2021
;
•
d
etermined
the
per
formance
me
asures
a
nd
targets
for
vari
able
pay
awards
under
the
Annual
Bonus
Scheme
in
respect of
2021
;
•
d
etermined
the
per
formance
measures
and
targets
for
calcul
ation
of
matching
awards
under
the
LTIP
in
respect of
the three financ
ial
year
s
2021
–
2023
;
•
a
ssessed
t
he
performance
of
Executive
Directors
for
2021
against
the
determined
targets
(which
excluded
the
acquisition
of
Electra)
under
the
Annual
Bonus
Scheme
.
Detail
s
of
perf
ormance
-
related
pay
awards
in
respect
of
2021
and how they were calculated ar
e set out in the
following pages
; and
•
reviewed
and approved the grant
of inaugural
awards
under the
ten
-
year
Performance
Share P
lan
(“PSP”)
whi
ch we
introduced
in
Decemb
er
2020
to
replace
the
expiring
2010 discretionary
S
hare
O
ption
P
lan
2010
.
Awards
made
in
2021 under the PSP
, and how they wer
e calculated, are
set out in the follow
ing pages.
As regards
salary reviews
in
2022
,
t
he
extraordinary circumstances
in today’s
i
nflationary market
mean
that
we
hav
e
adjusted
our
appr
oach
to
optimise
retention
and
fairness
across
roles
and
geographies
.
Previously,
the
system
has
seen
i
ndividual
s
receive
a
percentage
of
salary
increase
wi
th
the
reward
weigh
ted
by
their
in
dividua
l
performance
rating
.
However,
in
2022,
e
mployees will receive a
cost
-
of
-
living
rise
as
a
fixed
amou
nt,
plus
a
performance
-
related
increment
as
a
percentage
of sa
la
ry.
This
ensures
that
junior and
lower
earning members of
the
Group
receive
proportionately greater
rises that
our
top
earners.
Applying
this
approach
,
the
committee
has
assessed
that
Chief
Executive
and
Chief
Financial
Officer
basic
pay
should
increase
by 0.7% and 1.2%
respectively
, effective 1 Ap
ril 2022.
The average r
ise acros
s the gl
obal populat
ion is
expected t
o
b
e 5
%.
In
addition,
the
committe
e
has
determined
perfor
mance
measures
and
tar
gets
for
variable
pay
awards
under
the
Annual
Bonus
Scheme
for
2022
and
under
the
LTIP
in
respect of
the
three
financial
years
2022
–
2024
,
details
of
which
will
be
set
out in future r
eports as appropriate
.
We
remai
n
commit
ted
t
o
ensur
ing
th
at
exec
utiv
e
rewar
d
incen
tivi
ses
po
siti
ve
out
comes
fo
r
shar
ehold
ers
by
r
eflec
ting
strong
linkage w
ith strategy
and a fair,
open and
collaborativ
e corpora
te culture.
I am
satisfied
that the
comm
ittee has
appropriate
ly discha
rged its
duties
in the
year in
accorda
nce w
ith its te
rms of
referen
ce.
Terms of refer
ence are revi
ewed annually
and are avail
able at
www.
greshamt
ech.com/i
nvestors
.
Annual statemen
t from the
chair of t
he remuneratio
n committee
Gresham Technologi
es plc
Annual
Financial
Report
202
1
53
I encourage y
ou to read the D
irectors’ Rem
uneration Rep
ort on the followin
g pages.
Jenny Knott
Chair of
the re
muneration
committee
7
March
2022
DocuSign Envelope ID: BB8DFBB0-2E16-4C63-B3F9-138A47D638FF
Remuneration r
eport
Gresham Technologi
es plc
Annual
Financial
Report
202
1
54
This
report
co
mplies
with
the
r
equirements
of
t
he
Large
and
Medium
-
sized
Companies
and
Groups (Accounts
and
Reports)
Regulati
ons 2008 as
amended i
n
201
9
, the provisions
of the UK Co
rporate Gove
rnance Cod
e (
2018
) and the Listing R
ules.
The report i
s in two
sect
ions:
•
the
Directors’ remuneration policy,
as
approved at
the
general
meeting
held
in
December
202
0
,
which sets
out
the
Company’s c
urrent p
olicy o
n remunerat
ion for
Executi
ve and Non
-
Executi
ve Direct
ors; and
•
the Directors’ Rem
uneration Report, wh
ich sets out details of how the remu
neration policy was imple
mented for the
year
ended 31
December
2021
and how
the
Company
intends for
the
remuneration
policy
to apply
for the
year
ended
31 December
2022
. The
D
irectors’
Remuneration
Re
port
will be
put
to an
adv
isor
y s
harehold
er
vote a
t th
e
forthcoming A
GM.
Directors’
remunerati
on policy
General
princip
les
The po
licy
for
the
Director
s i
s bas
ed on
the
fol
lowing
principl
es,
and t
akes
into
account
prevail
ing
best
practice,
shar
ehold
er
expectations, and the
remuneration of the wider
employee population:
•
ensure remuneration arrangements
support the Group’s busines
s strategy;
•
align interests
of Directors with
those of the shareholder
s;
•
determine remuneration by reference to individual performance, experience and
preva
iling m
arket
conditions
, with
a
view to providing a package appropriate to
the responsibilities i
nvolved;
•
encourage
behaviours
which
will
enhance
the
per
formance
of
the
Group
and
reward
achievement
of
the
Group’s
strategic and financial goals;
and
•
ensure
that
an
appropriate
pr
oportion
of
the
overall
remuneration
package
is
incenti
ve
pay,
which
is
earned
for
t
he
delivery of str
etching performance conditi
ons.
Remuneration
policy t
able
The
table
bel
ow
sets
out
the
Director
s’
remunerati
on
policy
as
approved
by
shareholders
a
t
the
general
meeting
held
on
30
December 2020
. No change
s to the policy are
being propose
d at the
2022
AGM
.
Link to strategy
Operation
Framework
Base salary
Supports the rec
ruitment and
retention of Executive
Directors o
f the cal
ibre
required to deliver the Group’s
strategy.
Base salary is
paid monthly
and reviewed annually, with
any increases applying
from
1 April
.
Base salary and
reviews are asses
sed on both
Group an
d individu
al
performance and, in the case of
new Directors, their
prior experience and
skills.
Considera
tion is a
lso given t
o pay
increases for other em
ployees in the
Group and to
comparable
pay for si
milar
roles at similar companies. Where
approp
riate, the committee will engage externa
l remuneration consultants for
benchmarking.
Pension
Supports the rec
ruitment and
retention of Executive
Directors o
f the cal
ibre
required to deliver the Group’s
strategy.
Pension contribut
ions are
made
by the Company to a
defined
contribution scheme
operated by a third party
provider.
Pension contribut
ions are matched
by the Company up t
o a maximum of 5%
of base salary, in l
ine with other employees in t
he Group. In exceptional
circumstances, such as recruitment of new Directors, the committee has
discretion to authorise
higher Company contributions up t
o a maximum of
10% of base salary in tot
al.
Benefits
Remuneration r
eport
Gresham Technologi
es plc
Annual
Financial
Report
202
1
55
Link to strategy
Operation
Framework
Supports the rec
ruitment and
retention of Executive
Directors o
f the cal
ibre
required to deliver the Group’s
strategy.
Benefits princ
ipally
comprise private healthcare
and death in service
insurance.
Premiums are paid b
y the Company to a
n external broke
r to arrange
cover,
in
line with other Gro
up employees.
These benefits
are standard for all
Group
employees and are not assessed against
performance.
Annual Bonus S
cheme
Rewards and i
ncentivises
the
Executive Direct
ors for
achievement of strategic
objectives as measured by
short
-
term KPIs.
The annual bonus is
calculated after the end of
the financial year b
ased on
predetermined targets.
The annual bonus consists
of a mix of cash and
shares.
The cash element of the
bonus is paid at or around
the time of release
of the
final results. The sha
res are
deferred for two years and
then released.
This scheme is operated
pursuant to the rules of
the
Deferred Shar
e Bonus Plan
2017.
The committee determines the r
elevant performance target
s at the start of
each financial year. The
committee also determines the
annual bonus split
between cash and shares, which by def
ault is 50:50.
Targets are set predominantl
y (at least 75%) i
n relation to fi
nancial measures,
with the b
alance based
on non
-
financial objectives.
The annual bonus for perfor
mance significant
ly ahead of target is up to 100%
of base salary. On
-
target performance will resu
lt in an annual bonu
s of 50% of
base salary. Performance below a t
hreshold set by the committee
will result in
no bonus being paid.
The committee has final di
scretion in deter
mining t
he value
of the
bonus
payment (and, where the committee deems i
t appropriate in the
circumstances, to adjust the mix between cash and deferred shares), based
on its assessment of perfor
mance against the set target
s and as a whole.
Payments and awa
rds are subject to malus and clawback.
The maximum annual bonus payable in r
espect of a year is
100% of base
salary.
Long
-
Term Share Incentive Plan
Rewards and i
ncentivises
the
Executive Direct
ors for
achievement of sustained
long
-
term finan
cial growth and
returns.
Matching
shares ar
e earned
on the deferred shares
awarded under the Annual
Bonus Scheme, depending
on long
-
term financial
performance against
predetermined targets over
the three years follo
wing
the end of the relev
ant
financi
al year.
This plan is operated
pursuant to the rules of
the
Deferred Shar
e Bonus Plan
2017.
The committee determines the t
hreshold, on
-
target and stretch targets on
growth and return measures over t
he three subsequent financial
years.
The matching award is a mult
iple of the deferred
shares awarded under the
Annual Bonus Scheme.
The multiple appl
ied is determi
ned according to
a
reference matrix of multiples base
d on actual performance agains
t growth and
return measures over that three
-
ye
ar period. The matrix of matchi
ng rates is
determined in advance by the committ
ee.
The committee has final di
scretion in determi
ning the matching rates and
the
final award base
d on its assessmen
t of performance a
gainst the set targets
and as a whole after
the end of the three
-
year period.
Matching
awards ar
e subject
to cont
inuous e
mployment
and to ma
lus and
clawback.
The maximum matching award multiple
is 4x the number of def
erred shares.
Performance Share Pla
n
2020
Directly a
ligns
financial
incentives with re
turns to
shareholders. Financial reward
is created throug
h the creation
of shareholder value.
The committee has
discretion to make nil
-
cost
awards to Executive
Directors,
subject t
o the
plan rules, and to deter
mine
appropriate performance
conditions.
The plan is subject t
o rules approved by sharehol
ders in general meeting.
Awards will vest
following t
he later of (
i) a three
-
year period from the date of
grant and (ii) the dat
e on which the committee determines
that the
specified
performance conditions have been sat
isfied. No award or any part
thereof will
vest unless the Company’s share price has increased by at least 20% relative to
the share price at th
e date of grant. A m
aterial proportion of a
n award will be
linked t
o performance conditions directly ali
gned to shareholder value growth.
Awards are subject
to continuous
employment, post
-
vesting holding and malus
and clawback.
The maximum award for an indivi
dual in respect of
a year is 100% of base
salary or
up to 200%
in exceptional circumsta
nces.
Chairman and No
n
-
Executive Director f
ees
Remuneration r
eport
Gresham Technologi
es plc
Annual
Financial
Report
202
1
56
Link to strategy
Operation
Framework
Supports the rec
ruitment
and
retention of individuals of the
calibre required to constitute
an effective Board and
contribute to the Company’s
long
-
term succ
ess.
Fees for Non
-
Executive
Directors a
re set by
the
Board (excluding
Non
-
Executive Direct
ors). Fees
are paid monthly.
A basic fee i
s set for nor
mal duties, commensur
ate with fees
paid for simi
lar
roles in other similar companies, tak
ing account of the time co
mmitment,
responsibilities and committee p
osition(s). Supplementary
fees are paid for
any additional
duties at
fixed day rates. Non
-
Execut
ive Directors
are not
eligible for pensions,
incentives, bonus
or any similar pay
ments
other than
normal out
-
of
-
pocket
expenses incurred on behalf
of the business.
Compensation f
or loss
of office
is not p
ayable to
Non
-
Executive Directors.
Remuneration
policy cons
iderations
Selection
of perfo
rmance measures
The performance measures
under the
Annual Bonus
Scheme and
Long
-T
erm
Share Incentive
Plan are
selected to
reflect the
main KPIs
and str
ategic
priori
ties
for the
Group. Th
e perfo
rmance mea
sures un
der the
Perfor
mance Shar
e Plan ar
e select
ed
to
directly
align
award
s
with
shareholde
r v
alue
growth
and
to
reflect
key
drivers
of shareholder value growth.
The committee’s
policy
is
t
o
set
performance
tar
gets
which
are
both
challenging
and
achievable
and
that
the
maximum
outcomes
are
only
available for out
standing performance.
Performance
condi
tions
applyin
g
to
subs
isting
awards
m
ay
be
amended
or
subst
ituted
by
the
committee
if
an
event
occurs
(such
as
a
change
in
strategy,
a
material
acquisition
or
divestment
of
a
Group
business
or
a
change
in
prevailing
market
conditions)
which
causes
the
committee
to
determine
that
the
measures
are
no
longer
appropri
ate
and
that
amendment
is
required in order that the
y achieve their original purp
ose.
Operati
on of
share p
lans
The
committee
has
disc
retion
to
operat
e
the
Company’s
share
pl
ans
in
accordance
wi
th
their
ter
ms,
including
th
e
ability
to
settle
awards
in
cash
and
to
adjust
the
terms
of
awards
in
the
event
of
any
variation
of
the
Company’s
share
capital
or
any
demerger, delisting,
special dividend or
other relevant event
.
Policy on
Director
shareholdi
ngs
For
the
year
commencing
1
January 2019
and
thereafter,
the
Company expects
Directors,
when
acquiring
shares under
the
Annual Bonus
Scheme or
Long
-
Term Share Incent
ive Plan,
not to di
spose of more
than 50% of
the shares
acquired unt
il the
day
on
which
his
or
her
holdi
ng
has
a
market
value
equal
to
that
of
his
or
her
basic
salary.
Shares
acquired
by
Directors
pursuant
to t
he Perfor
mance Share
Plan
are
subject
to
a two
-
year post
vesting
holding
period duri
ng which
acquired
shares
may
not
be
disp
osed
of.
Any
s
hares
tha
t
are
sold
to
d
isc
harge
the
option
holder’s
fiscal
(including
tax)
obligations
are
not
treated as hav
ing been acqu
ired.
Post
employment,
the
Company
ex
pects
Director
s
not
to
dispose
of
more
than
50%
of
any
shares
held
as
a
result
of
being
acquired
under
the
Annual
Bonus
Scheme,
Long
-
Term
Share
Incentive
Plan
or
Performance
Share
Plan
for
a
period
of
s
ix
months foll
owing termin
ation of employment
. Any shares disposed of during this period shall
be
done in co
-
ordination w
ith the
Company and i
ts bro
kers in
order t
o ensure
an or
derly market
is maintained.
Malus a
nd cl
awback
No malus o
r clawbac
k provis
ions appl
y for
payments or
awards mad
e in re
spect of
financi
al year
2018 or
earlier
.
For
up
to
t
wo
years
following the
payment of
a bonus
under the
Annual
Bonus
Scheme,
t
he
committ
ee
may
r
equire
repayment
of some
or all of
any bonus payment
(including by way
of reduction in
the number of
deferred shares released) in
circumstances
which the
committee considers
appropri
ate,
including a
material
misstatement of
accounts, an
err
or
in
as
sessing performance conditions, or misconduct on the
part of the participant.
For
up
to
two
year
s
afte
r
the
vesting
of
an
award
under
the
Long
-
Term
Share
Incenti
ve
Plan
and
Performance
Share
Pl
an,
the committee may
cancel an award
or require
the participant to
make a
payment to
the Company in
respect of
an award
in
the event of
gross misconduct, fraud, malpractice, a material misstatement of results, a
material breach of
risk management
or
other
circumstances
that,
in
the
opi
nion
of
the
committee,
have
a
su
fficiently
significant
impact
on
the
reputation
of
any
Group bu
siness.
Remuneration r
eport
Gresham Technologi
es plc
Annual
Financial
Report
202
1
57
Legacy arrangements
The
committee
r
eserves
the
r
ight
to
make
any
remunerati
on
payments
and
pa
yments
for
l
oss
of
offi
ce,
notwith
standing
that
they are not in line with the remuneration
policy, where
the terms
of the
payment were
agreed (i)
before the
policy
came into
effect or (ii) at
a time when the
relevant individual was
not a
Di
rector of the
Company
and, in
the opinion
of the
committee,
the
payment
was
not
in
consideration
for
the
individual
becoming
a
Dir
ector
of
the
Company.
For
these
purposes
“payments”
includes the committee
satisfying awards of variable remuneration
and, in
relation to an award over
shares, the terms of the
payment are “agreed” at t
he time the award is gr
anted.
R
ecruitment
The
Company’s
n
omination
commit
tee
is
r
esponsible
for
leading
the
process
for
Board
appo
intments
and
making
recommen
dations to the Board. R
efer to the
N
omination
C
ommittee
Report
for details.
Loss of office payments
There
are
no
predete
rmined
s
pecial
provisi
ons
for
Directors
with
regard
t
o
c
ompensation
in
the
event
of
loss
of
offic
e.
The
remuneration
committee
considers
the
circumstances
of individua
l case
s of
early
termination a
nd o
nly in
exceptional
circumstances
would
the com
mittee
recommend
compensation
payments
in excess
of
the
Company’s contractual
obligations.
Wider
staf
f e
mploym
ent c
ondit
ions
The remuneration committ
ee considers pay and empl
oyment conditions of
other staff members of
the Group when designing
and setting executive remunera
tion. Underpin
ning all p
ay is a
n intention
to be
fair to a
ll staff of
the G
roup, taking
into ac
count
the individual’s se
niority and local m
arket practices
.
Consultat
ion wit
h sharehol
ders
The
remuneratio
n
committee
i
s
committed
t
o
an
ongoing
dialogue
with
s
hareholders
and
seeks
the
views
of
signifi
cant
shareholders when
any major changes
are
being made
t
o remune
ration arrangements.
The com
mittee takes
into account
the
views of significant shareholders
when formulating and implementing the policy.
Consultat
io
n with employees
The Board and th
e remuneration
committee did not
consult wi
th employees when
formulating an
d implementing t
he policy.
Service con
tracts an
d letter
s of appoi
ntment
It is the Company’s policy to offer Executive Direc
tors service contracts te
rmina
ble with a maximum of twelve months’ rolling
notice from either
side.
None of the No
n
-
Executive Dir
ectors have a
service cont
ract. Appoi
ntments are
for three
-
year terms, which may be renewed
by mutual agreement, subject
always to termination
by eithe
r party at any time on three month
s’ notice.
Remuneration
scenarios
The following graphs set out
an illustration of Executive Director pay for
202
2
.
The
potential
reward
opportunities fo
r
202
2
are
based
on
the
remuneration
poli
cy
described
herein.
Proj
ected
values
exclude
t
he
impact
of
share
price
movement
and
t
he
payment
of
dividends
and
actual
outc
omes
may
dif
fer
from
those
shown.
Project
ed
val
ues
al
so
excl
ude
a
ny
pote
ntial
discretionary awards
under the Performance Share Plan 2020.
Three differ
ent remun
eration
scenarios for 202
2
are provided,
as follows:
•
the “min
imum”
scenario
includes
base sa
lary, pens
ion and
benefits
(“fixed
remuneration
”) which
are
the elem
ents of
Executive
Director p
ay that a
re not at
risk;
•
the
“on
-
target”
scenario
includes
fixed
rem
uneration,
pl
us
an on
-
targe
t
bonus
of
50%
of
base
salary
under
the
Annual
Bonus
Scheme
(5
0%
cash
and
50%
shares)
and
an
assumption
that
the
Executive
Director
s
wi
ll
be
awar
ded
Remuneration r
eport
Gresham Technologi
es plc
Annual
Financial
Report
202
1
58
matchin
g
shar
es
th
ree
y
ears
l
ater
under
the
Long
-
Term
Share
Incentive
Plan
based
on
a
2x
multiple
of
the
shares
awarded under the Annual Bonus Scheme; and
•
the
“maximum”
scenario
includes
fixed
remuneration,
plus
a
maximum
bonus
of
100%
of
base
salary
under
the
Annual Bonus Scheme
(50% cash
and 50%
shar
es) and
an assumption that the
Execut
ive Directors will be
awarded
matchin
g
shar
es
th
ree
y
ears
l
ater
under
the
Long
-
Term
Share
Incentive
Plan
based
on
a
4x
multi
ple
of
t
he
shares
awarded under the Annual Bonus Scheme.
Directors’
remunerati
on report
Role of t
he
remuneration comm
ittee
The
re
muneration
committee’s
key
role
is
to
det
ermine
and
operate
a
remunerat
ion
poli
cy
that
supports
the
Company’s
strategy and
promotes
long
-
term sustainable success and aligns
the interests of
Directors and Senior Executives with those
of shareholders.
The committee’s
primary respons
ibiliti
es include:
•
setting
remuneration
incentives
to
att
ract
,
retain
and
motive
Senior
Executives
and
other
key
employees
of
the
quality
required
to
run
the
Company
successfully
and
support
its
strat
egy
and
its
long
-
term
succes
s
,
without
paying
more
than is necess
ary
;
•
approving the total
individual remunerati
on package of each Executive
Director;
•
reviewing and
setting performance targets for incentive plans including annual
bonus and long
-
term share p
lan
s;
•
determining remuneration out
comes in relation to
performance
-
related pay
; and
•
reviewing and ap
proving equity awa
rds under
the Pe
rformance S
hare Plan
.
Details
of
t
he
committee’
s
operation
,
roles
and
respo
nsibili
ties
are
set
o
ut
in
terms
of
ref
erence,
which
are
avai
lable
on
the
Company’s web
site.
Remuneration r
eport
Gresham Technologi
es plc
Annual
Financial
Report
202
1
59
Salary inc
reases in
2021
Mr
I
Manocha
and
Mr
T
Mull
an
r
eceived
a
b
ase
s
alary
incre
ase
of
1.25
%
in
2021
.
The
average
increase
across
Group
employees in 202
1
was
2
%.
There is
no link bet
ween base salar
y and the Company’
s share pric
e.
Variable pa
y in
2021
T
he
var
iable
element
of
Director
pay
in
2021
comprise
s
a
performance
-
based
bonus
under
the
Annua
l
Bonus
Scheme
,
an
equity
award
under the
Long
-
Term Share
Incentive P
lan
and an
equity
award
under
the
Performance
Share Plan
. In
addition,
Director
s ho
lding
share
opti
ons
under
the
now
-
expired Share
Option
Plan 2010
(see
page
61
for details)
are
included in this
section as they are considered to consti
tute variable pay
unti
l such time as the
options are exercised
(subject to vesting)
.
Performance
-
based bonus under
the
Annual
Bonus Scheme
The
a
nnual bonus awards
in respect of
2021
for Exe
cutive Director
s are set out in the table below. These awards have been
initially
as
sessed
by the
committee
by
ref
erence to
predetermined annual
performance targets linked
to Group
obj
ectives and
individual p
erforman
ce objectiv
es
.
Measure
Weightin
g
Attainment (
CEO)
Attainment (
CFO)
Clareti
ARR
30
%
94
%
94
%
Group revenue
15
%
110
%
110
%
Clareti ca
sh EBITDA
15%
105
%
105
%
Group adjust
ed EBITDA
15
%
118
%
118
%
Personal objecti
ves
25
%
84%
86%
Bonus Outcome (
% of base)
49.
6%
49.
8%
Bonus Payment (
£)
£
135,057
£
83,173
One
-
off discretionar
y bonus relating t
o the Electra acquisi
tion
In light of the success
ful and highly strateg
ic acquisition of Electra
in the year, the remu
neration comm
ittee considere
d that it
was appropriate to exception
ally award a one
-
off
bonus to
Executive Directors
and a
small number
of
other
senior employees
of
the
Company
who
were
instrumental
to
the
success
of
the
acquisition
(and
the
associated
fundraise
)
and
financial
performance
in
the
period
from
acquisiti
on
until
year
end.
In
making
this
determination,
the
comm
ittee
recognised
the
importanc
e
of
exercising
pay
restraint
whilst
al
so
providi
ng
fair
reward
for
the
exceptional
pr
ogress
towards
strategic
and
financial goals
delivered
by
the
acquisition. Details
of
the
one
-
off
discretionary
bonus
in
2021
to
Executive
Directors
ar
e
set
out in the table
below.
Mea
sure
CEO
CFO
Electra acquisi
tion and fundr
aise
100,000
25,000
Electra
FY21
financial performance
30,000
28,000
Total
130,000
53,000
In
2022,
the
remuneration
committee
intends
to
award
an
exceptional
bonus
to
Executive
Di
rectors
an
d
a
small
number
of
other employees based on and subject
to successful achievement of
certain key integration deliverables.
Details of
any such
awards in 2022 to Executi
ve Directors will
be disclosed in next
year’s report.
Equity awar
ds under t
he Long
-
Term Share I
ncentive Plan
Awards
were
made
under
the
Long
-
Term
Share
I
ncentive
Plan
in
2021
in
respect
of
perform
ance
in
financial
year
2020
,
detai
ls of
which
are set
out
on
page
60
.
Awards
were
gr
anted
in
accordance
wit
h
the
rules
of
the
plan
and
the
re
muneration
policy.
Equity awar
ds under t
he Performan
ce Share Pla
n
Remuneration r
eport
Gresham Technologi
es plc
Annual
Financial
Report
202
1
60
Awards were
made under
Performance
Share Plan
in 2021.
These wer
e the f
irst awar
ds
under this plan,
which was adopted
by
shareholders
in
December
2020.
Details
of
the
awards
are
set
out
on
page
61
.
Awards
were granted
in
accordance with
the rules of the pla
n and the rem
uneration policy
.
Single fi
gure for t
otal remunera
tion (audit
ed info
rmation)
The
fol
lowing
table
sets
out
the
singl
e
fi
gure
f
or
tot
al
r
emuneration
for
Directors
for
the
financial
years
ended
31
Dec
ember
2021
and 2020
:
31 December 2021
Base salary /
fees
Benefits in
kind
Performance
-
related
cash
bonus
Discretionary
bonus relating
to acquisition
Pension
IFRS 2 share
-
based payment
charge
Performance
-
related
share
bonus
Total
2021
£
£
£
£
£
£
£
£
Executive Director
s
I Manocha
271,717
1,887
67,529
130,000
13,574
64,813
67,528
617,048
T Mullan
166,595
3,103
41,587
53,000
8,317
51,367
41,586
365,555
Non
-
Executive Director
s
P Simmonds
80,000
-
-
-
-
-
-
80,000
A Balchin
45,000
-
-
-
-
-
-
45,000
J Knott
45,000
-
-
-
-
-
-
45,000
R Wandhöfer
40,000
-
-
-
-
-
-
40,000
648,312
4,990
109,116
183,000
(1)
21,891
116,180
109,114
1,192,603
(1)
Paid 100% in cash bonus.
(2)
Included
within
total remuneration
are
fixed
payments of
£
675,193
and
variable
payments of
£
517,410
.
31 December 2020
Base salary /
fees
Benefits in
kind
Performance
-
related
bonus
Discretionary
bonus relating
to acquisition
Pension
IFRS 2 share
-
based payment
charge
Performance
-
related
share
bonus
Total
2020
£
£
£
£
£
£
£
£
Executive Director
s
I Manocha
267,114
2,327
55,899
-
13,350
25,789
55,8
98
420,377
T Mullan
163,850
2,840
34
,226
-
8,180
42,506
34,226
285,828
Non
-
Executive Director
s
P Simmonds
(appointed 1 Aug 2020)
33,333
-
-
-
-
-
-
33,333
A Balchin
41,102
-
-
-
-
-
-
41,102
J Knott
(appointed 12 Oct 2020)
10,096
-
-
-
-
-
-
10,096
R
Wandhöf
er
(appointed 12 Oct 2020)
8,974
-
-
-
-
-
-
8,974
K Archer
(resigned 30 Sept 2020)
60,000
-
-
-
-
-
-
60,000
I Joss
(resigned 31 Oct 2020)
33,333
-
-
-
-
-
-
33,333
617,802
5,167
90,12
5
-
21,530
68,295
90,124
893,043
(1)
Included within total remuneration are fixed payments of
£
644,499
and variable payments of
£
248,544
.
IFRS
2 sha
re
-
based
payment
c
harges
referred to
in the
table
above
are
accounting
charges
that are
calculat
ed
in
accordance
with applicabl
e accounting rules as
set out in
note
2
3
of
the Group
f
inancial statements. These
charges do not
represent cash
payment
s. Benefits in kind i
nclude provision of private healt
hcare and death
-
in
-
service insurance.
Interests in op
tions
and conditional share awards
(audited inform
ation)
The
Group
operated
the
Long
-
Term
Share
Incentive
Plan
and
the
Performance
Share
Plan
(as
sho
wn
in
the
remuner
ation
policy) during the
year,
as
wel
l as
t
he
Share
Option Plan 2010
(
whi
ch
is
closed
for
new
awards
)
.
The
i
nterests
of the
Directors
under
those
plans
at
the start
and
end
of
the
year
are
as
set
out
in
the
table
s
below.
The interests
of
the D
irectors to
subs
cribe
for
or
acquire
ordinary
shares
have
not
changed
since
the
year
end.
Fur
ther
details
concerning
the
plans,
including
vesti
ng
conditions, can be found in note
22
of
the
Group fina
ncial
statemen
ts.
Long
-
Term Share Incenti
ve Plan
The fo
llowing
table
sets
out
the
outstanding
awards
to
Directors
pursuant to
the
Long
-
Term
Share I
ncentive
Plan
.
Vesting is
subject
t
o
performance
and
retention
conditions
in
accordance
with
the
rules
of
the
plan
.
No
awar
ds
are
made
t
o
Non
-
Executive
Direct
ors.
Remuneration r
eport
Gresham Technologi
es plc
Annual
Financial
Report
202
1
61
A
wards
at 1
January
2021
Granted
Cancelled
Exercised
Awards
at
31
December
2021
Date of
grant
Exercise
price
Date first
exercisable
Expiry date
Executive Director
s
I Manocha
(1) (2)
104,008
-
-
-
104
,
008
20
.03.20
nil
20.03.23
20.03.30
I Manocha
(1) (2)
-
137,937
-
-
137,937
31.03.21
nil
31.03.24
31.03.31
T Mullan
(
1) (
2)
67,532
-
-
-
67,532
20.03.20
n
il
20.03.23
20.03.30
T Mullan
(
1) (2
)
-
84,456
-
-
84,456
31.03.21
n
il
31.03.24
31.03.31
171,540
222,393
-
-
393,933
(1)
Options over which the Director has agreed to pay any
employer’s National Insurance arising from the exerci
se of the options.
(2)
Yet to vest.
Performance
Share
Pla
n 2020
The foll
owing t
able set
s out
the
number of
outs
tanding awards
granted to
Directors
pursuant to
the
Performance
Share
Pl
an
2020
. Vesting
is
subject to
perform
ance c
onditions
in acco
rdance
with the
rules
of the
pl
an
.
There are no outstanding awards
to Non
-
Executive Directo
rs.
Awards at 1
January
2021
Granted
Cance
lled
Exercised
Awards at
31
December
2021
Date of
grant
Exercise
price
Date first
exercisable
Expiry date
Executive Director
s
I Manocha
(1) (2)
(3)
-
203
,00
0
-
-
203
,00
0
21.1
0.2
1
nil
21.1
0.2
4
21.1
0.3
1
T Mullan
(3)
-
75,000
-
-
75,000
21.
10
.2
1
nil
21.1
0.2
4
21.1
0.3
1
-
278
,
00
0
-
-
278
,
00
0
(1)
Awards
over which the Director has agreed to pay any employer’s National Insurance arising
upon vesting
.
(2)
The share award includes a base award of 135,000
shares and an additional potential award of up to 68,000 shares in the event
of exceptional performance.
(3)
Yet to vest.
Share Optio
n Plan 2010
The foll
owing tab
le sets
out
the
number
of
outstandi
ng options
granted
to Directors pursuant to the
Share
Option
Plan
2010
.
Vesting
is
subject
to
performance
condi
tions
in
accordance
with
the
rules
of
the
plan
.
There
ar
e
no
outstanding
awards
to
Non
-
Executive
Directors.
Options at 1
January
2021
Granted
Cancelled
Exercised
Options at
31
December
2021
Date of
grant
Exe
rcise
price
Date first
exercisable
Expiry date
Executive Director
s
I Manocha
(1) (2)
1,500,000
-
-
-
1,500,000
01.06.15
111p
01.06.18
01.06.25
T Mullan
(2)
200,000
-
-
-
200,000
14.03.18
227p
14.03.21
14.03.28
T Mullan
(3)
100,000
-
-
-
100,000
28.03.19
97p
28.03.22
28.03.29
1,800,000
-
-
-
1,800,000
(1)
Options over which the Director has agreed to pay any
employer’s National Insurance arising from the exerci
se of the options.
(2)
Vested.
(3)
Yet to vest.
Payments for
loss of of
fice (audi
ted informat
ion)
No payments
for l
oss of o
ffice we
re made dur
ing the
year end
ed 31 December
2021
(
2020
: £nil).
Percentage ch
ange in CEO re
muneration
The
table
bel
ow
s
ets
out
the
in
crease
in
t
he
t
otal
remuneration of
the
CEO
and our
staff (excluding
pr
omotions
where
relevan
t)
in
2021
.
