MAKING DIGITAL WORK
for everyone everywhere
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Actual Experience plc
Annual Report 2020
OUR PERFORMANCE
Today’s
circumstances
present businesses
with a unique
opportunity to
reinvent themselves
We are currently experiencing a hugely
accelerated digital transformation across
the world. If we harness this radical
transformation in a positive way,
businesses will reduce their carbon
footprint, improve wellbeing for all
employees and tackle digital inequality.
Our offering has a powerful resonance
as part of this digital transformation.
Dave Page
Chief Executive Officer
CONTENTS
Strategic report
Our purpose
Our thinking
Our goal
Chair’s statement
Market overview
The challenge
Our value propositions
Human Experience in action
Business model
Chief Executive’s statement
Stakeholder engagement
Our people and culture
Thought leadership
Business continuity
Our community
Financial review
Principal risks and uncertainties
Governance
Board of Directors
Directors’ report
Statement of Directors’ responsibilities
Corporate governance report
Statement of compliance with the QCA
corporate governance code
Audit Committee report
Directors’ remuneration report
Financial statements
Independent auditors’ report
Consolidated statement of comprehensive income
Consolidated statement of changes in equity
Consolidated statement of financial position
Consolidated statement of cash flows
Notes to the consolidated financial statements
Company statement of changes in equity
Company statement of financial position
Company statement of cash flows
Notes to the Company financial statements
Other information
Notice of Annual General Meeting
Notes relating to Annual General Meeting
Glossary of terms
Actual Experience plc Annual Report 2020
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FINANCIAL HEADLINES
Revenue
£1.96m
Loss per share
9.87p
Loss for the year
£4.68m
Cash and cash equivalents
£2.75m
Financial statementsOther informationGovernanceStrategic report OUR PURPOSE
WE BELIEVE PASSIONATELY
in a digital world
that delivers a better
Human Experience
COVID-19 has changed all of our lives in ways that we never
conceived possible and it’s likely that many of these changes
will stay with us for generations to come.
The disruption to our everyday lives means that
all of us are doing more online; from working
to studying, from playing to purchasing.
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Financial statementsOther informationGovernanceStrategic report OUR THINKING
MAKING DIGITAL WORK PROPERLY
has never felt
so vital
We know, when digital environments don't work
properly, it creates a sense of friction. Whether it's
an app or a website that's unresponsive or slow to
respond, it stops us in our tracks and both time
and money are lost.
Think about all you could achieve if this time
could be given back to you.
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Financial statementsOther informationGovernanceStrategic report OUR GOAL
WE BELIEVE THE DIGITAL WORLD
should work better
for everyone
everywhere
Remote working has the potential to help us strike
a better work/life balance. Yet today, there still remains
a digital equality gap across society.
Our analytics help businesses prioritise and identify
these inequalities so that no one is left behind.
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Financial statementsOther informationGovernanceStrategic report CHAIR'S STATEMENT
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Actual Experience plc Annual Report 2020
The urgent need for businesses to enable
efficient and effective remote working
underscores the relevance of our offering.
Stephen Davidson
Chair
I am pleased to report on the progress
made during the financial year 2020
(FY20). In the first six months, we
completed our pivot from a managed
services to a professional services
(PS) offering. We have not only started
to see quicker customer engagements
and deployment cycles shorten as a
result, but we expect this new
approach to provide us with a wider
range of opportunities.
Outlook
The market opportunity for Actual Experience is significant,
and the Board believes that the Group is well positioned for
considerable revenue growth, supported by an excellent,
expanding portfolio of Channel Partners and customers.
The initial success of our recently launched Human
Experience Management offering has demonstrated the
need for businesses to analyse operational efficiencies and
employee wellbeing. We expect further market engagement
over the course of the current financial year as our Partners
and their customers continue to adapt to the permanent
change in work practices and realise the benefits of our
technology service.
Stephen Davidson
Chair
24 February 2021
The second half of the year was dominated by the impact of
COVID-19 which accelerated digital transformation and the
increased adoption of hybrid home and office working. The
urgent need for businesses to enable efficient and effective
remote working underscores the relevance of our offering,
resulting in increased engagement from our Channel
Partners, both existing and new. Wellbeing and productivity
play a vital role in the effectiveness of remote working. The
effects of COVID-19 have caused businesses to focus more
on digital collaboration tools to analyse human experience.
A white paper published by Verizon and Boston Consulting
Group last June shows that Actual Experience’s software
has delivered tangible results in determining the cause of
lost productivity within businesses which in turn may
identify wellbeing concerns.
Financials and cash
Revenue for the 12 months increased marginally to
£1.96m (FY19: £1.93m), while gross profit increased
29% to £1.02m (FY19: £0.79m). In line with expectations,
cash as at 30 September 2020 was £2.8m (FY19: £7.9m).
Shareholders and placing
We are thankful for the strong support shown by new and
existing investors in our recent fundraise announced in
January 2021. The placing will allow us to expand our sales
and support teams in response to the growing pipeline of
sales prospects and smoothly onboard new Partners.
Additionally, it will enable us to expand the Company’s
technology development team to facilitate the development
of enhanced cloud efficiency, scalability, and increased
automation of report regulation for the PS engagements.
People
In what has been an unprecedented time for businesses, our
colleagues have adjusted seamlessly to remote working and
I want to thank them all for their hard work throughout the
year. As previously announced, the Group has restructured
the business to align itself with the evolved sales model
which has resulted in a reduction of the cost base as well as
improving operational efficiencies. We welcomed Jamie
Dunkley to the senior leadership team in March 2020 as
Chief Operating Officer following the resignation of his
predecessor, Robin Young, in February 2020. Jamie has
been instrumental in ensuring smooth business continuity
during the pandemic.
Actual Experience plc Annual Report 2020
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Financial statementsOther informationGovernanceStrategic report MARKET OVERVIEW
The COVID-19 global pandemic is
accelerating digital transformation
Here we look at some of the key trends that shaped the digital economy in 2020.
1.Forced adoption of
remote working
COVID-19 compelled many companies to quickly relocate
their workforce from office spaces to their homes. The speed
at which this was done was unprecedented.
For remote working to continue to be viable in the long term,
significant investment will be needed to properly equip
people and deliver a secure infrastructure. In some parts of
the world more so than others, there will also need to be a
discernible shift in corporate culture.1
$4.5 trillion
estimated savings per year in the US alone as a direct
result of remote working by 2030 due to improving
productivity, reducing fixed overheads and increasing
agility2
77%
of people say that having the flexibility to work from
home would allow them to be healthier3
60% of US companies offer
their employees remote working
opportunities (3x increase from
1996 to 2016)4
In Latin America and the
Caribbean, school closures
left more than 154 million
children temporarily unable
to transition to e-learning
owing to lack of access to
online services5
Only 32% of Japanese
companies have flexible
working policies whereas
80% of Japanese employees
express the desire to
work remotely6
2.The immediate adoption of digital technologies
is bedding in for the long term
The response many businesses had to the pandemic led to an
acceleration in digital transformation. The mass adoption of new
technologies for employees to work remotely or for customers to
interact through digital channels took place almost overnight. Many
of these changes are now being bedded in to business operations
for the long term.
During the pandemic, consumers have shifted to consuming goods
and services online. Businesses have had to rapidly adapt their value
propositions to interact with customers solely through digital
channels, resulting in businesses saying at least 80% of customer
interactions are now digital.7
The increase in remote working, the need to build resilience in data
security, as well as the preference of customers to utilise digital
technologies has resulted in a strong move to longer term and
planned investment in cloud technologies.
This has resulted in business leaders bypassing the traditional
obstacles that would typically prevent long term digital
transformation from being a success. The result is ongoing
investment in digital technologies which will continue in the future.
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Actual Experience plc Annual Report 2020
3.
COVID-19 could widen
the digital equality gap
The onset of the pandemic has highlighted the impact of continuing
digital exclusion that millions are affected by in the UK.
A 2019 report by the Office for National Statistics (ONS) highlighted
that although the number of internet ‘non-users’ is declining it is still
remarkably high for a developed nation such as the UK. In 2018 this
figure was 5.3 million internet non-users which represented 10% of
the adult population.8
A study by the Cambridge Centre for Housing and Research at the
University of Cambridge quoted, ‘digital exclusion is another facet of
the deep inequalities which run through the social fabric of the UK,
and is more widespread than many people are aware of.’
Researchers Hannah Holmes and Dr Gemma Burgess explain in their
research that 22% of the UK’s population lack basic digital skills and
that the link between poverty and digital exclusion is clear.9 Although
this divide has been evident for a long time, the pandemic forced a
huge shift in our ways of life which was further compounded during
the first lockdown when schools were forced to close and education
was taken online.
Number (millions) and percentage of adult internet
non-users, UK, 2011 to 2018
Number of adults (millions)
% of adults
)
s
n
o
i
l
l
i
m
(
s
t
l
u
d
a
f
o
r
e
b
m
u
N
10.8
9.6
8.4
7.2
6.0
4.8
2011
2012
2013
2014
2015
2016
2017
2018
25
20
%
o
f
a
d
u
l
t
s
15
10
5
0
Source: Office for National Statistics – Internet Users, Labour Force
Survey (LFS)
8%
In the long term, strategies to close the digital divide will be required
to rebalance society across the UK.
of people in the UK (4.3 million people) estimated to have zero basic
digital skills in 201810
6.8 million
estimated number of people who will lack digital skills in 202811
Only 51%
of UK households earning between £6-10k had home internet access
compared with 99% of households with an income of
over £40k12
1
https://www.ey.com/en_be/covid-19/why-remote-working-will-be-the-new-
normal-even-after-covid-19
2 https://www.iwgplc.com/MediaCentre/PressRelease/flexible-working-to-
7 https://www.mckinsey.com/business-functions/strategy-and-corporate-
finance/our-insights/how-covid-19-has-pushed-companies-over-the-
technology-tipping-point-and-transformed-business-forever
contribute-10tr-usd-to-global-economy-by-2030
8 https://www.ons.gov.uk/peoplepopulationandcommunity/
3 https://www.flexjobs.com/blog/post/flexjobs-2018-annual-survey-workers-
believe-flexible-remote-job-can-help-save-money-reduce-stress-more/
4 https://www.merchantsavvy.co.uk/remote-working-statistics/
5 https://www.unicef.org/press-releases/covid-19-more-95-cent-children-are-
out-school-latin-america-and-caribbean
6 https://www.merchantsavvy.co.uk/remote-working-statistics/
householdcharacteristics/homeinternetandsocialmediausage/articles/
exploringtheuksdigitaldivide/2019-03-04
9 https://www.cam.ac.uk/stories/digitaldivide
10 https://www.ons.gov.uk/peoplepopulationandcommunity/
householdcharacteristics/homeinternetandsocialmediausage/articles/
exploringtheuksdigitaldivide/2019-03-04
11 https://www.goodthingsfoundation.org/sites/default/files/research-
publications/the_economic_impact_of_digital_inclusion_in_the_uk_final_
submission_stc_0.pdf
12 https://www.cam.ac.uk/stories/digitaldivide
Actual Experience plc Annual Report 2020
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Financial statementsOther informationGovernanceStrategic report
THE CHALLENGE
COVID-19 has triggered a radical and
enduring change to working practices
and dramatically increased reliance on
digital technology
Disrupted experience
2 hours lost
per employee per day
HX score
60
The cost of lost time...
for a Fortune 500 Company,
with just 20% digital business
processes, a digital quality score of
60 would indicate a cost of around
$400m in lost staff time per year.
$400m
per annum lost in staff time
As human experience
becomes disrupted, there are
increasing problems that
affect an individual’s ability
to use a digital service. This
could be, for example, poor
quality voice or video, or a
CRM application failing to
load, meaning that people
are unable to work efficiently
and effectively.
Actual Experience provides
planning and investment
insights to business leaders
struggling to assess the
effects of dramatic and
enduring change to working
practices and their digital
business wrought by the
COVID-19 pandemic.
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Actual Experience plc Annual Report 2020
The amount of time
spent by employees
working digitally has
increased dramatically
Inconsistent experience Frictionless experience
1 hour lost
per employee per day
0 hours lost
per employee per day
HX score
HX score
70
80
The cost of lost time...
The cost of lost time...
for a Fortune 500 Company,
with just 20% digital business
processes, a digital quality score of
70 would indicate a cost of around
$200m in lost staff time per year.
$200m
per annum lost in staff time
At a digital quality score
of 80, a user would be at
their most productive.
There is no wasted time.
$0m
per annum lost in staff time
Actual Experience plc Annual Report 2020
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Financial statementsOther informationGovernanceStrategic report OUR VALUE PROPOSITIONS
Our Human Experience
Management Services
HUMAN EXPERIENCE (HX) SERVICES
Professional Services offerings
BIA
Our Business Impact
Assessment helps corporates
understand the impact on
top-level business metrics
1-2 months
engagement
CI
A Continuous Improvement
service to optimise the digital
business over time
> 12-month
engagement
Value to our
Partners is…
Short commercial cycle
Pull-through revenue
potential by identifying
areas of weakness in
digital ecosystems
Managed Services offering
Assure
Diagnose human experience
problems as and when
they appear
Needs basis
Continuous customer
engagement opportunities
around major commercial KPIs
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Actual Experience plc Annual Report 2020
OUR CHANNEL PARTNERS
END CUSTOMER BENEFITS
Human Experience: The performance
indicator of your digital business
Employee
Experience
Environment
Equality
Operational
Efficiency
Revenue
Wellbeing
Actual Experience plc Annual Report 2020
15
Large-scale
global blue chip
enterprise
Multinational
computer
technology
company
Financial statementsOther informationGovernanceStrategic report HUMAN EXPERIENCE IN ACTION
BUSINESS IMPACT ASSESSMENT
Making the digital
world work properly
Our powerful business analytics is the result of over ten years’ research
into linking the complex nature of digital networks and the impact it
has on the human elements of a business – employee wellbeing,
efficiency and brand perception.
OUR HUMAN EXPERIENCE METRICS DEFINED
Equality
The gap between those
who are easily able to work
from home and those who
are struggling due to their
digital world not
working properly
Revenue
The revenue generation
potential of your business
if your digital world
worked properly
Wellbeing
The potential impact on
stress and wellbeing caused
by not being able to be
productive or collaborate
Employee
Experience
The total time wasted due
to inconsistent and poor
digital services
Operational
Efficiency
The total business payroll
waste due to inconsistent
and poor digital services
Environment
The amount of reduced
emissions due to employees
being able to avoid
commuting and
business travel
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Actual Experience plc Annual Report 2020
CASE STUDY:
Adapting to change
with clarity
The Business Impact Assessment had one goal: to help
Osborne Clarke identify employees that needed additional
digital technology support.
This enabled the Firm to quantify the impact and then deploy
the most appropriate technologies to improve its employee's
home working experience.
THE CHALLENGE
Osborne Clarke is an international legal
practice with over 270 Partners and
more than 900 lawyers across
25 locations. The Firm recently
launched an initiative with Actual
Experience to understand the impact
its digital technologies had on
employee's home working experience.
This is particularly relevant and timely
given the dramatic changes to working
practices and accelerated adoption of
digital technology since the start of the
COVID-19 pandemic.
Actual Experience's report was really useful in
helping us understand parts of the business we
need to continue to support to improve their
digital experience. This is obviously of increased
importance to us as a consequence of COVID-19
and also supports our continued focus and
commitment to wellbeing in this hybrid working
environment.
Ray Berg
Managing Partner
Actual Experience plc Annual Report 2020
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Financial statementsOther informationGovernanceStrategic report HUMAN EXPERIENCE IN ACTION CONTINUED
CASE STUDY: CONTINUED
WHAT ACTUAL EXPERIENCE DID
Actual Experience worked with Osborne Clarke to deploy
digital users across the technologies used by Osborne
Clarke's employees, monitoring their home working
environments and reporting on the efficiency of eight
critical applications.
Actual Experience also provided a pre-migration report to
understand the business impact of a proposed migration
from Skype to Microsoft Teams.
Actual Experience produced a Business Impact
Assessment, in three weeks with recommendations
that enabled Osborne Clarke to:
1.
support their continued focus and efforts on improving
employee wellbeing and home working experience;
2. confidently build the business case required to optimise
application and network performance; and
3. effectively plan the resources required internally to
improve the technologies they deploy to support
home working.
The report prioritised resource allocation and gave
recommendations to improve wellbeing and experience by
focussing efforts on application and network performance.
In addition, Actual Experience provided a list of
anonymised recommendations for the most affected
employees who were dealing with poor Wi-Fi speeds and
made recommendations for employees who have issues
with their ISP either through the capacity on the access or
ISP core issues.
VALUE DELIVERED
Osborne Clarke identified the projects needed to deliver
the most significant improvement to the wellbeing and
experience of their employees. Through continuous
improvement they are now in a position to confidently
allocate resources and report on the improvements to
employee's home working experience.
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Actual Experience plc Annual Report 2020
Deploying the Actual Experience digital user was
straightforward. The lightweight, security
compliant software was easy to understand, quick
to install and required minimal IT time to complete
a full rollout.