The comparativ
e is
all staff (arou
nd
1
50
people) because
this group is
considered to be
the most
relevant, due to
the
structure of total r
emuneration.
Remuneration r
eport
Gresham Technologi
es plc
Annual
Financial
Report
202
1
62
Change in
base
salary
(effective
April
202
1)
2021
bonus
payment
(%
of
base salary
)
CEO (I
Manoch
a)
1.25
%
97.5
%
All staff
2%
10
%
Relative
importance
of spend on
pay
The
chart
below
shows
t
he
total
D
irectors
remuneration
compared
to
total
employee
pay
cos
t
and
prof
it
before
tax
(for
continuing
operati
ons
and
before
exceptional
items
but
incl
uding
distri
butions)
for
the
five
years
ended
31
December
2021
.
There were no s
hare buy backs
in the year.
Comparison of
Company perfo
rmance
The
gr
aph
be
low
s
hows
th
e
C
ompany’s performance,
as
measured
by
total
shareholder
retur
n,
for
each of
the
l
ast
si
x
fi
nancial
years
in
terms
of
the
change
in
value
(with
di
vidends
reinvested)
of
an
initial
investment
of
£100
on
31
December
201
0
in
a
holding of the Company’s shares against the corresponding total shareholder ret
urn in a hypothetical holding of shares in the
FTSE
TechMark
All
-
Share
Index.
The
F
TSE
TechMark
All
-
Shar
e
Index
was
s
elected
as
it
re
presents
a
broad
equi
ty
market
index in w
hich the C
ompany
is a
constituent member.
Remuneration r
eport
Gresham Technologi
es plc
Annual
Financial
Report
202
1
63
Change in CEO
pay
The graph below
shows the singl
e total f
igure of r
emuneration for
the role o
f CEO for the
current and p
revious seven
years.
The graph above
is derived
from the data
in the fol
lowing table:
2016
2017
2018
2019
2020
2021
I Manocha
Base salary
250,000
254,000
259,840
261,245
267,114
271,717
Benefits in k
ind
1,983
1,491
2,882
2,223
2,327
1,887
Bonus
-
20,400
-
59,806
111,797
265,057
Pension
12,500
12,765
12,980
33,
056
13,350
13,574
IFRS 2
share
-
based payment charges
75,441
220,233
73,744
-
25,789
64,813
Total
339,924
508,889
349,445
356,330
420,377
617,048
Service cont
racts
Mr
I
Manocha
has
a
servi
ce
ag
reement
dated
15
F
ebruar
y
2015,
whic
h
is
termi
nable
by
twe
lve
mo
nths’
roll
ing
n
otice
from
either
side.
Mr
T
Mull
an’s
service
agreement
is
dat
ed
5
February
2018
and
is
ter
minable
by
six
months’
roll
ing
notice
from
either side.
Remuneration r
eport
Gresham Technologi
es plc
Annual
Financial
Report
202
1
64
Each
of
the
Non
-
Executive
Direc
tors
has
a
letter
of
appoi
ntment.
Appoint
ments
are
for
three
-
year
terms,
which
may
be
renewed by m
utual agreeme
nt, subject always to term
ination by either party at an
y time on three mo
nths’ notice.
All
Director
service
contra
cts
and
letters
of
appointment
are
available
for
inspection
by
shareholders
at
the
Company’s
registered office, Alderm
ary House, 10
–
15 Queen Street, London EC4N 1TX.
Remuneration
resolution
s at the
last AGM
At the l
ast AGM, hel
d on
10
May
2021
, the followi
ng resolution
was moved:
Resolution
For
(1)
Against
Withhe
ld
Remuneratio
n
R
eport
95.26
%
4.7
4%
0.0
0%
(1)
Includes votes giving the Chairman discretion.
External ad
visers
The
committee
seeks
professional
advice
where
it
consi
ders
it
appropr
iate
to
do
so
.
In
the
year
,
t
he
Group
continued
to
engage
Grant
Thornton
on
the
implemen
tation
of
the
new
Performance
Share
Plan
2020
wit
h
total
fees
paid
in
the
year
of
£7,000
(2020: £24,000)
.
Jenny Knott
Chair of
the re
muneration
committee
7
March
2022
DocuSign Envelope ID: BB8DFBB0-2E16-4C63-B3F9-138A47D638FF
Directors’
report
Gresham Technologi
es plc
Annual
Financial
Report
202
1
65
Registere
d number 01
072032
The Directors
present thei
r report
and the Group fi
nancial st
atements for t
he year ended 3
1 December
2021
.
The Group’s business
activities
, together with
the factors likely to
affect i
ts future
d
evelopment,
performance
and
position,
are
set
out
within
t
he
Strategic
Report.
Discl
osures
in
respect
of
principal
risks
and
uncertainties,
people
(incl
uding
employees
and
disabled
employees),
gl
obal
greenhouse
gas
emissions
and
product
development
(
incorporating
research
and
development activities) are incl
uded within the Strategic Report under section 414(c) of the Companies Act 2006. In addition,
note
21
to
the
financial
statements
includes:
the
Group’s
objectives;
policies
and
processes
for
m
anaging
its
capital;
its
financial
risk
management objectives;
details
of
its
financial
instruments
and,
if
any,
hedging
activities;
and
i
ts
exposures
to
credit
risk
and liquidity
risk. The
Stat
ement
of C
orporate
Governance
beginning
on
page
43
forms
part
of the
Directors’ Report.
Directors
and offi
cers
The
Direc
tors
who
served
on
t
he
Board
during
the
y
ear
are
set
out
on
page
42
.
Mr
J
Cathie
served
as
Company
Secretary
throughout the
year.
Results and
dividends
The
Group
’s
loss
for
the
year,
after
taxation,
attributable
to
equity
shareholders
amounted
to
£
1,012
,000
(2020:
profit
£
1,261,000
.
A
final dividend
of
0.75
pence per
ordinary
share (
2020
:
0.
7
5
pence)
has
been
recommended
by
the
Directors.
There has been n
o interim di
vidend (
2020
: £nil).
If approved
by t
he passing
of
a
resolution
at t
he fort
hcoming Annual
General
Meeting,
it i
s int
ended to
pay
the f
inal di
vidend
on 19
May
2022
to all
shareholders
on
the
re
gister
at
close
of
business
on
22
Apr
il
2022
.
The
ex
-
dividend
date will
be 21
Apr
il
2022
.
The profit
for the year
has been tr
ansferred to
reserves.
Going conc
ern and
viabil
ity st
atement
The
Group
has
suf
ficient
financial
resources
together
with
good
relationships
with
a
number
of
cus
tomers
and
suppliers
across
different geographic
areas
and
industries. The
Group
has
ac
cess
to
a strong
underlyi
ng
cash
f
low
arising
from
long
-
established maintenance
businesses
with long
-
standing
blue
-
chip customers
and
st
rong
growth
prospects
being
realised with
it
s flagship solution, CTC, and it
s other Clareti soluti
ons.
After
making
enquiries,
the
Directo
rs
have
a
reason
able
expectat
ion
that
t
he
Company
and
the
Gr
oup
have
adequat
e
resources to
continue in
operational ex
istence for a
period of a
t least twelve
month
s from the
date of approval of the financial
statements. For this reason, they conti
nue to adopt the going concern basis in pr
eparing the Annual Financial Report
2021
.
Refer to
page
46
for the viability statement r
equired pursua
nt to Provision C
2.2 of the
Code.
Post balance
sheet event
s
Even
ts after the reporting d
ate are set out in
note
28
to the fin
ancial stateme
nts.
Significant
relatio
nships
In
2021
,
the
Group
had
one cu
stomer
relationship
conside
red to
be
individually
significant
to
the G
roup. T
his rel
ates to APAC
operations
and
generates
a
mix
of
revenues
from
Cl
areti
Solutions
and
Other
Solutions,
including
strategic
non
-
recurring
revenues.
Revenues
from
t
his
customer
relationship
individually
exceeded
10%
of
the
Group’s
revenue
in
2021
.
In
the op
inio
n
of the Directors,
the Group does not have any
other individuall
y significant rel
ationships.
Fostering relat
ionships with st
akeholders
Refer to
page
24
for details of the Comp
any’s engage
ment with stak
eholders.
Directors
and their
interes
ts
Directors’
report
Gresham Technologi
es plc
Annual
Financial
Report
202
1
66
The
Di
rector
s
at
31
December
2021
and
their connected
persons’
interests
in
the
share
c
apital
of
the
Company
(all
benefic
ially
held, other than w
ith respect to options
to acquire ordinary shares
which are detailed in
the analysis of
options included in
the
Director
s’ Remunerat
ion Repor
t) are
as fol
lows:
Ordinary sh
ares of 5
pence each
31 Dec 2021
1 Jan 2021
P Simmonds
92,500
30,000
A Balchin
17,608
8,233
J Knott
31,250
-
R Wandhöfer
19,653
13,403
I Manocha
113,034
88,685
T Mullan
34,063
19,826
There have been
no further c
hanges in the
Directors’
interests
disclosed above
from 31 December
2021
to
4 March 2022
.
Directors’
liabi
lities
The
Company
has
granted
an
indemnity
t
o
one
or
more
of
its
Direct
ors
against
li
ability
in
res
pect
of
proceedings
b
rought by
third parties
, subject
to th
e condition
s set
out in
section
234 o
f the
Companie
s Act
2006.
Such q
ualifying third
party indemnity
provision r
emains in
force as
at t
he date
of approving
the Dir
ectors’ Report
. Director
s’ and
officers’
liability
insu
rance with an
indemnity
limit of £10
m has be
en purch
ased in ord
er to minim
ise the p
otential imp
act of pro
ceedings
against D
irectors.
Major i
ntere
sts in
shares
The
Company
has
been
notifi
ed,
either
directl
y
or
in
respon
se
t
o
a
secti
on
793
reques
t
made
on
it
s
behalf,
of
t
he
foll
owing
interests re
presentin
g 3% or m
ore of the
issued o
rdinary sh
are capital
of the Com
pany as
at
25
February
2022
:
Ordinary sh
ares
of 5 pence each
Percentage
h
eld
(%)
Kestrel Invest
ment Partners
16,084,580
19.29
Tellworth
Investments
8,305,526
9.96
Canaccord Genui
ty Wealth
Management
7,528,288
9.03
Schroder Investment
Management
7,098,000
8.51
JO Ha
mbro Capit
al Manageme
nt
5,593,250
6.71
Amati Global Inv
estors
4,512,500
5.41
Herald Inves
tment Management
3,471,274
4.16
Mrs M A Gr
een
3,073,290
3.69
Jupiter Asset Management
3,036,000
3.64
EFG Harris Allday
2,578,005
3.09
Political
donations
No donati
ons were mad
e in
2021 or
2020
.
Social and
community
No social
or communi
ty rev
iew has be
en perfor
med for
2021 or
2020
.
Special busi
ness at t
he Annual Genera
l Meeting
The special b
usiness to be
conducted at
the AGM includes:
•
the
Directors’
authority
to
allot
shares
and
the
partial
disapplication
of
pre
-
emption
right
s.
Resolutions
will
be
proposed
to r
enew the
authori
ties
given
to
the
Directors
to
allot
and
grant
rights
over
the
unissued
share
capital
up
to
a
maximum
nominal
amount
of
£1,389,407
representing
one
-
third
of
the
issued
ordinary
share
capital
as
at
4
March
2022
and
to
all
ot
and
grant
rights
over
shares
for
cash
up
to
a
maximum
nominal
amount
of
£208,411
,
representing 5%
of
the
issued
ordinary share
capital
as
at
4
March
2022
,
without
first
making a
pro
rata
offer
to
all
existing shareholders
;
Directors’
report
Gresham Technologi
es plc
Annual
Financial
Report
202
1
67
•
the re
newal of
the
authority
of
the Company
to make
market
purchases of
its
own or
dinary shares
. The
Company’s
authority
will
be
limited
to
8,336,446
ordinary
shares
which
r
epresents
10%
of
the
issued
ordinary
share
capital
of
the Compa
ny as at
4 March
2022
; and
•
the authority to ca
ll meetings (othe
r than Annua
l General Mee
tings) on not less
than 14 clear d
ays’ notice.
In the opinion of th
e Directors, the p
assing of these
resolutions is in th
e best interests o
f the shareholde
rs.
Additional
informati
on for s
harehol
ders
At 31 December
2021
, the Company
’s issued share
capital compr
ised:
Number
Nominal
value
£
% of to
tal
share capital
Ordinary sh
ares of 5
pence each
83,364,458
4,168,223
100%
The
Company is
not
aware
of
any
agr
eements
be
tween
sharehol
ders
that
may
result
in
restr
ictions
on the
transf
er
of
securities
and for voting ri
ghts.
During
the
year
ended
31
December
2021
,
certain
share
options
granted
under
the
Share
Option
Scheme
2010
were
exercised and
as a
result the
Compa
ny
issued
83,000
ordinary shares
(2020: 1,900,000
),
such sha
res
ranking
pari
passu
with
ordinary shares then
in issue.
In
June
2021
,
the
Company
iss
ued
13,125,
000
ordinar
y
shares
at
a
price
of
160
pence
(ranking
par
i
passu
with
existing
shares in issue)
in connection
with
the acq
uisition of Electra.
See note 22
of the
Group fina
ncial sta
tements for
further
detail
s.
Ordinary
shares
On a poll
, every
m
ember present in person or by proxy and entitled to vote shall
have one vote for every ordinary share held;
o
n a
s
how of
hands
at
a
general
meeting
of
the
Company,
every
holder
of
ordi
nary
shares
present
in
person
and
entitled
to
vote
shall
have
one
vote.
The
not
ice
of
the
general
meeting
spec
ifies
deadl
ines
for
exercisi
ng
voting
rights
ei
ther
by
proxy
notice or present in person or by proxy in relation to resol
utions to be passed at general meeting. All proxy votes are count
ed
and
t
he
numbers
for,
against
or
withhel
d
in
relat
ion
to
each
resol
ution
are
announced
at
the
Annual
General
Meeting
and
published on the Group’s
website after the meeti
ng.
There are
no restri
ctions on
the tr
ansfer of
ordinary
shares i
n the Company
other th
an certain
restric
tions that
may
from
time
to
time
be
imposed
by
laws
and
regulations
(for
example,
insider
trading
laws
and
market
requireme
nts
relating
to
close
periods).
The
Company’s
Art
icles
of
Association
may
o
nly
be
amended by
a
special
resolution at
a
general
meeting
of
t
he
s
h
areholders.
Director
s are r
eappointe
d by ordi
nary r
esolutio
n at a
general
meeting o
f the
shareholder
s. The
Board may
appoint
a Direct
or
but anyone
so appointed
must
be
elected by
an ordinary resolution
at
the
next Annual
General Meeting. A
ny D
irector who
h
as
held office for
more than
three years
since their last
appointment by
shareholders at a
general
meeting
must offer
themselves
up for re
-
election at
the following Annual
General Meeting.
Significant
interest
s
Director
s’
interest
s
in
t
he
share
capital of
the
Company
are
shown
in
the
table
on
page
66
.
Major
interests
(being
those
greater
than 3%) of w
hich the Com
pany has be
en notified are sh
own on page
66
.
Change of co
ntrol
In the event of a
change of control of the Company, employee share options granted u
nder the Share
Option Scheme
2010
,
the Deferred Share Bo
nus Plan 2017
and the Performance
Share Plan 2020
will
either
accel
erate
vesting,
wil
l be
rolle
d over
to the acquiring company’s shares or will lapse, depending on the circumstanc
es of the change. Further details are provided
in note
23
to th
e Group finan
cial statements
.
Directors’
report
Gresham Technologi
es plc
Annual
Financial
Report
202
1
68
There
are
no agr
eements
between
the
Group a
nd i
ts Di
rectors
or
employees
providi
ng f
or
compensation
for
loss
of
office
or
employment (whether through resi
gnation, purported r
edundancy or otherwise)
because of a takeover bid.
Power of Dir
ectors to
issue or buy
back shares
The
Di
rectors’
exist
ing
a
uthorities
to
allot
and
grant
ri
ghts
over
the
unissued
share
capital,
to
all
ot
an
d
gran
t
r
ights
over
the
unissued share
capi
tal for
cash withou
t firs
t
making
a pro
rata offe
r
to
all
existing
shareholders
and to
make
market
purchases
of
shares
in
the
issued
share
capital
of
the
Company
are
due
to
expire
at
the
upcoming
AGM.
Resolut
ions
will
be
put
to
shareholders at the upcoming AGM of the Company
to renew previou
s authorities gran
ted.
Information
to be includ
ed in the An
nual Financ
ial Report
2021
As
part
of
our
req
uirements
under
the
FCA
Listing
Rules
(“LR”),
the
i
nformatio
n
requi
red
to
be
di
sclosed
by
LR
9.8.4
R
can
be found in the fol
lowing loca
tions in this Annual Financ
ial Report
2021
:
LR 9.8.4 R
Topic
Location
(1)
Interest capitalised
Not applica
ble
(2)
Publication of
unaudited fina
ncial informati
on
Not applica
ble
(4)
Details of
long
-
term incentive scheme
s
Not applica
ble
(5)
Waiver
of
emoluments by a direc
tor
Not applica
ble
(6)
Waiver
of fut
ure emol
uments
by a d
irector
Not applica
ble
(7)
Non
-
pre
-
emptive issues of equity f
or cash
Page
122
(8)
Item (7) in relation to
major subsidiary u
ndertakings
Not applica
ble
(9)
Parent
participati
on in a placing by a li
sted subsidiary
Not applica
ble
(10)
Contracts of
signifi
cance
Page
65
(11)
Provision of s
ervices by a c
ontrolling shar
eholder
Not applica
ble
(12)
Shareholder waivers
of dividends
Not applica
ble
(13)
Shareholder waivers
of future dividends
Not applica
ble
(14)
Agreements with con
trolling shar
eholders
Not applica
ble
All the
informati
on cross
-
referenced above is hereby
incorporated by refere
nce into this Directors’ Rep
ort.
Auditor
A
resolution to re
appoint BDO LL
P as the Group’s a
uditor will be put to the forthcom
ing Annual Ge
neral Meeting.
Directors’
statement
as to
disclosure
of infor
mation to
the audit
or
The
Directo
rs
who
wer
e
members
of
the
Board
at
the
time
of
approving
the
Dire
ctors’
Report
are
listed
on
page
42
.
Having
made enq
uiri
es of
fello
w Dire
ctors
and of
the
Group’
s audi
tor,
each o
f the
se Dir
ectors
confi
rms t
hat:
•
to
the
best
of
each
Director’s
knowledge
and
belief,
there
is
no
information
(that
is,
information
needed
by
t
he
Group’s
auditor in connecti
on with preparing it
s report) of whic
h the Group’s auditor i
s unaware; and
•
each Director has taken all the steps a Director might reasonably be expected to have taken to
be aware of relevant
audit information and
to establish
that the Group’s auditor is awa
re of that informa
tion.
By order
of the
Board
Jonathan Cathie
Company Secre
tary
7
March
2022
DocuSign Envelope ID: BB8DFBB0-2E16-4C63-B3F9-138A47D638FF
Statement of direc
tors’ responsibil
ities
Gresham Technologi
es plc
Annual
Financial
Report
202
1
69
Directors’
responsib
ilitie
s
The
Directors are
r
esponsible for
pr
eparing the
Annual Financial
Report
2021
in
accord
ance
with
applicable
law
and
regulations.
Company la
w requi
res the
Direct
ors t
o prepar
e fin
ancial
statement
s for
each f
inancial
year.
Under
that
law,
the Dir
ectors
are
re
quired
to
prepar
e
the
Group
f
inancial
statements
in
accordance
with international accounting standards
in
conformit
y
with
the
requirements of
the
Companies Act
2006
and
in
accordance
with
international
financial
reporting
standards
s
issued
by
the
Internat
ional
Accounting
Standards
Board
(ASB)
and
have
elect
ed
to
prepare
t
he
Company
financial
statements
in
accordance
with
Financial
Report
ing
St
andard
100 “Application
of Financial
Reporting Requirements”
and
Financial
Reporting
Standard 101
“Reduced Dis
closu
re Framework” an
d applicable law. U
nder compa
ny law, the Directo
rs must not app
rove the
financial
statements
unless
they
are
satisfied
that
they
give
a
true
and
fair
view
of
the
state
of
affairs
of
the
Group
and
C
ompany
and of the profit
or loss of
the Gro
up for that
period.
In preparing the
se financial statem
ents, the Dire
ctors are require
d to:
•
select suitable accounting poli
cies and then apply them consistently;
•
make ju
dgement
s and
account
ing es
timate
s that
are
reasona
ble a
nd pru
dent;
•
state whether
they h
ave
been prepared
in accordance with
IFRSs
as
adopted
by the
European Union, subject
to
any
materi
al dep
artur
es dis
closed
and e
xplain
ed in
the f
inanci
al st
atement
s; an
d
•
prepare
a
Strategic
Report,
Directors’
Report
and
Director
s’
Remunerati
on
Report
which
comply
with
the
requirements of the
Companies A
ct 2006.
The Directors
are responsible for
keeping adequate
accounting records that
ar
e sufficient to
s
how and
expl
ain the
Company’s
transactions
and
disclose
with
reasonable
accuracy
at
any
time
the
financial
position
of
the
Company
and
enable
them
to
ensure
that
the
financial
stat
ements
comply
with
the
Companies
Act
2006
and,
as
regards
the
Group
financial
stat
ements,
Article
4 of
the I
nternation
al Account
ing Sta
ndards (“
IAS”) Regu
lation.
They ar
e also
respon
sible f
or safeguarding the assets
of the Company and hence for t
aking reasonable steps f
or the prevention and
detection of fraud and
other irregulari
ties.
The
Directors
are
r
esponsible
for
ensu
ring
that
the
Annual
Fi
nancial
Report
2021
,
taken
as
a
whole,
i
s
fair,
balanced
and
understandable
and
provides
the
inf
ormation
necessary
for
shareholders
t
o
assess
the
Group’s
position
and
perfor
mance,
business model and strategy.
Websit
e publ
icat
ion
The
Directors
are
responsible
for
ensuring
the
Annual
Fi
nancial
Rep
ort
2021
is
made
available
on
a
website.
Financial
statements
are
published
on
the
Company’s
website
i
n
accordance
with
legislation
in
the
United
Kingdom
governing
the
preparation and
disseminat
ion
of financial
s
tatements, which
may vary
f
rom
legislation in
other
jurisdictions. The
maintenance
and
integrity
of
the
Company’s
websit
e
is
the
responsibilit
y
of
the
Directors.
The
Direct
ors’
responsibili
ty
also
extends
to
the
ongoing integrity
of the financial
statements contained therei
n.
Directors’
responsib
ili
ties pursuant to DTR
4
The Directors
confirm to
the best of
their knowled
ge:
•
the
Group
fi
nancial
stateme
nts
have
been
prepared in
accordance
with
IFRSs
in accor
dance
wi
th IFRS as
issued by
IASB
and Article 4
of the I
AS Regulation and
give a
true and f
air view
of the asset
s, liabil
ities, fi
nancial positi
on and
profit and loss
of the Group; and
•
the
Annual
Financial
Report
2021
includes
a
fair
review
of
the
development
and
performance
of
the
busine
ss
and
the
financial
position
of
the
Group
and
the
Parent
Company,
together
with
a
description
of
the
principal
risks
and
uncertainties that
they face.
On behal
f of
the Boa
rd
Ian Manoc
ha
Chief Exe
cutive
7
March
2022
DocuSign Envelope ID: BB8DFBB0-2E16-4C63-B3F9-138A47D638FF
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t auditor’s repo
rt
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70
Opinion
on the
financi
al stat
ements
In our opinion:
•
the financial stateme
nts give a true and fair
view of the state of
the Group’s and of the Parent Company’s affairs as
at 31 December 2021 and of the
Group’s profit for
the year then ende
d;
•
the
Group
financial
statements
have
been
properly
prepare
d
in
accordanc
e
with
UK
adopted
internation
al
accounting
standards;
•
the
Parent
Company
financial
statements
have
been
properly
prepared
in
accordance
with
United
Kingdom
Generall
y
Accepted Acco
unting Pra
ctice; an
d
•
the fina
ncial statemen
ts have been p
repared in acc
ordance with th
e requiremen
ts of the Com
panies Act 200
6.
We
have
au
dite
d
the
f
inanc
ial
s
tateme
nts
of
Gresha
m
Techno
logi
es
Plc
(the
‘
Paren
t
Compan
y’)
an
d
its
subsi
diari
es
(t
he
‘Group’)
for
the
year
ended
31
December
2021
which
comprise
the
Consolidated
Income
Statement,
the
Consolidated
Statement
of
Co
mprehensive
Income
,
the
Consolidated
Statement
of
Financial
Position,
the
Consolidated
Statement
of
Changes
in
Equity,
the
Consol
idated
Statement
of
Cashfl
ow,
notes
to
the
Consolidat
ed
fina
ncial
st
atements,
the
Company
Balance Sheet, the Company Statement of Changes
in
Eq
uity
and
the
notes
to the
financial
statements,
including
a
summary
of
significant
account
ing
policies.
The
financi
al
reporting
framework
that
has
been
applied
in
the
preparation
of
the
Group
financial statements is applicable law and UK adopte
d inter
national accounting
standards.
The financial
reporting
framework
that
has
been
applied
in
the
preparation
of
the
Parent
Company fi
nancial statements
is
applicable
law
and
United
Kingdom
Accounting
Standards,
incl
uding
Fi
nancial
Reporting
Standard
101
Reduc
ed
Disclosure
Framework
(United
Kingdom
Generall
y Acce
pted Acc
ounting
Pract
ice).
Separate opi
nion in re
lation to
IFRSs as is
sued by the
IASB
As ex
plained
in
note
3
to
the
Group
financi
al
statements,
t
he Gro
up i
n ad
dition
to
complyi
ng wi
th
its
legal
obli
ga
tion to apply
UK adopted i
nternat
ional ac
counting s
tandards
, has also applied IFR
Ss as issue
d by the Inter
national Acco
unting Standa
rds
Board (IASB)
.
In
our opinion
the
Group
financial statements give
a
true
and
fair
view
of
the
consolidated financial
posi
tion
of
the Group
as
at
31
December
2021
and
of
i
ts
consolidated
f
inancial
performance
and
its
consolidated
cas
h
flows
for
the
year
then
ended
in accorda
nce with
IFRSs as
issued b
y the IASB
.
Basis for
opinion
We
cond
ucted
our
a
udit
in
acco
rdanc
e
wit
h
Int
er
national
Standards
on
Auditing
(UK)
(ISAs
(UK))
and
applicable
law.
Our
responsibilities
under
those
standards
are
further
described
in
the
Auditor’s
responsibilities
for
the
audit
of
the
financial
statements section of our
report. We believe
that the audi
t evid
ence w
e have
obtaine
d is
sufficient a
nd app
ropriate to
provide
a basis for our opi
nion. Our audit opi
nion is consistent
with the additional
report to the audi
t committee.
Independenc
e
Following
the
recommendation
of
the
audit
commit
tee,
we
were
re
ap
pointed
by
the
dir
ectors
on
14
December
2021
to
audi
t
the
financial
statemen
ts
for
the
year
ending
31
Decem
ber
2021
and
subsequent
financial
periods.
The
period
of
total
uninterrupted engagement
incl
uding
retenders and
reappointments is
12
years,
covering
the
years
ending
31
Decembe
r
2010
to
31
December
2021.
We
remain
independent
of
the
Group
and
the
Parent
Compan
y
in
accordance
with
the
ethical
requirements
that
are
relevant
to
our
audit
of
the
financial
statements
in
the
UK,
including
the
FRC’s
Ethical
S
tandard
as
applied
to
listed
public
interest
entities,
and
we
have
ful
filled
our
other
ethical
responsibili
ties
in
accordance
with
these
requirements. Th
e non
-
audit services prohibited by
that standard were not
provided to the Group or
the Parent Company.
Conclusions
relating
to going
concern
In
auditing
the financial
statements, we
have concluded
that the
Directors’ use
of the
going concern
basis of
accounting in
the
preparation
of
the
financial
statements
is
appropriate.
Our
evaluation of
the
Direct
ors’
assessment
of
the
Group
and
the P
arent
Company’s ab
ility
to cont
inue to
adopt t
he going
concern b
asis of
accounti
ng incl
uded:
•
Assessed the Di
rectors’ met
hod includ
ing the rel
evance and rel
iabili
ty of under
lying data
used to
make the
assessment, and
whether assumptions and
changes to assumptions
f
rom
prior years
are
appropriate and
consistent
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with
each
othe
r.
Our
work
incl
uded
str
ess
testing
the
revenue
growth
assumptions
downwards
within
the
Groups
forecasts, and
concluded tha
t such assum
ptions were re
mote.
•
Reviewing the Dire
ctors’ plan
s for future action
s in relation to the going conce
rn assessment incl
uding whether such
plans a
re feasible in the circumstance
s.
•
Assessing the
appropriatene
ss
of the
Dire
ctors’ stress
-
testing
of the
forecasts
to
the e
xtent
of reas
onable
worst
-
case
scenarios
comparing
to
our
own
sensitivit
y
analysis
perf
ormed
also
considering
the
likelihood
of
these
scenarios
occurring.
•
Reviewing the adequacy and
appropria
teness of disclosures in the financial statements relativ
e to
the going concern
assessment.
Based on the work we have pe
rformed, we have no
t identif
ied any materia
l uncertai
nties relat
ing to event
s
or conditions that,
individually
or collectively, may
cast significant doubt
on the
Group and
the
Parent Company’s
ability
to
continue as
a going
concern for a period of at l
east twelve months from when the financial st
atements are authorised for issue.
I
n
r
elation
to
the
Parent
Company’s
reporting
on
how
it
has
applied
the
UK
Corporate
Governance
Code,
we
have
nothing
materi
al
to
add
or
draw
at
tenti
on
to
in
relat
ion
to
the
Dir
ector
s’
state
ment
in
the
fi
nancial
statemen
ts
about
whet
her
the
Director
s consid
er
ed it appropriate t
o adopt the going concern
basis of accounting.
Our
re
sponsibi
liti
es
and
the
responsib
ilit
ies
o
f
the
Direc
tors
with
re
spect
to
going
concer
n
are
describe
d
in
the
rel
evant
se
ctions
of this report.
Overview
Direct
covera
ge
b
y
t
he
group engagement team
100% (2020: 100%) of Group revenue
84% (2020: 84%) of Group total
assets
Key audit
matters
2021
2020
Development
Costs
P
P
Goodwill
and i
ntangi
ble as
set i
mpairment
risk
P
P
Revenue rec
ognition
P
P
Acquisiti
on of El
ectra
Information Systems
Inc
P
O
Acquisiti
on of Inforal
go Informati
on Technology Limi
ted*
O
P
*
The
Acquisition
of
Inforalgo
Information
Technology
Limited
was
a
once
of
f
event
occurring
i
n
the
prior
year
and therefore no longer
a key audit matter.
Materi
ality
Group f
inanci
al sta
tements
as a wh
ole
£277,000 (2020:
£180,000) based on 0.
75% (2020: 0.75%) of revenue.
An overview
of the s
cope of our
audit
Our
Group
audit
wa
s s
coped
by
obtai
ning
an
under
standi
ng o
f
the
Group
and
it
s
environment,
including
the
Group’s sy
stem
of
internal
control,
and
assessing
the
risks
of
material
misstatement
in
the
financi
al s
tatements.
We
also
addressed
the
ris
k
of
management
override
of
internal
controls,
including
assessing
whet
her
there
was
evid
ence
of
bias
by
the
Di
rectors
that
may have
repr
esented
a ri
sk of
mater
ial mi
sstat
ement.
The Group
engagement
team
performed
full
sco
pe audi
ts of
the
signi
ficant
components
in
the
UK,
comprising
52%
of gr
oup
revenue and 90% of group total
assets. The audit
of
the Asia
Pacific
region si
gnificant
component, comprisi
ng 48% of
group
revenue and 10
% of group total asse
ts, was performed
by a BDO me
mber firm in Australia.
In
respect
of in
significant
components,
the Grou
p
engagem
ent
team, ca
rried
out
specific
proc
edures
i
n
respect of
the revenue
and profit recognit
ion key audit matter
as noted in the key
audit matters section
of this report.
Our
involvemen
t
with
component auditors
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For
the
work performed
by
component
auditors,
we
dete
rmined
the
leve
l
of
i
nvolvement
needed
in
order
t
o
be
able
to
conclude
whether suf
ficien
t appropri
ate audit
evidence h
as been obtai
ned as a basi
s for our
opinion on
the Group fi
nancial
statements
as a whole. Our involv
ement with component auditors i
ncluded the following:
•
The
issuanc
e
of
instruction
s
that
included
materiality
and
detailed
procedur
es
to
be
performed
on
the
significant
risks
of material misstatement;
•
Further involvement in directing the audit strategy through
remote meetings and
a review of
the component
auditor’
s
planning;
•
Supervisio
n
of
the
audi
t
process
t
hat
incl
uded
regular
communicatio
n
with
the
c
omponent
audit
or
and
a
remot
e
review of their audit files; and
•
Attending
an audit
close meet
ing.
Key audit
matters
Key audit matters are tho
se matters that, in our
professional
judgement, were of m
ost significance in our audit of the financial
statements of
the current
period and
include the
most significant
assessed risks
of material
misstatement (whether
or not
due
to
fraud)
that
we
identified,
i
ncluding
those
whic
h
had
the
greatest
effect
on:
the
overall
audi
t
strat
egy,
the
allocation
of
resources in
the audit, an
d directing the
efforts of th
e engagem
ent team.
These m
atters were
addressed
in the conte
xt of our
audit of the financial statements as a whole, and
in fo
rming our
opinion
thereon, an
d we
do not
provide
a separa
te opinion
on
these matters
.
Key audit
matter
How
the scope
of
our
audit
addre
ssed
t
he
key audit
matter
Development Cos
ts
Refer th
e accounti
ng
policies on page
87
, and
sign
i
ficant estimates
and
judgeme
nts on pag
e
85.
During t
he year,
development
s
costs of £4,105k (2020: £3,561k)
have been capitalised.
Development
costs ar
e
recognised as an
intangible asset
if specific c
apitalisation
criteria as
set out in the applicable
accounting standards have been
met. J
udgement
is r
equir
ed in
determining whether the
capitalisation crit
eria has been
met and
the
alloca
tion
of th
e
development costs to part
icular
Clareti
Control
and Clar
eti
Connect pr
oducts.
There is al
so a risk t
hat
develop
ment c
osts ma
y be
mainten
ance b
y natu
re or
supersede costs previously
capitalised.
Due to t
he level
of j
udgement,
there is conside
red to be an
inherent ris
k of man
agement
override of control
s.
We eva
luat
ed th
e Gro
up’s
accou
ntin
g pol
icy
in
this
area to ensure that
their recognition
and
measureme
nt pr
incip
les wer
e in
accord
ance wi
th t
he
applicable accounting
standards.
We agr
eed a
samp
le of
cap
ital
ised
cost
s t
o unde
rlyi
ng
supporting documentation
This incl
uded obtaining
time records to
corroborate the
allocation of cos
t
between products and inspecti
ng employee contracts
to check that the
ir stated job roles s
upport their
involvem
ent in deve
lopment a
ctivities. W
e also
recalculated the on
-
costs and overheads capitalised
with re
ference t
o source
data and
checked t
hat the
five criteria for capita
lisation, as require
d by the
applicable accounting
standard, had been met and
that the costs w
ere not mainte
nance by natu
re.
The testing
included gaini
ng an und
erst
anding of the
projects from the devel
opment team, as well as
obtaining evidence of
future economic benefits
such
as customer contracts and
pipeline opportuniti
es. We
also assessed assumptions such
as the level of non
-
productive time inher
ent in the development
of each
product based on factors
including the product
’s stage
of maturity.
Furthermore, we
specifical
ly reviewed t
he nature of
costs capitalised as enhancements to software
available for sal
e; checked that the enhanc
ements did
not supersede exis
ting development costs; a
nd
determined whether such enhancements met eac
h of
the five criteria for ca
pitalisation under
the applicable
accounting standard. Thi
s included discussions
with
the Group’s s
oftware develo
pers to unders
tand the
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roadmap for softw
ar
e products to which the
development costs relate,
and specifically
where
enhancements were made to existing
products.
In respect of en
hancements
to established s
oftware,
we assessed
the nat
ure of
the new r
eleases
-
and
resultant sales oppo
rtunities
-
to determ
ine whethe
r
there was ev
idence of supe
rseding previou
s
development effort.
Key observat
ions:
Based on th
e audit
work perfor
med we conside
r that
development costs have been capi
talised
appropriately and i
n accordance with the Group’
s
accounting polic
y.
Goodwill
and int
angible
asset impairment risk
As detail
ed in th
e
accounting policies
on
page
87
, and sign
ificant
estimates and judgements
on page
85.
Goodwill
, cap
itali
sed cos
ts dur
ing
development and other intangi
ble
assets are tested f
or impairment
at least annually
through
comparing the recoverable
amount of the cash
-
generating
unit, based on a val
ue
-
in
-
use
calculation, to the carr
ying value.
Furth
ermore, once avail
able for
use, capitalised dev
elopment
costs are tested for impairment
where an i
ndicato
r of i
mpairment
arises.
There is cons
idered to be
a
significant risk due t
o the level of
judgeme
nt involved
relating to
forecasted gro
wth of annual
re
curring revenues and
associated margins, the
opportunity for management bi
as
within
the impai
rment model
assumptions and impairment
indicators
for particula
r intangible
assets not being ident
ified.
We
perfo
rmed
a
rev
iew
of
the
Group
’s
good
will
,
development costs
and other
intangible assets
and
examined for indicator
s of impairment.
We
assess
ed
the
imp
airme
nt
revi
ews
pre
pared
by
managemen
t,
specif
icall
y
the
integr
ity
of
managemen
t’s
value
-
in
-
use
model
and,
with
the
assistance
of
our
internal
val
uation
expe
rts,
we
challenged
the
key
i
nputs
-
being
for
ecast
growth
r
ates,
operating cash flows and
the discount rate.
Our
pro
cedures
for
the
re
view
of
opera
ting
cash
f
lows
and
forecast
growth
rates
included,
c
omparing
the
forecast
to
recent
financial
performance
a
nd
budgets
approved by
the Board.
We
also ensured
the forecasts
were
c
onsistent
wit
h
t
hose
u
sed
i
n
the
Group’
s
go
ing
concern
assumptions.
We
used
market
data
t
o
independ
ently calculate
a discount rate and
compared
to that used by m
anageme
nt.
We
al
so
pe
rfo
rmed
a
sensitivity
analysis
on
the
key
valuation inputs.
Key observat
ions:
Based on th
e procedure
s performed,
we did n
ot
identify any
matters
to indicate t
hat the judg
ement
made by
manageme
nt in
their
impai
rment
assessment was inappropriate.
Revenue recog
ni
tion
As detail
ed in th
e
accounting policies
on
page
87.
The Group earns
revenue from
the sale of softw
are licenses,
rendering of services
,
subscriptions and maintenance
and solution sales.
Managemen
t exer
cises
judgeme
nt
in their ass
essmen
t of the stag
e of
completion of service contracts
and the unbundling of mul
ti
-
We rev
iewed
the
reve
nue r
ecogn
iti
on pr
inci
ples
applied to signi
ficant new contracts
written and
performed during the year
and ensured that the
revenue recogn
ition policies were in accord
ance with
the applicable ac
counting stand
ards and the G
roup’s
accounting policy.
In particular, we c
hecked a sa
mple of soluti
on sales
and assessed the appropriat
eness of unbundling
contract revenue into separate performance
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element solution sales,
with
reference to the estim
ated
standalone selling prices of t
he
deemed performance obligations,
both of which determine t
he
recognition of revenu
e and
therefore prese
nts a revenue
recognition existence
risk.
In line with the
req
uirements of
applicable accounting
standards
Managemen
t cont
inue
to exer
cise
judgeme
nt in determ
ining wh
ether
performance obligations
of
solution sales, such as software
licences a
nd suppo
rt and
mainten
ance c
ontrac
ts, ar
e
considered distinct; the l
evel
of
consideration to be allocated to
the performan
ce obligations
based on standalone selli
ng
prices; and whether t
he revenue
in respect
of the perfo
rmance
obligations is r
ecognised at a
point in time or
overtime.
Revenue and
profit
recogni
tion is
considere
d a significant
risk due
to the manua
l adjustments
required in order to app
ropriately
recognise the distinct pe
rformance
obligations withi
n revenue
contracts, which can involve
managemen
t jud
gement.
obligations along wi
th any judgements in the
allocation of t
he consideration across
the
performance obligations
based on estimated
standalone selling prices.
We
asse
ssed
the
unbundling judgement through benchmarki
ng with
reference to historic con
tracts executed by the
Group
and external sources i
n relation to t
he sector.
For the li
cence revenue el
ement of new cont
racts
executed in close prox
imity to the year
end, we
obtained evidence that
the software had been
delivered to the c
ustomer prior to the
end of the
financial year w
ith the licence fee b
eing recognise
d up
front on installation. F
or the licence e
lement we
agreed a sample of sales
and, where relevant,
underlying time costs
to supporting contrac
ts and
other documentation, incl
uding user acceptance
evidence, statements of
works and time records.
For fixed pr
ice servic
e contracts,
we assessed
managemen
ts ju
dgement
appli
ed in
deter
mining
the
estimated hours
, stage of completion an
d projected
project losses to
underlying contracts,
statement of
works and
time cos
ts.
Key observat
ions:
Based on th
e work perf
ormed, we co
nsider th
at
revenue has be
en recognised ap
propriately and in
accordance with the appl
icable accounting standar
ds
and the Group’s revenue rec
ognition accounting
policy.
Acquisiti
on of Ele
ctra
Information
Systems In
c
Refer
to
note
24
to
the
financial
statem
ents
on
page
12
6
,
and
signficiant
estimates and
j
udgements
on page
85.
As
detailed in
note 24 of the
Annual Fin
ancial Repo
rt,
the
Group under
took an
acquisition during
the financial
year. The acquisition resulted i
n
the recognition o
f intangible
assets at fair
value of £16.8m and
goodwill of £14.3m.
Managemen
t have
recog
nised
on
acquisition separatel
y identifiable
intangible a
ssets in re
spect of
software and
customer
relationships, exercising
judgeme
nt in estima
ting the fair
value for each. A third part
y expert
was
commissioned by
Managemen
t to
assist
with
the
purchase price allo
cation.
The provision
for conti
ngent
consideration is based
upon
estimates, at the date
of
acquisition, of
future performance
of the acquired enti
ty.
In
respect
of
the
fair
value
of
the
consideration,
we
reviewed
Management’s
calculation
with
reference
to
the Sa
le and
Purcha
se ag
reement.
W
e a
lso ass
essed
the
estimate
of
contingent
consideration
against
forecasts
and current
performance
and verified
the
initial
cash c
onsideratio
n
to
documentation
such
as
the
sale
and
purchase
agreement
and
completion
statement.
Our
procedures
on
the
f
orecasts
included
agreeing
to
pipeline,
new
contract
wins
post
year
end
and post year end tradi
ng activity.
We
ensure
d
that
th
e
a
cqui
siti
on
accou
ntin
g
exerci
se
had been
carried out
in accordance
with the
applicable
accounting
standards,
and
reviewed
and
subs
tantially
audited
Management’s
workings
relati
ng
to
the
estimates
in
respect
of
the
f
air
value
of
the
ass
ets
and
liabilities
acquired
to
supporting
third
party
evidence,
were
applicable.
We
also
assessed
the
competence,
capability,
independence
and
objecti
vity
of
the
Management’s
expert
who
perfor
med
the
purchase price alloc
ation exercise.
In
particular,
we
assessed
the
valuation
of
the
intangible
assets
that
were
con
sidered
separately
identifiable
on
acquisition,
testing
the
key
inputs
and
assumptions
in
the
valuation
model
and,
with
the
Independen
t auditor’s repo
rt
Gresham Technologi
es plc
Annual
Financial
Report
202
1
75
This matter i
s considered
to be a
significant risk as
Management
had to exercise judgement
in
determining
the fair value of the
consideration, which contained a
contingent element, and the
assets and liabil
ities acquired.
assistance of
our valuations
experts who
reviewed the
mechani
cs
and methodology
inhere
nt in
t
he
model,
which includ
e ensuring the sensit
iviti
es within were
appropriate.
We
also
consi
dered
t
he
compl
eten
ess
of
the
separately
identifiable intangib
le assets with refe
rence
to
our
understanding
of
the
business
and
key
motivat
ions
of th
e tra
nsacti
on.
Key observat
ions:
Based on th
e audit
work perfor
med, we consi
der that
the acquisition of E
lectra Informa
tion Systems
Inc,
including th
e separa
tely identifiab
le intangib
le assets
and contingent considerat
ion has been recognised
appropriately in
the financial stat
ements.
Our appl
ication
of mat
eriali
ty
We a
pply
t
he
concep
t
of
mate
rial
ity
bo
th
in
pla
nning
a
nd
perfo
rming
o
ur
audit
,
and
in
ev
aluat
ing
th
e
effec
t
of
miss
tate
ments.
We
cons
ider
mater
iali
ty
t
o
be
t
he
magn
itud
e
by
whi
ch
mi
ssta
tement
s,
i
nclud
ing
o
missi
ons,
could
infl
uence
the
e
conomi
c
decisions o
f reasonable users tha
t are taken on th
e basis of the finan
cial statements
.
In
order
to
reduce
to
an
appropriately
low
level
the
probability
that
any
misstatements
exceed
materiality,
we
use
a
lower
materi
ality
l
evel,
per
forman
ce ma
teria
lity,
t
o d
etermi
ne
the
extent of testing needed. Importantly, misstatemen
ts below these
levels will not necessarily be evaluated as immaterial as we also take
account of the nature of identified misstatements, and
the particular circu
mstances o
f their occurrenc
e, when evalu
ating their effect
on the financial
statements as a whole.
Based
on
our
professio
nal
judgement,
we
det
ermined
material
ity
for
the
fi
nancial
stat
ements
as
a
whole
and
performance
materi
ality
as f
ollows
:
Group fi
nancial
stateme
nts
Parent company
financial
st
atements
2021
£’000
2020
£’000
2021
£’000
2020
£’000
Materi
ality
277
180
150
105
Basis for
determini
ng
materi
ality
0.75% of revenue
56% of Group
materi
ality
58% of Group
materi
ality
Rationale
for the
benchmark applied
As a growin
g
technology busin
ess we
consider revenue to be the key
performance measure in drivi
ng the
valuation of the Group and informing the
economic decisions of t
he users of the
financial statem
ents. This is partic
ularly in
light of lowe
r levels of
profitability in
the
current environment and revenues being
an increasing basis
of business valuation
in
the sector.
Capped at
56% (2020:
58%) of
Group
materi
ality
give
n the
assessme
nt of
the
components aggregation risk.
Performance mate
riality
180
117
97.5
68
Independen
t auditor’s repo
rt
Gresham Technologi
es plc
Annual
Financial
Report
202
1
76
Basis for
determini
ng
performance material
ity
On the
basis
of our
risk
assessmen
t, t
ogether
with
our ass
essment
of the
Group a
nd
Parent Company’
s control
environ
ment and a h
istory of
minimal
errors,
our judgement
is
that performan
ce materiality for
the fin
ancial statements should be 65%.
Component mat
eriali
ty
We se
t mat
eriali
ty
for
each
componen
t of
th
e Gro
up ba
sed
on a
perc
entage
of
between
30%
and
75%
of
Group
materiali
ty
dependent
on
the
size
and
our
ass
essment
of
the
risk
of
materi
al
misstat
ement
of
that
component
.
Component
materiality
ranged
from
£83,100
to
£207
,750.
In
th
e
audi
t
of
each
component,
we
further
applied
performance materiality level
s of 65% of the component materiality to our
testing to ensure that the ri
sk of errors
e
xceeding component materiality was appropriately mitigat
ed.
Reporting
threshol
d
We
agreed
wi
th
the
Audi
t
Committ
ee
that
we
wou
ld
repor
t
to
them
al
l
indivi
dual
audi
t
diffe
rences
i
n
excess
of
£5,540
(2020:
£3,600).
We
also
agr
eed
to
report
differences
below
this
threshold
that,
in
our
view,
warranted
reporting on qualitative gro
unds.
Other i
nformati
on
The
directors are
res
ponsible for
the
other
information. The
oth
er
information comprises
the
information included
in
t
he
annu
al
financial report
other
than
t
he
fi
nancial
statements
and
our
auditor’s
r
eport
thereon.
Our
opinion
on
the
financial
st
atements
does not cover the other information and, except to the extent otherwis
e explicitly stated in our report
, we do not express any
form of
assurance
conclusion t
hereon.
Our
responsibili
ty
is
t
o
read
the
other
informati
on
and,
in
doing
so,
c
onsider
whether
the
other
information
is
materially
inconsistent
with
the
financial
statements
or
our
knowledge
obtained
in
the
course
of
the
audit,
or
other
wise
appears
to
be
materially
misstated.
I
f
we
identify
such
material
inconsist
encies
or
apparent
material
misstat
ements,
we
are
requi
red
t
o
de
termin
e
whet
her
this
gives
ris
e
to
a
ma
teria
l
mis
stateme
nt
i
n
th
e
fi
nancia
l
st
atement
s
themselves.
If,
based
on
the
work
we
have
perf
ormed,
we
conclude
that
there
is
a
material
misst
atement
of
this
other
informatio
n, we are
required to
report tha
t fact.
We hav
e not
hing
to
repor
t i
n thi
s r
egard.
Corporate go
vernance sta
tement
The Listing Rul
es require
us to review t
he Directors’
statemen
t in relation to going concern
, longer
-
ter
m viability and th
at part
of the
Corporate Governance Statement
relating to the
parent company’s
compliance with
the provisions of
the UK
Corporate
Governanc
e Code s
pecifi
ed for
our r
eview.
Based
on
the
work
under
taken
as part
of our
audit, we
have concluded that
each of
the following elements of
the
Corporate
Governanc
e Stat
ement i
s materi
ally
consis
tent w
ith t
he fin
ancial
state
ments or
our k
nowledge
obtai
ned duri
ng th
e audit
.
Going conc
ern
and longer
-
term
viabil
ity
•
The
Di
rectors'
statement
with
regar
ds
t
he
appr
opriateness
of
adopting
the
going
concern
basis of accounting and
any material uncertai
nties identified
as set out on page
46
; and
•
The
Directors’
expl
anation
as
to
its
ass
essment
of
the
entity’
s
prospects,
the
peri
od
t
his
assessment covers and why they per
iod is appropriat
e as set out on page
66
.
Other Cod
e
provisions
•
Director
s' stat
ement on
fair,
balanced
and underst
andable a
s set ou
t on page
69
;
•
Board’s
confirmati
on
tha
t
it
has
carried
out
a
robust
assess
m
ent
of
the
emerging
and
principal risk
s as set out on page
31
;
•
The
section
of
the
annual
repo
rt
that
describes
t
he
r
eview
of
effectiv
eness
of
risk
managemen
t and
inter
nal co
ntrol
syste
ms as s
et out
on p
age
43
; and
•
The section de
scribing th
e work of the
au
dit committee as s
et out on page
47.
Other Compa
nies Act
2006
reportin
g
Based on
the responsibilities de
scribed below and
our work performe
d during the course of the au
dit, we are required by the
Companies Ac
t 2006 an
d ISAs (
UK) to r
eport on
certain
opinion
s and matt
ers as d
escribed
below.
Independen
t auditor’s repo
rt
Gresham Technologi
es plc
Annual
Financial
Report
202
1
77
Strategic
report
and Directors’
report
In
our opinion, based on the
work undertaken in the c
ourse of the audit:
•
the
information
given
in
the
Strategic
report
and
the
Directors’
report
for
the
financial
year
for
which th
e financ
ial st
atements ar
e prepar
ed is co
nsistent
with t
he fina
ncial
statements; and
•
the
Strategic
report a
nd
the
Directors’ rep
ort
have
been prep
ared
in
accordance
with
applicable
legal requir
ements.
In the
light
of the
knowledge
and u
nderstanding
of
the G
roup
and Pare
nt C
ompany
and its
environment
obtained
in
t
he
course
of
the
audit,
we
have
not
identified
material
misst
atements
in
the strategic rep
ort or the Directo
rs’ report.
Directors’
remuneration
In
our
opinion,
the
part
of
the
Directors’
remunera
tion
report
to
be
audited
has
been
properly
prepared in accordance wi
th the Com
panies Act 200
6.
Matter
s on whi
ch
we are
required
to
report by
exception
We have not
hing t
o report
in resp
ect of t
he foll
owin
g matter
s in rel
ati
on to whic
h the Compa
nies Ac
t
2006 requires us to r
eport to you if,
in our opinion
:
•
adequate
accounting
records
have
not
been
kept
by
the
Parent
Company,
or
returns
adequate for our audit
have not been received f
rom branches not visit
ed by us; or
•
the
Parent
Company
financial
stateme
nts
and
the
part
of the
Directors’
remuneration
report
to
be audited are not in agr
eement with the accounting r
ecords and returns; or
•
certain disclosures of Direct
ors’ remuneration specified by law are not
made; or
•
we have not
recei
ved all
the inf
ormation
and expl
anations
we requir
e for
our audit
.
Responsibil
ities of Directors
As expl
ained
more fu
lly
in th
e stat
ement o
f Dir
ectors’
responsi
biliti
es, t
he Dire
ctors
are r
esponsible
for
the
preparati
on of
the
financial
statements and
for
being
satisfied
that
they
give
a
true
and
fair
view,
and
for
such
internal
control as
the
Directors
determine
is
necessary
to
enable
the
preparat
ion
of
financial
statements
t
hat
are
free
from
material
misstatement,
whether
due to fraud or err
or.
In
preparing
the
financial
statements,
the
Directors
are
responsible
for
assess
ing
the
G
roup’s
and
t
he
Parent
Company’s
ability to
continue as
a going
concern, disclosing,
as
applicable, matters
related to
goi
ng concern
and using
the going
conce
rn
basis
of
accounting
unless
the
Directors
either
intend
t
o
liquidate
the
Group
or
the
Parent
Company
or
to
cease
operations,
or have no realist
ic alternative but
to do so.
Auditor’s
responsibi
lities
for the
audit of
the fi
nancial st
atements
Our
object
ives
are
to
ob
tain
reas
onable
assu
rance
about
wh
ether
the
f
inanci
al
stateme
nts
as
a
whole
are
f
ree
fro
m
mater
ial
misstat
ement,
whether due to fraud or error, and to issue an auditor’s repor
t that includes
our opinion. Reasona
ble assuranc
e
is a hig
h level
of assu
rance, b
ut is n
ot a gu
arantee
that an
audit c
onducted
in acc
ordance
with IS
As (U
K) will
always
d
etect a
materi
al
missta
tement
whe
n i
t
exist
s.
Misstat
ements
can
ar
ise
fro
m f
raud
or
err
or
and
are
cons
idered
mat
erial
i
f,
indi
vidual
l
y
or
in
the
aggregate,
they
could
reasonabl
y
be
expected
to
influence
the
economic
decisions
of
users
taken
on
the
basis
of
these financial sta
tements.
Extent to
which the
audit was
capable of
detecti
ng irreg
ulariti
es, incl
uding
fraud
Irregularities, including fraud,
are
instances of
non
-
compliance wit
h
laws
and
regulations.
We
design
procedures
in
line
with
our
responsibilities,
outlined
above,
to detect
material
misstateme
nts in
respect
of irregularities,
including
fraud. T
he exten
t
to
which our
procedur
es are ca
pable of
detecti
ng irr
egularit
ies, i
ncluding
fraud i
s detai
led bel
ow.
Based on our
understan
ding of t
he
Group and sector in which
it operates, we ident
ified that the
principal risks
of non
-
compliance with laws and regulations relat
e to The Corporate Governance Code, Corporate and VAT legislation,
Employment Taxe
s and Healt
h and Safe
ty, and t
he extent
to w
hich non
-
compliance might have a material ef
fect on the
financial statem
ents. We also
considered tho
se laws and re
gulations whic
h have a direct im
pact on the pr
eparation of the
financial statem
ents such as th
e Compan
ies Act 2006 an
d the applicable
accounti
ng frameworks.
As a resul
t of per
forming t
he above we
identifi
ed the pr
incipal
risks wer
e
related to bias in ac
counting estimates, with
the most significant co
nsidered to relate to reven
ue rec
o
gnition and capitalisaiton of
developmemt costs.
The
Independent auditor’s rep
ort
Gresham Tec
hnologie
s plc
Annual Fina
ncial Repor
t 2021
78
Group audit engagement team shared this
risk assessment with the component auditors to ensure that appropriate audit
procedures were applied in response
to these risks. Our procedures included:
-
Evaluation of
management incentives and opportunities for fraudulent manipulation of the financial
statements
including management override;
-
This
evaluation involved a particular focus on the judgements and estimates inherent in the key audit matters and
exercising professional scepticism in considering the impact of t
hose estimates and judgements on the reported
results and key performance measures such as annually recurring revenues and cash E
BITDA;
-
The evaluation also
involved gaining an understanding of Management remuneration schemes and the extent
to
which remuneration is influenced by reported
results;
-
Discussions with Managemen
t and the Audit Committee regarding known or suspected instances of non-
compliance with laws and regulations;
-
Ensurng all a
udit team and component team members were cognizant of relevant laws and regulations through
engagement discussions and the issuing of specific audit instructions;
-
Obtaining and
understanding of controls designed to prevent and detect irregularities;
-
Review of board minutes f
or any evidence of fraud or non-compliance with laws and regulations; and
-
Testing journal
entries made to accounts that are considered to carry a greater risk of fraud as par
t of our planned
audit approach by agreeing to supporting documentation.
Our audit
procedures were de
signed to r
espond to
risks of
material
misstatement in th
e financial
statements, recognising t
hat
the
risk of not de
tecting a
material misstatement due
to fraud
is highe
r than the
risk of
not detecting
one resulting
from error,
as
fraud
m
ay
i
nvolve
deliberate
concealment
by,
fo
r
example,
forgery,
misrepresentations
or
thr
ough
collusion.
There
are
inherent
limitations
i
n
the
audit
procedures
per
formed an
d
the
fur
ther
removed
non-compliance
with
l
aws
and
regulations
is
from the events and t
ransactions reflected in the financial statements, the less likely we are to become aware of it.
A
fu
rther
description
of
our
responsibilities
is
ava
ilable
on
the
Financial
R
eporting
Counc
il’s
website
at:
www.frc.org.uk/auditorsresponsibili
ties
.
This description forms part of our auditor’s report.
Use of our report
This
report
is
made
solely
to
the
Parent
Company’s
members,
as
a
body,
in
accordance
with
Chapter
3
of
Part
16
of
the
Companies
Act 2006.
Our audit work ha
s been und
ertaken so
that we might stat
e to the
Parent Company’s mem
bers those
matters
we
are
r
equired
to
state
to
them
i
n
an
auditor’s
report
and
for
no
ot
her
pur
pose.
To
the
fullest
ex
tent
permitted
by
law,
we
do
no
t
accept
or
assume
responsibility
to
a
nyone
other
than
the
Parent
Company
and
the
Par
ent
Company’s
members
as a body, for our audit work, for this r
eport, or for the opinions we have formed.
Malcolm Thixton (Senior Statutory A
uditor)
For and on behalf of BDO LL
P, Statutory Auditor
Southampton
United Kingdom
7 March 2022
BDO LLP is a limited liability partnership registered in England a
nd Wales (with registered number OC305127).
Consolidated
income statement
Gresham Technologi
es plc
Annual
Financial
Report
202
1
79
Notes
Year ended 31
December
202
1
Restated
Year ended 31
December
2020
£'000
£'000
Revenue
4,5
37,026
24,752
Cost of sal
es
(11,799)
(7,003
)
Gross profi
t
25,227
17,749
Adjusted administ
rative expenses
(21,146
)
(15,911)
Adjusted
operating prof
it
4,081
1,838
Adjusting adminis
trative ite
ms:
Exceptional
cost
s
5
(1,821
)
(400
)
Exceptional
income
5
330
-
Amortisation on
acquired intangi
bles
14
(1,673)
(893
)
Share
-
based payments
23
(369)
(220
)
(3,533)
(1,513
)
Total administrative
expenses
(24,679
)
(17,424
)
Operating pr
ofit
5,6
548
325
Finance revenue
4,9
4
37
Finance costs
9
(121)
(54)
Profit before
taxation
431
308
Taxation
10
(1,443)
953
(Loss)/profit
after taxation
attributable t
o the equity holders
of the
Parent
(1,012)
1,261
Earnings per shar
e
Statutory
pence
pence
Basic earnings p
er share
11
(1.31)
1.84
Diluted ear
nings per
share
11
(1.31)
1.80
Adjusted
Basic earnings p
er share
11
5.08
4.04
Diluted ear
nings per
share
11
5.02
3.96
Consolidated
statement of
comprehensive income
Gresham Technologi
es plc
Annual
Financial
Report
202
1
80
Year ended 31
December
202
1
Year ended
31 December
2020
£'000
£'000
(Loss)/profit
after taxation attributabl
e to the equity holders
of the Parent
(1,012)
1,261
Other compreh
ensive expen
ses
Items that will or m
ay be re
-
classified into profit or loss:
Exchange differen
ces on translat
ing foreign ope
rations
(184)
(113)
Total
other comprehensive expenses
(184)
(113)
Total comprehensive
(expense)/
income for the year
(1,196)
1,148
Consolidated
statement of
financial
position
Gresham Technologi
es plc
Annual
Financial
Report
202
1
81
Notes
At 31 December
202
1
At 31 December
2020
£'000
£'000
Assets
Non
-
current assets
Property, plant
and equipment
13
218
243
Right
-
of
-
use assets
16
1,466
1,646
Intangible assets
14
62,267
31,108
Deferred ta
x assets
10
232
552
64,183
33,549
Current asset
s
Trade and other receivables
18
5,403
3,497
Contract ass
ets
18
1,665
923
Income tax receiv
able
18
1,204
-
Cash and cash
equivalents
19
9,139
8,876
17,411
13,296
Total assets
81,594
46,845
Equity and
liabilities
Equity attribut
able to owners of
the Parent
Called up e
quity share
capital
22
4,168
3,508
Share premium account
25
23,876
4,341
Own share res
erve
22
(609)
(778)
Other reser
ves
25
536
536
Foreign currency transl
ation reserve
25
(378)
(194)
Retained ear
nings
25
18,288
19,453
Total equity attribut
able to owners of the Parent
45,881
26,866
Non
-
current liabilities
Contract l
iabiliti
es
20
60
66
Lease liabilities
16
770
1,004
Deferred ta
x liabili
ty
10
6,831
1,289
Provisions
20
144
146
Contingent
considerati
on
20
3,575
349
11,380
2,854
Current lia
bilities
Trade and other payables
20
19,616
15,303
Lease liabilities
16
642
535
Income tax paya
ble
20
131
378
Contingent
considerati
on
20
3,944
909
24,333
17,125
Total liabilities
35,713
19,979
Total equity and liabil
ities
81,594
46,845
The financial
statements wer
e approved by
the Board of Di
rectors and
authorised f
or issue on
7
March
202
2
.
On behal
f of
the Boa
rd
Ian Manoc
ha
Tom Mullan
Chief Exe
cutive
Chi
ef Fin
ancial Of
ficer
7
March
202
2
7
March
202
2
DocuSign Envelope ID: BB8DFBB0-2E16-4C63-B3F9-138A47D638FF
Consolidated
statement of
changes in e
quity
Gresham Technologi
es plc
Annual
Financial
Report
202
1
82
Notes
Share
capital
Share
premium
account
Own share
reserve
Other
reserves
Foreign
currency
translation
reserve
Retained
earnings
Total
£'000
£'000
£'000
£'000
£'000
£'000
£'000
At 1 January
2020
3,413
3,903
(945)
536
(81)
18,478
25,304
Attributable
profit for
the period
-
-
-
-
-
1,261
1,261
Other compreh
ensive expen
ses
-
-
-
-
(113)
-
(113)
Total comprehensive
(
expense
s
)/income
-
-
-
-
(113)
1,261
1,148
Exercise of sha
re options
22
95
438
-
-
-
-
533
Transfer
of
own
shares
held
by
Employee
Share Ownership Trus
t
to employees
22
-
-
167
-
-
-
167
Share
-
based payments
23
-
-
-
-
-
220
220
Dividend pai
d
-
-
-
-
-
(506)
(506)
At 31 December
2020
3,508
4,341
(778)
536
(194)
19,453
26,866
Attributable
loss
for the perio
d
-
-
-
-
-
(1,012)
(1,012)
Other compreh
ensive expen
se
s
-
-
-
-
(184)
-
(184)
Total comprehensive
expense
s
-
-
-
-
(184)
(1,012)
(1,196)
Issue of equity sha
res
22
656
20,344
-
-
-
-
21,000
Share issue cost
s
22
-
(870)
-
-
-
-
(870)
Exercise of sha
re options
22
4
61
-
-
-
-
65
Transfer
of
own
shares
held
by Employee
Share Ownership Trus
t
to employees
22
-
-
169
-
-
-
169
Share
-
based payments
23
-
-
-
-
-
369
369
Dividend pai
d
12
-
-
-
-
-
(522)
(522)
At 31 December
202
1
4,168
23,876
(609)
536
(378)
18,288
45,881
Consolidated
statement of
cash flow
Gresham Technologi
es plc
Annual
Financial
Report
202
1
83
Notes
Year ended 31
December 202
1
Year ended 31
December 20
20
£'000
£'000
Cash flows f
rom operating
activiti
es
(Loss)/profit after
taxation
(1,012)
1,261
Depreciation
of proper
ty, plant
and equipment
13
175
245
Amortisation of
intangible as
sets
14
4,042
2,810
Amortisation of
right
-
of
-
use assets
16
581
496
Share
-
based payments
23
369
220
(Increase)/d
ecrease in trade and other receivables
(776)
1,060
Increase in contra
ct assets
(220)
(312)
Increase in trade a
nd other payables
1,996
1,111
Increase/(decrea
se)
in contract liab
ilities
256
(1,263)
Taxation
10
1,443
(953)
Exchange gain on
financial instrument
5
(330)
-
Net finance
costs
9
117
17
Cash inflow
from operat
ions
6,641
4,692
Income taxes rec
eived
-
1,307
Income taxes pa
id
(1,114)
(510)
Net cash in
flow from o
perating ac
tivities
5,527
5,489
Cash flows f
rom investin
g activiti
es
Interest received
9
4
37
Exchange gain on f
inancial inst
rument
5
330
-
Purchase of proper
ty, plant an
d equipment
13
(145)
(87)
Payments to acquir
e subsidiary u
ndertaking (net
of cash)
24
(19,639)
(1,900)
Payment of conti
ngent considerati
on on acquisit
ion of Infora
lgo
20
(923)
-
Payments to acquir
e intangible
fixed assets
14
(4,150)
(3,565)
Net cash used
in invest
ing activi
ties
(24,523)
(5,515)
Cash flows f
rom financin
g activiti
es
Interest paid
9
(39)
(16)
Principal paid
on lease liabi
lities
16
(590)
(576)
Dividends pai
d
12
(522)
(506)
Share issue proce
eds (net of co
sts)
22
20,195
533
Net cash
from/(
used in
)
financing activities
19,044
(565)
Net
increase/(
decrease
)
in cash an
d cash equivalen
ts
48
(591)
Cash and cash
equivalents
at beginni
ng of year
8,876
9,605
Effect of f
oreign exchange ra
te changes
215
(138)
Cash and cash
equivalents
at end of
year
19
9,139
8,876
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
84
1.