Myles Manning
Client Interface & Solutions Manager
Actual Experience plc Annual Report 2020
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Financial statementsOther informationGovernanceStrategic report BUSINESS MODEL
Our analytics gives our
Channel Partners the actionable
insight needed to improve their
customers' digital journeys
Human Experience (HX) is the
fundamentally unique capability
of our AaaS.
In an increasingly digital world business leaders are
taking ownership of digital strategy. They are doing
this because they know that staff productivity
and their online brand rely on the digital world
working properly.
Annuity revenue model
We provide Analytics-as-a-Service (AaaS) to our
Channel Partners. They are able to build this into their
solutions, hardware and software that they provide to
customers. This gives them the actionable insight
needed to improve their customers’ digital journeys.
We sell our Channel Partners analytic capacity in our
Analytics Cloud. The greater the required capacity, the
greater the fee. We believe, on the basis of our
experience, that the revenue to us, from a Channel
Partner's enterprise customer, can be $500k per
annum or more. Our Channel Partners have hundreds
of customers at the scale of those deployed this
year, and thousands of small and medium-sized
business customers.
Digital Users (DUs) are licensed for free. This enables
customers to install them wherever they may need
them. Fees are charged on a per employee basis.
As we have seen in this past year, some customers will
deploy at full scale immediately and some will grow to
full scale over a longer period. Full adoption of Actual
Experience within a Channel Partner’s customer is
expected to take from 12 months to two years.
KEY STRENGTHS
Intellectual property
Patents
We have patents granted in the US, China
and Europe.
Trade secrets
It has taken the last 10½ years, since the creation of
the Company, to make the patented technology
work effectively in the real world.
Expertise
Within the R&D team we have particular expertise
in the field of mathematics, and in Sales we have
extensive experience in understanding the
operations of Channel Partners.
Process and platform
Our AaaS platform has been live since 2011, with continual
improvements being made. The value proposition is now
firmly established amongst our Channel Partners.
Channel partnerships
We are focused on developing relationships with large
Channel Partners, who have access to an enormous number
of business and consumer customers.
First mover advantage
Although there are many vendors targeting budgets for the
improvement of digital journeys, the Board remains
convinced that we are uniquely positioned amongst these
vendors because of our ability to analyse complex digital
supply chains.
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Actual Experience plc Annual Report 2020
Our pivot to a professional services-led
engagement is now complete, placing us
at the heart of our Channel Partners’
processes in order to promote quicker
customer engagements and shortened
deployment cycles.
Dave Page
Chief Executive Officer
HOW WE GENERATE VALUE
WHO BENEFITS
AaaS
Our AaaS provides actionable information for our Channel
Partners. They can use this information to improve the HX of
their customers' digital journeys. Using our analytics,
businesses can manage and improve the HX of their digital
ecosystem, so that staff productivity is improved and online
brand is protected.
HXM provides the
business case for digital
investments
We measure the operational efficiency, wellbeing, inequality,
revenue, employee experience and carbon footprint. These
metrics empower business leaders with the information they
need to improve their business.
This subsequently provides the economic rationale for
ongoing Continuous Improvement service.
Scalable operating model
We have invested considerable time and effort working with
our Channel Partners to be built into their customer
offerings. We will continue our focus to be built not only into
their solutions but also into their software and hardware.
Channel Partners will increasingly become able to scale the
rollout of our AaaS independently, and in maturity they will
require minimal support from Actual Experience.
Vast market opportunity
Our AaaS improves the human experience quality of the
applications and transactions that make up the $29tn Global
Digital Economy.
As the number of transactions and value that take place
digitally increase, the need to manage and improve
consistency and value to support the Global Digital
Economy will only become more important.
Channel Partners
Our AaaS improves the operational efficiency of our
Channel Partners, reducing the cost of service delivery and
differentiating their offerings in the market.
End users
Clients, their staff and customers
Business leaders are increasingly aware that the
productivity of their staff and the satisfaction of their online
customers relies heavily on the consistency of their digital
business. With Actual Experience, they have actionable
information to continuously improve their digital business
from an HX perspective.
Shareholders
Long-term capital growth
With our long-term aim of being built into the
solutions, software and hardware supplied by our Channel
Partners, Actual Experience will be positioned to become
the HX management system to the entire Global Digital
Economy. Successful execution with our existing Channel
Partners will lay the foundation for enormous growth
potential in the next ten years through our existing and new
Channel Partner relationships.
Our Employees
Actual Experience is dedicated to ensuring the happiness
and success of our employees. We provide rewarding
careers at the cutting edge of technology: staff are
encouraged to grow with the business and are provided
with regular opportunities for personal development.
Actual Experience plc Annual Report 2020
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Financial statementsOther informationGovernanceStrategic report CHIEF EXECUTIVE’S STATEMENT
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Actual Experience plc Annual Report 2020
The progress we have seen since launching
the new Professional Services products
confirms that our Channel Partners and
their customers understand the value of
our offering.
Dave Page
Chief Executive Officer
As noted in the Chair's Statement, in
the first half of the year we completed
a pivot from a managed services-led
offering to a professional services (PS)
led offering. The COVID-19 pandemic
initially delayed the introduction of
the PS offering as it diverted attention
of the Company's Channel Partners
towards implementing business
continuity processes, not just for
their customers but for their own
organisations.
According to the McKinsey Global Survey of Executives1,
“COVID-19 has pushed companies over the technology
tipping point — and transformed business forever." The
increased adoption of hybrid home and office working has
accelerated digital transformation, significantly increasing
the relevance and addressable market of our offering.
1
https://www.mckinsey.com/business-functions/strategy-and-
corporate-finance/our-insights/how-covid-19-has-pushed-
companies-over-the-technology-tipping-point-and-transformed-
business-forever
Commercial milestones — year in focus
As our Channel Partners and their customers adapted to new
ways of conducting business in light of the pandemic,
Verizon, together with Boston Consulting Group, published a
White Paper that discussed the workplace of the future and
more specifically what businesses need to do to enable
hybrid working (a mix of office and remote working). It is a
testament to our strong relationship with Verizon and the
relevance of these new ways of working that we were the
only third-party vendor cited in the report. During the initial
lockdown, we created the new Human Experience
Management (HXM) Business Impact Assessment (BIA)
offering. BIA helps businesses quantify the impact of digital
business performance on their employees whether they are
at home, in the office or elsewhere, and on their overall
business. BIA assesses top level business metrics and
objectives such as operational efficiency, operational
inequality, carbon footprint and employee wellbeing.
Depending on the extent of the business impact identified by
the BIA, the customer may then choose to proceed to the
HXM Continuous Improvement (CI) service, which runs for a
minimum of 12 months. BIA and CI use a seat-based pricing
model with a ‘seat’ being an employee.
As previously announced, Verizon signed an extension to
its Master Service Agreement to sell and use HXM. An
amendment was made to our agreement with Accenture
to facilitate the sale of the new HXM offerings. Vodafone
did not require an amendment to its agreement to sell the
new offerings.
Post-period end, we were delighted to secure an initial order
from Oracle Corporation and sign a three-year framework
agreement with an American multinational computer
technology company, both for our HXM offering.
Sales and marketing
Our new offerings have been well received. We completed
our first BIA project with legal firm Osborne Clarke, who
reported that the analysis was extremely useful in helping
them to understand employees’ work practices and parts
of the business that required support to improve their
digital experience. In November 2020, we agreed the first
large-scale BIA engagement with one of our Channel
Partners and one of their customers, a large complex
global energy supplier. Initial introductions and testing
began in August through to full-scale deployment and an
order for 10,000 employees in November 2020.
These initial deployments indicate emerging evidence of a
shorter sales cycle of just four months compared to the
processing of our previous managed service offerings,
which could take up to 24 months. Since August 2020, the
Company's Channel Partners have rapidly established a
list of target customers amounting to over four million
addressable employees or seats. This number continues to
grow.
engagements. In particular, PS automation focuses on the
ability to generate BIA and CI reports more quickly in order to
increase the depth and breadth of the analysis.
Response to COVID-19
Throughout the year, the Group's top priority remained the
health and safety of our employees, Channel Partners and
their customers. The business continuity systems and
procedures that we put in place enabled the quick transition
of all employees to remote working, allowing us to continue
providing full support to our Channel Partners with no
compromise to service levels or delivery. Homeworking has
proved successful for the business. Productivity levels have
increased and as a result we are keeping future working
practices, and their effects on the wellbeing of our
employees, under review. As we look ahead, our vision is: ‘not
to commute to compute’.
The Board remains vigilant, assessing the impact of
COVID-19 on the general economy and managing our cash
resources carefully. Prior to the onset of the pandemic, we
carried out a restructure of the business to support our pivot
to PS. As a result, we were able to avoid furloughing any
employees during the pandemic.
I would like to take this opportunity to thank the entire team
for their unwavering support and dedication throughout
this period.
Current trading and outlook
This has been a challenging year, but we have worked
exceptionally hard to successfully launch our PS-led
offering and deliver our HXM service to business leaders,
enabling them to manage the impact COVID-19 has had
on their 'business as usual' processes. The progress we
have seen since launching the PS products confirms that
our Channel Partners and their customers understand the
value of our offering.
We have a number of opportunities in the pipeline as our
Channel Partners start delivering our PS-led offering to their
customers. We believe that Actual Experience now has a
solid operational platform and sales funnel with its Channel
Partners to enable it to implement customer deployments
more quickly, efficiently and on a larger scale, and our recent
successful fundraise in January 2021 will allow us to capitalise
on the current market opportunity.
We have an excellent, growing portfolio of Channel
Partners and customers, and continue to believe that
Actual Experience has the ability to become a significant
global player in the market for Human Experience
Management. Whilst we will continue to monitor the wider
market environment in regard to COVID-19, we are
confident in delivering against our strategic objectives,
and look forward to reporting on further progress with
both new and existing Partners in due course.
Product development
Our focus for the year was the continued automation of our
AaaS, concluding the development work to simplify managed
services deployments and instigate work to streamline PS
Dave Page
Chief Executive Officer
24 February 2021
Actual Experience plc Annual Report 2020
23
Financial statementsOther informationGovernanceStrategic report STAKEHOLDER ENGAGEMENT
Section 172(1) statement and
stakeholder engagement
Statement regarding Section 172(1) of the UK
Companies Act 2006 and our commitment to
transparent and constructive dialogue with
all of our stakeholders
The Directors, in good faith, have taken decisions that they consider
are most likely to promote the success of the Company for the benefit
of its stakeholders, having regard to the matters set out in s172(1)(a-f)
of the Companies Act 2006:
(a) The likely consequences of any decision in the long term:
The long-term success of the Company is always a key factor
when making strategic decisions. In particular, the Company is
committed to a long-term development plan for its technology.
Additionally, the Company continues to invest in its long-term
relationships with Channel Partners.
(b) The interests of the Company’s employees:
Our employees are the main asset of the Company and their wellbeing
and development are at the heart of our strategy for success.
A priority for the Company in 2020 has been to safely and efficiently
manage the transition of its employees to home-working.
STAKEHOLDERS AND KEY TOPICS
Employees
• Employee welfare during the COVID-19 pandemic
• Transitioning to working from home
• Workforce restructuring
• Feedback on engagement survey
• Company business plan and performance updates
• Introduction of payroll-based share
purchase scheme
Channel Partners
End Users
• Partner input regarding development priorities
• Improved sales collateral and training materials
• Closer sales collaboration and
marketing programmes
• Customer support
(c) The need to foster business relationships with suppliers,
customers and others: The Company regularly meets with key
suppliers and customers to review operations and explore mutually
beneficial future actions.
Shareholders
• Group strategy
• Financial results
• Corporate governance
(d) The impact of the Company’s operations on the community
and the environment: The Company places a high value on its
relationship with the local community and actively supports Bath
charitable initiatives. Due to the nature of its commercial activities,
the Company believes that it has no appreciable impact on the
environment, although it does take reasonable measures to ensure
that it procures its supplies from environmentally friendly and
sustainable sources.
(e) The Company’s reputation for high standards of business
conduct: Integrity, both personally and professionally, is embedded
in the Company’s culture. The Directors believe that it is important to
maintain a high standard of ethical values and seek to ensure that this
continues to be shared by all employees.
(f) The need to act fairly between members of the Company:
In making decisions, the Directors aim to strike a fair balance
between all stakeholders.
24
Actual Experience plc Annual Report 2020
Community
• Participation in local business meetings
and initiatives
• Establishment of an employee-led
charity committee
• Participation in local charity and
community events
Functional and Company-wide communications channels have
• Efficient transformation of operations from office-based
been established and continue to be reviewed for effectiveness.
to home-based, with no loss of productivity.
In the absence of face-to-face meetings for much of the year,
emphasis has been placed on regular videoconference meetings
and use of Slack channels.
• Development of new and engaging employee
communication channels.
• Enhanced transparency and two-way communication.
We continue to solicit employee feedback on key issues through
regular employee engagement surveys.
The Company prioritises regular and frequent meetings with
Channel Partners and their enterprise customers. These meetings
provide us with valuable feedback regarding market requirements
and competitive issues.
Both the Company and our Partners understand the critical
importance of coordinated sales programmes and joint
marketing activities. This ensures that we achieve our joint
objective of providing a high level of service and support to
enterprise customers.
• Increased engagement with Partners at a strategic level.
• Improved coordination with Partners regarding sales focus
• Regular scheduled meetings with Partners to agree product
and messaging.
development priorities.
The CEO, CFO and Investor Relations Director hold meetings with
• Communication styles vary to suit investor and potential investor
investors and analysts throughout the year, in particular following
preferences. Usually, the meetings are held in person, although
the release of the Group’s annual and half-year results. Feedback
videoconference calls are more typical during the current
from these meetings is shared with the Board.
COVID-related restrictions. In all cases, the objective remains
the same: to provide relevant and timely updates on the
The AGM is an important opportunity for communication between
Company’s progress.
the Board and shareholders, particularly private shareholders.
All Directors attend the AGM and engage with shareholders both
• All material new information is made available to shareholders
and potential shareholders at the same time.
during and after the meeting.
The Group’s Annual Report and Financial Statements is
available to shareholders in both hard copy form and online.
All announcements and important documents are available on
the Company’s website, www.actual-experience.com.
The Chief Executive Officer regularly meets with local government
• Continued support for local business initiatives, especially as
and business groups to discuss shared objectives and plans.
they relate to the technology sector.
• Maintaining visibility and a strong and positive presence in the
local Bath community.
During the year, an employee group was established to coordinate
our local charity efforts and represent the Company with regard to
activities in the community. Our principal focus continues to be the
active support of Julian House, a homeless charity based in Bath.
Despite the impact of COVID-19 restrictions, employees
participated in several local challenges, including the Bath
sleep-out and sponsored walk, and the Bath half-marathon.
Employees
• Employee welfare during the COVID-19 pandemic
• Transitioning to working from home
• Workforce restructuring
• Feedback on engagement survey
• Company business plan and performance updates
• Introduction of payroll-based share
purchase scheme
Channel Partners
End Users
• Partner input regarding development priorities
• Improved sales collateral and training materials
• Closer sales collaboration and
marketing programmes
• Customer support
Shareholders
• Group strategy
• Financial results
• Corporate governance
Community
• Participation in local business meetings
and initiatives
• Establishment of an employee-led
charity committee
• Participation in local charity and
community events
HOW WE ENGAGE
OUTCOMES
Functional and Company-wide communications channels have
been established and continue to be reviewed for effectiveness.
In the absence of face-to-face meetings for much of the year,
emphasis has been placed on regular videoconference meetings
and use of Slack channels.
We continue to solicit employee feedback on key issues through
regular employee engagement surveys.
• Efficient transformation of operations from office-based
to home-based, with no loss of productivity.
• Development of new and engaging employee
communication channels.
• Enhanced transparency and two-way communication.
The Company prioritises regular and frequent meetings with
Channel Partners and their enterprise customers. These meetings
provide us with valuable feedback regarding market requirements
and competitive issues.
Both the Company and our Partners understand the critical
importance of coordinated sales programmes and joint
marketing activities. This ensures that we achieve our joint
objective of providing a high level of service and support to
enterprise customers.
• Increased engagement with Partners at a strategic level.
• Improved coordination with Partners regarding sales focus
and messaging.
• Regular scheduled meetings with Partners to agree product
development priorities.
The CEO, CFO and Investor Relations Director hold meetings with
investors and analysts throughout the year, in particular following
the release of the Group’s annual and half-year results. Feedback
from these meetings is shared with the Board.
The AGM is an important opportunity for communication between
the Board and shareholders, particularly private shareholders.
All Directors attend the AGM and engage with shareholders both
during and after the meeting.
• Communication styles vary to suit investor and potential investor
preferences. Usually, the meetings are held in person, although
videoconference calls are more typical during the current
COVID-related restrictions. In all cases, the objective remains
the same: to provide relevant and timely updates on the
Company’s progress.
• All material new information is made available to shareholders
and potential shareholders at the same time.
The Group’s Annual Report and Financial Statements is
available to shareholders in both hard copy form and online.
All announcements and important documents are available on
the Company’s website, www.actual-experience.com.
The Chief Executive Officer regularly meets with local government
and business groups to discuss shared objectives and plans.
During the year, an employee group was established to coordinate
our local charity efforts and represent the Company with regard to
activities in the community. Our principal focus continues to be the
active support of Julian House, a homeless charity based in Bath.