Authorisati
on
of
fi
nancial
s
tatements
an
d
statement
of
complia
nce
with
I
nternatio
nal
Financi
al
Report
ing
Standards
Gresham Technologi
es plc
is
a
public limited
company incorporated
and
domiciled
in
England
and
Wales.
The
Company’s
ordinary shares are
traded as a premium list
ing on the London Stock Exchange.
The financial statements of Gresham Technologies plc and its subsidiaries (“t
he Group”) for
the
year e
nded 3
1 Dec
ember
202
1
wer
e
authori
sed
for
issue
by
the
Board
of
Direct
ors
on
7
Marc
h
202
2
and
the
Consolidated
Statement
of
Financial
Position
was signed
on the Boar
d’s behal
f by Mr I
Manocha and
Mr T Mullan
.
The
Gr
oup’s
financial
statements
hav
e
been
pr
epared
i
n
accordanc
e
with
adopted
International
Financial
Reporting
Standards (
“IFRSs”) as
they appl
y to the
financi
al statemen
ts of t
he Group for
the year
ended 31
December 202
1.
2.
Ac
counting
judgements and
estimation uncertainty
The
preparation of
financial
statements
requires
management
t
o
make
j
udgements,
estimates
and
assumptions
that
affect
the amounts reported for assets and liabilities as
at the statement of
financial position date and the amounts reported for
reven
ues a
nd ex
pens
es du
ring th
e yea
r. Ho
weve
r, the n
ature
of es
timat
ion m
eans
that a
ctual o
utco
mes c
ould
differ
from
those
estimates.
We
review
our
estimates
and
underlying
assumptions
on
an
ongoing
basis
and
recognise
revisions
to
accounting estimates in the period in whi
ch
we revise the
estimate and in
any future periods
affected. It is considered
that
all judgements have an el
ement of estimation.
Judgements
The
k
ey
j
udgements
that
have
a
s
ignificant
ri
sk
o
f
ca
using
a
mat
erial
adjustment
to
the
carryi
ng
a
mounts
o
f
as
sets
and
liabilities with
in the nex
t financial ye
ar are dis
cussed b
elow.
Revenue and pr
ofit r
ecognition
Revenue and the associated profit
are recognised from sale of software licences
, rendering of services,
subscriptio
ns and
mainten
ance
and
soluti
on
sales.
W
hen
software licences
are
sol
d,
we
must
exercise judgement
as
to
when
the
appropri
ate
point
in
time
has
passed
at
which
all
performance
obligations
for
t
hat
software
licence
have
been
performed,
at
which
point
revenue
in
relation
to
the
stand
-
alone
sales
p
rice
of
the
software
licence
is
recognised.
Whilst
in
most
cases
performance obligations clearly follow the comm
ercial and contractual arrangement we
have agreed
with the customer,
in
some
cases
the
revenue
streams
are
combined
as
wit
hin
an
overall
commerc
ial
arrangement.
Such
combined
circumstances
require
judgement
to
assess
performance
obligations
associated
with
each
revenue
stream
and
further
judgeme
nt as to
when an
d how
such pe
rformanc
e obligatio
ns have
been dis
charged
in order
to recog
nise the
associ
ated
revenue.
The
estimation
of
the
stage
of
completion,
along
with
the
distinct
performance
obligations
of
multi
-
element
solution sales, represents a ri
sk of incorrect revenue recogniti
on.
Where licences
ar
e
d
eliv
ered to
cus
tomer
s
o
n
c
ommence
ment of
the c
ontract,
the
licence
f
ee
is
recognised
upon
completion
of
performance
obligations
and
the
remaining
revenue
for
support
and
maintenance
i
s
subsequently
recognised over th
e contract term.
In
considering
the
distinct
performance
obligations of
multi
-
element
solutions,
i
nstances
may
arise
whereby
the
substance
of the performance obligati
ons differs from the l
egal form of the contract.
In such circumstances, judgement i
s required to
assess
the
estimated
stand
-
alone
sell
ing
price
of
the
constit
uent
elements
and
recognise
revenue
accordingly.
In
such
instances
we mus
t first determ
ine whe
ther:
1.
The satisfa
ction of
a perf
ormance obligat
ion with
a stand
-
alone selling pri
ce
is
operationally, technical
ly,
functionally sepa
rate, and deliver
able separately
, from other del
iverables
to the cus
tomer; or
2.
The
satisf
action
of
a
perf
ormance
oblig
ation
with
a
stand
-
alone
selling
price
is
not
operationally,
technically,
functionally and d
eliverable sepa
rate from other
deliverables to the
customer.
If
the
agreem
ent
is
determined
to
be
under
category 1
above, then
the
stand
-
alone sales
pr
ice of
each element
of
a
typical
software,
support
and
maintenance
is
determined,
unbundled
and
recognised
appropriately
for
each
element.
If
the
agreement
i
s
deter
mined
to
be
under
category
2
above
then
the
bundled
fee
is
r
ecognised
as
the
bundled
services
are
delivered over the
term of the contract.
Judgement
is
exercised
in
setting
the
stand
-
alone
selling
prices
of
each
element
of
bundled
contracts.
It
was
concluded
that
the
annual
stand
-
alone
sale
s
price
of
standard
support
and
maintenance
offerings
wil
l
be
equal
to
20%
of
t
he
five
-
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
85
year software licence
fee, or of
the total com
bined five
-
year licence, support
and maintenance
fees, the
stand
-
alone sales
price
of
the
licence
will
be
50%
and
the
suppo
rt
and
maintenance
50%.
This
ratio
is
aligned
to
the
proportion
of
development costs capital
ised in proportion
to our annual support
and maintenance costs.
Estimates and
assumptions
The
key
assumpti
ons
concerning
the
future
an
d
other
key
s
ources
of
est
imat
ion uncertainty at
the
statement of
financial
position dat
e that
have a
significant
risk
of
causing a
material
adjustment to
the c
arrying amounts
of
assets and
liabiliti
es
within
the next
financi
al year
are di
scussed be
low.
Contingent
considerati
on
Conting
ent consi
deration relating to acqui
sitions is incl
uded based on management estimates of the most likely outcome.
Those
j
udgements
include
the
f
orecasting of
a
number
of different
out
comes
agai
nst
the
per
formance
targets
and
estimating a probabil
ity and ris
k of
each outcome before arriving at a ri
sk weighted value of contingent considerati
on.
Further detai
ls are di
sclosed in no
te 2
4
to the financial state
ments.
Capitali
sed development
costs
The
Group
inv
ests
in
t
he
development
of
new
and
enhanced
featur
es
to
it
s
products.
Development
co
sts
are
ac
counted
for in accorda
nce with IAS
38 “Intangib
le Assets” an
d costs that
meet the qualifying
criteria are capitalised
and
systematically amortised ov
er the
useful economic life
of the intangible
asset.
Determini
ng
whether
development
costs
qualify
for
capi
talisa
tion
as
intangi
ble
ass
ets
requi
res
ju
dgement
as
to
the
technical an
d comm
ercial viability o
f each a
sset created
. These
judgements
are applied
consistently year to year with the
Group
eval
uating
whether
th
ere
are
fu
ture
econo
mic
benef
its
beyon
d
the
curr
ent
peri
od,
the
st
age
at
whi
ch
techni
cal
feasibility has been achieved, management’s intention to sue or
sell the
product, the likelihood of
succe
ss of
completion,
the
availability
of
technical
resources
to
complete
the
development
and
the
ability
to
measure
reliably
the
expenditure
attributed to each
product.
Estimates are
made
to
t
he
a
pplicable
usef
ul
economic
life
of
eac
h
as
set
created.
These
est
imate
s
are
continually
reviewed
and
updated
based
on past
exper
ience
and
reviews
of
competi
tor
products
available in
the
market. The
impact of
reduci
ng
the
useful
economic
life
by
one
year
would
increase
the
amortisation
charge
for
the
year
by
£
115
,000,
if
the
useful
economic life was incr
eased by one year the amorti
sation charge is r
educed by £443
,000.
The capitali
sed development c
ost is dis
closed in not
e 1
4.
Impairmen
t reviews
The Group
performs
impairment
reviews
at
the
reporting
period
end
to
identify any intangible assets that have a carrying
value t
hat i
s i
n excess
of
its
recoverable
value.
Determining
the recoverabi
lity
of
an int
angible asset
requir
es judgement
in both the methodology
applied and the key variables within that meth
odology. W
here it
is deter
mined that
an int
angible
asset is impaired, its carrying value will be reduced
to its recoverable value with the difference recorded as
an impairment
charge in the income statement.
The intangibl
e asset impai
rment reviews a
re disclosed
in n
ote 1
5.
Sensitivi
ty
analysis
has
bee
n pe
rformed
on
the
key
assumpti
ons
for
discount
r
ate,
growth
rat
e a
nd r
evenue
growth
rate
s
to determine w
hen impairm
ent would occ
ur these are dis
closed in note 1
5.
Useful econ
omic lif
e of capi
talised
development co
sts
Th
e assessment of the useful economic life of capitalised development costs is estimated by management based on
past
experience and reviews of
competitor products avai
lable in the market.
Valuation of
intangibl
e assets o
n business combi
nations
In
determinin
g
the
fair
value
of
intangible
assets
arising
on
acquisition,
management
is
requir
ed
to
make
judgements
regarding
the
timing
and
amount
of
future
cash
flows
applicable
to
the
businesses
being
acquired,
discounted
using
an
appropriate
discount rat
e. Such
judgements are
based on
current
budgets and
forecasts,
extrapolated
for an
appropriate
period
taking
int
o
account growth
rates
and expected
changes
to selling
prices
and
oper
ating
cos
ts.
Management
estimates
the
appropriate
di
scount
rate
using
pre
-
tax
rates
that
reflect
current
market
assessments
of
the
time
value
of
money an
d the
risks
speci
fic t
o the
busin
esses
being
acquir
ed. See
note
1
4
and note 2
4
for further details.
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
86
3.
Accounting pol
icies
Basis of
preparatio
n
The
Group’s financial statements
have
been
prepared
in
accordance w
ith international
accounting standards
in conformity
with
the
requirement
s
of
th
e
Companies
Act
2006
and
i
n
accordan
ce
with
i
nternati
onal
fi
nancial
reportin
g
standards
and
internation
al accoun
ting standa
rds as iss
ued by the
Interna
tional Accountin
g Standards B
oard (IASB
) and Interpretation
s
(collectively
IFRSs)
.
The
accounting
policies
which
follow
set
out
those
policies
which
apply
in
preparing
the
financial
statements for the year ended 31 December 2021.
The Group’s
financial statements have b
een prepared
on a historical co
st basi
s, except for the following items:
•
Contingen
t consi
deration
•
Cash set
tled sha
re
-
based payment liabilit
ies
The
Gr
oup
f
inancial
statement
s
a
re
presented
in
Sterling
,
which
is
also
the
Gr
oup’s
fu
nctiona
l
curren
cy.
A
ll
values
are
rounded to the ne
arest thousand po
unds (£’000) exce
pt when otherwise
indicated.
Basis of
consolidati
on
The
Grou
p
fi
nancial
statements
consolid
ate
t
he
fi
nancial
statements
of
Gresham
Technologies
plc
and
the
en
tit
ies
it
controls (its subsidiari
es) drawn up to 31 December each year.
The co
nsolidated
financi
al
statements
incorpor
ate
the f
inancial
statement
s of
the
Company
and
its
subsidi
aries
made
up
to
the
reporting
date.
Investees are
classified
as
subsidiaries
wh
ere
the
Company
has
control,
which
is
achieved
where
the
Company
has
the
power
to
govern
the
financial
and
operating
policies
of
an
investee
entity,
exposure
to
variable
returns
from
the
investee
and
the
ability
to
use
its
power
to
affect
those
variable
re
turns.
All
intra
-
group
t
ransactions,
balances, income and expenses ar
e eliminated on consoli
dation.
The
consol
idated
financial
statement
s
incor
porate
the
re
sults
of
busi
ness
combi
nations
using
the
acqu
isition
method.
In
the
statement
of
financial
position,
the
acquiree’s
identifiable
assets
and
liabilities
are
initially
recognised
at
their
fair
values
at acquisition date. The results of acquired entities are included in
the Consolidated Statement of Com
prehensive Income
from the date a
t which control is
obt
ained and are deconsolidated fr
om the date control ceases.
Going conc
ern
The Group’s bus
iness activ
ities, t
ogether with
the factors
likely
to affect
its futur
e development,
performance and
position
are
set
out
i
n
t
he
Str
ategic
report
on
pages
3
to
40
.
The
fi
nancial
position
of
the
Group
and
the
principal
risks
and
uncertainties are
also described in t
he Strategic report.
The
Group
has
sufficient
financi
al
res
ources
t
ogether
wi
th
good
relati
onships
with
a
number
of
cust
omers
and
suppliers
across
different
geogr
aphic
areas
and
industri
es.
The
Group
has
access
to
a
strong
underlying
c
ash
flow
aris
ing
from
long
-
established
maintenance
businesses
with
l
ong
-
standing
blue
-
chip
customers
and
strong
growth
prospects
being
realised with its
Cla
r
eti
solutions.
After
m
aki
ng
enquiries,
the
Directors
have
a
reasonable
expectati
on
that
the
Company
and
the
Group
hav
e
adequate
resources
to
continue
in
operational
existence
for
a
period
of
at
least
twelve
months
from
the
date
of
approval
of
the
financial
statements.
For
this
reason,
they
continue
t
o
adopt
the
going
concern
basis
in
preparing
the
Annual
Financial
Report 202
1.
The principal
accounting
policies adop
ted by the Grou
p are set out
below
.
Foreign currency t
ranslation
Transactions in foreign currencies are
i
nitially
re
corded
in the functional
curr
ency
by
applying an
approximation of
the spot
exchange
rate
ruling
at
the
date
of
the
transaction.
Monetary
assets
and
liabili
ties
denominated
in
foreign
currencies
are
retranslated
at
the
functional
currency
rate
of
exchange
r
uling
at
the
statement
of
financial
position
date.
All
dif
ferences
are
taken
to
t
he
i
ncome
stat
ement;
i
n
t
he
ins
tance
where
the
dif
ferences
on
monetar
y
ass
ets
and
li
abilities
form
part
of
the
Group’s
net
investment
in
foreign
operations,
they
are
moved
to
the
S
tateme
nt
of
Other
C
omprehensi
ve
I
ncome
on
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
87
consolidation
and
held
in
a separat
e component
of
equity
until
the
disposal
of
the
net
investment,
at
which
ti
me they
are
recognised in profit or loss.
The
assets
and
liabil
ities
of
for
eign
operations
ar
e t
ran
slated
into
Sterling
at
the
rate
of
exchange rul
ing
at t
he statement
of
fi
nancial
position
dat
e.
Income
and
expenses
are
translated
at
weight
ed
average
exchange
rates
for
the
year.
The
resulting exchange
differences are
taken
to
the
S
tatement of
Other
C
omp
rehensive
I
ncome
and
recognised
directly
to
a
separate
component
of
equity.
On
disposal
of
a
foreign
entity,
the
deferred
cumulative
amount
r
ecognised
in
equity
relating
to that particular for
eign operation is r
ecognised in the
I
ncome
S
tatem
ent.
Non
-
moneta
ry items that are measured in terms
of historical cost in a foreign curre
ncy are translated usin
g the exchange
rates
as
at
the
dates
of
the
initial
transactions,
on
consolidation;
all
assets
and
liabilities
of
overseas
subsidiaries
whic
h
report in a differ
ent functional currency are
retranslated using t
he closing rate.
Goodwill
Goodwill
repr
esents
the
excess
of
the
cost
of
acqui
sition
over
t
he
fair
value
of
the
identifiable
assets,
liabilities
and
contingent
liabilities
of
the acquired
entity
at
t
he
date
of
acquisition
.
At
the
date
of acquisition
,
goodwill
is
allocated
to
cash
-
generating
units
for
the
purpose
of
impairment
testing.
Goodwill is
recognised
as
an
asset
and
assessed
for
impairment
annually
.
Any
impairment
is
recognised
immediate
ly
in
the
Group
Statement
of Com
prehensive
Income.
Once
recognised,
an impairment of goodwill
is not reversed.
Intangible as
sets
Acquired i
ntangibles
Intangible
assets
acquired
sep
arately
are m
easured
on initial reco
gnition
at
cost. The
cost of
intangible assets acqu
ired in
a business
combination is
fair value
as at
t
he date
of
acquisition. Following initial recognition, intangible assets
are carr
ied
at cost
les
s
any accumulated
amorti
sation and
any accumulated
impairment losses
.
Internally gen
erated
intangible ass
ets
are subject to the
same recognition tests
as development costs, and i
f met, they are capit
alised.
Intangible
assets
with
finite
lives
are
amortised
over
their
useful
economic
lives
and
assessed
for
impairment
whene
ver
there
is
an
indication
that
they
may
be
impaired.
The
amortisation
period
and
the
amortisation
method
for
an
intangible
asset
with
a
fini
te
usef
ul
l
ife
is
r
eviewed
at
least
at
each
financial
year
end.
Changes
in
the
expected
useful
life
or
the
expected
pattern
of
consumption
of
futur
e
economic
benefits
embodied
in
the
asset
are
accounted
for
by
changi
ng
the
amortisation
period
or
method,
as
appr
opriate,
and
are
treated
as
changes
in
accounting
estimates.
The
amortisation
expense
on
intangible
assets
wi
th
finite
lives
is
recognised
in
the
i
ncome
st
atement
in
the
expense
category
consi
stent
with
the
functio
n
of
the
int
angible
asset.
The
usefu
l
ec
onomic
lives
of
separat
ely
acquired
soft
ware
i
s
de
emed
to
be
ten
years
and
the
useful
economic
life
of
customer
relations
is
between
six
and
twelve
years;
the
charge
in
the
income
statement is made within the amortisati
on for acquired intangibles.
Internally gen
erated intan
gibles
The
Group
has
capital
ised
dev
elopment
cost
s
in
respect
of
the
Clareti
pl
atform
whi
ch
ha
s
been
assessed
against
the
required capitalisation criteria and a
remaining useful economic life of
twelve
years reflecti
ng the
maturity and
availabilit
y
of
comparable
solutions
in
our
markets.
The
Group
has
capit
alised
development
costs
in
respect
of
i
nd
ividual
Clareti
applications
which
have
been
indivi
dually
assessed
against
the
requir
ed
capitalisation
cri
teria
and
been
individually
assigned
useful
economic
lives
reflecting
the
maturit
y
and
availability
of
comparable
applications
in
our
markets.
The
use
ful
economic
lives
are
assessed
to
be
between
two
and
twelve
years
.
The
amortisation
charge
is
recognised
in
the
income s
tatement.
Gains or losses arising
from derecognition
of
an intangibl
e asset are measured as
the differen
ce between the net
disposal
proceeds and the
carrying
amount of
the
asset and
are
recognised
in the
income s
tatement when the ass
et is
derecognised.
Purchased
i
ntangibles
with
fi
nite
li
ves,
incl
uding
purc
hased
patent
s,
know
-
how,
trademarks,
licenc
es
and
distribution
rights,
are
capitalised at cost and
amortised on a
straight
-
line
basis
over
their
estim
ated
useful
lives.
The
estimated u
seful
life
of t
hese
intangible
assets
range
between
two
and
ten
years
depending
on
their
nature.
Amortisation
charges
in
respe
ct
of intangible as
sets are included i
n administrative expenses.
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
88
Research and
development
costs
Research
costs
ar
e
expens
ed
as
incurred.
Development
expenditur
e
on
an
indi
vidual
project
is
reco
gnised
as
an
i
ntangibl
e
asset
when
the Group
can
demonstrate
t
he
technical
feasibility
of
completing
the
intangible
asset
so
that
it
will
be
available
for use
or
sale,
its inten
tion to
comple
te and
its ability to
use
or sell
the
asset,
how
the as
set w
ill genera
te future
econ
o
mic
benefits,
the
availabilit
y
of
r
esources
to
complete
the
asset
and
the
abil
ity
to
measure
reliably
the
expenditure
during
development.
Capitali
sed
pr
oduct
de
velopment
expendit
ure
is
state
d
at
cost
l
ess
acc
umulated
amortisat
ion
and
impair
ment
lo
sses.
Product
develop
ment
costs
that
have
been
capit
al
ised
are
amortised
from
the
time
the
product
or
related enhancement
becomes
avai
lable
for
use
as
part
of
a
version
release
issued
to
customers
on
a
straight
-
line
basis
over
two
to
twelve
years depending on the useful economic life of the asset assessed. Du
ring the period of developm
ent, the asset
is tested
for impairmen
t annually.
Property,
plant and eq
uipment
Property,
plant
and
equipment
is
state
d at
cost
less
accumulat
ed depr
eciation
and
accumulate
d impai
rment
losses.
Cost
comprises
the
aggregate
amount
paid
and the
fair
value
of
any
other
consideration given
to acquire
t
he
asset
and
includes
costs directly attri
butable to making the asset capable of operati
ng as intended.
Depreciat
ion
i
s
prov
ided
o
n
all
proper
ty,
plant
an
d
equip
ment
on
a
str
aight
-
line
b
asis
over
its
expected
useful
life
as
fol
lows:
•
Fixtures and
fittings
-
over the term of the underl
ying property lease.
•
Plant
and
equip
ment
-
over
lives
ranging
between
one
and
ten
years
to
write
down
t
he
asset
s
t
o
thei
r
residual
value based on current pri
ces for an asset
of the age the plant
and equipment is expected to
be at the end of
its
useful life.
The c
arrying
values
of
proper
ty,
plant
and
equipment
are
revi
ewed f
or
impairment
if
events
or
changes
i
n ci
rcumstances
indicate
the
carrying
valu
e m
ay n
o
t be
recov
erable, a
nd are
written
dow
n imm
ediately
to their
recoverable amo
unt. Us
eful
lives and r
esidual va
lues are re
viewed a
nnually an
d where a
djustmen
ts are req
uired these
are mad
e prospe
ctively.
An
i
tem
of
pr
operty, plant
and equipment
is
der
ecognised
upon
disposal
or when
no
f
uture
economic
benefits are
expected
to
arise
from
the
continued
use
of
the as
set.
Any
gain
or
loss a
rising
on
derecogn
ition
of
the
asset
is
included
in th
e
incom
e
statement in the period of derecogniti
on.
Leases
All leases
are a
ccounted for by recognising a right
-
of
-
use asset and a lease liabili
ty except for leases of low value assets;
and leases with a durat
ion of twelve months or
less.
Lease liabilities are measured at
the present value of
the contractual payments due
to the
le
ssor
over
the
lease
term,
with
the
discount
rate de
termined
by
reference
to
the
rate
inherent
in
the
lease
unless
(as
is typ
ically
the
case)
this
is
not
rea
dily
determinable,
in
which
case
the
Group’s
incremental
borrowing
rate
on
commencement
of
the
l
ease
i
s
used.
Vari
able
lease
payments
are
only
included
in
the
measurem
ent
of
the
lease
liability
if
they
depend
on
an
index
or
rate.
In
such
cases,
the
i
nitial
measurement
of
the
lease
liability
assumes
the
variable
element
will
remain
unchanged
througho
ut
the
lease term
. Other v
ariable lea
se paym
ents are e
xpensed
in the perio
d to which
they relate
.
On
i
nitia
l
r
ecognit
ion,
the
carr
ying
value
of
the
lea
se
l
iabil
ity
also
inc
ludes:
amoun
ts
expected
to
be
payabl
e
un
der
any
residual
value
guarantee;
the
ex
ercise
price
of any
purchase
option
granted in
favour
of
the Group
if
it
is reasonably
certain
to assess that option; and any penalties paya
ble for terminating the lease, if the term of the lease has been estimated on
the basis of term
ination option be
ing
exercised.
Right
-
of
-
use
asset
s
are
initially
measured
at
the
amount
of
the
lease
liabi
lity,
r
educed
for
any
lease
incentives
received,
and
increased
for:
lease
payments
made
at
or
bef
ore
commencement
of
the
lease;
initial
direc
t
costs
incurred;
and
the
amount of any provisi
on recognised where the Group
is contractuall
y required to di
smantle, remove or restor
e the leased
asset.
Subsequent
to
init
ial
measur
ement,
l
ease
lia
biliti
es
increa
se
as
a
result
o
f
inter
est
charg
ed
at
a
constant
rate
on
the
balance
outstanding and
ar
e
reduced for
l
ease paym
ents made.
Right
-
of
-
use assets are
amortised on
a straight
-
line
basis
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
89
over the remaining term of
the lease or over the r
emaining economic life of
the asset if, rarel
y, this is j
udged to be shorte
r
than the lease t
erm.
When
t
he
Gro
up
re
vises
its
est
imate
of
t
he
t
erm
of
any
lease
(bec
ause,
for
exampl
e,
i
t
r
e
-
assesses
the
probabi
lity
of
a
lessee extension
or
termination option
being
exercised), it
adjusts the
carrying
amount
of
the
lease
liability
to
reflect
the
payments to
make over the
revised term, which
are discounted at
the same
discount rate that
applied on lease
commencement.
The
carryi
ng
value
of
lease
liabi
lities
i
s
similarly
revised
when
t
he
variable
element
of
fut
ure
lease
payments dependent
on a
rate or
index i
s revised.
In
both cases
an equivalent
adjustment is
made to
the carrying
value
of the right
-
of
-
use asset
, with the revised
carrying amount being amorti
sed over the remaining (
revised) lease ter
m.
When
the
Gr
oup
ren
egoti
ates
t
he
cont
ract
ual
ter
ms
of
a
l
ease
wit
h
the
lessor,
the
accounting
depends
on
the
nature
of
the modification
:
•
if the
renegotiation results in
one or
more additional assets being
leased for an
amount commensu
rate with
the
stand
-
alone price
for
the additi
onal rights
-
of
-
use obtained,
the
mod
ifica
tion
is
acco
unted
for
as
a
separ
ate
lease
in accorda
nce with
the above
policy;
•
in
all
other cases
where the
renegotia
tion
increases the
scope of
the
lease
(whether that
is
an extension
to
the
lease term,
or
one or
more additional
assets
being
leas
ed),
the
lease
liabili
ty
is
remeasured
using
the
discount
rate applicable on the m
odification date, with the righ
t
-
of
-
use asset being adjusted by t
he same amount; and
•
if the renegotiation
results in a decrease in the scop
e of the lease, both the carryin
g a
mount of
th
e le
ase
liabi
lity
and
right
-
of
-
use asset
are reduced
by
the
same
proportion to
refl
ect
the partial
or
full termination
of
the
lease
with
any
dif
ference
r
ecognised
i
n
profi
t
or
loss.
The
lease liability
is then
further
adjusted
t
o
ensure its
car
rying
amount
reflects the
amount of the
renegotiated payments over the
renegotiated term, with the
modified lease payments
discounted
at
the
rate
applicable
on the
modification
date.
The right
-
of
-
use
asset
is
adj
usted
by the
same
amount.
For
co
ntracts
th
at
both
convey
a
right
to
the
Group
to
use
an
identified
asset
and
require
services
to
be
provi
ded
to
the
Group
by
the
l
essor,
t
he
Group
has
e
lected
t
o
account
f
or
the
ent
ire
cont
ract
as
a
le
ase,
i.
e.
it
does
a
llocat
e
any
amount
of the contractual
payments
to, and accou
nt separately for, a
ny services p
rovided by the s
upplier as part of th
e contract.
Impairmen
t of non
-
fin
ancial assets
The Group assesses
at
each reporting date
whether
there i
s an indi
cation t
hat any no
n
-
financial as
sets may
be impaired.
If an
y such indication
exists, or
when annual impairment test
ing for an
asset is required,
the Group makes an
estimate of
the
asset’s
recoverable
amount.
An
asset’s recoverable
amount
is
the
higher
of
an
asset’s
or
cash
-
generating
unit’s
fair
value less
costs t
o
sell
and i
ts value
in
use and
is deter
mined for
an indi
vidual asset
, unless
the
asset does
not gener
ate
cash
infl
ows
that
are
l
argely
independent
of
those
from
other
assets
or
groups
of
assets.
Where
t
he
carrying
amount
of
an asset exceeds
its recoverable amount,
the asset is
considered impaired and is
written down to
its recoverable amount.
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 assessm
ent
s
of
the time
val
ue
of mon
ey and
the risks specific
to
the asset.
I
n
determining
fair value less
costs to
sell, an
appropriate valuation model is used
incorporating industry standard valuation multiples or
other
available
fair
value
indicat
ors.
Impairment
losses on continuing operations are recognised in the
income statement
in those ex
pense ca
tegories c
onsistent
with the fun
ction of the
impaired
asset.
An assessment
is m
ade at
e
ach reporting date
as
to whether
there is
a
ny indication that
previously recogn
ised
impairment
losses
may
no
longer
exist
or
may
have
decreased
.
If
such
indication
exists,
the
recovera
ble
amount
is
estimate
d.
A
previously recognised impairment loss is reversed only if there has been a
change in the estimates used to
determine the
asset’s
recoverable
amount
since
t
he
last
impairment
loss
was
recognised.
If
that
is
the
case
the
carr
ying
amount
of
the
asset
is
increased
to
its
r
ecoverable
amount.
Impairment
charges
on
goodwill
are
consi
dered
permanent
and
cannot
be
reversed. That
increas
ed
amount
cannot
exceed
the
carrying
amount
that
would
have
been
determined,
net
of
depreciation, had no impair
ment loss been recognised for the as
set in prior years.
Such reversal is recognised i
n profit or
loss.
After
such
a
reversal
the
depreciation
cha
rge
is
adjusted
in
future
periods
to
allocate
the
asset’s
revised
carrying
amount, less any residual
value, on a systemati
c basis over its
remaining useful li
fe.
The
Group
assesses
at
each
reporting
date
whet
her
t
here
is
an
indicati
on
t
hat
c
ontract assets
may
be
imp
aired
by
appl
ying
the IFRS 9 sim
plified approac
h to measurin
g expected cre
dit losses using
a lifetime expecte
d credit loss pro
vision
.
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
90
Provisions
A pr
ovision
is
rec
ognised
when
the
Group
has
a
legal
or
constructi
ve
obligati
on
as a
r
esult
of
a
pas
t
event, it
is probable
that
an
outflow
of
economic benefits
will
be
required
to
settle
the
obligation,
and
a
reliable
estimate can
be
made
of
the
amount
of
the
obl
igation.
If
the
effect
is
material,
expec
ted
future
cash
flows
are
discounted
using
a
curren
t
pre
-
tax
rate
that reflects, whe
re appropriate, th
e risks specific to
the liability.
Where
the
Gr
oup
expec
ts
some
or
all
o
f
a
p
rovi
sion
to
be
rei
mburs
ed,
for
exa
mple
unde
r
an
i
nsur
ance
pol
icy,
t
he
reimburseme
nt is recognised as a separate asset but only w
hen recovery i
s virtuall
y certain.
The expense r
elating to
any
provision is
presented i
n the income
statement net
of any r
eimbursement. Where disc
ounting is
used, the i
ncrease in
the
provision due to unwindi
ng the discount is
recognised as a finance
cost.
Financial assets
Impairmen
t of financial a
ssets
The Gr
oup a
ssesses
at
each
statement
of
financ
ial
position
date
whether
a
fi
nancial
asset
or
group
of
fin
ancial
assets
is
impaired.
Financial assets
The
Group'
s
fi
nancial
assets
are
al
l
cl
assified
withi
n
the
amort
ised
cost
category
.
The
Group'
s
ac
counting
poli
cy
f
or
this
category is as follows:
Assets carr
ied at
amortised c
ost
These
assets
arise
princ
ipally
from
the
provis
ion
of
sales
and
services
of
soft
ware
and
support
and
maintenance
to
customers
(e.g. tra
de
receivables),
but
also
incorporate
other types
of financial
assets
where
the
objective
is to h
old th
ese
assets
in
order
to
collect
cont
ractual
cash
flows
and
the
contractual
cash
fl
ows
are
sol
ely
payments
of
principal
and
interest.
They
are
i
nitially recognised at fair value plus
transaction costs that are directly attributable to their acquisition or
issue,
and
are s
ubseque
ntly
carried
at am
ortised
cost
using
the e
ffective
interest
rate
method,
less
provision
for
impairme
nt.
Impairment
provi
sions
for
current
and
non
-
current
trade
r
eceivables
are
recognised
based
on
the
simplif
ied
approach
within
IFRS 9
using
a pr
ovision
matrix
in
the det
erminati
on of
the
lifeti
me expect
ed cre
dit l
osses.