Despite the impact of COVID-19 restrictions, employees
participated in several local challenges, including the Bath
sleep-out and sponsored walk, and the Bath half-marathon.
• Continued support for local business initiatives, especially as
they relate to the technology sector.
• Maintaining visibility and a strong and positive presence in the
local Bath community.
Actual Experience plc Annual Report 2020
25
Financial statementsOther informationGovernanceStrategic report OUR PEOPLE AND CULTURE
Our people are proof
of our success
Our success as a business depends on our ability to recruit the best people and support
their continued development. We encourage our diverse and talented team to have fun
and thrive in their careers while meeting their personal development goals.
The Company, its leadership and
management care about employees
and their wellbeing.
There are so many opportunities for our
product in a world where remote working
is now a daily way of life.
Jo Hatton
Human Resources Manager
Nicoleta Lazar
Technical Lead, Analytics Team
My journey with Actual Experience started in September 2016
when I joined the Company as a temporary HR Administrator.
Actual is a vibrant and growing company with an exciting product
and I was very pleased when a permanent HR Assistant role was
offered to me the following year. Actual gave me the opportunity
to grow and develop as an HR professional, and I was quickly
promoted to HR Advisor.
I was one of the first members of the HR team and due to the
fast-evolving size of the Company I have been exposed to a wide
range of projects and HR activities. I had the opportunity to develop
my membership of CIPD to the Associate level. This in turn led me
to being appropriately qualified to enable the business to promote
me to HR Manager in January 2020. Shortly after becoming the HR
Manager for the Company my first major challenge was to lead a
significant Company restructure. During this project, I had to utilise
all my HR expertise and quickly step up to my new role.
The Company, its leadership and management care about
employees and their wellbeing. This is of significant importance to
me as an HR professional because it enables me to innovate and
develop the HR function within the Company. It also gives me the
confidence that we all work towards a common goal.
I joined Actual Experience in 2016, attracted by the unique
and insightful product and by the research that produced the
remarkable Analytics Engine, which processes the analytics –
the smart maths! At the time, the Company was expanding but
still managing to preserve its attractive open and collaborative
culture and its start-up vibe.
My role offered a great opportunity to expand my technical skills,
working on a state-of-the-art microservices architecture,
designed to help the Analytics Engine scale the number analytics
it can process, in a controlled way.
Eighteen months later my work earned me promotion to senior,
and I became the technical lead for the ‘Analytics’ team. I was
immersed in exciting new projects which changed (and are still
changing) the shape and capabilities of the product. I relished the
technical challenge but also enjoyed mentoring my team, helping
their skills grow and giving them new opportunities.
Now I look towards the future, watching all our effort and hard work
pay off, as Actual Experience realises its full potential. We work
with great customers and there are so many opportunities for our
product in a world where remote working is now a daily way of life
for many people. Actual Experience is ideally placed to help change
the world and I’m proud that my work will be a part of it.
26
Actual Experience plc Annual Report 2020
THOUGHT LEADERSHIP
THE NEW NORMAL
Cybersecurity and
remote working
Some of the world's most attacked organisations have a relationship with
Actual Experience. They endorse our product as being secure for their
customers who classify the information we hold as highly sensitive.
85%
of IT leaders believed hybrid and remote working
plans increased the number of security incidents1
We get regular comprehensive auditing from some of
the best security experts in the industry. Audits can take
months with several members of staff from both Actual
Experience and the customer working full-time to complete.
Business Continuity Disaster Recovery (BCDR), data
protection, security process and software penetration
testing is now standard practice by each customer as part
of contract due-diligence. In one case, we answered over
1,000 questions posed by a single customer.
In 2020 the attack surface changed as staff moved to
home-working with the protection offered by a corporate
firewall removed and a laptop at home being the primary
defence for company data. This has increased the scrutiny
of any applications that run on the endpoint, ours included.
We have seen a different focus with customers assuming
the endpoint will now be compromised and corporate
laptops are no longer a secure platform. Each application
needs to consider the platform it’s running on is the
attacker and try to limit the ability of the platform to
compromise data.
1
https://www.tessian.com/research/the-future-of-hybrid-working/
Our customers know their data and care
deeply about its security – their audits will
always be the most demanding.
Rob Everard
Chief Security Officer
Actual Experience plc Annual Report 2020
27
Financial statementsOther informationGovernanceStrategic reportActual Experience has passed all security auditsOur training and awareness programme is outstanding, the technology reviews and penetration tests rarely find anything of note. This is the feedback we get from customers’ security teams. Understanding what our customers care about and being able to show them we care about it as well has resulted in great relationships. BUSINESS CONTINUITY
Swift and decisive action
In March 2020, following the Government's announcement that a nationwide
lockdown was due to commence, our team instigated our Business Continuity Plan.
This had been predetermined in the scenario of any illness epidemic.
The core team was assembled consisting of representatives from Facilities, HR, Operations and Information
Security, all overseen by our Project Management team. From that point forward we’ve had a minimum of two calls
a week to discuss how we could ensure the business continued to operate, with minimal disruption, whilst keeping
our colleagues informed and ensuring they and their families weren’t put at any risk due to our business activities.
Actions and recommendations from these meetings were presented for approval by the Executive team weekly at
first, then reduced to biweekly as the volume decreased.
Broadly speaking, the team focused
on a few key areas:
Maintain – Can people work from home?
Assess & Improve – DSE, experience
• Whilst a number of employees already worked from home we’d
previously not worked in an entirely remote working fashion so
the primary focus was on ensuring people had access to the
software and hardware they need to perform their basic tasks.
• Our 24/7 Service Desk already used IP Telephony softphones
which allowed them to work from home with no interruption to
customer support.
• We ensured that we had access to replacement computer
devices so we could provide equipment in the event of a
hardware error or someone new joining the business.
• As it became clear that remote working would be in place for a
number of months we reviewed how to provide our employees
with the best possible working environment and experience.
Every employee completed a Display Screen Equipment (DSE)
and workplace questionnaire. After reviewing the results we
shipped over 80 items to various households ranging from
chairs and monitors through to 4G routers and printers.
• We already use our own software on our devices to better
understand our users’ digital experience; in the early stages of
lockdown it allowed our Internal Systems team to focus their
effort in resolving the most impacting issues. For example,
we quickly identified that our DNS servers were causing
impairments so we changed the priority away from our office
servers to our cloud-hosted servers.
Ensure we have a COVID-secure office to return to
Maintain – Culture and mental wellbeing
• Once we were confident that everyone had a suitable home-
• Working remotely can be tough, especially when you’ve been
working environment and user experience, our focus moved to
creating a COVID-secure workplace in preparation for the end
of the lockdown. We’ve rearranged our meeting rooms and
desks to allow for two metres of working space and pathways,
sanitising stations have been installed as permanent fixtures,
desk booking and rota systems are ready to use, and antiviral
protection has been fitted to frequent touch points.
• During the first lockdown we experienced issues with our power
supply to the office, resulting in intermittent outages. This
triggered another scenario from our Business Continuity Plan
which we ran as a sub-project using the same team. Whilst most
of our applications are cloud-based, we still have some services
running in our HQ; these services were prioritised based on
business impact and then mitigation plans put in place.
used to working in a busy office environment or you live on your
own. This is compounded when you’re in a national lockdown
and are unable to see friends, family and colleagues outside of
an office environment.
• From the start of the lockdown it was obvious to us that regular
communication was important, not just about the pandemic,
but also about business projects, sales developments and
Company updates.
• We’ve produced CEO videos, Company-wide videoconferences
and we’ve used Slack and intranet updates to provide reference
material for important information like temporary expenses,
holiday and sickness policies. We’ve adapted our
communication frequency and style based on the feedback
we’ve had and from best practices shared by other
organisations. We have organised team activities including
quizzes, drawing competitions and virtual gym sessions to
name a few.
28
Actual Experience plc Annual Report 2020
OUR COMMUNITY
Following the success of our relationship with Julian House in 2019 the Actual
Experience Charity Committee decided to continue the relationship into 2020.
The team set the business the target of raising £2,500 and we have successfully
raised (to date) well over £3,000. Below, Cathy Adcock highlights where and
how these funds have helped during 2020 amid the onset of COVID-19.
Reassurance in difficult times...
At the beginning of the pandemic, the Julian House Day Centre
had to close drop-in sessions for rough sleepers, and in response
the Outreach Team doubled the number of outreach sessions on
the streets. Walking eight miles a day, they engaged with and
supported rough sleepers, keeping them up to date with what
was happening and reassuring them during these worrying times.
They also held drop-in sessions outside the rear of the emergency
hostel as meals were given out.
Then, in March the Government rightly decided that the streets
were not a safe environment during the pandemic. Working
closely with BANES and Curo, the Outreach Team supported
30 rough sleepers (plus ten people from the emergency hostel)
off of the streets and into emergency accommodation, in under
just two weeks. An incredible feat!
However, support doesn’t end with providing accommodation.
Julian House supported men and women to make the transition
from living on the streets, to living in a bedsit or single room,
during lockdown. Thanks to fundraising like that achieved by
Actual, we were able to buy beds, fridges, kettles as well as TVs.
Many clients admitted that they had no idea how bad the
pandemic was as they had little access to media beforehand.
The team also supplied over 30 mobile phones so that clients had
access to support over the phone, when face-to-face wasn’t
possible. This financial support also helped to provide over 3,300
meals during lockdown as well as vital PPE equipment.
During lockdown Julian House supported 79 men and women with
positive ‘move-ons’ either into supported housing or reconnections
to other areas. Being supported into accommodation gave our
clients the opportunity to see a future away from the streets.
As other drug and alcohol agencies were now working from home,
the Outreach Team also retrained so that they could provide initial
triage and urine screening for subscribing methadone and Subutex
medication to help those with opiate withdrawal symptoms, as
well as supporting clients through another transition.
When lockdown started to ease, the Outreach Team found
themselves again supporting new rough sleepers in Bath. During
COVID-19, domestic abuse and relationship breakdowns rose and
many of those who had been sofa-surfing during lockdown
suddenly found themselves on the streets.
With support like Actual Experience’s we can continue
to provide not just life-changing support, but often
life-saving support.
The Outreach Team supported
30 rough sleepers (plus ten people
from the emergency hostel) off
of the streets and into emergency
accommodation, in under just two
weeks. An incredible feat!
Cathy Adcock
Area Funding Manager
Actual Experience plc Annual Report 2020
29
Financial statementsOther informationGovernanceStrategic report
FINANCIAL REVIEW
30
Actual Experience plc Annual Report 2020
The decrease in expenses reflects the focus
on effective management of the Group’s
cost base.
Steve Bennetts
Chief Financial Officer
Financial Review
Revenue recognised in the year ended 30 September
2020 was £1,960,933 (2019: £1,934,082) and relates to the
supply of analytical services and associated consultancy
activities to customers.
99% of revenue was derived from sales to Channel
customers (2019: 99%) with the balance arising from
direct sales. This high percentage reflects the Group’s
strategic focus on generating revenue growth from its
Channel Partners.
Gross profit
The gross profit for the year was £1,020,400, a significant
improvement from the prior year (2019: £790,966). This
improvement reflects further operational efficiency gains
as the Group continues to provide full support to its
Channel Partners.
Expenses
Administrative expenses comprising R&D, operational support,
sales and marketing, finance and administration costs, and foreign
exchange gains and losses, totalled £5,600,609, a decrease of
£1,449,808 compared to the prior year. This decrease reflects the
focus on effective management of the Group’s cost base, in particular
the restructuring of operations which resulted in a reduction in
headcount of 19. Personnel costs, however, continue to be the largest
expense and represent approximately 83% of the Group’s cost base
(2019: 81%). The functional cost breakdown is as follows:
Administrative expenses
2020
£
2019
£
Research and development
1,960,213
2,546,368
Operational support
Sales and marketing
1,055,113
1,112,153
1,512,709
2,403,106
Finance and administration
1,045,116
1,066,049
Foreign exchange losses/(gains)
27,458
(77,259)
Total
5,600,609
7,050,417
Exceptional item
As noted in the Chair's Statement, the Company completed a
restructuring of its operations in February 2020. The cost of the
restructuring was £411,525 and is not included in the above table. The
restructuring reduced headcount from 93 to 74 and, together with
related costs such as employee travel expenses, has reduced
operating expenses by approximately £200,000 per month,
commencing in March 2020.
Tax
The tax credits recognised in the current and previous financial year
arose from the accrual of R&D tax credits.
Free cash flow for the year was £(5,004,343) (2019: £(5,629,771)).
Free cash flow is defined as net cash flows used in operating
activities, plus development of intangible assets, plus purchase of
property, plant and equipment.
In January 2021, the Group successfully raised from existing and new
shareholders gross proceeds of £10,000,000 through a share placing
at 105p per share.
Software development capitalisation
The Directors believe that the software development capitalisation
criteria in IAS38 have been met and accordingly development costs,
net of amortisation charges, of £1,972,781 have been capitalised as at
30 September 2020 (2019: £1,792,465).
Accounting policies
The Group’s financial statements have been prepared in accordance
with International Financial Reporting Standards. The Group’s
significant accounting policies have been applied consistently
throughout the year.
Key performance indicators
As the Group is in the process of development and commercialisation
of its services, the Directors consider the key quantitative
performance indicators to be sales revenues of £1,960,933 (2019:
£1,934,082) and the level of cash held in the business of £2,754,274
(2019: £7,876,634). The Board performs regular reviews of actual
results against budget, and management monitors cash balances on
a monthly basis to ensure that the business has sufficient resources
to enact its current strategy. Certain non-financial measures, such as
the number of active customers and deployed Digital Users, are
monitored on a monthly basis. The Board will continue to review the
KPIs used to assess the business as it grows.
Loss for the year
Losses after tax totalled £4,681,488 (2019: loss of £5,911,950).
This reduction in losses is the result of a significant decrease in
administrative expenses, which reflects a continuing focus on
rigorous expense management as well as operational efficiencies
arising from the reorganisation.
Steve Bennetts
Chief Financial Officer
24 February 2021
Loss per share
The loss per share for the year was 9.87p (2019: loss per share of
13.04p). The reduction in loss per share reflects the decrease in total
comprehensive loss for the year as well as an increase in the
weighted average number of ordinary shares in issue.
Dividend
No dividend has been proposed for the year ended 30 September
2020 (2019: £nil).
Cash flow
We are investing in the growth of our operations to address what we
believe to be a significant commercial opportunity and our cash flow
from operations was therefore negative during the year ended
30 September 2020, and in line with expectations.
The Group’s costs are mostly operating related, with very little
investment required for capital infrastructure. Cash used by operating
activities was £3,856,067 for the year, compared to cash used of
£4,418,091 for the year ended 30 September 2019, with the
improvement resulting from the reduction in losses. This operating
cash requirement was funded by cash reserves. The Group ended
the year with cash totalling £2,754,274 (2019: £7,876,634).
Actual Experience plc Annual Report 2020
31
Financial statementsOther informationGovernanceStrategic report PRINCIPAL RISKS AND UNCERTAINTIES
Risk management framework
In common with all businesses, we are exposed to risks and uncertainties as an inherent part of creating value for our shareholders.
The Board recognises that effective risk management is fundamental to the Group’s ability to meet its strategic objectives and it is the Board’s
responsibility to ensure that risk is appropriately managed across the Group. The identification of risk therefore continues to be an important
activity and effective risk management is ingrained in all aspects of our business.
The risk management process is overseen by the Audit Committee which meets at least twice each year and reports its findings to the Board.
The day-to-day management of risk is delegated to the Executive Risk Committee, which is chaired by the Chief Financial Officer and
includes key operational managers. Each representative is responsible for the evaluation and implementation of risk mitigation within their
functional areas.
It is the responsibility of the Executive Risk Committee to maintain the master risk register. This register lists recognised risks and categorises
them into risk themes. Resource and mitigation priorities are assessed based on likelihood and impact of risk occurrence.
Principal operational risks
The key challenges, risks and uncertainties facing the Group arise from the early stage of the Group’s maturity, the anticipated rapid growth in
its operations, and the constantly changing nature of associated technologies such as mobile telephony and cloud computing.
The Group’s financial risks are detailed in note 3 to the consolidated financial statements. The Board considers that the principal operational
risks to achieving our strategic objectives are as summarised below.
Description of risk
Mitigation of risk
Economic conditions: Brexit
As a majority of its revenue will continue to be generated from markets
outside the UK, the Group is exposed to fluctuations in the global economy.
Significant uncertainty remains regarding the economic effects on the
Group's business of the UK's exit from the European Union and other global
economic developments.
Economic conditions: COVID-19
The pandemic virus is impacting all companies, employees, suppliers and
customers on a worldwide basis, and creates significant uncertainty
regarding the ability of companies to operate effectively. The virus impacts
on the Group’s ability to work from its corporate office and may adversely
affect its ability to progress commercial opportunities with its Partners.
Technology ownership, change and competition
Fundamental to the Group’s business is a combination of patents and
know-how. Our success will, in part, depend on our ability to maintain
adequate protection of this intellectual property and know-how.