Duri
ng thi
s proce
ss the
probability
of
the
non
-
payment
of
the
trade
recei
vables
is
assessed.
This
probabilit
y
is
then
multiplied
by
the
amount
of
the
expected
loss
arising
from
default
to
determine
the
lifetime
expected
credit
loss
for
the
trade
receivables.
For
trade
receivables,
which
are
reported
net,
such
provisions
ar
e
recorded
in
a
separate
provisi
on
account
with
the
loss
being
recognised within
cost
of
sales
in
the
consolidated statement
of
comprehensive income.
On
confirmation
that
the
trade
receivable will not be collecta
ble, the gross carrying va
lue
of the asset is written
off against the assoc
iated provision.
If, in
a subsequen
t pe
riod, th
e a
mount
of
the
impairmen
t loss
de
creases
and
the decrease
can be
related
objective
ly to
an
event occurring after
the impairment
was recognised, the
previously recognised impairment
loss is reversed.
Any
subsequent reversal
of
an i
mpairment l
oss
is
recognised
in
the
income st
atement t
o t
he ext
ent
that
the
carrying
value
of
the asset does
not exceed its a
mortised cos
t at the reversal d
ate.
The
Group's
f
inancial
assets
measured
at
amortise
d
cost
comprise
trade
and
other
receivables
and
cash
and
cash
equivalents in the
consolidated statement of
financial positi
on.
Cash and
cash equivalents
includes cash
in hand,
deposits held
at call
with banks,
other sho
rt
-
te
rm
highly
liquid
investme
nts with
original
maturities of
three
months or
less,
and
–
for
the
purpose of
the
statement
of
cash
flows
-
bank
overdrafts.
Bank
overdrafts
are
shown
within
loans
and
borrowings
in
curr
ent
liabil
ities
on
the
consoli
dated
sta
tement
of
financial position.
Cash and cash
equivalent
s
Cash
and
short
-
term deposits in
the
consolidated statement of financial
position comprise cash
at bank
and in
hand
and
short
-
term deposits
with an original m
aturity of three m
onths or less.
For
the
pu
rpose
of
the
consolidated
statement
of
cash
fl
ow,
cash
and
cash
equivalents
consist
of
cash
and
cash
equivalents as defined
above, net of outstandi
ng bank overdrafts.
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
91
Income tax
es
Current
tax
assets
and
l
iabili
ties
are
mea
sured
at
the
amount
expect
ed
to
be
recovered
from
or
paid
to
the
t
axation
authorities,
based
on
tax
rates
and
laws
that
are
enacted
or
substantively
enacted
by
the
stat
ement
of
f
inancial
posi
tion
date.
Research
a
nd
develo
pment
tax
credit
s
are
r
ecognised
on
an
a
ccruals
basis
an
d
recorde
d
as
a
credit
in
the
taxation
line
of the income statement.
Deferred i
ncome tax is reco
gnised on all
temporary di
fferences
arising bet
ween the tax base
s of assets and l
iabili
ties and
their carrying am
ounts in the fina
ncial statemen
ts, with the followin
g except
io
ns:
•
where
the
temporary
differ
ence
arises
from
the
i
nitial
r
ecogniti
on
of
goo
dwill
or
of
an
ass
et
o
r
l
iabili
ty
in
a
transaction
that
is
not
a
business
combination
that
at
the
time
of
the
transaction
affects
neither
accounting
nor
taxable profit or los
s
.
•
in
respect
of
taxable
temporary
differences
associa
ted
with
investm
ents
in
subsidiaries,
associat
es
and
joint
ventures,
where
the
timing
of
t
he
reversal
of
the
temporary
dif
ferences
can
be
controlled
and
it
is
probable
that
the temporary
differences w
ill n
ot reverse in the
foreseeable future
.
•
deferred income
tax
assets are
recognised only
to the extent
that
it is
probable
that taxable
profit will
be
available
against which the deducti
ble temporary differ
ences, carried for
ward tax credits or
tax losses can be
utilised.
Deferred inc
ome tax assets and liabi
litie
s are measured at the tax rates that
are expected to apply when the rel
ated asset
is realis
ed or
liability
is se
ttled, b
ased o
n tax
rates
and
laws
enacted
or s
ubstantiv
ely ena
cted a
t the
statem
ent of
fin
ancial
position date.
The
car
rying
amount
of
deferred
income
tax
ass
ets
i
s
rev
iewed
at
each
statement
of
financial
position
date.
Deferred
income
tax
assets
and
liabilities
are
offset
only
if
a
legally
enforcea
ble
right
exists
to
set
off
current
tax
assets
agai
nst
current tax liabili
ties, the deferred income taxes rel
ate to the same taxation authority
and that authority permits the Group
to make a sing
le net payme
nt.
Income
tax
is
charged
or
credited
to
other
compreh
ensive
income
or directly
to eq
uity if
it
relates
to
items
that a
re cre
dited
or
charged
to
other
comprehensive
income
or
directly
to
equity.
Otherwise,
income
tax
is
r
ecognised
in
the
income
statement.
Purchases
and
sal
es
of
financi
al
asse
ts
measure
d
at
fair
value
through
other
c
omprehensive
inco
me
are
recogni
sed
on
settlement
date
with
any
change
in
fair
value
between
trade
date
and
settlement
date
being
recognised
in
the
fair
value
through other c
omprehens
ive income res
erve.
Financial lia
bilities
The Group classifies
its financial li
abiliti
es
into one
of tw
o categ
ories, d
epending
on th
e purp
ose for
which
the lia
bility wa
s
acquired.
The
Group
's
ac
counting
policy
for
other
financi
al
l
iabiliti
es
(
which
include
trade
payables
and
other
short
-
term
monetary
liabilities),
are
initially
recognis
ed
at
fair
value
and
subsequently
carried
at
amortised
cost
using
the
effective
interest
method.
Other f
inanci
al l
iabili
ties
inclu
de the
foll
owing i
tems:
•
Bank borrowings
are initiall
y recognised at fai
r value net of any transacti
on costs directl
y attribut
able to
the
issue
of
the
instrument.
Such
inter
est
-
bearing
liabiliti
es
are
s
ubsequently
measured
at
amort
ised
cost
using
the
effective
interest
rate
method,
which
ensures
that
any
interest
expense
over
the
period
to
repayment
is
at
a
constant
rate
on
the
balance
of
the
li
ability
carried
in
the
consolidated
statement
of
financial
positi
on.
For
the
purposes
of
eac
h
financial
liability,
interest
expense
includes
initial
transaction
cost
s
and
any
premium
payable
on redemption, as well
as any interest or
coupon payable while t
he liability
is outstanding.
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
92
•
Trade pa
yables and
ot
her short
-
term moneta
ry liabilities, which are initially recogn
ised at fair value and
subsequently carried at amortised cost usi
ng the effective interest
method.
Derecogniti
on of fi
nancial a
ssets a
nd li
abilities
A
fi
nancial
asset
or
li
ability
is
gener
ally
derecogni
sed
when
t
he
co
ntract
that
gives
ri
se
t
o
i
t
i
s
s
ettled,
sold
,
ca
ncelled
or
expires.
Where
an
exi
sti
ng
fina
ncial
liabi
lit
y
is
rep
laced
by
a
nother
f
rom
the
s
ame
lende
r
on
subst
anti
ally
d
iffe
rent
terms,
or
the
terms of
an existing
liability are
substantially modified, such
an exchange or
modification is
treated as
a
derecognition of
the
original
liability
and
the
recognition
of
a
new
li
ability,
such
that
the
difference
in
the
respective
carryi
ng
amounts
together with an
y costs or fees
incurred are rec
ognised in profit o
r loss.
Pensions
Contribut
ions to defined contribut
ion schemes are recognised in the income statement in the
period in which they become
payable.
Dividends
Dividends
are recogn
ised when t
hey become l
egally pa
yable. I
n the case
of inte
rim divi
dends to eq
uity shar
eholders,
this
is when d
eclared by
the Direc
tors. In the
case of fin
al dividend
s, this is w
hen appro
ved by th
e shareho
lders at th
e AGM.
Revenue rec
ogni
tion
Revenue,
comprisi
ng
s
ales
of
products
and
services
to
third
partie
s,
is
r
ecognised
to
the
extent
that
satisf
action
of
contractual performance obli
gations has occurred and
it is
probable that the
economic benefits will
flow to
the Group and
the
rev
enue can
be
reliably measured.
Revenue
is
measured
at
the stand
-
alone
sell
ing
price
of
the
perf
ormance
obligation
delivered,
excluding
discounts,
rebates,
VAT
and
other
sales
taxes.
To
note
t
here
i
s
no
material
impact
of
variable
consideration or financin
g c
omponents across all revenue
streams.
The following
criteria
must also be
met before reve
nue is recogni
sed:
Software li
cences
Revenue on
software
licences
is re
cognised wh
en all
of the
followi
ng crit
eria ar
e met:
•
persuasive evidence of
an arrangement ex
ists, such as a
signed co
ntract or p
urchase
order;
•
satisfaction
of
the
contracted
perf
ormance
obligations
has
been
met,
which
in
the
case
of
software
licences
typically means
delivery has occ
urred and no futu
re elements to b
e delivered are es
sential to the
functionality of
the delivered ele
ment;
•
a stand
-
alone selling pr
ice of the perfor
mance obligation can be measured;
and
•
collectability i
s probable.
Provision of
services
Revenue
and
profi
ts
fr
om
the
pr
ovision
of
pr
ofession
al
serv
ices,
such
as
i
mplementati
on,
development,
training
and
consultancy,
are
deli
vered
under
a
t
ime
and
materials
type
contract
and
are
therefore
r
ecognised
over
time
and
based
upon
number
of
hours
worked.
On
occasion
fixed
pr
ice
serv
ices
contr
acts
are
entered
into,
upon
which
revenue
is
recognised
on a
percentage
-
of
-
completion basis,
as
costs incurred
relate
to total
costs for
t
he contract,
when
the
outcome
of
a
contract
can
be
estimated
reliabl
y.
Determining
whether
a
contract’s
outc
ome
can
be
estimated
reliably
requires
managemen
t to
exercise judgement, whilst
calculation of the contract’s profit requires estimates of
the total contract costs
to
completion.
Cost estim
ates
and
judgeme
nts
are
continually
reviewed a
nd
updated
as determ
ined
by
events
or
circumstances.
Revenue
from
t
his
re
venue
stream
cr
eates
contract
assets
through
yet
to
be
billed
time
input
and
expenses
at
the
reporting
date.
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
93
Support and mai
ntenance
Revenue
fro
m
support
an
d
maintenanc
e
service
s
is
reco
gnised
rat
eably
over
the
peri
od
of
th
e
contract
.
Revenue
is
recogni
sed
when the
provision of
support and
maintenance
and
completion of
the performance
obligations are
carried out
which
is
deemed
to
be
evenly
thro
ughout
the
term
of
the
contr
act.
The
customer
si
multaneousl
y r
eceives
and
consumes
the benefits prov
ided by the
Group’s
perfor
mance as
the Gr
oup per
forms.
Revenue
from
this
revenue
stream
creat
es
c
ontract
lia
bilit
ies
through
the
invoici
ng
of
s
ervices
prior
t
o
p
erformance
obligations being per
formed.
Data servi
ces
Revenue
related
to providing
data se
rvices
is
based o
n
a
consu
mption
basis
whereby revenue is
recognised based on
the
customer utilisation
of
such services.
Solution sal
es
Contracts
for
t
he
deliv
ery
of
solution
s
with
multiple
elements,
typic
ally
i
nvolving
softwar
e
licences,
rendering
of
ser
vices,
support, maintenance and
inf
rastructure are
unbundled
where possibl
e and revenue
is
recognised
based
on t
he
accounting
policy
appl
icable
to
each
consti
tuent
part,
for
example
the
stand
-
alone
selli
ng
price
of
the
sof
tware
licence is
recognised at
a
point
in
time,
upon
satisfaction
of
the
performance obligations
associated to
that
licence,
and
the
stand
-
alone selling price
of software maintenance and support i
s recognised over the period
over which the service is pr
ovided.
A
typical example of such a
scenario is where we sell
a subscription licence but are
not contracted to provide the
hosted
infrastructu
re to deploy th
e software
upon
–
the
customer deploy
s the software on
-
premise or on a
cloud environment
for
which we
are no
t responsible.
We
hav
e
many
inst
ances
wher
e
unbu
ndli
ng
is
not
possi
ble,
thi
s
i
s
wher
e
a
b
undle
d
el
ement
cannot
tech
nical
ly
or
operationally
be
provi
ded
without
another.
The
typical
example
of
this
is
when
the
customer
contr
acts
our
hosted
Cloud
software o
ffering
s
, un
der which
the custo
mer cann
ot gain be
nefit from th
e software
without th
e Group
also provid
ing, and
continuing to
provide, the
hosted
infrastructure upon
which software
is
deployed. W
here
objective unbu
ndling of
a solution
is not poss
ible, reven
ue is recognised over t
he period of the cont
ractual service pr
ovision.
Interest incom
e
Interest
income
is
recognised
as
fi
nance
revenue
as
interest
accrues
using
the
effective
interest
method.
The
effective
interest
rate
is
the
rate
that
exactly
discounts
estimated
future
cash
recei
pts
thr
ough
the
expected
life
of
the
financial
instrumen
t to its net c
arrying am
ount.
Share
-
based payments
Equity
-
settled transacti
ons
The cost of
equity
-
settled transactions with
employees
is measured
by reference to
the fair
v
alue at the
date at
which they
are
granted
and
i
s
recognised
as
an
expense
over
the
vesting
period,
which
ends
on
the
date
on
which
the
relevant
employees become fully entit
led to the award.
Fair value of awards with a
market condition
-
based performance target is
determined by an
external valuer using a
Monte
Carlo si
mulation
prici
ng model.
In valu
ing equi
ty
-
settled transactions, no account i
s taken of any vesting conditions,
other
than conditions
linked to the price o
f the shares of th
e Compan
y (market co
nditions).
Fair
val
ue
of
awards
wit
h
a
f
inancial
result
-
based
performance
target
is
determined
by
management
usi
ng
the
Bl
ack
Scholes pri
cing model
.
No
expense
is
rec
ognised
for
a
wards
that
do
not
ultimatel
y
vest,
exc
ept
for
awards
wh
ere
vesting
i
s
conditi
o
nal
upon
a
market
cond
ition
,
wh
ich
are
treat
ed
as
v
esting
ir
respec
tive
of
wheth
er
o
r
n
ot
the
market
cond
ition
is
sat
isfi
ed,
provid
ed
that all other vestin
g conditions are
satisfied.
At each
statement
of
financial
posit
ion da
te befo
re vesti
ng, t
he cumulat
iv
e expense i
s calculated,
representing
the extent
to which the vesting period has expired and managem
ent’s best estimate of the achievement or otherwis
e of non
-
market
conditions
and
of
the
number
of
equity
instruments
that
wi
ll
ultimately
vest
or,
in
the
ca
se
of
an
instrument
subj
ect
to
a
market
condit
ion,
be
trea
ted
as
vesti
ng
as
descr
ibed
a
bove.
The
moveme
nt
in
cumul
ative
expense
since
t
he
pr
evious
statement of financial posit
ion date is recognised in the i
ncome statement, with a corresponding entry in equ
ity.
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
94
Where t
he ter
ms of an
equit
y
-
settled award are modified or a
new award
is designated as replacing a
cancelled or settled
award, the cost
based on
the original award terms
continues to be
recognised over the
original vesting period. In addition,
an expense i
s recognised
over the
remainder
of the
new vesting
period for
the
incremental fai
r value
of any
modification,
based
on
the
difference
between
the
fair
value
of
the
original
award
and
the
fair
value
of
the
modif
ied
award,
both
as
measured
on t
he dat
e
of the modifi
cation. No reduction
is recognised if
this difference
is negative.
Where
an
equ
ity
-
sett
led
award
i
s
cancelled,
it
is
treated
as
if
it
had
vested
on
the
date
of
cancellation,
and
any
cost
not
yet recognised in
the profit and loss
account for t
he award is
expensed immediately. Any compensation paid
up to the fair
value
of
the
award
at
the
cancellation
or
set
tlement
date
is
deducted
from
equity,
with
any
excess
over
fair
value
being
treated as an e
xpense in the inc
ome statem
ent.
The share
-
based payment expense is
recognised as a staff
cost and the associat
ed credit entry i
s made against equity.
Financial inst
ruments
The G
roup, outside
of normal
b
usiness operations, enters
into
f
orward
cur
rency contracts.
Forward
currency
contracts are
valued at
fair value through pro
fit or loss.
Employee Share
Ownership Trust
(ESOT)
The
Company
i
s
deemed
to
have
contr
ol
of
its
ESOT
t
herefore
t
he
trust
is
incl
uded
withi
n
the
co
nsolidated
financial
statements.
The
ESOT
investment
in
t
he
Company’s
shares
is
deducted
from
equity
in
the
consolida
ted
statement
of
financial position. T
he shares are
valued at the av
erage purcha
se price.
Exceptional
items
Exceptional
it
ems
are
discl
osed
separately
in
the
financi
al
st
atements
where
it
is
n
ecessary
to
do
so
to
provide
furth
e
r
understanding
of
the
financial
per
formance
of
the
Group.
They
are
non
-
recurring
items
of
income
or
expense
that
have
been shown separately due to
the significance of
their nature or
amount.
Cost of s
ales
Costs
of
sales
comprise
costs
i
ncurred
to
achieve
t
he
financial
years
revenue
and
ar
e
recognised
withi
n
the
Income
statement primarily consisting of
the following costs:
•
Cu
stomer spec
ific
third p
arty cos
ts incur
red in
providi
ng our c
loud host
ed cloud
soluti
ons
•
Thi
rd party c
ontractor co
sts incurre
d
by our contracting serv
ices business
•
Pa
yrolled e
mployees tha
t provide
fixed mar
gin contr
acting ser
vices
Administrat
ive expense
s
Administrat
ive
expenses
are
recognised
wit
hin
the
I
ncome
S
tatement
in
the
period
that
they
are
incurred
and
primarily
consist o
f the following costs:
•
Staff cost
s includ
ing salar
ies, bonus
es and commiss
ions excl
uding payro
lled emplo
yees provi
ded fixed
margin
contracting services which are withi
n costs of sale
•
M
arketing
costs including tr
avel and entertainment cos
ts
•
P
roperty
costs excluding any costs discl
osed as amortisation under IFRS 16
•
IT and communication co
sts
•
P
rofessional
advisory fees and gener
al administration
costs
•
D
epreciat
ion and amorti
s
ation
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
95
Changes in
accounting po
licies
New standards,
interpretations a
nd amend
ments effec
tive from 1 J
anuary 202
1
A number
of
new
st
andards
, interpretations and amendmen
ts
are ef
fective
for the year ended 31 December
2021
,
whic
h
have
been
li
sted
below,
these have
had
no
impact
on
the
Group’s
accounting
policies
and
disclosures
in
these
financial
statements.
IBOR reform
and its Effects
on F
inancia
l reporting
–
phase 2
C
OVID
-
19 related rent concessi
ons (Amendment to IFRS 16)
New standards,
interp
retations
and amendments
not yet e
ffective
A
ccounting st
andards,
amendments t
o
standards
and
interpretations
i
ssued
by
the
IASB
that
are
effecti
ve
for
the
period
beginning 1 January 202
2
are not expect
ed to have a signifi
cant impact on the
Group
’s financial s
tatemen
ts.
There
are
no
new
sta
ndards
,
and
amendments
to
st
andards
and
interpretations
which
are
eff
ective
for
annual
periods
beginning after 1 Januar
y 202
2
which have
been adopt
ed in t
hese fin
ancial
statements.
Prior year
restatement
For
t
he
ye
ar
end
ing
31
December 2020
t
he
Group
’s
fixed
margin
contracti
ng
service
s
disclosed
third
party
contractor
costs
within
c
osts
of
sal
e
,
with
f
i
xed t
erm contractors t
hat were paid
through
the
Group’s
payrolls
being
d
i
sclosed as
administrative
expenses.
To
provide
more
r
elevant
and
reliable
informa
tion
for
the
year
ended
31
Decem
ber
2021
all
contractor costs
incurred under the
Group’s contracting busi
ness have been disclosed
within
costs of
sales regardless
of
how the contractors have
been paid.
As a result
of the chan
ge in account
ing treat
ment, cos
ts incurred of £
3,143,000
previously disclosed within administr
ative
expenses
in
the
year
ended
31
December
202
0
have
been
reclassifi
ed
as
costs
of
sale.
This
is
di
sclosed
within
t
he
restated Income Statement. The
overall
effect
of
thi
s
change i
s
to
increa
se
costs
of
sale
by £
3,
143,000
from
£3,860,000
as
previously
r
eported
to
£7,003,000
and
reduc
e
total
administrative
expenses
by
£3,
143,000
from
£20,567
,000
to
£17,424,000
.
There
was
no
impact
to
retained
earnings
for
the
year
ended
31
December
2020
and
to
the
Statement
of
Financial Posi
tion
at 31 December 2020
.
4.
Revenue
Revenue di
sclosed i
n the i
ncome stat
ement is
analysed
as fol
lows:
202
1
2020
Note
£'000
£'000
Provision of s
oftware and serv
ices
37,026
24,752
Finance revenue
9
4
37
Total revenue
37,030
24,789
The Group has di
saggregated rev
enue into var
ious categori
es in the f
ollowing tab
le which is
intended to:
•
depict how the nature, am
ount, timing and uncertainty of
revenue and cash
flows are affected by
economic data;
and
•
enable users to under
stand the relationshi
p with the revenue segment i
nformation provided i
n note
5.
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
96
Clareti
Solutions
Other
Solutions
Contracting
Services
Total
2021
£’000
£’000
£’000
£’000
Non
-
recurring software revenue (so
ftware licences)
13
7
73
-
21
0
Recurring
software
revenue
(annually
recurring
software
licences
,
support and maintenance
and managed services
)
18,800
4,581
-
23,381
Rendering of
services
6,532
569
6,334
13,435
25,469
5,223
6,334
37,02
6
Timing of revenue recognit
ion
Non
-
annually recurring
-
at a poi
nt in time
13
7
73
-
21
0
Annually recurri
ng
-
at a point in ti
me
3,286
-
-
3,286
Rateably rec
ognised
-
over contract
period
22,046
5,150
6,334
33,530
25,469
5,223
6,334
37,02
6
Clareti
Solutions
Other
Solutions
Contracting
Services
Total
202
0
£’000
£’000
£’000
£’000
Non
-
recurring software revenue (so
ftware licences)
-
-
-
-
Recurring
software
revenue
(
annually
recurring
software
licences
,
support and
maintenance
and managed services
)
11,428
3,674
-
15,102
Rendering of
services
4,025
721
4,904
9,650
15
,4
53
4,395
4,904
24,752
Timing of revenue recognit
ion
Non
-
annually recurring
-
at a poi
nt in time
-
-
-
-
Annually recurri
ng
-
at a point in ti
me
2,891
-
-
2,891
Rateably rec
ognised
-
over contract
period
12,562
4,395
4,904
21,861
15,4
53
4,395
4,904
24,752
Contract bal
ances
Contract
assets
Contract
assets
Contract
liabilities
Contract
liabilities
202
1
2020
202
1
2020
£'000
£'000
£'000
£'000
At 1 January
3,431
3,829
(11,096)
(10,156)
Amounts included i
n contract l
iabilities t
hat were
recognised as revenue du
ring the period
-
-
11,030
9,983
Acquisition
s
1,447
93
(756)
(655)
Excess of revenue
recognised over
cash
(or rights to
cash) being recognised during the period
581
(491)
-
-
Cash received
in advance
of perfor
mance and not
recognised as revenue du
ring the period
-
-
(
11,286
)
(10,268)
At 31 December
5,460
3,431
(12,
108
)
(11,096)
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
97
Contract assets
,
including
trade
receivables
relate
to
services
performed
but
do n
ot
have
an
unconditional
right
to
payment
and
are disclosed within
the Statement of financi
al position.
Contract
li
abilit
ies
relate
to
subscription,
support and maintenance
contracts i
nvoiced
wit
h per
formance
oblig
ations
yet
to
be
satisfi
ed
and
ari
se
when
the
Group
enters
into
a
contract
which
r
esults
in
cumulative
payments
received
from
cust
omers
at
the
Statement
of
Financial
Position
date
which
do
not
necessar
ily
equal
to
the
amount
of
revenue
recognised
on
the
contracts and relate to performance obli
gations yet to be satisfi
ed. These are disclosed within trade and other
payables.
Amounts
due
to
be
recognis
ed
in
more
th
an
one
year
ar
e
£
60
,000
(20
20
:
£
66
,000).
Trade
receivables
included
in
the
above as at 1 January 2020
wer
e £
3,
344
,000.
The
Group
applies
the
IFRS
9
simplified
appr
oach
to
measuring
credit
lo
sses
using
a
lifetime
expected
credit
loss
pr
ovision
for trade
receivables
and
contract
assets.
The G
roup
has
not provided for any impairment
. See
note
1
8
fo
r further
details.
5.
Segment
information
The segmental
discl
osures re
flect t
he analys
is pres
ented on
a monthl
y basis
to
the chie
f operat
ing decis
ion maker
of
the
business, the Chief Execut
ive Officer and t
he Board of Directors.
In
addition,
the
split
of
revenues
and
non
-
current
assets
by
the
UK
and
overseas
have
been
included
as
they
are
specifically required by I
FRS 8 “Operating Segments”.
For management purpos
es, the Group
is organised
into the f
ollowing repor
table segments:
•
Clareti
Soluti
ons
–
supply
of
solutions
predominantly
t
o
the
finance
a
nd
banki
ng
markets
across
Asia
Paci
fic,
EMEA and
North America. Includes both software and services
that
can be accessed
i
n the
cloud, o
n
-
premise or
deployed into hybrid
environments.
These
pr
imary offerings withi
n this segment include:
o
Clareti
Control
pro
ducts
(which now includes the ac
quired Electra ‘Recon
ciliation’ prod
ucts
)
o
Clareti
Connect produc
ts
(which n
ow includes
the acqu
ired
Electra
products except for ‘Reconcil
iation
’)
•
Other Solut
ions
–
supply
of a
range of
well
-
established solutions to enterpris
e-
leve
l cu
stomers
in
a variety
of
end
markets
•
Contract
ing Serv
ices
–
Supply of
IT contr
acting se
rvices to
one banki
ng customer
Transfer
prices
between
segments ar
e set
on
an arm’
s lengt
h basis
in
a manner
simil
ar to
transac
tions
with t
hird p
arties.
Segmen
t revenue, segment expense and segment result
include transfers between business segments. Those transfers
are eliminated on consol
idation.
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
98
Other
Notes
Clareti
Solutions
Solutions
Contracting
Services
Adjustment
s, central
overheads
and
elimination
Consolidat
ed
202
1
£'000
£'000
£’000
£'000
£'000
Revenue
4
25,470
5,222
6,334
-
37,026
Cost of sal
es
(
3,978
)
(2,338)
(5,483)
-
(11,
799
)
Gross profi
t
21,492
2,884
851
-
25,227
Gross profit %
84%
55%
13%
68%
Adjusted administ
rative expenses
(20,9
96
)
(150)
-
-
(21,1
46
)
Adjusted operati
ng profit
49
6
2,734
851
-
4,08
1
Adjusting items:
Exceptional cost
s
5
(1,491)
(1,491)
Amortisation of
acquired intan
gibles
14
(1,673)
(1,673)
Share
-
based payments
23
(369)
(369)
Adjusting adminis
trative expense
s
(3,533)
(3,533)
O
perating profit
54
8
Finance revenue
9
4
Finance costs
9
(121)
Profit before
taxation
431
Taxation
10
(1,443)
Loss
after taxation
(1,012)
Adjusted operati
ng p
rofit
4,08
1
Amortisation
of
intangibles
14
2,36
9
Depreciation
of proper
ty, plant
and
equipment
13
1
75
Amortisation of
right
-
of
-
use assets
16
581
Adjusted EBIT
DA
7,206
Development co
sts capital
ised
14
(4,105)
Principal paid
on lease liabi
lities
16
(590)
Adjusted cash
EBITDA
2,511
Segment assets
8
1,594
Segment liabili
ties
(3
5,713
)
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
99
Other
Notes
Clareti
Solutions
Solutions
Contracting
Services
Adjustment
s, central
overheads
and
elimination
Consolidat
ed
2020
(restated)
£'000
£'000
£’000
£'000
£'000
Revenue
4
15,453
4,395
4,904
-
24,752
Cost of sal
es
(1,
12
6)
(1,
605
)
(
4,272
)
-
(
7,00
3)
Gross
profit af
ter contracting full
y costed
14,32
7
2,790
632
-
17,
7
49
93%
63
%
13
%
72%
Adjusted administ
rative expenses
(15,75
2)
(
159
)
-
-
(15,91
1)
Adjusted operati
ng (loss)/prof
it
(1,
425)
2,631
632
-
1,838
Adjusting items:
Exceptional cost
s
5
(
400
)
(
400
)
Amortisation of
acquired intan
gibles
14
(
893
)
(
893
)
Share
-
based payments
23
(
220
)
(
220
)
Adjusting adminis
trative expense
s
(1,
513
)
(1,
513
)
O
perating profit
325
Finance revenue
9
37
Finance costs
9
(54)
Profit before
taxation
308
Taxation
10
953
Profit after
taxation
1,261
Adjusted operati
ng profit
1,838
Amortisation of
intangibles
14
1,917
Depreciation
of
property, pl
ant and
equipment
13
213
Amortisation of
right
-
of
-
use assets
16
496
Bank charges
9
(13)
Adjusted EBIT
DA
4,451
Development co
sts capital
ised
14
(3,
561
)
Princi
pal paid on l
ease liabilities
16
(
576
)
Adjusted
cash EBITDA
314
Segment assets
46,845
Segment liabili
ties
(
19,979
)
The Group has a cust
omer relations
hip with one bank
ing customer which
is considered
by the Direct
ors to be indi
vidually
significant;
revenue
from
this
relationship
exceeded
10%
of
the
Group’s
revenue,
totalling
£
17
,
618
,000
(20
20
:
£1
1,
388
,000) wh
ich includes low
-
margin c
ontrac
ting
revenu
e of £
8,
442
,000 (20
20
: £
5,
115
,000).
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
100
Adjusting
administrat
ive it
ems
Operati
ng
p
erforman
ce
i
s
analysed
excluding
exceptional
items,
share
-
based
payment
charges
and
amortisat
ion
from
acquired
intangibles
which
is
consistent
in
with
the
way
in
which
the
Board
and
most
stakeholders
review
t
he
financi
al
performance
of
the Group.
These
adjusting
items
a
re
all either non
-
cash
or n
on
-
recurring
IFRS
expense
s (or
income) that
do
not
reflect
the
underlying
perf
ormance
of
the
business
.
In
the
case
of
share
-
based
payme
n
t
charges,
managemen
t
acknowledge
that
these
awards
are
potenti
ally
paid
’i
n
-
lieu’
of
cash
sa
lary
or
bonuses
and
therefore
t
here
is
a
val
ue
to
these.
H
owever,
the
IFRS
valuation m
ethodology
applied to
th
ese
charges
does no
t r
epresent
a cash
cost to
the business
or a
value
that is representative of
any
the
actual
cost
to the
Company,
its
shareholde
rs
or any
other Group stakeholder
,
nor
is it
representa
tive of the
ultimate
value
to t
he award
beneficiary.
Adjusti
ng f
or t
hese i
tems i
s
als
o consistent
with
the
manner in
which similar small
and
mid
cap LSE
(or AIM)
listed present
their results
and how
we
unders
tand
the
investment
community
to assess
performance
,
where,
for
growth
shares
t
he
rec
urring
cash
perfor
mance
of the
business
is
considered
most
important
.
In
addition,
th
ese
adjustments
are
also
ali
gned
with
the
performance
methodology
used
by
the
panel
of
debt providers that tendered
for
the
re
volving cre
dit fac
il
i
ty
established during the year
in ord
er
to as
sess a
nd con
tinually
monitor
cred
it wo
rthine
ss
,
risk and
upon which covenants are set
.
The adjusting
administrati
ve items are:
202
1
2020
£'000
£'000
Acquisition and
associated int
egration costs
1,814
423
Advisory fees f
or new share opt
ion scheme
7
33
Exceptional cost
s
1,821
456
Exceptional inc
ome
(330)
(56)
Total e
xceptional items
1,491
400
Amortisation on
acquired intangi
bles
1,673
893
Share
-
based payments
369
220
Total adjusting adminis
trative items
3,533
1,513
During
the
year
the
Group
incur
red
£
1,814
,000
(20
20
:
£
4
23,000)
except
ional
costs
relating
to
legal,
due
diligence
and
professional fees f
or
the
acquisition
of Electr
a Information Systems
and associat
ed integration cost
s.
E
xceptional
legal
and
tax
advisory
costs
we
re
incurred
i
n
the
year
of
£
7
,000
(20
20
:
£
33,000
)
associated
with
impleme
nt
ation of
a
new
ten
-
year
s
hare
option incenti
ve scheme. These
costs
are not
expected to
occur
for a
further ten
years
.
E
xceptional
income
of £330,000
was
recognised
in
the ye
ar
on
realising
a
gain on
the
completion of a cont
ract to
forward
purchase US dollars
. The
contract
was entered int
o
to
minimise the
curren
cy risk
o
n
the
acquisition
of Electra
Information
Systems
.
£
56,000
was
received
during
2020
f
ollowing
an
ini
tiative
by
t
he
Austral
ian
Government
to
support
businesses
during the C
OVID
-
19 pandemic.
This
income
has been treated as exceptional as
it is non
-
recurring.
Due to the amount
and nature of
amortisat
ion of acqui
red inta
ngibles and
share
-
based payment
s both costs were treated
as an adjusting administ
rative item.
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
101
Adjusted EBI
TDA
Adjusted
EBITDA
is
disclosed
with
in
the
f
inancial
sta
tements
to
show
t
he
u
nderlying
perf
ormance
of
the
g
roup
on
a
consistent basis and to aid understanding of
the financi
al
performance during the year.
Notes
202
1
2020
£’000
£’000
Profit before
taxation
431
308
Adjusting items:
Amortisation of
intangibles
14
4,042
2,810
Depreciation
of proper
ty, plant
and equipment
13
175
213
Amortisation of
right
-
to
-
use assets
16
581
496
Notional
interest
on lease liabilit
ies
9
43
38
Finance revenue
9
(4)
(
37
)
Interest payable
9
78
3
EBITDA
5,346
3,831
Exceptional it
ems
5
1,491
40
0
Share
-
based payments
23
369
220
Adjusted EBIT
DA
7,206
4,451
Adjusted
EBITDA is
not an I
FRS measure
or not
considered
to be
a substi
tute fo
r or su
perior t
o any I
FRS measures.
It i
s
not directly comparabl
e to other companies.
Geographic
infor
mation
202
1
2020
£'000
£'000
Revenues from e
xternal cust
omers (by
destinati
on)
UK
5,998
6,719
EMEA
3,151
2,593
United Stat
es
9,096
3,038
America
s
517
494
Australia
17,73
8
11,413
Asia Pacific
526
495
37,026
24,752
EMEA includes
revenue f
rom external
customers
located p
rimarily
in
the Netherlands, L
uxembourg
,
Germany,
Belgium
and South Afric
a
. Asia Pacific inc
ludes revenue
from external c
ustomers loc
ated primarily in M
alaysia and
Singapore.
202
1
2020
£’000
£’000
Non
-
current assets
UK
62,777
32,269
EMEA
448
588
North America
396
9
Asia Pacific
562
683
64,183
33,549
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
102
Non
-
current
assets
consist
of
property,
plant
and
equipment,
r
ight
-
of
-
use
assets
,
intangible
assets
and
deferred
tax
asset
s
.
6
.
Group
operati
ng profi
t
The Group operati
ng profit
is stated
after chargi
ng:
Notes
202
1
2020
£'000
£'000
Research and
development co
sts writt
en off
1,721
1,049
Amortisation of
deferred develo
pment costs
recognised in administration expenses
14
2,32
6
1,863
Total research and development
costs
4,04
7
2,912
Depreciation
of proper
ty, plant
and equipment
13
175
245
Amortisation of
right to us
e assets
16
581
496
Amortisation of
intangible as
sets
(excluding development costs)
14
1,716
947
Total depreciation, i
mpairment and amortisation
expense
2,472
1,688
Employee benefit
expenses
8
20,521
16,641
Net foreig
n currency d
ifferences
losses
/(gains)
69
(7)
7.
Audit
or’s remuner
ation
The
Group
paid
the
following am
ounts to
its auditor
in
respect
of
the
audit
of
the
financial statements
and
f
or
other
service
s
provided to the Group.
202
1
2020
£'000
£'000
Audit
fees
Audit of the
Group financial
statements and as
sociated company
29
27
Other fees
to the au
ditor
-
auditing the accounts of subsi
diaries
11
1
84
-
audit of acquisition
14
10
154
121
Non
-
audit fees
Accountants re
p
ort on hi
storical
financial information
160
-
Audit of bank
co
venant certif
icates
6
-
166
-
8.
Staff
costs and
Directors’
emoluments
The
followi
ng
disclo
sures
in
respect
of
the
cons
olidated
i
ncome
statement
items
ar
e
presented
in
respect
of
continuing
operations
only,
wit
h
comparativ
es
rest
ated
where appropriate
to
exclude
di
scontinuing
operations
f
rom
these disclosures.
Staff and
Director cos
ts
31 December 202
1
Income
statement
Capitalised
d
evelopment
costs
Total
excluding
contracting
Contracting
costs
expensed
Total
£'000
£'000
£'000
£'000
£'000
Wages and
salar
ies
13,120
3,031
16,151
2,250
18,401
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
103
Social securit
y costs
8
33
246
1,079
131
1,210
Other pensi
on costs
58
1
10
9
690
220
910
14,534
3,386
17,920
2,601
20,521
31 December 2020
Income
statement
Capitalised
d
evelopment
costs
Total
excluding
contracting
Contracting
costs
expensed
Total
£'000
£'000
£'000
£'000
£'000
Wages and
salar
ies
9,129
2,836
11,965
2,703
14,668
Social securit
y
costs
724
299
1,023
182
1,205
Other pensi
on costs
434
77
511
257
768
10,287
3,212
13,499
3,142
16,641
Included
in
wages
and
salaries
is
a
total
expense
of
share
-
based
payments
of
£369
,000
(20
20
:
£
220
,000)
all
of
which
arises from
transactions accounted
for as equity
-
settled share
-
based payment transacti
ons.
The average monthl
y number of empl
oyees during t
he year was made u
p as follows:
202
1
2020
Management
12
11
Sales and administ
ration
42
32
Technical
128
107
Total
18
2
150
Contracting
services
33
20
Details
of Dir
ectors’
compensati
on are i
ncluded i
n the
Director
s’ Remunerat
ion Repor
t.
9.
Finance r
evenue and costs
202
1
2020
Finance revenue
£'000
£'000
Bank interest
receivable
4
37
Finance costs
Notional i
nterest on
lease lia
bilities
43
38
Other inte
rest payabl
e
1
3
Other bank
charges
77
13
Total finance costs
121
54
10
.
Taxation
Tax on profit
on ordinary acti
vities
Tax charge in
the income st
atement
202
1
2020
£’
000
£’
000
Current inc
ome tax
Overseas tax
c
redit
-
adjustment to previous years
(93)
(124)
Overseas tax
charge
-
current year
1,1
18
599
UK corporati
on tax cre
dit
-
adjustment to previous
years
(1,045)
(
1,307
)
Total current income t
ax
(20)
(
832
)
Deferred in
come tax
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
104
Movement i
n net de
ferred t
ax
asset
1,23
1
(202)
Tax rate change adjustments
232
81
Total deferred income tax
1,46
3
(121)
Total charge
/(
credit
)
in the income statemen
t
1,443
(953)
Reconcilia
tion of
the total
tax char
ge
The tax charge
in the
income statement for the
year is
higher
(2020
: low
er)
than
the
standard
rate of c
orporation
tax in th
e
UK
of 19.0% (2020
: 19.0%). The difference
s are reconciled
below:
202
1
2020
£'000
£'000
Profit before
taxation
431
308
Profit before
taxation multi
plied by the
UK standard rate
of corporation
tax of 19.0% (
20
20
: 19.0%)
82
59
Expenses not deduct
ible for ta
x purposes
288
137
Differences
in tax r
ates
785
168
Overseas tax
credit
-
adjustment to previous
years
(93)
(124)
Research and
development cr
edit
-
adjustment to prev
ious year
(1,045)
(
1,307
)
Research and
development en
hanced reli
ef
(1,703)
(1,
424
)
Movement i
n unrecog
nised los
ses carr
ied forwa
rd
1,37
1
1,359
Recognition
of deferr
ed tax lia
bility
on t
he
inte
r-
group
sale of
i
ntellectual
p
roperty
1,398
-
Movement i
n unrecog
nised temp
orary di
fference
s
254
211
Movement i
n unrecog
nised fi
xed asset
temporar
y diffe
rences
25
3
(16)
Temporary difference on
share
-
based pay
ments
(61)
73
Temporary movement on acquired int
angibles
(318)
(
170
)
Tax rate change adjustments
2
32
81
Total tax charge
/(
credit
)
reported in the income statement
1,4
43
(953)
Unrecognised
tax losses
The Group
has
tax
losses
that
are
available
indefinitely
for
offset
against
future t
axable prof
its of
the
companies i
n which
the
losses
arose
as
analysed
below.
Deferred
tax
assets
have
not
been rec
ognised
in respe
ct
of
these losse
s
as
they ma
y
not
be
used
to
off
set
taxable
profits
el
sewhe
re
in
the
Group
and
they
have
arisen
in
subsidiaries
that
have
been
loss
making
for s
ome ti
me.
The tax effect of exchange differences recor
ded within the consolidated stat
ement of comprehensive income is a credit of
£
35
,000 (20
20
: £
2
1,000).
Temporary diffe
rences associated with Group investm
ents
At
31
December
202
1
,
there
was
no
recognised
deferred
tax
liability
(20
20
:
£nil)
for
taxes
that
would
be
payable
on
the
unremitted
earnings
of
certain
of
the
Group’s
subsidiari
es
as
t
he
Group
has
determined
that
und
istributed
profits
of
its
subsidiaries will not
be distributed in the foreseeable
future.
Deferred t
ax
Deferred
tax asset
s/(li
abilit
ies)
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
105
202
1
Asset
Liability
Net
£'000
£'000
£'000
1 January
552
(1,289)
(737)
Movement i
n the pe
riod:
-
Tax losses
(24)
-
(24)
-
Employee share award sch
emes
119
-
119
-
Qualifying r
esearch and
development
expenditure
(
494
)
-
(494)
-
Fixed asset timing diff
erences
(96)
-
(96)
-
Acquired intangibl
es
-
318
318
- I
nter
-
group sale of intellectual
property
-
(1,398)
(1,398)
Acquisition of
intangibles
in subsidiaries
-
(4,
055
)
(4,
055
)
Impact of change
in tax rate
17
5
(407)
(
23
2)
31 December
232
(
6,831
)
(6,599)
2020
1 January
489
(
952
)
(463)
Movement i
n the pe
riod:
-
Tax losses
411
-
154
-
Employee share award sch
emes
(219)
-
(262)
-
Qualifying r
esearch and
development
expenditure
(
513
)
-
(
211
)
-
Fixed asset timing diff
erences
353
-
351
-
Acquired intangibl
es
-
170
170
Acquisition of
intangibles
in subsidiaries
-
(395)
(395)
Impact of change
in tax rate
31
(112)
(81)
31 December
552
(
1,289
)
(
737
)
Comprising:
202
1
2020
Asset
£’000
£’000
Tax losses
3,639
2,784
Employee share award
schemes
310
1
45
Qualifying
research a
nd development
expenditur
e
(4,545)
(3,
079
)
Fixed asset timing di
fferences
828
702
31 December
232
552
2021
2020
Liability
£’000
£’000
Inter
-
group sale of intellectual proper
ty
(1,398)
-
Acquired intangi
bles
(5,433)
(1,289)
31 December
(6,
831
)
(
1,289
)
Unrecognis
ed potent
ial def
erred ta
x assets
The
deferr
ed
tax
not
recogni
sed
in
the
consol
idated
st
atement
of
financial
positio
n
is
as
follows:
202
1
2020
£'000
£'000
Gresham Technol
ogies
(Luxembourg) S
.A.
816
429
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
106
Gresham Technol
ogies
(Holdings)
SARL
103
604
Inforalgo Informa
tion Technology Lim
ited
243
2
05
Gresham Technol
ogies (Sin
gapore) Limi
ted
1
25
12
9
Gresham Technol
ogies (TDI
) Limited
1
16
91
Tax losses
1,403
1,458
Gross
tax losses unrecognised
5,857
6,459
Future tax r
ates
The main
UK corporation tax
rate
is
due
to
increa
se
to
25
%
from 1 April 202
3
as
s
ubstantively
enacted
by the
Finance
Act
2021
.
Therefore, the
rate used to
calculate def
erred tax b
alances at 31
December 202
1
has increased fr
om 1
9
% to
25
%.
The
Group’s
recognised
and
unrecogni
sed
deferr
ed
tax
assets
in
the
UK,
Luxembourg,
Austral
ian
and
US
subsi
diaries
have been shown at the rates
in the follow
ing table, be
ing the su
bstantively
enacted
rates in the
se countr
ies.
202
1
2020
%
%
UK
25
19
Luxembourg
25
25
Australia
30
30
US
27
27
11.
Earnings
Earnings per
share
Basic earnings
per share amounts are calcul
ated by
dividing profit or loss for the year attributable to owners of the Parent
by the weighted average number of
ordinary shares out
standing during the year
.
Diluted
earni
ngs
per
share
amounts
are
calcula
ted
by
di
viding
profi
t
or
l
oss
attrib
utable
to
owners
of
the
Parent
by
the
weighted
average
nu
mber
of
o
rdinary
shares
ou
tstanding
during
the
year
plus
the
weight
ed
averag
e
number
o
f
ordin
ary
shares
that
would be
issued
on
the conversion
of all
the d
ilutive po
tential
ordinary
shares
int
o
ordi
nary
shares
except wh
en
such dilutive instruments would reduce t
he loss per share.
The following
reflects
the earnings
and share data
used in the
basic and dil
uted earnings
per share co
mputations:
202
1
2020
Basic weighted av
erage number of sha
res
77,132,796
68,697,828
Employee share opti
ons
-
weighted (n
ote 2
3)
890,100
1,414,549
Diluted wei
ghted averag
e number of
shares
78,022,896
70,112,377
Notes
202
1
2020
£'000
£'000
Adjusted earnings
attributable
to owners of t
he Parent
3,919
2,774
Adjusting items:
Exceptional it
ems
5
(1,491)
(
400
)
Amortisation of
acquired intan
gibles
14
(1,673)
(
893
)
Deferred ta
x charge
on int
er
-
group sale of intellect
ual property
10
(1,
3
98
)
-
Share
-
based payments
23
(369)
(
220
)
Statutory earni
ngs attributa
ble to owners of
the Parent
(1,012)
1,261
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
107
During
the
year
ended
31
Dec
ember
202
1
,
share
options
granted
under
s
hare
o
ption
schemes
wer
e
exercised
and
the
Group issued
83
,000
(20
20
:
1,900,00
0)
ordinary
shares
accordingly
(ranking
pari pa
ssu
with
existing
shares
in
issue).
See
note 2
2
for further deta
ils
.
In
June
2021
the
Company issued
13,125,000
ordinary
shares at
a
price
of
160
pence
(ranking pari
passu
with
existing
shares in issue)
.
See not
e 2
2
for further details
.
There
have be
en no
other
tran
sactions
involvi
ng or
dinary
shares
or
potential
ordi
nary
shares
between
the
reporting
date
and the date of completi
on of this Annual Financ
ia
l Report 202
1.
12.
Dividends paid
and proposed
The
final
dividend
for
the
year
ended
31
December
2
0
20
was
appr
oved
at
the
Compa
ny
Annual
General
Meeting
on
10
May
202
1
and
paid
on
20
May
202
1
of
0.75
pence
per
share,
equat
ing
to
a
total
of
£522
,000.
T
he
Company
will
be
proposing a final
dividend for approval
at the AGM for the year
ended 31 December 202
1
of 0.75
pence per share.
13.
Property, plant
and equipment
Fixtures and
fittings
Property,
plant and
equipment
Total
202
1
£'000
£'000
£'000
Cost
At 1 January
756
1,009
1,765
Additions
1
1
44
1
45
Additions acquir
ed as part of
a business combin
ation
-
9
9
Disposals
-
(
83
)
(
83
)
Exchange adjustment
(
12
)
(6)
(1
8)
At 31
December
7
45
1,07
3
1,818
Depreciation
and impair
ment
At 1 January
(691)
(831)
(1,522)
Charge for
year
(4
3)
(1
32
)
(175)
Disposals
-
83
83
Exchange adjustment
11
3
14
At 31 December
(7
23
)
(877)
(1,
60
0)
Net carryin
g amount
At
31 December
22
19
6
218
At 1 January
65
178
243
Fixtures and
fittings
Property,
plant and
equipment
Total
Earnings per shar
e
Statutory
pence
pence
Basic earnings p
er share
(1.31)
1.84
Diluted ear
nings per
share
(1.31)
1.80
Adjusted
Basic earnings p
er share
5.0
8
4.04
Diluted ear
nings per
share
5.02
3.96
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
108
202
0
£'000
£'000
£'000
Cost
At 1 January
733
1,076
1,809
Additions
5
82
87
Additions acquir
ed as part of
a
business combination
7
7
14
Disposals
-
(156)
(156)
Exchange adjustment
11
-
11
At 31 December
756
1,009
1,765
Depreciation
and impair
ment
At 1 January
(609)
(813)
(1,422)
Charge for
year
(71)
(174)
(245)
Disposals
-
156
156
Exchange adjustment
(11)
-
(11)
At 31 December
(691)
(831)
(1,522)
Net carryin
g amount
At 31 December
65
178
243
At 1 January
124
263
387
14.
Intang
ible assets
Separately identi
fied
intangibles on ac
quisition
Development
costs
Patents and
licences
Software
Customer
relationship
s
Goodwill
Total
202
1
£'000
£'000
£'000
£'000
£'000
£'000
Cost
At 1 January
26,996
832
7,161
2,410
5,625
43,024
Additions
4,105
45
4,959
11,800
14,27
9
35,18
8
Disposals
-
(
6)
-
-
-
(6)
Exchange adjustment
(29)
(13)
-
-
(56)
(98)
At 31 December
31,072
858
12,120
14,210
19,84
8
78,1
08
At 1 January
(8,117)
(739)
(2,141)
(669)
(2
5
0)
(11,916)
Charge for
year
(2,326)
(43)
(964)
(709)
-
(4,042)
Eliminated on di
sposal
-
6
-
-
-
6
Exchange adjustment
65
13
-
-
33
111
At 31 December
(10,378)
(
763
)
(3,105)
(1,378)
(2
1
7)
(
15,841
)
Net carryin
g amount
At 31 December
20,694
95
9,015
12,832
19,63
1
62,26
7
At 1 January
18,879
93
5,020
1,741
5,3
75
31,108
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
109
Separately identi
fied
intangibles on ac
quisition
Development
costs
Patents and
licences
Software
Customer
relationship
s
Goodwill
Total
2020
£'000
£'000
£'000
£'000
£'000
£'000
Cost
At 1 January
23,345
872
6,275
1,218
2,943
34,653
Additions
3,561
4
886
1,192
2,656
8,299
Disposals
-
(44)
-
-
-
(44)
Exchange adjustment
90
-
-
-
26
116
At 31 December
26,996
832
7,161
2,410
5,625
43,024
Amortisation and
impairment
At 1 January
(6,182)
(729)
(1,477)
(440)
(250)
(9,078)
Charge for
year
(1,863)
(54)
(664)
(229)
-
(2,810)
Eliminated on di
sposal
-
44
-
-
-
44
Exchange adjustment
(72)
-
-
-
-
(72)
At 31 December
(8,117)
(739)
(2,141)
(669)
(250)
(11,916)
Net carryin
g amount
At 31 December
18,879
93
5,020
1,741
5,375
31,108
At 1 January
17,163
143
4,798
778
2,693
25,575
Development
costs
Development
co
sts
are
inte
rnally
gen
erated
and
are
cap
itali
sed
at
cost.
The
se
intangib
le
assets
hav
e b
een
assessed
as
having
a
finite
l
ife
and
are
amortised
on
a
straight
-
line
basis
over
their
useful lives
of
two
to
elev
en
years.
These
asset
s
are
tested fo
r
impairment
where
an
indicator
of impairme
nt
arises
and an
nually
prior
to them
being
made
available
for use.
For the y
ears ended
31 December 202
1
and 31
December 2020
the Group has cap
italised developm
ent costs in respec
t
of
indi
vidual
Cl
areti
appl
ications
which
have
been
individual
ly
assess
ed
against
the
r
equired
capi
talisation
criteria
and
been indi
vidually
assigned
useful
economic l
ives
reflecting
the
maturity
and a
vailability
of
comparable
applications
in our
markets
. Thes
e usef
ul eco
nomic l
ives
are as
sessed
to be
betwee
n two
and
eleven
years.
No
ch
anges
have
bee
n
made
to
development
cost
s
c
apitali
sed
in
pr
ior
years
in
r
espect
of
the
Cl
areti
platf
orm,
which
continue
to be amortise
d on a system
atic basis over th
e existing usefu
l economic life of
eleven
years.
Patents and
licences
Patents
and
li
cences
a
re
the
third
par
ty
costs
incurred
in
seeking
and
obtaining
prot
ection
for
certain
of
the
Group’
s
products and
services
. The
se
intangible
assets
have been
as
sessed
as having
a finite
life an
d
are
being
amortised
ev
enly
over their useful economic life, to
a maximum
of ten years. P
atents have a rem
aining life of three years and
licences have
a remaining life of
one to ten year
s.
Separately
identif
ied acqui
red intan
gibles
Separately
identifi
ed
intangi
bles
acquir
ed
through
bu
siness
combin
ations
repr
esent
softwa
re
and
customer
relation
ships
which aros
e through
the acquis
itions
of C24 Techno
logies Li
mited,
B2 Group
,
Inforalgo
and E
lectra Information Systems
.
Software i
s amortise
d over it
s useful
economic l
ife, whi
ch is deemed
to be t
en years.
Customer
r
elation
ships
acq
uired
i
n
the
y
ear
are
amortised
over
th
eir
usef
ul
econo
mic
lif
e,
whic
h
is
de
emed
to
be
twelve
years for
the
Electra
acquisition
,
eight years for the Inforalgo and C24 Technologies Limited acquisitions and six years for
B2 Group.
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
110
G
oodwill
Goodwill
arose
on the
acquisi
tion o
f our As
ia Paci
fic r
eal
-
time financial solutio
ns business
, C24 Tec
hnologies Lim
ited, B2
Group
,
Inforalgo
and
Elec
tra
Informati
on
Systems
.
It
is
assessed
as
having
an
indefinite
life
and
is
assessed
for
impairment
at least annually.
15.
Impa
irment of go
odwill and in
tangibles
Goodwill
Goodwill
acqu
ired
through
busin
ess comb
inati
ons has
been
alloc
ated t
o one
indiv
idual
cash
-
generati
ng unit
(“CGU”), the
lowest lev
el at which
goodwill is
monitore
d for intern
al manag
ement pu
rposes, fo
r impairm
ent testing
.
Carrying
amount of
goodwill
202
1
2020
£'000
£'000
Clareti Sol
utions CGU
19,63
1
5,375
Development c
osts (fi
nite li
fe)
Development costs are
reviewed for
impairment on
an
annual basis
prior to
being m
ade available for
use,
or sooner
where
an indicator of i
mpairment exists. The fol
lowing table summarises t
he net book value of devel
opment costs:
202
1
2020
£'000
£'000
Clareti Sol
utions CGU
20,694
18,879
Clareti
Soluti
ons cash
-
generating uni
t
The recoverable amount of
this CGU
has been
determined based on
a value
-
in
-
use
calculation.
The
cash flow
projections
are
based
on
the
202
2
financial
budget,
as
approved
by
the
Board
,
which
are
extrap
olated
fo
r
five
y
ears
and
ext
ended
beyond
five
years
using
a
long
-
term
growth
rate
.
T
he
Board
considers
this
approach
appropriate
gi
ven
the
long
-
term
opportunities
that
exist
in
the
Asia
Pacific,
EMEA
and
North
American
regions.
The
impact
of
C
OVID
-
19
on
fi
nancial
budgets and projections
ha
s
been considered by the Board with
any appropriate adjustments
reflected.
The
dis
count
r
ate
app
lied
to
cash
flow
projec
tions
is
15%
(20
20
:
15%)
and
cash
flows
beyond
the
five
-
year
period
are
extrapolated
using a
2% gr
owth rate
(2020
:
2%) that is
a prudent approximation to the long
-
term average growth rate for
the
region
in
which
the
CGU
operates.
The
recoverab
le
amount
of
the
Clareti
Solutions
CGU
supports
the
value
of
goodwill
on the statement of fi
nanc
ial position.
Key assumpti
ons used i
n the val
ue
-
in
-
use calculations
Key assumptions are
made
by management
based on
past experience taking
into account external sources of
i
nformation
around gross margins, growt
h rates and discount r
ates for similar
busine
sses.
The calculati
on of value
in use is
most sensitiv
e to assumption
s around:
•
operating cash flows,
based on financial budget
s for 202
2
approved by the Board;
•
growth rates, based on i
nternally estimated
growth rates for t
he market and business offer
ings; and
•
the discount rate
, based on the
pre
-
tax w
eighted averag
e cost of capital o
f the Group.
Sensitivi
ty to ch
anges in a
ssumptions
A
change
in
our
key
assumption
in
res
pect
of
operatin
g
cash
flows
could
cause
the
carr
ying
value
of
the
goodwi
ll
or
development
costs to exceed the recoverable amount, resulti
ng in an impairment charge.
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
111
If
any
one
of
the
following
changes
were
made
to
the
above
key
assumptions,
the
carrying
amount
and
recoverable
amount
would be
equal.
Pre
-
tax discount rate
Increase from
15% to
23
%
Growth r
ate be
yond yea
r 5
Reduction
from 2% t
o
-
15
%
Revenue gro
wth
Reduction
from
18
% aver
age ov
er fi
ve ye
ars t
o
8
% ave
rage
We are
confi
dent
the as
sumpt
ions
in re
spect
of op
erati
ng ca
sh fl
ows r
emain
approp
riat
e. Whe
re th
e oper
atin
g cash
flow
s
incorpora
te products or solutions that will
be sold in
an existing known market, past experienc
e is used
as a guide to
the
level
of
sales
achievable,
growth
rates
and
associated
margins.
Where
the
operating
cash
flows
relate
to
products
or
solutions
that
wil
l
be
sol
d
into
a
new
or
emerging
mark
et,
past
experie
nce
with
similar
products
or
solu
tions
i
s
combined
with releva
nt informati
on from external
market sources,
such as competitor pri
cing and discussi
ons with potent
ial
customers, in arriving at t
he level
of sales achievabl
e, growth rates and as
sociated margins.
16.
Leases
All l
eases a
re accou
nted fo
r by
recognisi
ng a
right
-
of
-
use ass
et and a
lease l
iability
except for
leases of
low value
assets
or leases
with a
durat
ion of
twelve m
onths or
less. The
expen
se relating
to
short
-
term
leases
of twelve
months or
les
s
was
£nil (2020
: £
nil
). The Group held no low value as
set leases.
Right
-
of
-
use
assets
are
initi
ally
measured
at
the
amount
of
lease
liabilit
y
reduced
for
any
lease
incentives
received
and
increased
f
or initial
direct c
osts incurred
and any provisi
on contractually
required. Ri
ght
-
of
-
use assets are
amortised on a
straight
-
line basis ov
er the perio
d of the lea
se.
Lease liabiliti
es are measured at the present value
of the contractual payments due t
o the lessor over t
he lease term with
the
discount
rate
determine
d
by
reference
to
the
interest
rate
inherent
in
the
lease
and
where
that
is
not
readily
determinable
the
incremental
borrowing
rate
,
3.1%. Subsequent to the
initial measurement lease liabilities
are
increased
as a result of i
nterest charged and reduc
ed for lease payments made.
The Group
leases a
number of office buildings where
pa
yments are
fixed until the
con
tracts expire. The
Group
also leases
motor
vehicl
es wher
e payme
nts ca
n be i
ncreas
ed if
actua
l mileage is
higher tha
n the con
tracted rate
s.
Right
-
of
-
use assets
202
1
Property
Motor
vehicles
Total
£'000
£'000
£'000
Cost
At 1 January
3,183
99
3,282
Additions
232
-
232
Acquisition
293
-
293
Disposals
(810)
(31)
(841)
Exchange adjustment
(5
2)
(6)
(
58
)
At 31 December
2,84
6
62
2,
9
08
Amortisation
At 1 January
(1,
570
)
(6
6)
(1,
636
)
Charge for
year
(
556
)
(
25
)
(
581
)
Disposals
704
31
7
35
Exchange adjustment
38
2
40
At 31 December
(1,
384
)
(
58
)
(1,
4
42
)
Net carryin
g amount
At 31 December
1,462
4
1,466
At 1 January
1,613
33
1,646
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
112
2020
Cost
At 1 January
2,283
146
2,429
Additions
659
5
664
Acquisition
193
-
193
Disposals
-
(60)
(60)
Exchange adjustment
48
8
56
At 31
December
3,183
99
3,282
Amortisation
At 1 January
(1,075)
(62)
(1,137)
Charge for
year
(466)
(30)
(496)
Disposals
-
30
30
Exchange adjustment
(29)
(4)
(33)
At 31 December
(1,570)
(66)
(1,636)
Net carryin
g amount
At 31
December
1,613
33
1,646
At 1 January
1,208
84
1,292
Lease liabili
ties
Land and
buildings
Motor
vehicles
Total
£’000
£'000
£'000
At 1 January 202
1
1,510
29
1,539
Cash
items
:
Lease payments
(566)
(24)
(
590)
Non
-
cash
items:
Additions
125
-
125
Acquisitions
306
-
306
Interest expense
42
1
43
Foreign exchange movements
(11)
-
(11)
At 31 December
20
21
1,406
6
1,412
£’000
£'000
£'000
At 1 January 2020
1,161
84
1,245
Cash items:
Lease payments
(516)
(60)
(576)
Non
-
cash items:
Additions
623
-
623
Acquisitions
193
-
193
Interest expense
36
2
38
Foreign exchange movements
13
3
16
At 31 December
2020
1,510
29
1,539
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
113
202
1
2020
£'000
£'000
Due between 0
-
3 months
161
133
Due
between 3
-
12 months
4
81
402
Due less th
an one year
6
42
535
Due more than
one year
77
0
1,004
Lease liabilities
1,412
1,539
17.
Investm
ents
Details
of Group unde
rtakings
Details of
the investment
s in which the Group holds
20% or more of the
nominal value of any class of
share capital are as
follows:
Name of subsi
diary company
Registered a
ddress
Holding
(shares)
Proportion of
voting
rights and shares
held
Nature of
business
Gresham Technol
ogies (UK)
Limited
Aldermary House, London,
England
Ordinary
100%
Software soluti
ons
Gresham Technol
ogies (Sol
utions) Li
mited
Aldermary House, London,
England
Ordinary
100%
Software soluti
ons
C24 Technologi
es Limited
(4)
Aldermary House, London,
England
Ordinary
100%
Software soluti
ons
Gresham Technol
ogies (Aust
ralia) Pt
y
Limited
(3)
Level 6, 1 Pacifi
c Highway,
North Sydney,
Australi
a
Ordinary
100%
Software soluti
ons
Gresham Technol
ogies (TDI
) Limited
(1
,4
)
Aldermary House, London,
England
Ordinary
100%
Software soluti
ons
Gresham
Technologies (
Malaysia) SDN BHD
(1)
Level
7,
Menara
Milenium,
Jalan Damanlela, Malaysia
Ordinary
100%
Software soluti
ons
Gresham Technol
ogies (Sin
gapore) Pte.
Limited
138
Cecil
Street,
Cecil
Court, Sing
apore
Ordinary
100%
Software soluti
ons
Gresham
Technologies (
US) Inc
(1,3)
381
Park
Ave
S
, New
York,
US
Ordinary
100%
Software soluti
ons
Gresham Enterp
rise Stora
ge Inc
(
1,3)
381
Park
Ave
S, New
Y
ork,
US
Ordinary
100%
Software soluti
ons
Electra Infor
mation Services I
nc
(1,3)
381
Park
Ave
S, New
York,
US
Ordinary
100%
Software soluti
ons
Electra
Solutions
Inc.
(1,3)
381
Park
Ave
S, New
Y
ork,
US
Ordinary
100%
Software soluti
ons
Electra Infor
mation Services L
imited
(
1,4)
Aldermary House, London,
England
Ordinary
100%
Software soluti
ons
Gresham
Technologies (
International
)
Limited
(4)
Aldermary House, London,
England
Ordinary
100%
Holding compan
y
Gresham Technol
ogies (Hol
dings) SARL
6E
route
de
Treves,
L
-
2633, Luxembourg
Ordinary
100%
Holding compan
y
Gresham Technol
ogies
(Luxembourg) S.A.
(1)
6E
route
de
Treves,
L
-
2633, Luxembourg
Ordinary
100%
Software soluti
ons
GMS Loan Technol
ogies Limi
ted
(4)
Aldermary House, London,
England
Ordinary
100%
Software soluti
ons
Inforalgo Informa
tion Technology Lim
ited
(4)
Aldermary
House, London,
England
Ordinary
100%
Software soluti
ons
Gresham Consult
ancy Servi
ces Limited
(2)
Aldermary House, London,
England
Ordinary
100%
Dormant
Gresham Tech L
imited
(2)
Aldermary House, London,
England
Ordinary
100%
Dormant
Gresham
Telecomputing Li
mited
(2)
Aldermary House, London,
England
Ordinary
100%
Dormant
Circa Busine
ss Systems Li
mited
(2)
Aldermary House, London,
England
Ordinary
100%
Dormant
Cheerkeep Limi
ted
(2)
Aldermary House, London,
England
Ordinary
100%
Dormant
(1)
Held by a subsidiary under
taking.
(2)
Subsidiary exempt from UK audit unde
r section 480a of t
he Companies Act 2006.
(3)
Subsidiary has no requirement for
a local statutor
y audit.
(4)
Subsidiary exempt from UK audit unde
r section 479a of t
he Companies Act 2
006.
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
114
18
.