Our revenue and profitability are affected by the extent to which there is
increasing requirement for, and development by our competitors of,
additional product features and capabilities. Significant investments are
made in new product development to address these requirements, and
there can be no guarantee that we will be able to generate sufficient
revenue to offset the associated development costs.
There are also risks relating to difficulties and delays in the development
process of new products and features, and their acceptance by customers.
If a future competitor successfully launches new products or features which
we are unable to match, then it is likely that we could lose market share with
a corresponding impact on our operational results.
Global diversification
Having a global customer base provides a natural mitigation against a
localised economic downturn. The Board continues to monitor global
economic developments and will consider further mitigating action
where necessary.
Embracing safe and flexible working practices
The Group’s continued investment in IT infrastructure, together with the
long-standing development of a robust disaster recovery plan, has facilitated
a smooth transition to employees working effectively from home, with the
minimum of disruption. Management will continue to closely monitor the
situation and expects to be guided by government and scientific advice to
minimise the risk to employees and operating procedures.
Product protection and innovation
The Group retains the services of a leading patent attorney and ensures
that all reasonable steps are taken to protect its patented technology.
In addition, enhanced procedures have been introduced to ensure that
critical know-how is identified and recorded, with appropriate controls
over access to these records.
We have an ongoing programme, both internal and with our commercial
Partners, to constantly identify evolving customer needs and potential
competitor advances. The resulting feedback informs our new product
development priorities and helps to ensure that the Group maintains its
technology leadership in the evolving digital quality management sector.
We focus our development efforts on features that meet an identified market
requirement and are likely to generate sufficient revenue to fund their
development. We have developed internal processes for prioritising and
reviewing our development projects.
Managing rapid growth
The anticipated rapid growth of our business may place a significant strain
on our management, operational and financial resources. If we are unable to
address this growth in a timely and profitable manner, as a result of not
being able to recruit skilled employees or effectively scale our operations,
there could be a material adverse impact on our financial position.
Investing in operational excellence
The Board and management are continually reviewing and enhancing our
internal controls and processes. A critical objective of this analysis is to ensure
that capability to scale operations is a core consideration within each business
function, and that all functions interoperate efficiently as required to deliver and
support our services at scale.
32
Actual Experience plc Annual Report 2020
Description of risk
Mitigation of risk
Acceptance of the Group’s analytic services and pricing model
The Group is at an early stage of development and its ultimate success will
depend on the acceptance of its analytical services and pricing model by
Channel customers. Successful engagement with large Channel customers
typically requires the completion of an extensive on-boarding process and
the timescales for this are both lengthy and time-consuming. A risk exists
that the Group will be unable to generate enough revenue to recover it’s
initial investment.
Adequacy of financial resources
The current level of cash may be insufficient to support the business
through to profitability and positive cash flow. The Group may be unable to
access additional equity or debt capital, or to raise funds on acceptable
terms. In the event that the resources available to the Group are inadequate
then this could have a materially adverse impact on the implementation of
the Group's strategy, its business, financial condition and operations.
Dependence on key executives and personnel and recruitment
and retention of new talent
The Group is dependent on its senior management and skilled technical
personnel. Whilst much of the Group’s know-how is documented, senior
managers and members of the technical team each contribute valuable
skills and know-how to the business and, despite contractual confidentiality
agreements in favour of the Group, there can be no guarantee that those
individuals will not join competitors or establish themselves in competition
with the Group in the future.
Failure to retain the services of any of these people may adversely affect the
Group’s ability to achieve its commercial objectives. In addition, as the
Group continues to expand, it is essential that it is able to attract employees
of a high calibre to drive its future success.
Security Breaches
Any compromise of the Group’s systems security could harm its reputation
or financial condition and, therefore, its business. Such compromises can
result from deliberate attacks or unintentional events and may lead to,
amongst other things, third parties gaining unauthorised access to the
Group’s software for the purpose of misappropriating financial assets,
intellectual property or sensitive information, corrupting data, or causing
operational disruption. Although the Group employs security measures for
its systems, these may not protect against all possible security breaches
that could harm the Group’s business. There is no guarantee that the Group
will be able to prevent such attacks or breaches in the future and, in the
case of such an event, there is no guarantee that it will be able to promptly
and effectively remedy any damage caused. In particular, the Group’s
reputation as a reliable and secure software provider is vulnerable to
any negative press caused by material IT outages or breaches. Such an
event may cause the Group’s customers to have less confidence in the
Group’s products.
These security risks could also lead to costly litigation, significant financial
liabilities and penalties, increased regulatory scrutiny and a loss of
confidence in the Group’s ability to serve its customers.
Developing improved customer engagement practices
Management has acquired considerable experience in partnering with large
Channel customers and seeks to apply best practice in learning to drive
efficiencies and improve its operational capabilities.
While prioritising sales efforts on Channel development, the Group will
continue to maintain a number of direct customer engagements to ensure a
thorough understanding is maintained of both evolving digital quality
management practices in the enterprise sector and the pricing characteristics
of this service.
Expense control
The Group will continue to rigorously manage its cash resources. Expenditure
has been reduced from prior levels and management will continue to assess
the appropriate levels of expenditure as the business develops.
Developing the human resources function
The HR function is leading new initiatives and enhancing existing processes
with regard to recruitment activities, employment practices and staff benefits.
The Group has introduced share-based compensation as a critical element of
its ability to attract, retain and motivate key talent and will continue to issue
options in accordance with its policy in this area. The Group has introduced a
defined contribution pension scheme, health insurance, life insurance and
other employee benefits, ensuring that the Group remains competitive with
market practice.
Investment will continue to be made in human resource systems and
procedures to ensure compliance with legislation and effective interactions
with employees.
Effective protection of information security and data integrity
The Group employs security testing measures for the software it deploys and on
internal systems. Employees are trained on the risks of phishing and best
practice for data security.
Where possible the Group endeavours to negotiate limitations on its liability in
customer contracts.
The security of the cloud infrastructure is reviewed regularly to identify any
areas that require improvement. The Group is alert to indications of security
vulnerability and regularly considers additional protective action. Information
integrity is protected by regular off-site back-ups, and disaster recovery
and business continuity plans are in place to ensure robust sustainability
of operations.
Pages 1 to 33 of this Annual Report and Financial Statements comprise the Strategic Report for the Group which has been prepared in accordance with
Chapter 4A of part 15 of the Companies Act 2006.
Approved by the Board and signed on its behalf by:
Dave Page
Director
24 February 2021
Actual Experience plc Annual Report 2020
33
Financial statementsOther informationGovernanceStrategic report BOARD OF DIRECTORS
BOARD OF DIRECTORS
Committed to delivering
long-term success
Stephen Davidson
Non-executive Chair
Appointed to Board:
February 2014
Independent:
Yes
Stephen is currently Non-executive chair of JSE listed
Datatec Limited and holds Non-executive Director
roles at Informa plc and MCB Group Ltd. In his earlier
career, Stephen was CFO, then CEO, of Telewest
Communications plc and Vice Chairman of investment
banking at WestLB Panmure.
Steve Bennetts
Chief Financial Officer
Appointed to Board:
February 2014
Independent:
No
After qualifying as a Chartered Accountant with EY Steve
worked as EMEA Finance Director for several Nasdaq
quoted technology companies where he gained valuable
international experience as well as leading the accounting,
HR, legal and administrative functions. This period included
leadership of the team put in place to establish Amazon’s
European operations, including managing the early
hyper-growth in the UK and Germany. Subsequently
Steve has worked at several VC-funded technology
companies, including Content Technologies which he sold
for approximately $1bn.
34
Actual Experience plc Annual Report 2020
Dave Page
Chief Executive Officer
Appointed to Board:
February 2014
Independent:
No
Dave was the founding member of the management team
at Nexagent, a venture funded software business acquired
by EDS in 2008. In 1998, Dave established and led the
Consulting team for the $1bn European Service Provider
line of business at Cisco. Before this, Dave worked at IBM
Global Services, BT Global Services and NatWest on
numerous aspects of corporate IT infrastructure.
Committee membership:
Executive Board
Audit
Remuneration
Nominations
Denotes Chair
Sir Bryan Carsberg
Non-executive Director
Appointed to Board:
July 2014
Independent:
Yes
The former Director General of OFT and Oftel,
Sir Bryan Carsberg brings to the Board vast experience
of the communications industry. He has held board
positions with Cable & Wireless Communications plc,
Inmarsat plc and RM plc, and in 2002 was Expert Adviser
to the Joint Parliamentary Committee to undertake
prelegislative scrutiny of the Communications Act, 2003.
Kirsten English
Non-executive Director
Appointed to Board:
January 2020
Independent:
Yes
Kirsten’s executive career has spanned several continents
and includes CEO, General Manager and Chair assignments
in technology, telecoms and financial services. She was
a founder board member and SID at Innovate Finance
(the independent industry body that represents and
advances the global FinTech community in the UK) as well
as a Non-executive Director of Universities Superannuation
Scheme with prior non-executive roles in public and private
equity backed companies.
Experienced
leadership
Actual Experience plc Annual Report 2020
35
Financial statementsOther informationGovernanceStrategic report DIRECTORS’ REPORT
The Directors present their report and audited consolidated financial
statements of the Group and of the Company for the year ended
30 September 2020. These will be laid before the shareholders of the
Company at the next Annual General Meeting (AGM).
General information and principal activities
Actual Experience plc is listed on the AIM market of the London Stock
Exchange (LSE: ACT). The Company is incorporated and domiciled in
the United Kingdom, registration number 06838738 and the address
of its registered office is Quay House, The Ambury, Bath BA1 1UA.
The principal activity of the Group is the provision of Human Experience
Management Services and associated consultancy services.
Share capital
Details of the Group’s issued share capital are shown in note 17 to the
consolidated financial statements.
The share capital comprises one class of ordinary shares and these
are listed on AIM. Following the completion of the recent funding
round as at 15 February 2021 there were in issue 57,184,802 fully paid
ordinary shares. All shares are freely transferable and rank pari passu
in all respects, including voting and dividend rights.
Substantial shareholdings
As at 15 February 2021, shareholders holding more than 3% of the
share capital of Actual Experience plc were as follows:
Results and dividends
The results of the Group for the year ended 30 September 2020 are
set out in the Consolidated Statement of Comprehensive Income on
page 49.
The Directors do not propose payment of a dividend for the year
ended 30 September 2020 (2019: nil).
Review of the year and future developments
A summary of the Group’s progress and development is set out in the
Chair’s statement, the Chief Executive’s statement, and the Financial
review, which form part of the Strategic Report on pages 1 to 33. This
analysis includes comments on the position of the Group at the end of
the financial year, an indication of likely future developments in the
business of the Group and details of the Group’s activities in the field
of research and development.
Research and Development
Research and development in the year amounted to £2,140,529
(2019: £2,759,606) of which £180,316 (2019: £213,238) was capitalised.
Post balance sheet event
As noted in note 22, subsequent to the year end the Group raised
from existing and new shareholders gross proceeds of £10,000,000
through a share placing at 105p per share.
Directors
The Directors of the Company who served during the year and up to
the date of approval of the financial statements are as follows:
• Stephen Davidson, Non-executive Chairman.
• Dave Page, Chief Executive Officer.
• Steve Bennetts, Chief Financial Officer and Company Secretary.
• Sir Bryan Carsberg, Non-executive Director.
• Kirsten English, Non-executive Director (appointed 1 January 2020).
• Robin Young, Chief Operational Officer (resigned 28 February 2020).
• Paul Spence, Non-executive Director (resigned 28 February 2020).
• Mark Reilly, Non-executive Director (resigned 3 December 2019).
Short biographies of each current Director are provided on
pages 34 and 35.
Directors’ interests and indemnity arrangements
Directors’ interests in the shares of the Company, including family
interests, are disclosed in the Directors’ remuneration report on pages
43 and 44. No Director had, during or at the end of the year, a material
interest in any contract which was significant in relation to the
Group’s business except in respect of service agreements, share
options, and the Company’s share purchase plan, as disclosed in the
Remuneration report.
As permitted by the Articles of Association, in accordance with the
provisions of the Companies Act 2006 the Group has maintained
insurance throughout the year for its Directors and officers against
the consequences of actions brought against them in relation to their
duties for the Company. The Group has granted no indemnities to any
of its Directors against liability in respect of proceedings brought by
third parties.
36
Actual Experience plc Annual Report 2020
Name of shareholder
IP Group plc
M&G
Lombard Odier
Mr Michael Edge
Queen Mary University of London
Mr Dave Page
Professor Jonathan Pitts
Allianz
Number of
shares
% of
voting rights
9,460,977
7,921,115
6,729,724
3,195,000
2,110,000
1,938,559
1,879,750
1,815,705
16.54%
13.85%
11.77%
5.59%
3.69%
3.39%
3.29%
3.18%
Save as referred to above, the Directors are not aware of any persons
as at 15 February 2021 who were interested in 3% or more of the
voting rights of the Company or could directly or indirectly, jointly or
severally, exercise control over the Company.
Financial risk management objectives and policies
The Group’s financial risk management objectives and policies are
shown in note 3 to the consolidated financial statements. The main
risks arising from the Group’s financial instruments are interest rate
risk, exchange rate risk, credit risk and liquidity risk, which are
continuously monitored by the Board. The Group extends credit only
to recognised creditworthy third parties, and trade receivable
balances are monitored to minimise the Group’s exposure to bad
debts. Details of the Group’s trade receivables are shown in
note 13 to the consolidated financial statements.
Employment policies
The Group is committed to providing equality of opportunity to all
existing and prospective employees without unlawful or unfair
discrimination. Full support is given to the employment and
advancement of disabled persons.
Annual General Meeting
The AGM will be held virtually at 11.00am on 29 March 2021. On page
76 is the Notice of the AGM, which gives details of the resolutions to
be proposed to shareholders.
Independent auditors
The independent auditors, PricewaterhouseCoopers LLP, have
indicated their willingness to continue in office and a resolution that
they be reappointed will be proposed at the AGM.
Disclosure of information to the auditors
Each of the persons who are Directors of the Company at the date
when this report was approved has confirmed that:
• so far as the Directors are aware, there is no relevant audit
•
information of which the Company and Group’s auditors are
unaware; and
the Directors have taken all the steps that ought to have been
taken as Directors in order to be aware of any relevant audit
information and to establish that the Company and Group’s
auditors are aware of that information.
The Directors’ report was approved and signed by order of the Board.
Steve Bennetts
Chief Financial Officer and Company Secretary
24 February 2021
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law
and regulations.
The Directors are also responsible for safeguarding the assets of the
Group and Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Company law requires the Directors to prepare financial statements
for each financial year. Under that law the Directors have prepared
the Group and Company financial statements in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006. Under company law the
Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of the
Group and Company and of the profit or loss of the Group and
Company for that period. In preparing the financial statements, the
Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• state whether, for the Group and Company, international
accounting standards in conformity with the requirements of the
Companies Act 2006 have been followed, subject to any material
departures disclosed and explained in the financial statements;
• make judgements and accounting estimates that are reasonable
and prudent; and
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and Company
will continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group and
Company’s transactions and disclose with reasonable accuracy at any
time the financial position of the Group and Company and enable
them to ensure that the financial statements comply with the
Companies Act 2006.
The Directors are responsible for the maintenance and integrity of the
Company’s website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
The Directors consider that the Annual Report and Financial
Statements, taken as a whole, is fair, balanced and understandable
and provides the information necessary for shareholders to assess
the Group and Company’s performance, business model and strategy.
Each of the Directors, whose names and functions are listed
in the Corporate governance report confirm that, to the best of
their knowledge:
•
the Group and Company financial statements, which have been
prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006, give
a true and fair view of the assets, liabilities, financial position and
loss of the Company;
the Group financial statements, which have been prepared in
accordance with IFRSs as adopted by the European Union, give a
true and fair view of the assets, liabilities, financial position and
loss of the Group; and
the Directors’ report includes a fair review of the development and
performance of the business and the position of the Group and
Company, together with a description of the principal risks and
uncertainties that it faces.
•
•
Actual Experience plc Annual Report 2020
37
Financial statementsOther informationGovernanceStrategic report Board composition
We are led by a strong and effective Board of Directors. The Board
comprises the following individuals:
Executive:
Dave Page
Steve Bennetts
Non-executive:
Stephen Davidson
Sir Bryan Carsberg
Kirsten English
Chief Executive Officer
Chief Financial Officer
Non-executive Chair
Non-executive Director
Non-executive Director
The Board considers that it contains a range of skills, experience
and knowledge that is appropriate for the business. Furthermore,
the Board members are of sufficient calibre to bring independent
judgement of issues of strategy, performance, resources and
standards of conduct, which are vital to the success of the Group.
The Board believes that it operates in an open and constructive
manner and works effectively.
Brief biographies of the Directors, together with their membership of
Board Committees, can be found on pages 34 and 35.
Independence of Non-executive Directors
The Board considers many criteria in assessing the independence of
the Non-executive Directors including the criteria recommended by
the Quoted Companies Alliance. The Non-executive Chair and the
Non-executive Directors are all considered by the Board to be
independent of management and free of any relationship which could
materially interfere with the exercise of their independent judgement.
Board operation
The Board is responsible for the Group’s strategy and for its overall
management. The operation of the Board is documented in a formal
schedule of matters reserved for its approval. These include matters
relating to:
• The Group’s strategic aims and objectives.