Current assets
202
1
2020
£'000
£'000
Trade receivables
3,795
2,508
Prepayments
1,032
796
Other recei
vables
576
193
Trade and other receivables
5,403
3,497
Accrued income
1,234
447
Prepaid commission
431
476
Contract ass
ets
1,665
923
Income tax
receiva
ble
1,204
-
Inc
ome
tax
r
eceivable
includes
£1,045,000
for
a
research
and
development
credi
t
expected
relatin
g
to
the
surrender
of
tax losses for the
year ending 3
1 Decembe
r 2020.
Trade receivab
les are
denominated i
n the following cur
rencies:
2021
2020
£'000
£'000
Sterling
3
42
473
Euro
7
40
287
US Dollar
2,009
1,036
Singapore Dollar
-
85
Canadian Doll
ar
10
-
Australian Doll
ar
531
393
Malaysian
Ringgit
163
234
Total trade
receivables
3,795
2,508
Trade
receivables
are
non
-
interest bearing and are generally on 30
to
60
day ter
ms and
are
shown net
of
a
provision
for
impairme
nt.
At 31 December
, the an
alysis of
trade r
eceivables
that were
past due
but not i
mpaired i
s as
follows:
Total
Due not
impaired
Past due but not
impaired
<30
days
30
-
60
days
60
-
90
days
90
-
120
days
>120 days
£'000
£'000
£'000
£'000
£'000
£'000
£'000
202
1
3,795
1,774
1,62
5
122
28
47
199
2020
2,508
1,462
601
-
445
-
-
The
Grou
p’s
cust
omers
primarily
comprise
national
and
international
banks,
Government
bodies
and
substantial
private
and public
companies.
As a
result, t
he credit
quality
of t
rade receivabl
es that
are neit
her past
due nor
impaired
has been
assessed
by
the
Directors
to
be
relativel
y
high,
taking
account
of
a
low
historical
experi
ence
of
bad
debts
and
relativel
y
good ageing profiles.
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
115
The
Group
applies
the
I
FRS
9
s
implified
appr
oach
to
measuring
expect
ed
credit
losses
u
sing
a
lifeti
me
e
xpected
credit
loss provision
for tr
ade
receivables
and
contract
assets.
To
measure
expect
ed
credit
l
osses
on
a
col
lective
basis,
trade
receivables
and
contract
assets
are
grouped
based
on
similar
credit
risk
and
ageing.
The
contract
assets
have
similar
risk characteristics to the trade
re
ceivables for similar types of
contracts.
The expec
ted l
oss rat
es are
based
on
the
Group’s
historical
credi
t l
osses ex
perienced
over
the t
hree ye
ar per
iod pr
ior t
o
the period
end.
The
historical
loss ra
tes are
then
adjusted
for curre
nt and
forward
-
looking
info
rmation
on m
acroec
onomic
factors
affecting
the
Group’s
customers,
such
factors
include
but
are
not
limited
to
gross
domestic
product
(“GDP”),
unemployment
rate
and
inf
lation
rates.
The
Group
does
not
anticipate
any
expect
ed
losses
and
ther
efore
have
not
pr
ovided
for any impairm
ent.
19.
Cash and cash equi
valents
202
1
2020
£'000
£'000
Cash at bank
and in han
d
9,139
8,876
Cash
at
bank
earns
i
nterest
at
bot
h
fixed
-
term
rates
and
floating
rates
based
on
daily
bank
deposit
rates.
Short
-
term
deposits are m
ade for
varying periods of
between one
day and
three months
depending on
the immediate cash
requirements of
the
Group,
and
e
arn
interest
at
the
r
espective
short
-
term
deposit
rates.
The
fair
value
of
cash
and
cash
equivalents is the
same as stated above.
For
the
purpose
of
the
conso
lidated
st
atement
of
cash
fl
ow,
cash
and
cash
eq
uivalents
comprises
cas
h
at
ban
k
and
in
hand and
short
-
term deposits.
20
.
Trade, other pay
ables, provisions
and financial
liabilitie
s
Trade and other pay
ables
Trade payables,
other payabl
es and contrac
t liabili
ties are
non
-
interest bea
ring.
Current
202
1
2020
£'000
£'000
Trade payables
1,059
934
Other payabl
es
6,509
3,339
Contract l
iabiliti
es
12,048
11,030
19,616
15,303
202
1
2020
£'000
£'000
Income tax paya
ble
131
378
Non
-
current
2021
2020
£'000
£'000
Contract
liabilities
60
66
Provisions
Property provis
ions
202
1
2020
£'000
£'000
At 1 January
-
Current
-
-
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
116
-
Non
-
current
146
144
146
144
Foreign exchange movements
(2)
2
At 31 December
-
Current
-
-
-
Non
-
current
14
4
146
14
4
146
The p
rovisions
relate
t
o t
he Gro
up’s
proper
ty
portfol
io
and
the
result
ing
lease
liabili
ties,
co
mprising
end
-
of
-
lease
dilapidation costs
and empty property costs.
Contingent
considerati
on
202
1
2020
£'000
£'000
At 1 January
-
Current
909
-
-
Non
-
current
349
-
1,258
-
Payments made during
the year
(923
)
-
Increase in conting
ent consideration
arising on the acquisiti
on of Inforalgo
34
-
Arising on the
acquisition o
f Inforalgo
-
1,258
Arising on the
acquisition o
f Electra
6,938
-
Foreign exchange movements
21
2
-
At 31 December
7,519
1,258
Current
3,944
909
Non
-
current
3,575
349
7,5
19
1,258
21.
Financial instruments
The Group is ex
posed through i
ts operati
ons to credit
risk,
interest rate
risk, capit
al risk, liquid
ity risk and
currency
risk.
The Group is exposed to risks that
arise from its use of financ
ial instruments.
This note describes the Group's
objectives,
policies and
pr
ocesses for
managing those
risks and
the methods
used
to
measure
them.
Further quantitative
information
in respect of these risks is
presente
d throughout these financial statem
ents. There have been no substantive
changes in
the Group's
exposure to
financial
instrument risks,
its
objectives, policies
an
d
processes
for
managing
those
risks
or
the
methods
used t
o measu
re th
em fro
m previ
ous pe
riods
unless
other
wise
stated
in t
his no
te.
Categories
of finan
cial asse
ts and li
abilit
ies
Set
out
be
low
is
an
analys
is
by
cate
gory
of
t
he
Gr
oup’s
financial
as
sets
and
liabilities
that
are
carried
in
the
financial
statements (there is no material
difference between the carrying amounts and fair val
ues):
Fair value
Amortised
Total
through
cost
carrying
profit and loss
amount
202
1
£'000
£'000
£'000
Financial assets
Trade receivables
-
3,795
3,795
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
117
Contract ass
ets
-
1,665
1,665
Cash and cash
equivalents
-
9,139
9,139
-
14,599
14,599
Financial liabil
ities
Trade payables
-
1,059
1,059
Contingent
cons
i
deration
-
7,519
7,519
Other payabl
es
-
6,509
6,509
-
15,087
15,087
Fair value
Amortised
Total
through
cost
carrying
profit and loss
amount
2020
£'000
£'000
£'000
Financial assets
Trade receivables
-
2,508
2,508
Contract
assets
-
923
923
Cash and cash
equivalents
-
8,876
8,876
-
12,307
12,307
Financial liabil
ities
Trade payables
-
934
934
Contingent
considerati
on
-
1,258
1,258
Other payabl
es
-
3,339
3,
3
39
-
5,531
5,531
The
Group
applies
the
IFRS
9
simplified
approach
to
measuring
expect
ed
credit
losses
using
a
lifeti
me
expect
ed
credit
loss provision
for trade
receivables and
contract assets.
To
measure expected credit
losses on
a
collective basis,
trade
receivables
and
contract
a
ssets
are
grouped
based
on
si
milar
credit
ri
sk
and
ageing.
The
cont
ract
assets
have
similar
risk characteristics to the trade
receivables for similar type
s of contracts.
The expect
ed loss
rates
are
based
on the
Group’s
histor
ical c
redit
losses
experienced
over the
three
-
year
period prior
to
the period
end.
The
historical
loss ra
tes are
then
adjusted
for curre
nt and
forward
-
looking
inform
ation
on m
acroecon
omic
factors affecting th
e Group’s cu
stomers.
As at 31
December 202
1
and 31 December 2020
the Group
held no foreign exchange instruments.
Objecti
ves, pol
icies
and str
ategies
The
Group’s
objecti
ve
is
to
finance
the
business
throug
h
management
of
existing
l
iquidity,
focusing
on
working
c
apital
acceleration to cash
and converting illiquid assets
to liquid
assets
and, ultimately, cash.
I
nvestments in
non
-
current
assets
have been made with the benefit
of research and devel
opment tax credits taken
as cash.
The
Group’s
policy
toward
s
us
ing
financial
i
nstruments
is
to
manage
credit
,
liquidity
and
cur
rency
expos
ure
risk
without
exposing the
Group to undue
ris
k or
speculat
ion. The
poli
cy is
kept under review
by the Directors
according to
the Group’s
foreign exchan
ge and treasu
ry policy.
Risk management
The risks ar
ising from
the Group’s oper
ations and
financial instrum
ents are explain
ed below.
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
118
Credit manag
ement
The Group moni
tors expos
ure to
credit r
isk on
an ongoing
basis.
The risk
of fin
ancial l
oss due t
o a count
erparty f
ailure
to
honour
its
obl
igations
ari
ses
principall
y
in
relat
ion
to
trans
actions
where
the
Group
provides
s
olutions
and
ser
vices
on
deferred terms and where i
t invests or deposi
ts surplus cash.
Group
polici
es
ar
e
ai
med
at
mini
mising
such
losses
,
and
requ
ire
that
deferr
ed
te
rms
ar
e
gra
nted
only
to
cu
stomers
who
demonstrate an appropriate
payment history and
satisfy creditworthiness procedures. Individual exposures are monitored
with
customer
s
subject
to
cred
it
limit
s
to
ensure
that
the
Gr
oup’s
exposure
t
o
p
rovision
s
f
or
bad
debts
is
not
si
gnifica
nt.
Solutions
and se
rvices
may be so
ld on
a
cash
-
with
-
order bas
is to mit
igate credit
risk.
Bad debt provis
ion insurance
is not
carried.
Performance
of
indivi
dual
businesses
is
monitor
ed at
bot
h oper
ating
unit
and
Group
level
allowi
ng th
e earl
y i
dentific
ation
of major risks and
reducing the likel
ihood of an unmanaged concentrat
ion of credit r
isk.
Cash
investments
are
only
allowed
in
liquid
securi
ties
with
major
financia
l
i
nstitu
tions
that
satisf
y
sp
ecific
crit
eria.
The
maximum
cr
edit
r
isk
ex
posure
at
the
s
tatemen
t
of
f
inanci
al
posi
tion
date
is
repr
esented
by
the
carrying
value
of
financial
assets. There are no si
gnificant concentrat
ions of credit
risk.
Interest rate ris
k
The
Group
ha
s
limited
exposure
to
interest
rate
risk
since
i
t
has
n
o
b
ank
borrowings
and
interest
receivabl
e
on
cas
h
deposits does not for
m a material part of
Group income.
Capital
risk
The
Group
defines
its
capital
as
the
Group’s
tot
al
equity
and
manages
capital
based
o
n
the
level
of
net
cash
held.
Its
objective
when
managing
capit
al
i
s
t
o
safeguar
d
the
Group’s
abili
ty
to
continue
as
a
going
concern
in
order
to
provide
returns
for
shareholders,
to
provide
an
adequate
return
to
investors
based
upon
the
level
of
risk
undertaken,
to
have
available the
necessary financial
resources
to
al
low
the
Group
to invest
i
n
areas
that
may
deliv
er future benefit to
investor
s
and to maintain suffi
cient financial
resources to mitigat
e risks and unforeseen event
s.
In
order
to
maintain
or
adjust
the
capital
structure,
the
Group
may
issue
new
shares
or
sell
assets
to
provide
additional
capita
l.
Liquidity ri
sk
The Group’s li
quidity r
isk falls
within the
following ma
in
categories:
•
Trade
r
eceivables
-
a
significant
element
of
the
Group’
s
liqui
dity
i
s
tied
up
in
working
capital,
which
primari
ly
comprises
trade
receivables.
The
settlement
risk
associated w
ith these
assets comprises
both credit
risk
(the
risk
that the counter
party will not settle a
t all) and liquidity risk (th
e risk that the cou
nterparty will not s
ettle on time).
•
Non
-
current
assets
-
a significant
element
of
the
Group’
s
liquidity is
tied up
in
in
tangible
and
tangible
fixed
assets.
For those
assets required
in the
busi
ness for
day
to day
opera
tions, the
Group considers
the use
of finance lease
arrangements
to
reduce
the
amount
of
liquidity
tied
up
in
such
assets.
The
Group
keeps
it
s
in
vestment
in
fixed
assets under review and ac
tively considers c
onverting such assets t
o more liquid assets.
•
Other
payables
–
the
Group’s
liquidity
depends
on
the
ability
to
fund
future
operating
activities,
the
Grou
p
beli
eves
that there is sufficie
nt cash
rese
rves
to
cover any short and long
-
term requirem
ents
.
•
Currency
risk
-
this risk is discussed b
elow.
The
table
below
s
ummarises
the
remaining
contractual
maturity
for
the
Group’
s
financi
al
li
abilities,
based
on
contrac
tual
undiscounted payments:
Between
Between
Between 0 and
3
months
Between 3 and
12 months
one and two
two and five
years
years
202
1
£'000
£'000
£'000
£'000
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
119
Trade payables
1,059
-
-
-
Other payabl
es
5,638
871
-
-
Contingent
considerati
on
369
3,575
3,575
-
Lease
liabilities
161
4
81
394
3
76
7,227
4,927
3,969
3
76
Between
Between
Between 0 and
3
months
Between 3 and
12 months
one and two
two and five
years
years
2020
£'000
£'000
£'000
£'000
Trade payables
934
-
-
-
Other payabl
es
2,715
-
-
-
Contingent
considerati
on
-
909
349
-
Lease liabilities
133
402
506
498
3,782
1,311
855
498
All
current
liabi
lities
are
expect
ed
to
fal
l
due
wit
hin
o
ne
year
of
the
state
ment
of
fi
nancial
positi
on
da
te
at
th
eir
carryin
g
amount.
The Group
moni
tors
and con
trols
liq
uidit
y thro
ugh th
e fol
lowing
key c
ontrol
s:
•
weekly ca
sh and ove
rdue tra
de receiv
ables ar
e report
ed to t
he Executi
ve Board;
•
cash forecasts are maintained;
•
foreign exchan
ge risks are he
dged where
significant; and
•
credit control is op
er
ated locally with
Group oversight.
Where
app
ropri
ate,
disco
unts
ar
e
offer
ed
for
early
pa
yment
by
custome
rs
and
fi
nance
lease
and
deferr
ed
payme
nt
arrangements are considered t
o retain or improve
liquidity.
In June
2021
the Group
arranged
a
$10m rev
olving
credit
facility
with
the
Bank
of
I
reland
,
this facility
has
not be
en
used
during the period and
there was no o
utstanding l
iab
ility
as at 31 December 2021.
L
iquid
i
ty ris
k
is not con
sidered
as
a
significant
risk
to the Grou
p
.
Currency ri
sk
The
Group
has
significant
exposures
to
the
following
c
urrencies:
US
Dollar,
Australian
Dollar,
Euro,
Malaysi
an
Ringgit,
Singapore Do
llar and
South Afri
can Rand.
Currency exposure
arises through intra
-
group loans and trading
balances throughout all G
roup lo
cations. Natural hed
ging
is
employe
d,
to
the
extent
possible,
to
minimise
net
exposures;
however,
where
significant
exposures
arise
outside
of
intra
-
group
trading, it
is Group
policy to
ent
er into
formal hedging arrangements
where these
can be
shown to
be
effective.
At 31 December
202
1
, the Group ha
d no foreign curr
ency forward
contracts (20
20
: none).
Currency
exp
osures
compri
se
the
monetar
y
assets
and
mone
tary
lia
biliti
es
of
the
Gro
up
that
are
no
t
denominate
d
in
the
functional
currency
of
the
operating
un
it
involved.
In
general,
all
overseas
operating
units
trade
and
hold
assets
and
liabilities in th
eir function
al currenc
y.
An analysi
s of tra
de receiva
bles by cur
rency is
included
in note
1
8.
Sensitivit
ies
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
120
The f
ollowing
table
detai
ls
the
Group’s
sensitiv
iti
es
to
a
change i
n Sterl
ing exc
hange rates
against
the
respecti
ve for
eign
currencies.
The
sensiti
vities
represent
management’s
assessment
of
the
effect
on
monetary
assets
of
the
possible
changes
in
foreign
exchange
rates,
which
for
202
1
and
2020
take
account
of
the
potential
fluctuations
seen
in
the
most
recent
periods.
The
sensitivity
analysis
of
the
Group’s
exposure
to
foreign
currency
risk
at
the
year
end
has
been
determined
based
on
the
assumption
that
the
change
is
effecti
ve
throughout
the
financ
ial
yea
r
and
all
other
variables
remain
constant. The
impact o
f
translating
the
net assets
of foreign
operations in
to
Sterling
is
excluded
from the
sensitivit
y
analysis.
A
p
ositive
number
i
ndicates
an
in
crease
in
profi
t
after
taxat
ion
and
other
compon
ents
of
equ
ity
where
Sterling
weakens
against the respecti
ve currencies.
Net foreign
currency
financial assets
Increase/decre
ase in
exchange rates
Effect on profi
t before
tax
202
1
£’000
£'000
Euro
1,000
+20%
(167)
-
20%
250
Australian
Dollar
4,723
+20%
(787)
-
20%
1,181
US Dollar
4,492
+20%
(749)
-
20%
1,123
Malaysian
Ringgit
285
+20%
(48)
-
20%
71
Singapore Dollar
31
+20%
(5)
-
20%
8
South African Rand
24
+20%
(4)
-
20%
6
Net foreig
n
currency financial
assets
Increase/decrea
se in
exchange rates
Effect on prof
it before
tax
2020
£’000
£'000
Euro
397
+20%
(66)
-
20%
99
Australian Doll
ar
4,168
+20%
(695)
-
20%
1,042
US Dollar
3,716
+20%
(619)
-
20%
929
Malaysian
Ringgit
310
+20%
(52)
-
20%
77
Singapore Dollar
112
+20%
(19)
-
20%
28
South African Rand
26
+20%
(4)
-
20%
7
The
Group
has
no
material
ex
posure
to
i
nterest
rat
e
sensitiv
ities;
howev
er,
in
addi
tion
to
t
he
year
-
end
ri
sk
quantified
we
remain
susceptible
to
the
changes
on
foreign
exchange
rates
on
our
future
currency
cash
inflows
and
outflows
which
although
are
notable,
are
mitigated
through
the
use
of
forward
exchange
c
ontracts
from
time
to
t
ime
and
are
not
anticipated
to materially affec
t the earnings in th
e future period
s.
22.
Issued
share capita
l
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
121
Ordinary sh
ares allot
ted, call
ed up and f
ully paid
Number
Nominal value
£'000
At 1 January
2020
68,256,458
3,413
Exercise of sha
re options (not
e 2
3)
1,900,000
95
At 31 December
2020
70,156
,458
3,508
Exercise of
share options (
note 2
3)
83,000
4
Issue of new sha
res
13,125,000
656
At 31 December
202
1
83,364,458
4,168
The Company’s ordi
nary share ca
pital consi
sts of indi
vidual shar
es having a nomi
nal value of
5 pence each.
During
the
year en
ded 31
December
202
1
, share options granted under
s
hare
o
ption
schemes
wer
e exer
cised
at a
pric
e
of
28.05
pence
and
the
Group
issued
83,
000
(20
20
:
1,900,000)
ordinary
shares
accordingly
(ranking
pari
passu
with
existing shares i
n issue). Share premium of
£61
,000
was recognis
ed as a
result.
In
June
2021
the
C
ompany
issued
13,125,
000
ordinary
shares
at
a
pr
ice
of
160
pence
(ranking
pari
passu
with
existing
shares in
issue)
. S
hare
premium
of £
19,474,000
was recognised as a result
after
deduction of
£870,000
directly
attributable expenses
.
At 31
December 202
1
and 2020
there were outstanding
options granted to acquire ordina
ry shares in the Compan
y. See
note 2
3
for further deta
ils.
There are no p
reference shar
es in issue
(20
20
: none
).
An explanation of the Group’s capital management process and
objective
s is
set out in the
discussio
n of
capital
managemen
t in
the St
rategi
c Repo
rt an
d capi
tal r
isk d
isclos
ures i
n not
e 2
1.
Shares held
by Employee Shar
e Ownership Tr
ust (“ESOT”)
£’000
Num
ber
At 1 January 20
20
945
976,596
Issue of shares
(
167
)
(144,996)
At 31 December 20
20
778
831,600
Issue of shares
(169)
(202,292)
At 31 December
202
1
609
629,308
The shares
held by
t
he ESOT
are expected to
be issued
under share
option
contracts.
The
shares
are
held
at the
average
purchase price.
23.
Share
-
based payments
The following
disclosures
are in res
pect of both
the Company and th
e Group.
The grant of all opt
ions and awards is made by t
he remuneration committ
ee and such grants invo
lve equity sett
lement. In
granting
execut
ive
share
options
the
remuneration
committee
has
regard
to
both
the
par
ticipant's
level
of
responsibi
lity
within
the Grou
p and t
o individual and Group
performance.
Share Optio
n Schemes
The Share
Opti
on S
chemes 2010
were approved by
s
hareholders on
30
December 2010,
wi
th amendments
subs
equently
approved
by
shareholders
on
May 2012
and
February
2015.
The
scheme
was
created
fo
r
a
ten
year
period
and
expired
in Decem
ber 2020
replaced
by the Sh
are Optio
n Sc
heme 2020.
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
122
No share
options
have been
granted
under t
h
e 2010
scheme during the year
and
no options wi
ll be granted
in the futur
e.
The
2010
schemes consist
ed
of:
•
the Gresham
Te
chnologies plc Enterprise Management (“EMI”) Incentive Plan 2010;
•
the Gresham
Technolog
ies plc Unappr
oved Share O
ption Plan 20
10; and
•
the Gresham
Technolog
ies plc Non
-
Employee Share
Option Pl
an 2010.
As its
name implies, the EM
I Plan
operates as an
enterpr
ise m
anagem
ent
incent
ive
schem
e
comply
ing
with
the EM
I
Code
and accordingly being ent
itled to certai
n beneficial tax
treatment.
The Unapproved Plan enables the remuneration committee to grant share optio
ns in excess of the limits applicable under
the EMI C
ode and/or to employees of the Group who do not qual
ify for EMI treatment.
The N
on
-
Employee Plan
enables the
remuneration committee to
grant share
options to
persons whose
ser
vices are
made
available to the
Group without an employment relat
ionship.
The
remuneration committee
is
responsible for
administering the
Share
Option
Schem
es and
may grant
options to
acqui
re
ordinary
shares
to
any
employees
and
Director
s
of
the
Group,
and
r
etains
di
scretion
to
impose
exercise
perfor
mance
conditions as appropriate. Options are gr
anted free of charge and are non
-
transferable.
The exercise
pr
ice per ordin
ary share
is determ
ined by th
e remune
ration com
mittee
.
Options
may
normall
y be
exerci
sed onl
y on
or
after
the
third
anni
versary
of
the d
ate of
gra
nt sub
ject
to c
ompleti
on of
any
relevant
performance
criteria,
save
to
the
extent
that
the
remuneration
committee
i
n
its
discretion
declares
any
other
period
for exercise
and will
lapse
on
cessation of
such employment, save
again to
the
extent
the remuneration committee
in i
ts
discretion allows
it to remain exerci
sable for such peri
od following the ce
ssation as it may determine.
Exercise
is
permitted
i
n
conjuncti
on
with
a
take
over
or
simil
ar
transact
ion
and
in
su
ch
circumstan
ces
the
vesti
ng
period
does not
apply. I
n the
event of
a tak
eover, an
option hol
der may,
by agreement
with t
he acquirer,
exchange
their options
for options over
shares in the ac
quiring Comp
any.
A
new
long
-
term
incentive
performance
share
plan,
the
2020
share
option
scheme,
was
approved
by
shareholde
rs
in
December
2020.
The
plan
enables
the
r
emuneratio
n
committee
to
grant
share
opt
i
ons
to
key
employees
foll
owing
the
expiry
of
the
Share
Option
Plan
2010
on
29
December
2020.
Any
conditional
share
award
is
grant
ed
on
an
ad
hoc
discretionary
basis
at
nil
cost
to
the
part
icipant.
The
share
award
will
vest
on
the
later
of
a
t
hree
year
vest
ing
period and
the achievem
ent of objective
performance targets which wi
ll be specified
by the remuneration committee.
950,500
(2020:
nil)
share
options
have
been
awarded
in
the
year
to
31
December
202
1
under
the
2020
share
option
scheme.
At 31 December
202
1
,
48
participants held awards
under th
e
share option scheme
s
(20
20
:
19
).
Outstand
ing
option
s
t
o
s
ubscrib
e
f
or
ordinar
y
sh
ares
of
5
p
ence
at
31
Dec
ember
202
1
,
including
those
noted
in
the
Director
s' Remunera
tion Repo
rt,
are as follows:
202
1
Number
WAEP
2020
Number
WAEP
(pence)
(pence)
Outstanding
at 1 Janua
ry
2,588,000
1
23
4,498,000
81
Granted duri
ng the yea
r
950,500
5
75
,000
152
Forfeited during the
year
-
-
(
85
,000)
(
61
)
Exercised
during the
year
(83,000)
(
79
)
(1,900,000)
(
28
)
Outstanding
at 31 Decembe
r
3,455,500
92
2,588
,000
123
Exercisable at
31 December
2,255,000
125
2,138
,000
114
Weighted
averag
e remai
ning co
ntract
ual li
fe (ye
ars)
6.10
4.90
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
123
During the year
83
,000 options
were exercised
during
the p
eriod w
hen th
e Com
pany
share
price w
as be
tween
1
52
pence
and 161
pence.
No price
is paya
ble on awa
rd of s
hare opti
ons.
Outstand
ing opt
ions and a
wards to
subscri
be for or
dinary
shares o
f 5 pence a
t
31 December 202
1
, including
those no
ted
in the Dire
ctors' Rem
uneratio
n Report s
howing th
e range o
f exercise
prices an
d dates, ar
e as follow
s:
Number
Date of
Exercise
Date first
Expiry
Cash
of share
grant
price
exercisable
date
receivable if
options
£
exercised £
Share Option Schemes 20
10
45,000
15
-
Aug
-
12
0.6850
15
-
Aug
-
15
15
-
Aug
-
22
30,825
2
25
,000
01
-
Aug
-
13
0.9630
01
-
Aug
-
16
01
-
Aug
-
23
216,675
50,000
07
-
Oct
-
13
1.3230
07
-
Oct
-
16
07
-
Oct
-
23
66,150
1,500,000
01
-
Jun
-
15
1.1057
01
-
Jun
-
18
01
-
Jun
-
25
1,658,550
50,000
21
-
Jun
-
16
1.0945
21
-
Jun
-
19
21
-
Jun
-
26
54,725
140,000
20
-
Mar
-
17
1.7352
20
-
Mar
-
20
20
-
Mar
-
27
242,928
45,000
28
-
Nov
-
17
2.1505
28
-
Nov
-
20
28
-
Nov
-
27
96,773
200,000
14
-
Mar
-
18
2.2715
14
-
Mar
-
21
14
-
Mar
-
28
454,300
100,000
28
-
Mar
-
19
0.9720
28
-
Mar
-
22
28
-
Mar
-
29
97,200
75,000
25
-
Oct
-
19
1.2210
25
-
Oct
-
22
25
-
Oct
-
29
91,575
75,000
24
-
Dec
-
20
1.5180
24
-
Dec
-
23
24
-
Dec
-
30
113,850
Share Option Schemes
2020
950,500
21
-
Oct
-
21
0.0500
4,753
3,
455
,5
00
3,
128,
304
Outstand
ing
option
s
t
o
s
ubscrib
e
f
or
ordinar
y
sh
ares
of
5
p
ence
at
31
Dec
ember
20
20
,
including
those
noted
in
the
Director
s' Remunera
tion Repo
rt showi
ng the r
ange of e
xercise
prices
and
dates, are as fol
lows:
Number
Date of
Exercise
Date first
Expiry
Cash
of share
grant
price
exercisable
date
receivable if
options
£
exercised £
Share Option Schemes 20
10
38,000
05
-
Aug
-
11
0.5803
05
-
Aug
-
14
05
-
Aug
-
21
22,051
45,000
15
-
Aug
-
12
0.6850
15
-
Aug
-
15
15
-
Aug
-
22
30,825
270,000
01
-
Aug
-
13
0.9630
01
-
Aug
-
16
01
-
Aug
-
23
260,010
50,000
07
-
Oct
-
13
1.3230
07
-
Oct
-
16
07
-
Oct
-
23
66,150
1,500,000
01
-
Jun
-
15
1.1057
01
-
Jun
-
18
01
-
Jun
-
25
1,658,550
50,000
21
-
Jun
-
16
1.0945
21
-
Jun
-
19
21
-
Jun
-
26
54,725
140,000
20
-
Mar
-
17
1.7352
20
-
Mar
-
20
20
-
Mar
-
27
242,928
45,000
28
-
Nov
-
17
2.1505
28
-
Nov
-
20
28
-
Nov
-
27
96,773
200,000
14
-
Mar
-
18
2.2715
14
-
Mar
-
21
14
-
Mar
-
28
454,300
100,000
28
-
Mar
-
19
0.9720
28
-
Mar
-
22
28
-
Mar
-
29
97,200
75,000
25
-
Oct
-
19
1.2210
25
-
Oct
-
22
25
-
Oct
-
29
91,575
75,000
24
-
Dec
-
20
1.5180
24
-
Dec
-
23
24
-
Dec
-
30
113,850
2,588,000
3,188,937
The fair
value of
equity
-
settled share
options granted by the Share
Option Schemes
are
estimated
as at the dat
e of grant
using a Black Scholes model,
taking into account
the terms and conditions
upon which the options were
granted.
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
124
The following
table li
s
ts the range of inpu
ts to the mode
l used for the gran
ts made durin
g the year:
Vesting date
21
-
Oct
-
24
Expiry date (nu
mber of years af
ter grant)
10
Exercise price
£0.05
Share price at
valuation
£1.72
Vested options'
expected lif
e
5.8 years
Volatility
30%
Dividend yi
eld
0%
Risk free
rate
1.0%
Impact of continue
d employment c
onditions
0%
Vesting
of
opt
ions
i
s
reli
ant
on
achieve
ment
of
any
r
elevant
performance
condit
ions
se
t
by
the
re
muneration
committee,
which ty
pically
take t
he
form of sales
-
based targets
and share price growth.
The expected
life
of t
he option
s is
based on
histori
cal data
and i
s not
necessaril
y indica
tive of
exercise
patterns
that
may
occur.
The
expected
volat
ility
reflec
ts
the
assumption
that
t
he
historical
vol
atility
is
indicative
of
future
trends,
whi
ch
may
also not necessarily be
the actual
outcome. No
other features of
options granted were
incorporated into the
measurement
of fair value.
Deferred Sh
are Bonus Pl
an
2017
The
Defer
red
Share
Bonus
Plan
operates
in
conjunction
with
t
he
annual
cash
bonus
scheme,
a
percentage
of
each
participating
employee’s
net
annual
bonus
ent
itlement
will
continue
to
be
paid
in
cash
with
the
remaining
amount
of
the
bonus being
paid to
the trustee
of a
newly establi
shed e
mpl
oyee
benefi
t t
rust
whic
h wi
ll
have
been
consti
tuted
to
acqu
ire
existing issued
ordinary
shares
and
facilitate the
Deferr
ed
Share
Bonus
Plan.
These
bonus
-
related
shares
will b
e
beneficially owned by
each participant but
held by the trustee
as its nominee
.
At the same
time, a corresponding matching award will be made by
the Company, entitling the participan
t to receive, at nil
cost, an entitlement to f
urther ordinary shares. These awards will vest
subject to the following
conditions:
•
the related bonus
shar
es being retained for a speci
fied period;
•
any relevant perfor
mance targets being met; and
•
the participant
remaining
in emplo
yment w
ith the G
resham G
roup until
the end
of the s
pecified reten
tion period.
Due
to
the
est
ablishmen
t
of
the
empl
oyee
benefi
t
trus
t,
which
will
acquire
existing
issued
ordinary
shares,
the
Deferred
Share Bonus Plan will be non
-
dilutive to existing shareholders above the levels permitted by the Investment A
ssociation’s
remuneration gu
idelines.
On
31
March
2
02
1
125,526
share
options
w
ere
granted
at
nil
cost
with
two
-
year
and
three
-
year
vesting
period
s
;
the
options
expire March 203
1.
Share
-
based payments
The
expense
recognised
in
the
income
statement
for
all
equit
y
-
settled
share
-
based
payments
in
respect
of
employee
services received is
as foll
ows:
202
1
2020
£'000
£'000
Expense recognised
in respect of
share
-
based payments
369
220
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
125
24
. Busin
ess Com
binations du
ring the perio
d
On
22
J
une
2021
Gresham
Technolo
gies
p
lc
acq
uired
the
ent
ire
o
rdinar
y
share
capit
al
i
n
Elect
ra
Information
Systems,
Inc.,
a
specialist
in
connectivity
and
intelligent
automation
solutions
for
financial
services
institutions
enabling
straight
through proce
ssing and real
-
time regulato
ry reporting.