• The structure and capital of the Group.
• Financial reporting, financial controls and dividend policy.
•
Internal control, risk and the Group’s risk appetite.
• The approval of significant contracts and expenditure.
• Effective communication with shareholders.
• Changes to Board membership or structure.
Apart from the matters above, the Board has delegated all authority
to the Executive Directors on the understanding that they will at all
times act in accordance with the best interests of the shareholders of
the Group, while giving weight fairly to the interests of employees and
other stakeholders, that their actions will be consistent with the
Group’s financial and strategic plans and objectives and in conformity
with relevant legislation and best practice, and that they will report
regularly to the Board on the execution of these responsibilities.
CORPORATE GOVERNANCE REPORT
Chair’s introduction to the
Corporate Governance Report
Dear fellow shareholders
On behalf of the Board I am pleased to present the
Actual Experience governance report for the year ending
30 September 2020.
As I have confirmed in my previous reports, the Board has always
considered good governance to be of fundamental importance
and is committed to ensuring that it remains embedded in
Actual Experience’s culture. We view the way that the business is
run to be critical to its success, and we see our style of leadership
as key in setting the tone from the top. These beliefs have always
been at the core of the way in which we have managed the
Company’s business.
As Chair, I am responsible for ensuring that the Company
continues to operate to this high standard of corporate
governance. The Board has assessed the governance structures
within the Company and considers these appropriate for the size,
complexity and risk profile of the Company.
Consistent with this, the Board has adopted the 2018 Quoted
Companies Alliance Corporate Governance Code (the QCA Code).
The QCA Code sets out ten corporate governance principles and
requires the Company to publish certain related disclosures; these
appear in this Annual Report and on our website, in accordance
with the recommendations in the QCA Code. Where we have
deviated from the QCA Code we have stated that fact and noted
the reason for this. This information is reviewed annually and the
date of the latest review is noted on our website.
S.172 Statement UK Companies Act 2006
The Board recognises its responsibilities to take into consideration
the needs and concerns of all our stakeholders as part of our
discussion and decision-making process. We strive to engage
effectively with our shareholders, care for our employees, help our
Channel Partners and their customers improve the human
experience of their digital infrastructure, and support our wider
communities. More details on how we engage with our
stakeholders can be found in the Section 172(1) statement on
pages 24 and 25.
Stephen Davidson
Non-executive Chair
24 February 2021
38
Actual Experience plc Annual Report 2020
Board meetings
The Board met nine times in the 2020 fiscal year. In addition, the
Non-executive Directors communicate directly with Executive
Directors and senior management between formal Board meetings.
The Board continued to review and assess the Group’s strategy at
meetings throughout the year.
Directors are expected to attend all meetings of the Board and
Committees on which they sit, and to devote sufficient time to the
Group’s affairs to enable them to fulfil their duties as Directors. In the
event that Directors are unable to attend a meeting, their comments
on papers to be considered at the meeting will be discussed in
advance with the Chairman so that their contribution can be included
in the wider Board discussion.
The following table shows Directors’ attendance at scheduled Board
and Committee meetings during the year:
Board Nominations
Audit
Remuneration
Stephen Davidson
Sir Bryan Carsberg
Paul Spence
(resigned 28 February 2020)
Mark Reilly
(resigned 3 December 2019)
Dave Page
Robin Young
(resigned 28 February 2020)
Steve Bennetts
Kirsten English
(appointed 1 January 2020)
* Attended by invitation.
9/9
9/9
4/9
2/9
9/9
4/9
9/9
7/9
1/1
1/1*
1/1
1/1
1/1
—
1/1*
1/2
2/2
1/2
1/2
2/2*
—
2/2*
—
1/2
2/2
2/2
—
1/2
2/2*
—
2/2*
1/2
The Chair, aided by the Company Secretary, is responsible for
ensuring that the Directors receive accurate and timely information.
The Company Secretary compiles the Board and Committee papers,
which are electronically circulated to Directors at least two days
prior to meetings. The Company Secretary provides minutes of
each meeting and every Director is aware of the right to have any
concerns minuted.
Conflicts of interest
To address the provisions of Section 175 of the Companies Act 2006
relating to conflicts of interest, the Company’s Articles of Association
allow the Board to authorise situations in which a Director has, or may
have, a conflict of interest. Directors are required to give notice of any
potential situation or transactional conflict that are to be considered
at the next Board meeting and, if considered appropriate, conflicts
are authorised. Directors are not permitted to participate in such
considerations or to vote regarding their own conflicts.
The Board has received no notice from Directors of potential or actual
conflicts of interest.
Reappointment of Directors
The Company’s Articles of Association require that at each Annual
General Meeting (the AGM) one-third of Directors shall retire and
seek re-election by shareholders. Additionally, any new Director
appointed by the Board is required by the Articles to retire at the next
AGM and to seek appointment by shareholders. Notwithstanding
these requirements, the Board has decided that all Directors will seek
re-election on an annual basis.
Insurance
The Board has in place Directors’ and Officers’ liability insurance.
Board Committees
The Board has delegated certain powers and duties to the Audit,
Remuneration and Nominations Committees, details of which are set
out in the table below. Each Committee has written terms of reference
setting out its duties, authority and reporting responsibilities. Copies
of these terms of reference are available on the Company website
(www.actual-experience.com). The terms of reference of each
committee are reviewed annually by the Board to ensure they remain
appropriate and reflect changes to legislation, regulation and
best practice.
The workload of the Committees is greater than the scheduled
meetings would indicate as ad hoc meetings and communications
between meetings are frequently required.
Audit Committee
The Audit Committee determines and examines
matters relating to the financial affairs of Actual
Experience including the terms of engagement of
the Company’s auditors and, in consultation with
the auditors, the scope of the audit. It receives and
reviews reports from management and the
Company’s auditors relating to the half yearly and
annual financial statements and the accounting
and the internal control systems in use throughout
the Company.
The Audit Committee report on page 42 contains
more detail on the Committee’s role.
Remuneration Committee
The Remuneration Committee reviews and makes
recommendations in respect of the Directors’
remuneration and benefits packages, including
share options and the terms of their appointment.
The Remuneration Committee also makes
recommendations to the Board concerning the
allocation of share options to employees under the
Share Option Scheme.
The Remuneration Committee report on page 43
contains more detail on the Committee’s role.
Nominations Committee
The Nominations Committee monitors the size
and composition of the Board and the other Board
Committees, is responsible for identifying suitable
candidates for Board membership and monitors
the performance and suitability of the current
Board on an ongoing basis.
Chair:
Sir Bryan Carsberg
Members:
Stephen Davidson
Kirsten English
Chair:
Stephen Davidson
Members:
Sir Bryan Carsberg
Kirsten English
Chair:
Stephen Davidson
Members:
Dave Page
Kirsten English
Actual Experience plc Annual Report 2020
39
Financial statementsOther informationGovernanceStrategic report
CORPORATE GOVERNANCE REPORT CONTINUED
Board performance
In October 2020 each Director completed a questionnaire designed
to measure the effectiveness of Board performance. The consolidated
results of this exercise were subsequently reviewed by the Board.
While no major performance impairments were noted, several minor
matters were identified for further attention.
It is intended that this exercise will be repeated in 2021 and any
significant matters arising will be noted in the Annual Report.
Internal controls
The Board is responsible for maintaining a sound system of internal
financial and operational control and the ongoing review of their
effectiveness. The Board’s measures are designed to manage, not
eliminate, risk and such a system provides reasonable but not
absolute assurance against material misstatement or loss. Whilst the
Company, as a small AIM-listed company, is not required to comply
with the full provisions of the ‘Internal Control Guidance for Directors
on the Combined Code’ (The Turnbull Report), the Board considers
that the internal controls do meet many of those requirements and are
adequate given the size of the Company.
Communication with shareholders and the AGM
The Board recognises that it is accountable to shareholders for the
performance and activities of the Group and is committed to
maintaining regular dialogue and meetings with shareholders.
Apart from the AGM, the Group communicates with its shareholders
by way of the Annual Report and financial statements and via the
Company’s website (www.actual-experience.com) which is kept
updated with preliminary and interim results, and announcements to
the Stock Exchange.
The AGM offers a valuable opportunity to shareholders to meet and
communicate with the Board. At the meeting the Board gives a
business presentation which is followed by a question and answer
session, offering shareholders an opportunity to question the Board
on any matters affecting the Group’s performance. The Chairs of the
Audit, Remuneration and Nominations Committees are available at
the AGM to answer questions. Details of the resolutions to be
proposed at the AGM can be found in the Notice of Meeting on
page 76. This Notice of Meeting has been circulated to shareholders
and is on the Company’s website.
The principal elements of the Group’s internal control system are:
i. Close management of the day-to-day activities of the Group by the
Executive Directors;
ii. An organisational structure with defined levels of responsibility,
which promotes entrepreneurial decision-making and rapid
implementation whilst minimising risks;
iii. A comprehensive annual budgeting process producing a detailed
integrated profit and loss, balance sheet and cash flow, which is
approved by the Board;
iv. Detailed monthly reporting of performance against budget; and
v. Central control over key areas such as capital expenditure
authorisation and banking facilities.
Business ethics
The Board believes that it is critically important that Executive
Directors are actively involved in ensuring our ethical values and
culture continue to be shared by all employees. In support of this,
anti-bribery and whistleblowing policies are circulated to all
employees, who are required to certify annually that they have read
and understood the policies. In addition, an online employee training
course has been introduced, which includes compulsory modules
on anti-bribery and fraud. The aim of the whistleblowing policy
is to encourage all employees regardless of seniority to bring
matters which cause them concern to the attention of the
Non-executive Directors.
The Group continues to review its system of internal control to
ensure compliance with best practice, whilst also having regard to
its size and the resources available. The Board considers that the
introduction of an internal audit function is not appropriate at
this time.
Going concern
The Board is required to assess whether the Group has adequate
resources to continue operations for the foreseeable future. As noted
in note 22, subsequent to the year end the Company raised £10m
before expenses from a Placing with shareholders. As a result, the
Directors have a reasonable expectation that the Company and the
Group will have adequate resources to fund their activities for the
foreseeable future (being a period of at least 12 months from the date
of this report). For this reason, they continue to adopt the going
concern basis for preparing the financial statements.
Approved by the Board of Directors and signed on its behalf.
Stephen Davidson
Non-executive Chair
24 February 2021
40
Actual Experience plc Annual Report 2020
STATEMENT OF COMPLIANCE WITH THE QCA CORPORATE GOVERNANCE CODE
The Board has adopted the Quoted Companies Alliance (QCA) Corporate Governance Code. We comply with the ten key principles set out in
the QCA Code as set out below.
Statement of Compliance with the QCA Corporate Governance Code
Governance principles
Explanation
Further reading
Deliver
growth
1. Establish a strategy and
business model which
promote long-term
value for shareholders.
2. Seek to understand and
meet shareholder needs
and expectations.
The Company’s strategy and business model is designed
to promote long-term value for shareholders and all stakeholders by
establishing a leading position in the emerging field of optimisation of
digital human experience.
Further information regarding the
Company’s strategy and business
model can be found on pages 20
and 21.
The Company actively engages with shareholders. The CEO, CFO, and
IR Director meet regularly with analysts and institutional shareholders.
The Company also uses the Annual General Meeting as an opportunity to
engage directly with its shareholders.
Please visit www.actual-
experience.com/about/
investors/board-and-
governance/governance/ for
further information regarding
the Company’s interaction
with its shareholders.
Information regarding the
Company’s relationship with its
shareholders and other
stakeholders can be found on
pages 24 and 25.
More detail about the identified
principal risks can be found on
pages 32 and 33.
3. Take into account wider
stakeholder and social
responsibilities and
their implications for
long-term success.
The Board considers the interests of shareholders and all relevant
stakeholders in line with section 172 of the Companies Act 2006.
The Company focuses on building strong and sustainable relationships
with a range of different stakeholders in order to support the long-term
success of the Company.
4. Embed effective risk
management,
considering both
opportunities and
threats, throughout the
organisation.
The principal ways in which their feedback is gathered is via meetings and
conversations, and through our support system for customers.
The Company is exposed to a number of potential risks which may have a
material effect on its reputation, financial or operational performance.
The Board is responsible for ensuring the Group has effective and sound
systems of internal controls, which are designed to manage the risk of failure
to achieve business objectives and provide reasonable assurance against
material misstatements and loss. The Board, with the advice of the Audit
Committee, has reviewed the effectiveness of the systems of internal control
for the year to 30 September 2020.
Maintain
a dynamic
management
framework
5. Maintain the Board as
a well-functioning,
balanced team led by
the Chair.
The composition and experience of the Board is shown in the Annual
Report. The Board meets regularly and is supported by the Audit,
Remuneration and Nomination Committees. All Directors are required to
devote sufficient time to carry out their role.
See pages 38 and 39..
6. Ensure that between
them the Directors have
the necessary
up-to-date experience,
skills and capabilities.
7. Evaluate Board
performance based on
clear and relevant
objectives, seeking
continuous
improvement.
8. Promote a corporate
culture that is based on
ethical values and
behaviours.
9. Maintain governance
structures and
processes that are fit for
purpose and support
good decision-making
by the Board.
The Board considers its size and composition to be suitable and to have an
appropriate balance of sector, financial and public markets skills and
experience, as well as a necessary balance of personal qualities and
capabilities. To ensure that the Directors maintain appropriate skills they are
provided with training when identified as appropriate by the Chairman.
The Board regularly considers and evaluates its own performance and
effectiveness and that of the individual Directors and Board Committee
members. The most recent Board Effectiveness Assessment was
completed by all Directors in October 2020 and the results have been
carefully analysed and communicated to the Board.
www.actual-experience.com/
about/investors/board-and-
governance/governance/
See page 40.
The Board believes that the promotion of a corporate culture based on
sound ethical values and behaviours is essential to creating a workplace
environment that allows people to flourish and this will contribute to
enhancing shareholder value.
www.actual-experience.com/
about/investors/board-and-
governance/governance/
See pages 38 and 39.
Whilst the Board is collectively responsible for defining corporate
governance arrangements, the Chairman is ultimately responsible for
corporate governance. The governance structures have been assessed by
the Board and are considered appropriate for the size, complexity and risk
profile of the Company. This will continue to be reviewed regularly by the
Board to ensure governance arrangements continue to be appropriate as
the Company changes over time.
There is a formal schedule of matters reserved for the decision of the Board
that covers the key areas of the Company’s affairs. The schedule includes
approval of the Annual Report and other financial statements, the adoption
of the budget and business plans, material financial commitments, and the
release of inside information.
Build trust
10. Communicate how the
Company is governed
and is performing by
maintaining a dialogue
with shareholders and
other relevant
stakeholders.
The Company is committed to open communications with all its
shareholders. Communication is primarily through the Company’s website
and the Annual General Meeting. Results from our AGM are announced via
RNS, and historical announcements can be accessed via the RNS and
News page of our investor website.
www.actual-experience.com/
about/investors/reports-results-
and-presentations/reports-
results-and-presentations/
Actual Experience plc Annual Report 2020
41
Financial statementsOther informationGovernanceStrategic report AUDIT COMMITTEE REPORT
Introduction to the Audit Committee report
Dear shareholders
I am pleased to present the report of the Audit Committee, which
provides a summary of the Committee’s role and activities during
the 2020 financial year. In summary, these activities help to ensure
the interests of shareholders are protected and the Group’s
reporting is fair, balanced and understandable.
The Audit Committee is responsible for monitoring the financial
reporting process, including the integrity of the financial
statements, reviewing financial disclosures, the application of
accounting policies, and accounting judgements. It reviews the
Group’s internal control and risk management systems, monitors
the extent and nature of the non-audit services undertaken by
external auditors, advises on the appointment of external auditors
and maintains a regular dialogue with external auditors, both with
and without executives.
Sir Bryan Carsberg
Audit Committee Chairman
24 February 2021
Members of the Audit Committee
The Committee currently consists of three Non-executive Directors:
Stephen Davidson, Kirsten English, and Sir Bryan Carsberg, its
Chairman. Mark Reilly and Paul Spence also served on the
Committee during the year, prior to their resignation from the Board.
By invitation, meetings of the Committee may be attended by the
Chairman of the Board, the Chief Executive Officer, and the Chief
Financial Officer. The Committee met twice in the year.
Of the three members of the Audit Committee, I am a chartered
accountant and Stephen Davidson and I both have recent and
relevant financial experience. Kirsten English, having held several
senior management positions, has a high level of financial literacy.
The Committee’s deliberations are reported at the subsequent Board
meeting and the minutes of each meeting are made available to all
members of the Board.
42
Actual Experience plc Annual Report 2020
Duties
The main duties of the Audit Committee are set out in its Terms of
Reference, which are available on the Company’s website
(www.actual-experience.com) and on request from the Company
Secretary.
The main items of business considered by the Audit Committee
during the year included:
•
• consideration of the external audit report and management
review of the financial statements and Annual Report;
representation letter;
• going concern review;
•
•
•
• meetings with the auditors with and without management present.
review of the 2020 audit plan and audit engagement letter;
review of the risk management and internal control systems;
review of the interim results; and
Role of the auditors
The Audit Committee monitors the relationship with the auditors,
PwC LLP, to ensure that auditors independence and objectivity are
maintained. As part of its review the Committee monitors the
provision of non-audit services by the external auditors.
The Audit Committee recommends that PwC LLP be reappointed as
the Group’s auditors at the next AGM.
Audit process
The auditors prepare an audit plan for the full-year financial
statements. The audit plan sets out the scope of the audit, areas of
special focus and audit timetable. This plan is reviewed and agreed
in advance by the Audit Committee. Following the audit of the
annual financial statements, the auditors presents its findings to
the Audit Committee for discussion. No major areas of concern
were highlighted by the auditors during the year. However,
areas of significant risk and matters of audit judgement are
regularly discussed.
Internal audit
At present, in keeping with the size and level of complexity of the
affairs of the Group, it does not have an internal audit function. The
Committee keeps under review the desirability of establishing an
internal audit function.
Risk management and internal controls
As described on pages 32 and 33 of the Strategic Report, the Group
has established a framework of risk management and internal control
systems, policies and procedures. The Audit Committee is
responsible for reviewing the risk management and internal control
framework and ensuring that it operates effectively. During the year,
the Committee has reviewed risk management and internal controls
and is satisfied that they are operating effectively.
Whistleblowing
The Group has in place a whistleblowing policy which sets out the
formal process by which an employee of the Group may, in
confidence, raise concerns about possible improprieties in financial
reporting or other matters. The Committee will review the policy and
its effectiveness periodically. During the year, there were no incidents
for consideration.
DIRECTORS’ REMUNERATION REPORT
Remuneration Policy
It is the Group’s policy that Executive Directors should have contracts
with an indefinite term providing for a maximum of six months’ notice.
In the event of early termination, the Directors’ contracts provide for
compensation up to a maximum of basic salary for the notice period.
The main elements of the remuneration package for Executive
Directors and senior management are:
Base annual salary
The base salary is reviewed annually by the Remuneration Committee
and any change in salary is applied from the beginning of each
calendar year. In determining the base annual salary the
Remuneration Committee takes into account several factors,
including the current position and development of the Group,
individual contribution, and market salaries for comparable
organisations.
Discretionary annual bonus arrangements
All Executive Directors and senior managers are eligible for a
discretionary annual bonus which is paid in accordance with a bonus
scheme developed by the Remuneration Committee. This takes into
account the financial performance of the Group.
Pension and other benefits
As with all employees, the Executive Directors may participate in the
Group defined contribution pension scheme. In the 2020 fiscal year,
the employer pension contribution was 3% of base salary.
The only other significant benefits that Executive Directors are
entitled to are private health insurance and life assurance.
Remuneration Committee
The responsibilities of the Committee are to advise upon and make
recommendations to the Board on the Group’s remuneration policies
and, within the framework established by the Board, to recommend
the remuneration of the Executive Directors. The Chief Executive
Officer and Chief Financial Officer are invited to attend meetings to
discuss remuneration arrangements and bonus schemes for senior
executives within the Group, as well as the awarding of share options
to such persons under any share scheme adopted by the Group.
Stephen Davidson chairs the Committee (with effect from
3 December 2019) following the resignation of Mark Reilly. Kirsten
English and Sir Bryan Carsberg served on the Committee during the
year. Attendance at the scheduled Committee meetings during the
year was as follows:
Number of scheduled meetings
Mark Reilly (Chair) (resigned 3 December 2019)
Stephen Davidson (Chair)
Sir Bryan Carsberg
Kirsten English2
Dave Page1
Steve Bennetts1
1 By invitation.
2 Appointed to Committee 1 January 2020.
2
1
2
2
1
2
2
Share incentive schemes
The Group operates share option plans, under which certain Directors
and senior management have been granted options to subscribe for
ordinary shares. All options are equity-settled. The options are subject
to service conditions, have an exercise price of between 9.09 pence
and 302.50 pence and the vesting period is up to four years. If the
options remain unexercised after a period of ten years from the date
of grant, the options expire. The Group has no legal or constructive
obligation to repurchase or settle the options in cash.
Remuneration Policy for Non-executive Directors
Non-executive Directors are employed on letters of appointment
which have an initial fixed term of three years and which may be
terminated at any time by either party with three months’ notice.
Remuneration for Non-executive Directors is set by the Chairman and
the Executive Members of the Board. Non-executive Directors do not
participate in bonus schemes. Stephen Davidson, Sir Bryan Carsberg
and Kirsten English have each been awarded share options, as shown
on the next page.
The Remuneration Committee assesses the performance of the
Executive Directors and other senior managers in the context of
recommending their annual remuneration, bonus awards and share
option grants to the Board for final determination. The remuneration
of the Non-executive Directors is recommended by the Executive
Directors and takes account of the time spent on Board and
Committee matters. The Board will make the final determination
although no Director will participate in any discussion about his or her
own remuneration.
The objective of the Group’s remuneration policy is to attract,
motivate, and retain high-quality individuals who will contribute fully
to the success of the Group. The Committee seeks to ensure that a
competitive and appropriate base salary is paid to Executive Directors
and senior managers, together with incentive arrangements that are:
• aligned with shareholders’ interests and with long-term business
strategies;
• measured against challenging and well-defined financial targets
•
(which are set in advance); and
transparent and without ‘soft’ non-financial targets which could
otherwise allow undue discretion to award bonuses that do not
reflect actual financial performance.
Actual Experience plc Annual Report 2020
43
Financial statementsOther informationGovernanceStrategic report DIRECTORS’ REMUNERATION REPORT CONTINUED
Directors’ remuneration (audited)
The remuneration of the Board Directors of Actual Experience plc during the year ended 30 September 2020 was:
Stephen Davidson1
Dave Page
Steve Bennetts1
Sir Bryan Carsberg1
Kirsten English1 (appointed 1 January 2020)
Robin Young (resigned 28 February 2020)
Paul Spence (resigned 28 February 2020)
Mark Reilly (resigned 3 December 2019)
Salary
and
fees
£
50,000
147,500
102,500
25,000
18,750
152,765
13,359
4,435
Employer
pension
contributions
£
—
7,000
33,900
—
—
—
—
—
Healthcare
£
Bonus
£
Total
Year ended
30 September
2020
£
Total
Year ended
30 September
2019
£
—
482
995
—
—
—
—
—
—
—
—
—
—
—
—
—
—
50,000
154,982
137,395
25,000
18,750
152,765
13,359
4,435
556,686
50,000
154,211
134,553
25,000
—
150,419
33,426
25,000
572,609
Total
514,309
40,900
1,477
1
In addition, certain Directors hold share option scheme interests in the Group. The fair value share-based payment charge recognised in the Consolidated Statement of
Comprehensive Income attributable to these Directors are: Kirsten English £3,650 (2019: n/a), Robin Young £0 (2019: £1,375), and Paul Spence £0 (2019: £2,009). All other
Directors’ share options were fully expensed in prior years.
Directors’ shareholdings (audited)
The interests of the Directors holding office at 30 September 2020 in the shares of the Company, including family interests, were:
Stephen Davidson
Dave Page
Steve Bennetts
Sir Bryan Carsberg
Kirsten English
Ordinary shares of 0.2p each
2020
Number
20,334
1,933,734
176,554
233
213
2020
%
0.04
4.06
0.37
0.00
0.00
Directors’ interests in share options (audited)
Directors’ interests in share options, granted under either the Actual Experience plc Enterprise Management Incentive Share Option Scheme
or the Actual Experience plc Unapproved Share Option Scheme, to acquire ordinary shares of 0.2 pence each in the Company at 30 September
2020 were:
Steve Bennetts
Steve Bennetts
Stephen Davidson
Sir Bryan Carsberg
Kirsten English
At 1 October
2019
Granted
during year
At 30 September
2020
Exercise
price
Vesting
dates
227,250
22,500
70,000
70,000
—
—
—
—
—
70,000
227,250
22,500
70,000
70,000
70,000
14.25 pence
54.50 pence
186.50 pence
186.50 pence
47.50 pence
2014 — 2017
2014 — 2017
2015 — 2017
2015 — 2017
2021 — 2023
Share options are subject to employment conditions and vest in equal annual instalments over the vesting period.
Other transactions that occurred with Directors during the year are detailed in note 21 to the financial statements under Related Party
Transactions.
Stephen Davidson
Chair of the Remuneration Committee
24 February 2021
44
Actual Experience plc Annual Report 2020
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ACTUAL EXPERIENCE PLC
Report on the audit of the financial statements
Opinion
In our opinion, Actual Experience plc’s group financial statements and company financial statements (the “financial statements”):
• give a true and fair view of the state of the group’s and of the company’s affairs as at 30 September 2020 and of the group’s loss and the
group’s and the company’s cash flows for the year then ended;
• have been properly prepared in accordance with international accounting standards in conformity with the requirements of the Companies
Act 2006; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report, which comprise: the Consolidated and Company statements of
financial position as at 30 September 2020; the Consolidated statement of comprehensive income, the consolidated and company statements
of cash flows, and the consolidated and company statements of changes in equity for the year then ended; and the notes to the financial
statements, which include a description of the significant accounting policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities
under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in
the UK, which includes the FRC’s Ethical Standard, as applicable to listed entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Our audit approach
Overview
• Overall group materiality: £250,000 (2019: £312,000), based on 5% of loss before tax.
• Overall company materiality: £237,000 (2019: £269,000), based on component allocation of group materiality.
• We have performed full-scope audit procedures in respect of the company, Actual Experience plc.
• Our audit scope included limited desktop audit procedures on the subsidiary, Actual Experience Inc., which were
performed by the group engagement team.
• Our audit procedures covered 99% of the group’s loss before tax for the year ended 30 September 2020.
• All work has been performed by the group engagement team.
• Risk that internally generated intangible assets capitalised do not qualify for recognition and that costs previously
capitalised may not be recoverable (Group and Company).
Impact of COVID-19 (Group and Company).
•
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In
particular, we looked at where the directors made subjective judgements, for example in respect of significant accounting estimates that
involved making assumptions and considering future events that are inherently uncertain. As in all of our audits we also addressed the risk of
management override of internal controls, including evaluating whether there was evidence of bias by the directors that represented a risk of
material misstatement due to fraud.
Actual Experience plc Annual Report 2020
45
Other informationStrategic reportFinancial statementsGovernance INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ACTUAL EXPERIENCE PLC
CONTINUED
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the 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)
identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit;
and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures thereon, were
addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. This is not a complete list of all risks identified by our audit.
Key audit matter
How our audit addressed the key audit matter
Risk that internally generated intangible assets
capitalised do not qualify for recognition and that costs
previously capitalised may not be recoverable.
(Group and Company)
We have considered whether the amounts capitalised in the year meet
the criteria for capitalisation set out in IAS 38. This included meeting
with project managers to understand the nature of them to challenge
whether the costs capitalised meet the criteria set out in IAS 38, and
testing on a sample basis for the specific costs capitalised.
We focus on this area because of the magnitude of the cumulative
capitalised development expenditure of £1,132,440 and the risk
that amounts may not be recoverable if future revenue growth is
not realised.
Furthermore, we note that judgement is applied by management
whether the costs that are capitalised in the year meet the criteria
in IAS 38. This risk is set out in the critical accounting estimates
and areas of judgement.
Impact of COVID-19
(Group and Company)
The emergence of COVID-19 has impacted all businesses, both
financially and operationally, and creates significant uncertainty in the
wider economic environment. Management refer to their assessment
of the pandemic risk and the mitigating actions taken, in the principal
risks and uncertainties section within the strategic report on page 32.
The business continuity systems and procedures enabled the quick
transition of all employees to remote working, allowing the Group to
continue providing full support to their Channel Partners without
compromise on service levels or delivery.
The Directors consider there is an immediate and heightened
relevance of their human experience offering due to the enduring
COVID-19 related changes to global working practices.
However, the Directors recognise the risk that the pandemic may
adversely affect its ability to progress commercial opportunities with
its Partners, and remains vigilant, assessing the impact of COVID-19
on the general economy and management of their cash resources.
The Directors have prepared detailed projections of future cash flows
to September 2024 which reflect different revenue growth
assumptions.
The Directors have reasonable confidence from the outcome of the
assessment that the group can survive even significant reductions in
revenue for at least the next 12 months, due to the current strong cash
balances from the recent successful fundraise in January 2021.
For cumulative amounts capitalised we considered and challenged
management on the economic benefits expected to flow from the
technology introduced from the projects. Management demonstrated
a market for the new technology developments, by providing the
customer agreements and the expanding portfolio of Channel
Partners subsequent to the year end with their recently launched
Human Experience Management offering.
The market capitalisation of the group has also increased subsequent
to the year end, and the recent successful fund raise in January 2021
highlights the confidence in the market. This provides the group with
cash resources to continue to develop and invest in products while
sales and current market opportunities are achieved.
We concluded that the judgement of management that the amounts
capitalised were not impaired to be reasonable.
The business continuity plan has resulted in the Group’s ability to
maintain its control environment whilst working remotely. There was
no evidence to suggest a breakdown in controls as part of our audit
work, and the control processes previously in place have continued to
operate during this period. Sufficient and appropriate audit evidence
was obtained, despite the audit being performed remotely.
We obtained the group’s modelled scenarios and evaluated the
appropriateness of key assumptions and inputs including;
• Verified the integrity of management’s model, as well as agreeing
the data to underlying support. We have agreed the model to the
approved forecasts prepared for the fundraise.
• Obtained management information for the year to date financial
performance to support our evaluation of management’s
assumptions. We also confirmed cash balances at the end of
January 2021 to third party bank statements.
• Corroborated the £10m gross proceeds from the fundraise
subsequent to year end, to cash receipts as per third party
bank statements.
• Evaluated and challenged management’s assumptions,
and performed sensitivities on key assumptions such as
revenue growth.
• Agreed the mathematical accuracy of the modelled scenarios.
We obtained evidence to support management’s disclosures in the
financial statements, and agreed the relevant disclosures within the
Annual Report, and verified the consistency of this with the financial
statements and our knowledge of the audit.
We concur with management’s assessment that the going concern
basis remains appropriate, and that the disclosures in the financial
statements adequately describes the nature of the risk, and impact on
the group.
46
Actual Experience plc Annual Report 2020
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a
whole, taking into account the structure of the group and the company, the accounting processes and controls, and the industry in which
they operate.
Actual Experience plc is structured with one reporting component, Actual Experience Inc., reporting into the parent operations in the UK as
Actual Experience plc.
Actual Experience Inc. does not require a local statutory audit. Actual Experience Inc. earned no external revenues in 2020 and represents an
insignificant portion of the loss before tax of the group. As such, limited audit and desktop procedures were performed on the Actual
Experience Inc. by the group engagement team.
99% of the group’s loss before tax is represented by the company, and full scope audit procedures have been performed on the company by
the group engagement team.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together
with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the
individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on
the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall materiality
£250,000 (2019: £312,000).
Group financial statements
Company financial statements
£237,500 (2019: £269,000).
How we determined it
5% of loss before tax.
Component allocation of group materiality.
Rationale for benchmark
applied
Based on the benchmarks used in the Annual
Report, loss before tax is the primary measure
used by the shareholders in assessing the
performance of the group, and is a generally
accepted auditing benchmark.
Since the materiality we would have employed to
this entity on a standalone basis was in excess of
the component allocation, materiality was capped
at the component materiality allocation.
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality. There was one
component in scope this year, and the materiality allocated to the component was £237,000.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £12,500 (Group audit)
(2019: £15,600) and £11,875 (Company audit) (2019: £13,500) as well as misstatements below those amounts that, in our view, warranted
reporting for qualitative reasons.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which ISAs (UK) require us to report to you where:
•
•
the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the
group’s and company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the
date when the financial statements are authorised for issue.
However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the group’s and company’s
ability to continue as a going concern.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report
thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any
form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether
the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to
be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to
conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on
the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report based on these responsibilities.
With respect to the Strategic Report and Directors’ Report, we also considered whether the disclosures required by the UK Companies Act
2006 have been included.
Based on the responsibilities described above and our work undertaken in the course of the audit, ISAs (UK) require us also to report certain
opinions and matters as described below.
Actual Experience plc Annual Report 2020
47
Other informationStrategic reportFinancial statementsGovernance INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ACTUAL EXPERIENCE PLC
CONTINUED
Strategic Report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic Report and Directors’ Report
for the year ended 30 September 2020 is consistent with the financial statements and has been prepared in accordance with applicable
legal requirements.