The initial consideration was £17
,77
8
,000
wi
th
an addi
tional
£1
,991,000
consideration paid
to settle outstanding
liabilities.
Contingent
considerat
ion
dependent on
per
formance of
up to
£
6,936,000
is
payable
over
a
24
month
period
post
acquisition. The maximum potenti
al consideration i
s £26,701,000
.
The amounts recogni
sed in resp
ect of ident
ifiable as
sets and li
abilities
assumed are set
out in the
table below:
Book value
Adjustments
Fair
value
£'000
£'000
£'000
Intangible assets
Customer rel
ationships
-
11,
800
11,
800
Software
-
4,959
4,959
Property, plant
and equipment
10
-
10
Right
-
of
-
use assets
285
-
285
Trade and other receivables
1,645
-
1,645
Cash and cash
equivalents
1
30
-
1
30
Trade and other liabil
ities
(
2,051
)
-
(
2,051
)
Lease liabilities
(
297
)
-
(
297
)
Deferred ta
x liabili
ty
-
(
4,055)
(
4,055)
Total net (liabil
ities)/assets
(
278
)
12,704
12,426
Satisfied as
follows:
Cash
19
,
769
Contingent
considerati
on
6,936
Total consideration
26,7
05
Goodwill (n
ote 1
4)
14,27
9
Analysis of ca
sh
flows on acquisitio
n:
Net cash acqu
ired
(1
30
)
Cash paid
19,769
Net cash fl
ow
19,639
Fair value of
consideration paid:
Cash
19,769
Contingent
considerati
on due less
than one ye
ar
3,468
Contingent
considerati
on due more t
han one year
3,468
Total consideration
26,705
The
goodwill
recognised
above
i
s
attribut
able
to
int
angible
asset
s
that
cannot
be
individually
separately
and
reliably
measured
due t
o the
ir na
ture.
These
items
inclu
de the
expect
ed val
ue of
syner
gies a
nd asse
mbled w
orkfor
ce.
Acquisiti
on
costs
of
£
1,579
,000
were
incu
rred
during
the
year
ended
31
December
202
1
as
a
result
of
the
acquisition
of
El
ectra
. These costs have b
een recognis
ed
as
exceptional costs within the
Income Statement.
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
126
From the
d
ate of
acquisition,
Electra
has
contr
ibuted revenue
of
£
5,
647
,000
to the
Group
and
operating
profit of
£
1,352
,000. If the acq
uisitio
n had occurred on 1 January 202
1
,
G
roup revenue wou
ld have been £
41,747
,000 a
nd Group
operating profit
£1,345
,000.
Contingent
considerati
on
As
part
of
the
sal
e
and
pu
rchase
agre
ement,
cont
ingent
c
onsiderati
on
is
p
ayable
up
to
£
6,
936
,000
with
the
maximum
amount
payabl
e
if
t
he
Annual
Recurring
Revenues
are
£
9,
185
,000
24
months
after
acquisition.
The
consideration
is
payable on
a st
raight
-
line basis with no lower threshold with 50% payable
in June 202
2
and the
balance
payable in
June
2023.
Due
to
the
nature
of
these
payments
Manage
ment
ha
s
perf
ormed
a
review
and
estimates
that
the
full
amount
of
contingent
consideration
is
expected
to
be
paid.
As
result,
continge
nt
con
sideratio
n
has
been
recognised
in
full
in
the
statement of financial posit
ion, with
£3,468
,000 due in less than one
year and £
3,
468
,000 due
in more than on
e year.
25.
Reserves
Share capit
al
The balance
classified as share
capital represents the nominal
value arising from
the issue
of the
Company
’s equity share
capital, comprising 5 pence
ordinary
shares.
During the year ended 31
December 202
1
,
share
options grante
d u
nder
the
2010
Share Option
P
lans
were
exercise
d a
nd
the G
roup
issued
83,000
(20
20
:
1,900,000)
ordinary
sha
res a
ccordingly
(ranking
pari passu
with
existing
shares in
issue).
See note 22
for fur
ther det
ails.
In
June
2021
the
Company issued
13,125,000
ordinary
shares at
a
price
of
160
pence
(ranking pari
passu
with
existing
shares in
issue)
.
Share premium
account
The
bal
ance
cl
assified
as
share
premium
r
epresents
the
premium
ar
ising
from
the
i
ssue
of
the
Company’s
equity
share
capital,
comprising
5
pence
ordinary
shares,
net
of
share
issue
expenses.
There
are
restrictions
on
the
use
o
f
the
share
premium account. It can only be used for bonus issues, to provide for the premium payable on redemption of debentures,
or to write off preliminary expenses, or expenses of, or commissions paid on, or
discounts allowed on, the same issues of
sha
res or debentures
of the Compan
y.
Own share
re
s
erve
Weight
ed a
verage
cost
of
own
share
s hel
d in
tr
ust b
y th
e ESOT
.
Other r
eserves
The
balance
classi
fied
as
other
reser
ves
comprises
a
speci
al
reserve
of
£
536
,000.
The
special
reserve
arose
on
the
cancellatio
n of
deferred
ordinary shar
es in
June 1992.
In 2018,
134,440 shares
were issued
as part
considerati
on for
the
acquisition
of
B2
Group
at
a
placing
price
of
£1.71.
The
excess
over
the
nominal
value
of
the
shares
issued
has
been
credited to other reserves (m
erger
reserve) in compli
ance with s612 and s613 of
the Companies Act 2006
.
Foreign currency t
ranslation rese
rve
The
curr
ency
tra
nslation
reserve
i
s
used
to
reco
rd
exchange
diffe
rences
ar
ising
f
rom
the
translati
on
of
the
fi
nancial
statements of foreign subs
idiaries.
Retained ea
rnings
All othe
r net gai
ns and lo
sses and tr
ansactions
with owner
s (e.g.
dividends)
that ar
e not reco
gnised el
sewhere.
26.
Capital commitment
s
There were no c
apital commitment
s at 31 December
202
1
(2020: none).
Notes to the
financial
statements
Gresham Technologi
es plc
Annual
Financial
Report
202
1
127
27.
Related party
transacti
ons
Key management
compensation (
including
Directors)
202
1
2020
£'000
£'000
Directors’
emoluments
Remuneration
648
618
Social securit
y costs
1
45
100
Bonuses
401
180
Pension
22
22
Share
-
based payments
116
68
1,332
988
Details
of Dir
ectors’
compensati
on are i
ncluded i
n the
Director
s’ Remunerat
ion Repor
t.
There i
s no
singl
e part
y known
that
the
Directo
rs cons
ider
to be
a
controll
ing s
hareholder
or
ultimate
parent
undertak
ing.
Refer to
page
66
for details of all significant sha
reholders that th
e Company
has been no
tified of.
28
. Even
ts after the
rep
orting date
A
div
idend
of
0.75
pence
per
share
has
been
approved
by
the
Board
to
propose
to
sharehol
ders
at
the
Annual
General
Meeting
.
Company balance
sheet
Gresham Technologi
es plc
Annual
Financial
Report
202
1
128
At 31
December
At 31
December
202
1
2020
Notes
£'000
£'000
Fixed
assets
Lease receivable
8
945
1,134
Deferred ta
x asset
9
-
18
Investments
5
41,638
20,466
42,583
21,618
Current asset
s
Debtors
6
39,000
34,756
Cash at bank
and in han
d
643
2,996
39,643
37,752
Creditors:
amounts fal
ling due wi
thin one
year
7
(
42,253
)
(36,798)
Net current
(liabilities
)
(2,
610
)
954
Total assets less cur
rent liabiliti
es
39,973
22,572
Contingent
considerati
on due more t
han one year
7
-
(349)
Creditors:
amounts fal
ling due
mor
e than
one year
7
(
553
)
(
705
)
Total assets less l
iabilities
39,420
21,518
Capital and
reserves
Called up s
hare capita
l
10
4,168
3,508
Share premiu
m
11
23,876
4,341
Own share res
erve
10
(
609)
(
778
)
Special reserve
11
313
313
Merger re
serve
11
1,583
1,583
Profit and lo
ss account
11
10,089
12,551
Shareholders' f
unds
-
equity interests
39,420
21,518
The Company made a ret
ained loss i
n the year
of £
2,309
,000 (20
20
: £
2,381
,000).
The financial
statements wer
e approved by
the Board of Di
rectors and
authorised f
or issue on
7
March
202
2.
On behal
f of
the Boa
rd
Ian Manoc
ha
Tom Mullan
Chief Exe
cutive
Chief Fi
nancial
Officer
7
March
202
2
7
March
202
2
DocuSign Envelope ID: BB8DFBB0-2E16-4C63-B3F9-138A47D638FF
Company statement
of changes i
n equity
Gresham Technologi
es plc
Annual
Financial
Report
202
1
129
Notes
Share
capital
Share
premium
Own
shares
Special
reserve
Merger
reserve
Profit and
loss account
Total
£'000
£'000
£’000
£'000
£'000
£'000
£'000
At 1 January
2020
3,413
3,903
(945)
313
1,583
15,218
23,485
Exercise of sha
re options
10
95
438
-
-
-
-
533
Share
-
based payments
14
-
-
-
-
-
220
220
Transfer
of
own
shares
held
by
Employee
Share Ownership Trus
t
to employees
10
-
-
167
-
-
-
167
Dividend pai
d
4
-
-
-
-
-
(
506
)
(
506
)
Retained lo
ss for the
year
-
-
-
-
-
(2,381)
(
2,381
)
At 31 December
2020
3,508
4,341
(
778
)
313
1,583
12,551
21,518
Issue of equity sha
res
656
20,344
-
-
-
-
21,000
Share issue
costs
-
(870)
-
-
-
-
(870)
Exercise of sha
re options
10
4
61
-
-
-
-
65
Share
-
based payments
14
-
-
-
-
-
369
369
Transfer
of
own
shares
held
by
Employee
Share Ownership Trus
t
to employees
10
-
-
169
-
-
-
169
Dividend pai
d
4
-
-
-
-
-
(522)
(522)
Retained lo
ss for the
year
-
-
-
-
-
(
2,309
)
(
2,309
)
At 31 December
202
1
4,168
23,
87
6
(609)
313
1,583
10,089
39,420
Notes to the
Company financ
ial statement
s
Gresham Technologi
es plc
Annual
Financial
Report
202
1
130
1.
Accounting pol
icies
Basis of
preparatio
n
The
Company
f
inancial statements
o
f
Gresham
Tec
hnologies plc
(the “Company”)
have
bee
n
prepared
in
accordance
with
Financial
Reportin
g
Standa
rd
100
“Appl
ication
of
Financial
Reporti
ng
Requi
rements”
and
Financial
Rep
orti
ng
Standard
101 “Reduced Disclosure Framework”
and as required by the
Companies Act 2006.
The
fin
ancial
statements
are
prep
ared
under
the
historic
al
cost
conventi
on
as
modified
for
financial
instru
ments
that
are
measured
at f
air
value
and wer
e appr
ove
d for is
sue on
7
March 20
2
2.
No income stat
ement is prese
nted by the Company
as permitted
by section 408
of the Companies
Act 2006. For t
he year
ended 31 December 202
1
, the Compan
y recorded a r
etained loss of £
2,309
,000 (20
20
: loss £
2,
3
81
,000).
The
balance
sheet
heading
relating
to
the
Company’s
investments
in
subsidiaries
has
been
amended
to
“Fixed
assets”
from
“Non
-
current
assets”
to
be
consistent
with
the
Company’s
presentati
on
of
its
balance
sheet
in
accordance
with
the
balance
sheet
formats
of
the
Companies
Act
2006.
Assets
are
classifi
ed
in
accordance
with
the
defi
nitions
of
fixed
and
current assets
in the
Companies
Act instead
of the
presentation requirements
of IAS
1
Presentation of
Financial
Statements.
Going
c
oncern
The
Grou
p
and
the
Company
’s
business
activities,
togethe
r
with
the
factors
likely
to
affect
its
future
develop
ment,
performance and position ar
e set out in the
Strategic report on
pages
3
to
40
.
After
maki
ng
enqui
ries,
the
Director
s
have
a
reasonabl
e
expect
ation
t
hat
the
Company
ha
s
adequat
e
resources
t
o
continue
in
operational existence
for
a
period
of
at
least
twelve months
from
the
date
of
approval
of
the
financial
statements.
For
this reason, they
continue to ado
pt the going con
cern basis in pr
eparing the An
nual Financial R
epo
rt 202
1.
Disclosure
exemptions
adopted
In prep
aring th
ese fin
ancial s
tatements
the
Compan
y has
taken
adva
ntage
of all
disclosure
exem
ptions
conferred
by
FRS
101. Therefore these fi
nancial statements do not
include:
•
certain comparative information as otherwise
required by
adopted
IFRSs;
•
certain disclosures regarding the Company's capit
al;
•
a statement of cash fl
ows;
•
the effect of future
accounting sta
ndards not yet a
dopted;
•
the disclosure o
f the remunera
tion of key ma
n
agement personnel; and
•
disclosure
of
related
party
tr
ansactions
with
other
wholl
y
owned
members
of
the
Gresham
Technologies
plc
Group.
In
addition,
and
in
accordance
with
FRS
101,
further
disclosure
exemptions
have
been
adopted
because
equivalent
disclosures
are
included
in
the
consolidated
financial
statements.
These
financial
statements
do
not
include
certain
disclosures in r
espect of:
•
share
-
based payments;
•
business combinations;
•
assets held for sal
e and discontinued operat
ions;
and
•
impairme
nt of asse
ts.
Investmen
ts
Investments
are recorded a
t cost less provis
ion for impairm
ent.
Notes to the
Company financ
ial statement
s
Gresham Technologi
es plc
Annual
Financial
Report
202
1
131
Financial assets
Impairmen
t of financial a
ssets
The Company assesses
at each balanc
e sheet date whe
ther a finan
cial asset
or group of
financial
assets is i
mpaired.
Assets carr
ie
d at amorti
sed cost
These assets arise
principally
from
the provision of
services to
the Company’s subsidiary, but
also incorporate other types
of financial assets
where the
objective is to
hold these
assets in
order to
collect contractual cash flows
and the
contractual
cash flows
are
solely
payments of
principal
and
interest.
They
are
initially
recognised
at f
air value
plus
transaction
costs
that
are
directly
attributable to
their acqu
isition
or
issue,
and are
subsequently
carried
at amortised
cost using
the
effective
interest rat
e method
, less prov
ision for im
pairment.
Impairment
provisions
from
related
parties
and
loans
to
related
parties
are
recognised
based
on
a
forward
-
looking
expected
credit
loss
model.
The
methodology
used
to
det
ermine
the
amount
of
the
pr
ovision
is
based
on
whether
there
has been a signifi
cant increase in
credit risk si
nce initial
recognition of the
financial asset.
For those where t
he credit
risk
has
not
increased
signi
ficantly
since
ini
tial
recogniti
on
of
the
financial
asset,
t
welve
-
mon
th
expe
cted
c
redit
losses
along
with
gros
s
inter
est
income
are
recogni
sed.
For
those
f
or
which
c
redit
ri
sk
has
i
ncreased
si
gnific
antly,
lifeti
me
expected
credit
losses
along
with
the
gross
i
nterest
income
are
recognised.
For
those
that
are
deter
mined
t
o
be
cre
dit
i
mpaired
,
lifetime exp
ected cre
dit losses
along with
interest inc
ome on a
net basis
are recog
nised.
The
Company'
s
fi
nancial
assets
measured
at
amort
ised
c
ost
c
omprise
intercompany
receivables
and
cash
and
cash
equivalents in the
consolidated statement of
financial posit
ion.
Cash
an
d
cash
equiv
alents
includ
e
cash
in
hand
for
the
purpose
of
t
he
st
atement
of
cash
f
lows
-
bank
overdrafts.
Bank
overdrafts are shown wit
hin loans and borrowings
in current li
abilities on the
consolidated stateme
nt of financial
position.
Taxation
Income tax
es
Current
tax
assets
and
l
iabili
ties
are
mea
sured
at
the
amount
expect
ed
to
be
recovered
from
or
pai
d
to
the
taxati
on
authorities,
based
on
tax
rates
and
laws
that
are
enacted
or
substantively
enacted
by
the
st
atement
of
financial
position
date.
Research
a
nd
develo
pment
tax
credit
s
are
r
ecognised
on
an
a
ccruals
basis
an
d
recorde
d
as
a
credit
in
the
taxati
on
li
ne
of the income statement.
Deferred i
ncome tax is reco
gnised on all
temporary di
fferences
arising between the tax bases of assets and liabilities and
their carrying am
ounts in the fina
ncial statemen
ts, with the followin
g exceptions:
•
where the tempor
ary differ
ence arises from the init
ial recogni
tion of goodwil
l or of an asset or liabilit
y in a t
ransaction
that is
not
a
business combination that
at
the time
of
the
transaction affects neither
accounting nor
taxable profit
or
loss;
•
in
respect
of
taxable
temporary
differences
associated
with
investments
in
subsidiaries,
associates
and
joint
ventures,
where t
he ti
ming of
the
reversal
of
the
temporary
diff
erences
can be
contro
lled
and it
is
probabl
e that
the
temporary
differences will
not reverse in t
he foreseeable future;
and
•
deferred
inc
ome
tax
ass
ets
are
recognised
only
to
the
extent
that
it
is
probable
that
tax
able
profit
will
be
avail
able
against which the deducti
ble temporary differ
ences, carried for
ward tax credits or
tax losses can be uti
lised.
Deferred inc
ome tax assets and liabi
litie
s are measured at the tax rates that
are expected to apply whe
n the related asset
is realis
ed or
liability
is se
ttled, b
ased o
n tax
rates
and
laws
enacted
or s
ubstantiv
ely ena
cted a
t the
statem
ent of
financi
al
position date.
The
car
rying
amount
of
deferred
income
tax
ass
ets
i
s
rev
iewed
at
each
statement
of
financial
position
date.
Deferred
income
tax
assets
and
liabilities
are
offset
only
if
a
legally
enforcea
ble
right
exists
to
set
off
current
tax
assets
against
current tax liabili
ties, the deferred income taxes rel
ate to the same taxation authority
and that authorit
y permits the Group
to make a sing
le net payme
nt.
Notes to the
Company financ
ial statement
s
Gresham Technologi
es plc
Annual
Financial
Report
202
1
132
Income
tax
is
charged
or
credited
to
other
compreh
ensive
income
or directly
to eq
uity if
it relates to
item
s tha
t are
credite
d
or
charged
to
other
comprehensive
income
or
directly
to
equity.
Otherwise,
inco
me
tax
is
recogni
sed
i
n
the
inco
me
statement.
Foreign currencies
Transactions denominated in
foreign currencies are
tr
anslated at
an
approximation of
the exchange
r
ate ruling
on
the date
of the transaction.
Assets
and
li
abiliti
es
denominated
in
foreign
currencies
are
translated
at
the
exchange
rate
ruling
on
the
balance
sheet
date. Resulting exchange gai
ns and losses are tak
en to the income statement.
Related par
ty trans
actions
The
Company
has
t
aken
advantage
of
the
exemption
under
FRS
101
fro
m
d
isclosing
related
party
transactions
with
entities
that are wholly o
wned subsid
iary undertaking
s of the Gresh
am Techno
logies plc Grou
p.
Share
-
based payments
–
equity
-
settled transacti
ons
The cost of
equity
-
settled transactions with
employees
is measured
by
refere
nce
to the
fair
value
at the da
te at
which they
are granted
and i
s recognised
in
the Company
financial
statements as
a
capital c
ontribution
to the
subsidiaries
for
whom
the employe
es perform
services, with
the credit entry
being mad
e to reserves
, ov
er the vesting period, which ends on the
date on which the rel
evant employees become fully ent
itled to the award.
Fair value of awards with a
market condition
-
based performance target is
determined by an
external valuer using a
Monte
Carlo si
mulation
pric
ing model. In valu
ing equity
-
settled transactions, no account is
taken of any vesting conditions, ot
her
than conditions
linked to the
price of the sh
ares of the C
ompany (m
arket cond
itions). Fair value
of awards
with a financia
l
result
-
based performance target is deter
mined by management using the Black Schol
es pricing model.
No capital cont
ributi
on is recognis
ed for awards that do not
ultimatel
y vest, except
for awards where vesti
ng is condit
ional
upon
a
market
condition,
which
are
treated
as
vest
ing
i
rrespective
of
whether
or
not
the
market
condition
is
sati
sfied,
provided that all
other vesting condit
ions are satisfi
ed.
At
each
balance
she
et
date
before
ve
sting,
the
cumul
ative
expens
e
is
calculat
ed,
represent
ing
the
extent
to
which
the
vesting
period
has
expired
and
management’s
best
esti
mate
of
the
achievement
or
otherwise
of
non
-
market
cond
ition
s
and
of
the
number
of
equity
instr
uments
that
will
ultimately
vest
or,
in
the
c
ase
of
an
instr
ument
subject
to
a
market
condition,
be
treated
as
vesting
as
descri
bed
above.
The
movement
in
cumulative
expense
since
the
previous
bal
ance
sheet date is recognised as a capital
contribution, with a corr
esponding entry in equity.
Where t
he ter
ms of an
equit
y
-
settled award are modified or a
new award
is designated as replacing a cancelled or
settled
award,
the
cost
based
on
the
ori
ginal
award
terms
continues
t
o
be
recognised
as
a
capital
contribution
over
the
original
vesting
period.
In
addi
tion,
an
expense
is recognised
as a
capital contribution
over the
remainder of
the n
ew
vesting period
for the in
cremental
fair value
of any
modification,
based on
the diffe
rence betw
een the
fair value
of the
original aw
ard and
the fair
value
of the
modified award,
both as
measured on
the
date of
the
modification. No reduction
is recognise
d if
this
difference is negat
ive.
Where
an
equ
ity
-
sett
led
award
i
s
cancelled,
it
is
treated
as
if
it
had
vested
on
the
date
of
cancellation,
and
any
cost
not
yet recog
nised in
the income
st
atement
for
the
award
is
recorded
as
a
capital contribution
i
mmedia
tely. A
ny
compe
nsation
paid up to
the fair
value of
the award at
the cancellat
ion or set
tlement date i
s deducted fr
om equity, with
any excess
over
fair value being tre
ated as a capita
l contribution in the b
alance sheet.
Employee Share
Ownership Trust
(ESOT
)
The Company is deemed to
have control of
its ESOT theref
ore the invest
ment in the
C
ompany’s shares i
s deducted from
equity. The shares are
valued at the average pur
chase price.
Notes to the
Company financ
ial statement
s
Gresham Technologi
es plc
Annual
Financial
Report
202
1
133
2.
Auditor’s
remuneration
The figures within the auditor’s
remuneration note
in the
Gresh
am con
solidated fina
ncial statem
ents includ
e fees
charged
by the
Company’s
auditor
to Gresham
Technologies
plc
in respect
of
audit
and non
-
audit servi
ces. As
such,
no separ
ate
disclosure has been gi
ven above.
3.
Directors’
rem
uneration
Information
concerning
Directors’
remuneration
and
gains
on
exercise
of
share
options
can
be
found
i
n
the
Directors’
Remuneratio
n Report beginn
ing on page
54
and in note
8
to
the G
roup financ
ial stateme
nts. There are no staff employed
or costs recognised i
n relation to t
he Parent Company.
4.
Dividends pa
id and prop
osed
The
final
dividend
for
the
year
ended
31
December
2
0
20
was
appr
oved
at
the
Compa
ny
Annual
Gen
eral
Meeting
on
10
May
202
1
and
paid
on
20
May
202
1
of
0.75
pence
per
share,
equating
to
a
total
of
£522
,000.
The
Company
will
be
proposing a final
dividend for approval
at the AGM for the year
ended 31 December 202
1
of 0.75
pence per share.
5.
Investmen
ts
202
1
2020
Investment in su
bsidiaries
£'000
£'000
Cost
At 1 January
34,058
30,538
Acquisitions
23,
866
3,300
Disposals
(
3,063)
-
Capital con
tribution
-
share
-
based payments
369
220
At 31 December
55,230
34,058
Impairment pro
visions
At 1 January
13,592
13,592
At 31 December
13,592
13,592
Net book val
ue
At 31 December
41,638
20,466
Details
of
the
investmen
ts
in
which
the
Compan
y
holds
20%
or
more
of
the
nomi
nal
value
of
an
y
class
of
share
c
apital
ar
e
included w
ithin note
17
to the
Group financia
l statements.
6.
Debtor
s
202
1
2020
£'000
£'000
Amounts owed by subsi
diary
undertakings
38,904
34,635
Other
receivable
s
-
114
Prepayments and accr
ued income
96
7
39,000
34,756
All
amount
s
that
fall
due
for
r
epayment
wit
hin
one
year
and
are
presente
d
within
current
assets
as
required
by
the
Companies
Ac
t.
The
loans
to
Group
companies
are
rep
ayable
on
demand
with
no
fixe
d
repay
ment
da
te
al
though
it
is
noted that a
significant pr
oportion of t
he amounts may not be
sought for
repayment within one
year depending on
activity
in the grou
p compa
nies
.
7.
Credi
tors
Notes to the
Company financ
ial statement
s
Gresham Technologi
es plc
Annual
Financial
Report
202
1
134
Amounts falli
ng due withi
n one year
202
1
2020
£'000
£'000
Amounts owed to subs
idiary undertak
ings
41,447
35,320
Lease liabilities
313
320
Trade creditors
50
245
Contingent
considerati
on
379
909
Other credi
tors and a
ccruals
64
4
42,253
36,798
Amounts falli
ng due more t
han one year
202
1
2020
£'000
£'000
Lease liabilities
553
705
202
1
2020
£'000
£'000
Contingent co
nsideration
-
349
8.
Leases
The
Company
holds
a
number
of
leases in
respect of
office buildings
whic
h
are
uti
lised
b
y
subsidi
ary
compani
es
. These
leases
are
disclosed
wi
thin
t
he
Company
as
a
leas
e
recei
vable
,
representing
the
amounts
due
from
the
subsidiaries
in
respect of these lease
s.
Lease liabiliti
es are measured at the present val
ue of the contractual payments due t
o the lessor over the l
ease term with
the
discount
rate
determined
by
reference
to
the
Group’s
incremental
external
borrowing
rate,
3.1%.
Subsequent
to
the
initial meas
urement
lease liabilitie
s are incr
eased as a result of
interest charged and r
educed for lease payments made.
The table bel
ow represents
the maturity
of the lease
receivable:
202
1
2020
£'000
£'000
Less than 3 months
78
77
3 to 12 months
233
238
1 to
2
years
237
309
2 to 5 years
39
7
510
Total
945
1,134
Notes to the
Company financ
ial statement
s
Gresham Technologi
es plc
Annual
Financial
Report
202
1
135
Lease liabili
ties
Total
£'000
At 1 January 20
20
746
Cash
items
:
Lease payments
(3
32
)
Non
-
cash items:
Additions
586
Interest expense
25
At 31 December 20
20
1,025
Cash
item
s:
Lease payments
(308)
Non
-
cash items:
Additions
232
Disposals
(109)
Interest expense
26
At 31 December
202
1
866
202
1
2020
£'000
£'000
Due between 0
-
3 months
73
80
Due between 3
-
12 months
240
240
Due less th
an one year
313
320
Due more than
one year
553
705
Lease liabilities
866
1,025
9.
Defer
red tax
The Company has a r
ecognised defer
red tax asset
as follows:
202
1
2020
£'000
£'000
As at 1 January
18
211
Movement i
n the pe
riod wit
hin the
income st
atement
(18)
(193)
As at 31 December
-
18
Comprising:
Tax losses
-
18
-
18
10.
Issued
share capita
l
Ordinary sh
ares allot
ted, call
ed up and f
ully paid
Number
Nominal
value
£'000
At 1 January
2020
68,256,458
3,413
Exercise of sha
re
options
1,900,000
95
At 31 December
2020
70,156
,458
3,508
Exercise of sha
re options
83,000
4
Issue of new sha
res
13,125,000
656
At 31 December
202
1
83,364,458
4,168
Notes to the
Company financ
ial statement
s
Gresham Technologi
es plc
Annual
Financial
Report
202
1
136
The Company’s ordi
nary share ca
pital consi
sts of indi
vidual shar
es having a
nominal value of 5 pence
each.
During the year ended 31
December 202
1
,
share
options grante
d u
nder
the
2010
Share Option
P
lans
were
exercise
d a
nd
the G
roup
issued
83
,000
(20
20
:
1,900,00
0) or
dinary
shares
according
ly (ra
nking
pari p
assu
with
existing
shares
in
issue).
See note 22
of the
Group fina
ncial sta
tements for
further
detail
s.
At 31
December 202
1
and 2020
there were outstanding
options granted to acquire ordina
ry shares in the Compan
y. See
note 22 of the Group fi
nancial statements for
further detail
s
.
There are no p
reference shar
es in issue
(20
20
: none).
Shares held
by Employee Shar
e Ownership Tr
ust (“ESOT”)
£’000
Number
At 1 January 20
20
945
976,596
Issue of shares
(
167
)
(144,996)
At 31 December
2020
778
831,600
Issue of shares
(169)
(202,292)
At 31 December
202
1
609
629,308
The shares
held by
t
he ESOT
are expected to
be issued
under share
option contracts. The
shares are
held
at the
average
purchase price.
11.
Reserves
Share capit
al
The balance
classified as share
capital
represents
the nominal
value arising
from the
issue of
the
Comp
any’s
equity
share
capital, comprising 5 pence ordinary shares.
During the year ended 31
December 202
1
,
share
options grante
d u
nder
the
2010
Share Option
P
lans
were
exercise
d a
nd
the G
roup
issu
ed
83,000
(20
20
:
1,900,000) ordin
ary s
hares
accordingly
(rank
ing p
ari pa
ssu
with
existing
shares
in
issue).
See note 22
of the
Group fina
ncial sta
tements for
further
detail
s.
In
June
2021
the
Company issued
13,125,000
ordinary
shares at
a
price
of
160
pen
ce
(ranking
pari
passu
with
existing
shares in issue)
.
Share premium
The
bal
ance
cl
assified
as
share
premium
r
epresents
the
premium
ar
ising
from
the
i
ssue
of
the
Company’s
equity
share
capital,
comprising 5
pence ordinary
shares, net
of
share issue
expens
es.
There
are
restricti
ons on
the use
of
the shar
e
premium account. It can only be used for bonus issues, to provide for the premium payable on redemption of debentures,
or to write off preliminary expenses, or expenses of, or commissions paid on, or
discounts allowed on, the same issues of
shares or debentures of the Company.
Own share
reserve
Weight
ed a
verage
cost
of
shar
es he
ld i
n t
rust
by t
he ES
OT.
Special re
serve
The special r
eserve arose
on the cancell
ation of de
ferred ordi
nary shares i
n June
1992.
Merger
reserv
e
The
merger
reserve
aros
e
on
iss
ue
of
shar
es
in
r
espect
of
acquisiti
ons
and
merg
ers
in
the
period
1992
to
1999
and
i
n
2018.
Notes to the
Company financ
ial statement
s
Gresham Technologi
es plc
Annual
Financial
Report
202
1
137
Profit and
loss account
All othe
r net gai
ns and lo
sses and tr
ansactions
with owner
s (e.g.
dividends)
that ar
e n
ot recognised elsewhere.
12.
Capital commitment
s
There were no c
apital commitment
s at 31 December
202
1
(2020: none).
13.
Contingent li
abiliti
es
In the
normal
course
of
business,
the
Company
has
issued
general
guarante
es in
respect
of
the co
ntractual
obligations
of
certain
subsidi
ary
undertakings.
The
Company
has
assessed
the
risk
of
defaults
by
subsi
diary
undertakings
and
should
Gresham Technologi
es
plc
have
to
assume
the debt
and
make settlement,
the
appropriate
provisioning would
be provided
for within the Co
mpany.
14.
Share
-
based payments
Share
-
based
payments
in
respect
of
both
the
Company
and
t
he
Group
are
discl
osed
in
note
23
of
the
consol
ida
ted
financial
statements.
15.
Related party
transacti
ons
The
Company
is
exempt
from
disc
losing
transact
ions
within
th
e
wholly
owned
subsidi
aries
in
the
Group.
Other
related
party transactions
are included within
those given in note
27
of the
Group
financia
l statem
ents.
Corporate in
formation
Gresham Technologi
es plc
Annual
Financial
Report
202
1
138
Registered
office
Aldermary Hou
se
10
–
15 Queen Street
London
EC4N 1TX
Broker and
financial
adviser
Singer Capi
tal Market
s Limited
One Bart
holomew
Lane
London
EC2N 2AX
Auditor
BDO LLP
Arcadia Hous
e
Mariti
me Walk
Ocean Vi
llage
Southampton
SO14 3TL
Registrars
Equiniti
Limited
Aspect House
Spencer Road
Lancing
West
Sussex
BN99 6DA
Solicitors
Blake Morgan
LLP
Tollgate
Chandler'
s Ford
Eastleigh
SO53
3LG
Bankers
HSBC Bank pl
c
55 Above Bar Street
Southampton
SO14 7DZ
Annual General
Meeting
10
May 202
2
Singer Capi
tal Market
s Limited
One Bart
holomew
Lane
London
EC2N 2AX
Aldermary Hous
e 10
-
15 Queen Street London EC4N 1TX
investorrelations@
greshamte
ch.com www
.greshamtech
.com