In light of the knowledge and understanding of the group and company and their environment obtained in the course of the audit, we did not
identify any material misstatements in the Strategic Report and Directors’ Report.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of directors’ responsibilities set out on page 37, the directors are responsible for the preparation of the
financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are
also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors
either intend to liquidate the group or the company or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but
is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Chapter 3 of Part
16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other
purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior
consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not received all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches
not visited by us; or
• certain disclosures of directors’ remuneration specified by law are not made; or
•
the company financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Heather Ancient (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Bristol
24 February 2021
48
Actual Experience plc Annual Report 2020
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2020
REVENUE
Cost of sales
GROSS PROFIT
Administrative expenses
OPERATING LOSS BEFORE EXCEPTIONAL ITEM
Exceptional item: redundancy expense
OPERATING LOSS
Finance income
Finance expense
Finance (expense)/income – net
LOSS BEFORE TAX
Tax
LOSS FOR THE YEAR
Other comprehensive expense:
Items that may be reclassified to profit or loss:
Foreign currency difference on translation of overseas operations
TOTAL COMPREHENSIVE EXPENSE FOR THE YEAR
LOSS PER ORDINARY SHARE
Basic and diluted
Note
4
2020
£
2019
£
1,960,933
(940,533)
1,934,082
(1,143,116)
1,020,400
790,966
(5,600,609)
(7,050,417)
(4,580,209)
(6,259,451)
(411,525)
—
(4,991,734)
(6,259,451)
13,933
(31,140)
(17,207)
54,235
(34,687)
19,548
(5,008,941)
327,453
(6,239,903)
327,953
(4,681,488)
(5,911,950)
5
5
7
7
8
(15,350)
(7,241)
(4,696,838)
(5,919,191)
9
(9.87)p
(13.04)p
Actual Experience plc Annual Report 2020
49
Other informationStrategic reportFinancial statementsGovernance CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2020
At 1 October 2018
Loss for the year
Other comprehensive expense for the year
Total comprehensive expense for the year
Issue of shares
Expenses of share issue
Share-based payment expense
At 30 September 2019
Loss for the year
Other comprehensive expense for the year
Total comprehensive expense for the year
Note
17(a)
20
Share
capital
£
Share
premium
£
Accumulated
losses
£
Total
equity
£
89,805
31,928,013
(18,959,190)
13,058,628
—
—
—
4,444
—
—
—
—
—
2,995,557
(217,168)
—
(5,911,950)
(7,241)
(5,919,191)
—
—
83,199
(5,911,950)
(7,241)
(5,919,191)
3,000,001
(217,168)
83,199
94,249
34,706,402
(24,795,182)
10,005,469
—
—
—
—
—
—
(4,681,488)
(15,350)
(4,681,488)
(15,350)
(4,696,838)
(4,696,838)
Transactions with owners, in their capacity as owners
Issue of shares
Share-based payment credit
17(a)
20
1,035
—
61,947
—
—
(174,842)
62,982
(174,842)
At 30 September 2020
95,284
34,768,349
(29,666,862)
5,196,771
50
Actual Experience plc Annual Report 2020
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2020
ASSETS
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
TOTAL NON-CURRENT ASSETS
Current assets
Trade and other receivables
Income tax receivable
Cash and cash equivalents
TOTAL CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
Non-current liabilities
Deferred tax
Lease liabilities
TOTAL NON-CURRENT LIABILITIES
Current liabilities
Trade and other payables
Lease liabilities
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Share capital
Share premium
Accumulated losses
TOTAL EQUITY
Approved by the Board of Directors and authorised for issue on 24 February 2021.
Stephen Davidson
Chair
Steve Bennetts
Chief Financial Officer
Company number: 06838738
Note
2020
£
2019
£
10
11
12
13
8
14
8
11
15
11
58,997
782,606
1,972,781
140,806
894,398
1,792,465
2,814,384
2,827,669
690,514
295,550
2,754,274
681,670
296,866
7,876,634
3,740,338
8,855,170
6,554,722
11,682,839
(7,079)
(719,177)
(14,317)
(866,134)
(726,256)
(880,451)
(519,393)
(112,302)
(689,426)
(107,493)
(631,695)
(796,919)
(1,357,951)
(1,677,370)
5,196,771
10,005,469
17(a)
17(a)
17(b)
95,284
34,768,349
(29,666,862)
94,249
34,706,402
(24,795,182)
5,196,771
10,005,469
Actual Experience plc Annual Report 2020
51
Other informationStrategic reportFinancial statementsGovernance
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Cash flows from operating activities
Loss before income tax
Adjustments for:
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Amortisation of intangible assets
Loss on disposal of property, plant and equipment
Non-cash employee benefits (credit)/expense – share-based payments (credit)/expense
Finance expense/(income) – net
Operating cash outflow before changes in working capital
Increase in trade and other receivables
Decrease in trade and other payables
Cash used in operations
Income taxes received
Net cash outflow from operating activities
Cash flows from investing activities
Development of intangible assets
Purchases of property, plant and equipment
Finance income
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from issue of share capital, net of costs
Principal element of lease payments
Employee Benefit Trust – (repayment)/advance
Net cash (outflow)/inflow from financing activities
Decrease in cash and cash equivalents
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at start of year
Cash and cash equivalents at end of year
Note
2020
£
2019
£
(5,008,941)
(6,239,903)
10
11
12
97,458
111,788
952,124
181
(174,842)
17,207
125,136
111,788
982,808
—
83,199
(19,548)
(4,005,025)
(4,956,520)
(4,968)
(167,605)
(2,446)
(213,300)
(4,177,598)
(5,172,266)
321,531
754,175
(3,856,067)
(4,418,091)
12
10
7
(1,132,440)
(15,836)
13,933
(1,196,046)
(15,634)
54,235
(1,134,343)
(1,157,445)
17(a)
62,982
(173,288)
(18,299)
2,782,833
(138,630)
27,101
(128,605)
2,671,304
(5,119,015)
(3,345)
7,876,634
(2,904,232)
4,350
10,776,516
14
2,754,274
7,876,634
52
Actual Experience plc Annual Report 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
1 Summary of significant accounting policies
This note provides a list of the significant accounting policies adopted in the preparation of these consolidated financial statements to the
extent they are not disclosed in the other notes below. These policies have been consistently applied to all the years presented, unless
otherwise stated. The financial statements are for the Group consisting of Actual Experience plc and its subsidiary. The financial statements
are audited financial statements for the year to 30 September 2020. These include comparatives for the year ended 30 September 2019.
1(a) Basis of preparation
Actual Experience plc is a public limited company domiciled in the United Kingdom and incorporated in England. The Company’s registered
office is Quay House, The Ambury, Bath, BA1 1UA.
(i) Compliance with IFRS
The consolidated financial statements of the Actual Experience plc Group have been prepared in accordance with international
accounting standards in conformity with the requirements of the Companies Act 2006 (‘IFRS’) and the applicable legal requirements
of the Companies Act 2006.
(ii) Historical cost convention
The financial statements have been prepared on a historical cost basis.
(iii) New and amended standards adopted by the Group
No new or amended standards were adopted by the Group for the annual reporting period commencing 1 October 2019:
The Group elected to early adopt IFRS 16, ‘Leases’ in 2019, as permitted by the IASB. Refer to note 11 for the Group’s accounting policies
for leases.
(iv) New standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 30 September 2020 reporting periods
and have not been early adopted by the Group. These standards are not expected to have a material impact on the entity in the current or
future reporting periods and on foreseeable future transactions.
(v) Going concern
At 30 September 2020, the Group had a cash and cash equivalents position of £2,754,274 with no bank debt. As noted in note 22, subsequent
to the year-end the Company raised £10.0m, before expenses, from a Placing with shareholders. The Directors have prepared detailed
projections of future cash flows to September 2024 which reflect different revenue growth assumptions.
After due consideration, the Directors have concluded that there is a reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future due to the current strong cash balances from the recent successful fundraise in
January 2021. For this reason, they continue to adopt the going concern basis in preparing the financial statements.
1(b) Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company
(its subsidiaries) made up to 30 September each year. Control exists when the Company has the power, directly or indirectly, to govern the
financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently
are exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the financial statements from the
date that control commences until the date that control ceases.
Accounting policies adopted are consistent across the Group. All intra-Group balances and transactions, including unrealised profits arising
from intra-Group transactions, are eliminated fully on consolidation.
1(c) Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker.
1(d) Foreign currency translation
(i) Functional and presentational currency
Items included in the financial statements are measured using the currency of the primary economic environment in which the Group operates
(the functional currency) which is UK sterling (£). The financial statements are presented in pounds sterling (£), which is the Group’s
presentational currency. All amounts are rounded to the nearest £.
Actual Experience plc Annual Report 2020
53
Other informationStrategic reportFinancial statementsGovernance NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 SEPTEMBER 2020
1 Summary of significant accounting policies continued
(ii) Group companies
The results and financial position of foreign operations that have a functional currency different from the presentation currency are translated
into the presentation currency as follows:
• assets and liabilities are translated at the closing rate at the date of the balance sheet;
•
income and expenses are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative
effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the
transactions); and
• all resulting exchange differences are recognised in other comprehensive income and as a separate component of equity.
(iii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of
monetary assets and liabilities denominated in foreign currencies are recognised in the Consolidated Statement of Comprehensive Income.
Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
1(e) Revenue recognition
Revenue is recognised at the fair value of the consideration received or receivable for the sale of services in the ordinary course of business
and is shown net of Value Added Tax. The Group primarily earns revenues from Human Experience Management Services and associated
consultancy services.
Revenue from Human Experience Management Services is recognised in the accounting period in which the services are rendered. For
fixed-price contracts, revenue is recognised based on the actual service provided to the end of the reporting period as a proportion of the total
services to be provided because the customer receives and uses the benefits simultaneously.
The difference between the amount of revenue recognised and the amount invoiced to a particular customer is included in the Consolidated
Statement of Financial Position as deferred or accrued income as appropriate. Amounts included in deferred income are expected to be
recognised within one year and are included within current liabilities.
1(f) Internally generated intangible assets – research and development expenditure
Expenditure on research activities is recognised as an expense in the period in which it is incurred. Development costs incurred on specific
projects are capitalised when all the following criteria are satisfied:
a. completion of the intangible asset is technically feasible so that it will be available for use or sale;
b. the Group intends to complete the intangible asset and use or sell it;
c. the Group has the ability to use or sell the intangible asset and the intangible asset will generate probable future economic benefits over
and above cost;
d. there are adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and
e. the expenditure attributable to the intangible asset during its development can be measured reliably.
The Directors believe that the criteria for capitalising development costs have been met in respect of certain projects. Consequently, the
identifiable costs relating to these projects have been capitalised as intangible assets. The capitalised costs are being amortised over the
estimated useful lives of those assets and the amortisation charge for the period is included within ‘Administrative expenses’ in the
Consolidated Statement of Comprehensive Income. Expenses for research and development include associated wages and salaries, material
costs and directly attributable overheads.
The estimated useful life of the development costs capitalised is two years. Amortisation commences when the project is available for use
within the business.
Intangible assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purpose of
assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash flows (cash-generating units). Prior
impairments of non-financial assets (other than goodwill) are reviewed for possible reversal at each reporting date.
1(g) Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any impairment losses. Cost includes the original purchase
price of the asset and the costs attributable to bringing the asset to its working condition for its intended use. Depreciation is charged so as to
write off the costs of assets over their estimated useful lives, on the following basis:
Right-of-use assets
Over the term of the lease
Leasehold improvements
5 years straight-line
Fixtures, fittings and equipment
5 years straight-line
Computer equipment
3 years straight-line
54
Actual Experience plc Annual Report 2020
The gain or loss arising on the disposal of an asset is determined as the difference between the sales proceeds and the carrying amount of the
asset and is recognised in the Consolidated Statement of Comprehensive Income.
Impairment of property, plant and equipment
At each period end, the Group reviews the carrying amounts of its property, plant and equipment assets to determine whether there is any
indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in
order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other
assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the
risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or
cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to
its recoverable amount. An impairment loss is recognised as an expense immediately.
1(h) Financial instruments
Financial assets and financial liabilities are recognised in the Consolidated Statement of Financial Position when the Group becomes party to
the contractual provisions of the instrument. Financial assets are de-recognised when the contractual rights to the cash flows from the
financial asset expire or when the contractual rights to those assets are transferred. Financial liabilities are de-recognised when the obligation
specified in the contract is discharged, cancelled or expired.
Subsequent to initial recognition, assets are measured at either amortised cost, fair value through other comprehensive income or fair value
through the Consolidated Statement of Comprehensive Income.
(i) Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost. Appropriate provisions for estimated
irrecoverable amounts are recognised in the Consolidated Statement of Comprehensive Income when there is objective evidence that the
assets are impaired.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all
trade receivables and contract assets. To measure the expected credit losses, trade receivables and contract assets have been grouped based
on shared credit risk characteristics and the days past due. The contract assets relate to unbilled work in progress and have substantially the
same risk characteristics as the trade receivables for the same types of contracts. The Group has therefore concluded that the expected loss
rates for trade receivables are a reasonable approximation of the loss rates for the contract assets.
The expected loss rates are based on the payment profiles of sales over a period of 12 months before 30 September 2020 and the
corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and forward-
looking information on macroeconomic factors affecting the ability of the customers to settle the receivables.
(ii) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, demand deposits, and other short-term highly liquid investments that are readily
convertible to a known amount of cash and are subject to an insignificant risk of changes in value. Cash and cash equivalents are held
in either UK sterling or US dollars and are placed on deposit in UK and US banks.
(iii) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
(iv) Trade and other payables
Trade payables are initially measured at their fair value and are subsequently measured at their amortised cost using the effective interest
rate method; this method allocates interest expense over the relevant period by applying the ‘effective interest rate’ to the carrying amount
of the liability.
(v) Investments
Investments comprise amounts held in a bank deposit account which has a maturity date between three months and 12 months after the
balance sheet date.
1(i) Current and deferred tax
The tax expense/(credit) represents the sum of the tax currently payable or recoverable and the movement in deferred tax assets and liabilities.
Current tax is based upon taxable profit/(loss) for the year. Taxable profit/(loss) differs from net profit/(loss) as reported in the Consolidated
Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it
further excludes items that are never taxable or deductible.
The Group’s liability or receivable for current tax is calculated by using tax rates that have been enacted or substantively enacted by the
reporting date.
Actual Experience plc Annual Report 2020
55
Other informationStrategic reportFinancial statementsGovernance NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 SEPTEMBER 2020
1 Summary of significant accounting policies continued
Credit is taken in the accounting period for research and development tax credits, which have been claimed from HM Revenue and Customs,
in respect of qualifying research and development costs incurred. Research and development tax credits have been accounted for on an
accruals basis.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled based
upon tax rates that have been enacted or substantively enacted by the reporting date. Deferred tax is charged or credited in the Consolidated
Statement of Comprehensive Income, except when it relates to items credited or charged directly to equity, in which case the deferred tax is
also dealt with in equity.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the liability method.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it
is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are
not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other
assets and liabilities in a transaction that affects neither the profit nor the accounting period.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all or part of the asset to be recovered.
1(j) Leases
The accounting policy for leases is described in note 11.
1(k) Investment in subsidiaries
Shares in Group undertakings are stated at cost less any provision for impairment.
The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying of an investment
may not be recoverable. If any such indication of impairment exists, the Company makes an estimate of the recoverable amount. If the recoverable
amount of the cash-generating unit is less than the value of the investment, the investment is considered to be impaired and is written down to
its recoverable amount. An impairment loss is recognised immediately in the Consolidated Statement of Comprehensive Income.
1(l) Employee benefits
(i) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulative sick leave that are expected to be settled
wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees’
services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The
liabilities are presented within ‘Other creditors’ in the Consolidated Statement of Financial Position.
(ii) Post-employment obligations
The Group operates a defined contribution pension plan. The Group pays contributions to publicly or privately administered pension insurance
plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid.
The contributions are recognised as employee benefit expense when they are due.
(iii) Share-based payments
The Company issues equity-settled share-based payments to certain employees.
Equity-settled share-based payments are measured at fair value at the date of grant and expensed in the Consolidated Statement of
Comprehensive Income on a straight-line basis over the vesting period, along with a corresponding increase in equity. At each reporting date,
the Company revises its estimate of the number of equity instruments expected to vest as a result of the effect of non-market-based vesting
conditions. The impact of the revision of the original estimates, if any, is recognised in the Consolidated Statement of Comprehensive Income
such that the cumulative expense represents the revised estimate, with a corresponding adjustment to equity reserves.
The fair value of share options is determined using a Black-Scholes model, taking into consideration the Directors’ best estimate of the
expected life of the option.
1(m) Equity-settled share-based payments
The estimation of share-based payment costs requires the selection of an appropriate valuation method, consideration as to the inputs necessary
for the valuation model chosen and the estimation of the number of awards that will ultimately vest. Inputs subject to judgement relate to the
future volatility of the share price of comparable companies, the Group’s expected dividend yields, risk-free interest rates and expected lives of
the options. The Directors draw on a variety of sources to aid in the determination of the appropriate data to use in such calculations.
1(n) Recoverability of deferred tax assets
Deferred tax assets are recognised only to the extent that it is considered probable that those assets will be recoverable. This involves an
assessment of when those deferred tax assets are likely to reverse and a judgement as to whether or not there will be sufficient taxable profits
available to offset the tax assets when they do reverse. This requires assumptions regarding future probability and is therefore inherently
uncertain. To the extent that assumptions regarding future probability change, there can be an increase or decrease in the level of deferred tax
assets recognised which can result in a charge or credit to the Consolidated Statement of Comprehensive Income in the period in which the
change occurs.
56
Actual Experience plc Annual Report 2020
1(o) Exceptional Items
The Group classifies certain one-off charges or credits that have a material impact on the Group’s financial results as ‘exceptional items’. These
are disclosed separately to provide further understanding of the financial performance of the Group.
2 Critical accounting estimates and areas of judgement
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. The estimates and
assumptions that have the most significant effects on the carrying amounts of the assets and liabilities in the financial information are
discussed below:
Research and development costs
The assessment of when development expenditure meets the recognition criteria required for capitalisation requires judgement as to the
technical feasibility and commercial viability of products and ideas that are under development. These judgements are subjective and, to the
extent that actual circumstances differ, there can be an increase or decrease in the amount of expenditure expensed to the Consolidated
Statement of Comprehensive Income.
When development expenditure is capitalised, the Directors also make a judgement in respect of the expected useful lives of the intangible
development costs and an appropriate amortisation charge is made. The useful economic life of the development costs is two years.
A one-year reduction in the period over which such development costs are amortised would have increased loss before income tax by
£952,129 (2019: £1,000,062). A one-year increase in the period over which such development costs are amortised would have reduced loss
before income tax by £317,373 (2019: £333,354).
3 Financial risk management
The Board has overall responsibility for the determination of the Group’s risk management objectives and policies. The overall objective
of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group’s competitiveness and flexibility.
The Group does not use derivative financial instruments such as forward currency contracts or similar instruments. The Group does not issue
or use financial instruments of a speculative nature.
The Group is exposed to the following financial risks:
• Credit risk
• Liquidity risk
• Market risk
It should be noted that the same policy is applied to the Company as is applied to the Group.
To the extent that financial instruments are not carried at fair value in the Consolidated Statement of Financial Position, book value
approximates to fair value at 30 September 2019 and 30 September 2020.
Trade and other receivables are measured at fair value and amortised cost. Book values and expected cash flows are reviewed by the Board
and any impairment charged to the Consolidated Statement of Comprehensive Income in the relevant period.
(i) Credit risk
Credit risk is the risk of loss to the Group if a customer or counterparty to financial instruments fails to meet its contractual obligation. Credit
risk arises from the Group’s cash and cash equivalents and receivables balances. The concentration of the Group’s credit risk is considered by
counterparty, geography and currency.
The Group gives careful consideration to which organisation it uses for its banking services in order to minimise credit risk. The majority of the
cash balance is held in two banks with A+ credit ratings (long term, as assessed by Fitch). The amounts of cash held on deposit with those
banks at each reporting date can be seen in note 14. All of the cash and cash equivalents held with those banks at each reporting date were
denominated in UK sterling or US dollars. The Directors are satisfied that the level of risk inherent in holding the cash deposits with three
banks is low given the credit ratings assessed. The Directors monitor the levels of cash held by the Group on a regular basis and, if necessary,
will mitigate any perceived increase in the level of risk by spreading the cash deposits across other institutions.
The nature of the Group’s business and current stage of its development are such that individual customers can comprise a significant
proportion of its trade and other receivables at any point in time. The Group mitigates the associated risk by close monitoring of the
receivables ledger.
At 30 September 2020, the Group’s trade receivables balance was £427,458 (30 September 2019: £425,636). The carrying amount of financial
assets recorded in the financial statements represents the Group’s maximum exposure to credit risk. An allowance for impairment is made
where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows.
In the Directors’ opinion, there has been no impairment of financial assets at any point during the year.
No collateral is held by the Group as security in relation to its financial assets.
The Directors consider the above measures to be sufficient to control the credit risk exposure.
Actual Experience plc Annual Report 2020
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FOR THE YEAR ENDED 30 SEPTEMBER 2020
3 Financial risk management continued
(ii) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. This risk is managed by ensuring that
sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. The Group’s cash is held in bank
accounts with notice periods no greater than three months and management continually monitors rolling cash flow forecasts to ensure
sufficient cash is available for anticipated cash requirements.
At 30 September 2020, the Group had £2,754,274 (30 September 2019: £7,876,634) of cash and cash equivalents.
(iii) Market risk
Market risk is the risk of loss that may arise from changes in market factors such as interest rates and foreign exchange rates. The Group’s
activities expose it primarily to the financial risks of changes in foreign currency exchange rates. The Group’s exposure to foreign currency risk
has been limited, as the majority of its invoicing and payments are in UK sterling. There are no significant balances held in foreign currencies at
each reporting date and it has made no payments in foreign currencies other than US dollar and Euro. Accordingly, the Board has not
presented any sensitivity analysis in this area as it is immaterial.
The carrying values of trade and other receivables, trade and other payables and cash and cash equivalents approximate their fair values due
to their relatively short periods to maturity. Fair value measurements are determined in accordance with the following levels:
Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities.
Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Prices or valuations that require management inputs that are both significant to the fair value measurement and unobservable.
Fair values of all financial assets and liabilities are classified as Level 3 financial instruments, except cash and cash equivalents which is
classified as Level 2.
(iv) Capital risk management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future
development of the business.
The Group’s objective when managing capital is to maintain adequate financial flexibility to preserve its ability to meet financial obligations,
both current and long-term. The capital structure of the Group is managed and adjusted to reflect changes in economic circumstances.
The Group’s capital is made up of share capital, share premium and retained earnings totalling at 30 September 2020: £5,196,771
(30 September 2019: £10,005,469).
The Group funds its expenditures on commitments from existing cash and cash equivalent balances, primarily received from issuances of
shareholders’ equity. There are no externally imposed capital requirements.
Financing decisions are made by the Board based on forecasts of the expected timing and level of capital and operating expenditure required
to meet the Group’s commitments and development plans.
4 Revenue
The information that is presented to the Chief Executive Officer, who is considered to be the Chief Operating Decision-Maker (CODM), for the
purposes of resource allocation and assessment of performance, is based wholly on the overall activities of the Group. Due to the current size
and activities of the Group, there is a high degree of centralisation of activities. The Directors therefore consider that there is one operating,
and hence one reportable, segment for the purposes of presenting information under IFRS 8; that of Human Experience Management
Services. There are no differences between the segment results and the Consolidated Statement of Comprehensive Income. The assets and
liabilities information presented to the CODM is consistent with the Consolidated Statement of Financial Position.
During the year ended 30 September 2020 the Group had two customers who generated more than 10% of total revenue. These customers
generated 82% and 14% of revenue respectively.
During the year ended 30 September 2019 the Group had two customers who generated more than 10% of total revenue. These customers
generated 79% and 17% of revenue respectively.
An analysis of revenues by geographic location of customers is set out below:
United Kingdom
United States of America
58
Actual Experience plc Annual Report 2020
2020
£
2019
£
353,100
1,607,833
396,300
1,537,782
1,960,933 1,934,082
5 Operating loss
Loss from operations is stated after charging/(crediting):
Depreciation on property, plant and equipment
Depreciation of right-of-use assets
Amortisation of intangible assets
Employee costs (including exceptional item)
Foreign exchange losses/(gains)
Auditors’ remuneration:
– Audit of these financial statements
Total auditors’ remuneration
Note
10
11
12
6
2020
£
2019
£
97,458
111,788
952,124
4,332,180
27,458
125,136
111,788
982,808
5,133,281
(77,259)
50,750
50,750
43,000
43,000
An exceptional item of £411,525 has been separately disclosed on the Consolidated Statement of Comprehensive Income. This relates to
redundancies following a corporate reorganisation.
6 Employee costs
The average monthly number of persons (including Directors) employed by the Group during the year was:
Directors
Sales and support
Software development
Administration
The aggregate remuneration, including Directors, comprised:
Wages and salaries
Social security costs
Other pension costs
Share-based (credit)/expense (note 20)
Directors’ remuneration comprised:
Emoluments for qualifying services
2020
Number
2019
Number
6
39
29
9
83
2020
£
7
43
33
10
93
2019
£
4,780,818
561,719
296,925
(174,842)
5,401,892
585,336
258,900
83,199
5,464,620
6,329,327
556,686
572,609
Directors’ emoluments disclosed above include £154,982 paid to the highest paid Director (2019: £154,211); which includes £7,000 paid under a
defined contribution scheme (2019: £3,750).
The Remuneration Report on pages 43 and 44 details Directors’ interests in share options.
Included within total employee costs of £5,464,620 (2019: £6,329,327) is £1,132,440 (2019: £1,196,046) which has been capitalised within
development costs in accordance with IAS 38 (see note 12). The remaining £4,332,180 (2019: £5,133,281) has been expensed in the
Consolidated Statement of Comprehensive Income.
7 Finance income and expense
Finance income
Bank interest receivable
Finance expense
Interest payable for lease liabilities
Net finance (expense)/income
2020
£
2019
£
13,933
54,235
31,140
34,687
(17,207)
19,548
Actual Experience plc Annual Report 2020
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Other informationStrategic reportFinancial statementsGovernance NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 SEPTEMBER 2020
8 Tax
Tax on loss
Current tax:
UK corporation tax on losses of the year
Prior year adjustment
Overseas taxes
Deferred tax:
Origination and reversal of timing differences
Total tax credit
Factors affecting the current tax credits
The tax assessed for the year varies from the standard UK company rate of corporation tax as explained below:
Loss before tax
Tax at the UK corporate tax rate of 19% (2019: 19%)
Effects of:
Expenses not deductible for tax purposes
Unrecognised deferred tax asset on losses
Research and development enhancement in respect of the current year
Prior year adjustment
Employee share acquisition adjustment
Change in rate of tax used to calculate deferred tax liability
Tax credit for the year
2020
£
2019
£
(295,550)
—
(24,665)
(296,866)
(30,911)
12,370
(7,238)
(12,546)
(327,453)
(327,953)
2020
£
2019
£
(5,008,941)
(6,239,903)
(951,699)
(1,185,582)
174,739
851,347
(342,334)
—
(61,156)
1,650
231,498
1,010,552
(354,985)
(30,911)
—
1,475
(327,453)
(327,953)
The Group has tax losses carried forward of approximately £34,800,000 (2019: £30,355,000).
The Group has incurred qualifying expenditure on research and development projects which has given rise to tax credits due from
HM Revenue and Customs. At 30 September 2020, the amount due from HMRC was £295,550 (2019: £296,866).
Deferred tax
Deferred tax relates to the following:
Accelerated depreciation for tax purposes
Deferred tax liability
Reconciliation of deferred tax liabilities
Balance at the beginning of the year
Credit to the Consolidated Statement of Comprehensive Income
Balance at the end of the year
Unrecognised deferred tax assets/(liabilities)
The Group had unrecognised deferred tax assets/(liabilities) as follows:
At 1 October 2019
Deferred tax asset
Deferred tax liability
Net unrecognised asset/(liability)
60
Actual Experience plc Annual Report 2020
2020
£
7,079
7,079
2020
£
14,317
(7,238)
7,079
2019
£
14,317
14,317
2019
£
26,863
(12,546)
14,317
Tax
losses
£
Lease
liabilities
£
Right-of-use
assets
£
Total
£
5,160,000
—
5,160,000
165,517
—
165,517
—
(152,048)
5,325,517
(152,048)
(152,048)
5,173,469
At 30 September 2020
Deferred tax asset
Deferred tax liability
Net unrecognised asset/(liability)
Tax
losses
£
Lease
liabilities
£
Right-of-use
assets
£
Total
£
6,608,000
—
6,608,000
157,981
—
157,981
—
(148,695)
6,765,981
(148,695)
(148,695)
6,459,305
The Group has not recognised the net deferred tax asset in respect of tax losses in the Consolidated Statement of Financial Position due to the
uncertainty in the timing of when it is probable that future taxable profit will be available against which the unused tax losses and unused tax
credits can be utilised. The Group has not recognised the net deferred tax asset of £9,286 (2019: £13,469) arising on the recognition of
right-of-use assets and the associated lease liability following the adoption of IFRS 16 on the basis that it is not material.
9 Loss per ordinary share
Basic loss per share is calculated by dividing the loss attributable to the owners of the parent by the weighted average number of ordinary
shares in issue during the year. Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares in issue
during the year to assume conversion of all dilutive potential ordinary shares.
The Company has one class of potentially dilutive ordinary shares, being those share options granted to employees where the exercise price is
less than the average market price of the Company’s ordinary shares during the year. However, due to losses incurred in both the current and
previous financial year there is no dilutive effect from the potential exercise of these dilutive shares.
Total loss attributable to the equity holders of the parent
Weighted average number of ordinary shares in issue during the year
Loss per share
Basic and diluted on loss for the year
The weighted average number of shares in issue throughout the year is as follows:
Issued ordinary shares at the beginning of the year
Effect of shares issued in July 2019
Effect of shares issued in October 2019
Effect of shares issued in November 2019
Effect of shares issued in March 2020
Effect of shares issued in April 2020
Effect of shares issued in August 2020
Effect of shares issued in September 2020
Weighted average number of shares at the end of the year
2020
£
2019
£
(4,681,488)
(5,911,950)
No.
No.
47,452,334
45,334,606
(9.87)p
(13.04)p
2020
2019
47,124,561
—
20,970
199,995
81,036
19,830
5,622
320
44,902,338
432,268
—
—
—
—
—
—
47,452,334
45,334,606
Actual Experience plc Annual Report 2020
61
Other informationStrategic reportFinancial statementsGovernance NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 SEPTEMBER 2020
10 Property, plant and equipment
Cost
At 1 October 2018
Additions
Foreign currency translation differences
At 30 September 2019
Additions
Disposals
Foreign currency translation differences
At 30 September 2020
Accumulated depreciation
At 1 October 2018
Charge for the year
Foreign currency translation differences
At 30 September 2019
Charge for the year
Disposals
Foreign currency translation differences
At 30 September 2020
Net book value
At 30 September 2020
At 30 September 2019
At 30 September 2018
Leasehold
improvements
£
173,909
—
—
173,909
—
—
—
Fixtures,
fittings
and
equipment
£
81,270
4,737
—
86,007
1,200
—
—
Computer
equipment
£
324,722
10,897
302
335,921
14,636
(7,540)
(259)
Total
£
579,901
15,634
302
595,837
15,836
(7,540)
(259)
173,909
87,207
342,758
603,874
82,655
34,782
—
117,437
34,781
—
—
36,394
16,812
—
53,206
16,159
—
—
210,602
73,542
244
284,388
46,518
(7,359)
(253)
329,651
125,136
244
455,031
97,458
(7,359)
(253)
152,218
69,365
323,294
544,877
21,691
56,472
91,254
17,842
32,801
44,876
19,464
51,533
114,120
58,997
140,806
250,250
11 Leases
This note provides information where the Group is a lessee.
11(a) Amounts recognised in the Consolidated Statement of Financial Position
The Consolidated Statement of Financial Position shows the following amounts relating to leases:
Right-of-use assets
Buildings
Total
Lease liabilities
Current
Non-current
Total
11(b) Amounts recognised in the Consolidated Statement of Comprehensive Income
The Consolidated Statement of Comprehensive Income shows the following amounts relating to leases
Depreciation charge for right-of-use assets
Buildings
Total
Interest expense (included in finance cost)
The total cash outflow for leases in 2020 was £173,288 (2019: £138,630).
62
Actual Experience plc Annual Report 2020
2020
£
782,606
782,606
2020
£
112,302
719,177
831,479
2019
£
894,398
894,398
2019
£
107,493
866,134
973,627
2020
£
111,788
111,788
2019
£
111,788
111,788
31,140
34,687
11(c) The Group’s leasing activities and how these are accounted for
The Group leases an office. The lease commenced in February 2016 and has a fixed term ending September 2027. The lease agreement does
not impose any covenants other than the security in the leased assets that are held by the lessor. Leased assets may not be used as security
for borrowing purposes.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the
following lease payments:
• Fixed payments, less any lease incentive receivable.
• Payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally
the case for leases in the Group, the Group’s incremental borrowing rate is used, being the rate that the Group would have to pay to borrow
the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security
and conditions.
To determine the incremental borrowing rate, the Group has used rates obtained from its principal bankers.
The Group is exposed to potential future increases in variable lease payments based on rent reviews which are not included in the lease
liability until they take effect. When adjustments to lease payments take effect, the lease liability is reassessed and adjusted against the
right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to
produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use assets are measured at cost comprising the amount of the initial measurement of the lease liability.
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.
Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognised on a straight-line
basis as an expense in the Consolidated Statement of Comprehensive Income. Short-term leases are leases with a lease term of 12 months or
less. Low-value assets comprise IT equipment and small items of office furniture.
12 Intangible assets
Cost
At 1 October 2018
Additions
At 30 September 2019
Additions
At 30 September 2020
Accumulated amortisation and impairment losses
At 1 October 2018
Charge for the year
At 30 September 2019
Charge for the year
At 30 September 2020
Net book value
At 30 September 2020
At 30 September 2019
At 30 September 2018
Development
costs
£
3,112,397
1,196,046
4,308,443
1,132,440
5,440,883
1,533,170
982,808
2,515,978
952,124
3,468,102
1,972,781
1,792,465
1,579,227
Amortisation and impairment charge
The amortisation of development costs is recognised within administrative expenses in the Consolidated Statement of Comprehensive Income.
Actual Experience plc Annual Report 2020
63
Other informationStrategic reportFinancial statementsGovernance NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 SEPTEMBER 2020
13 Trade and other receivables
Trade receivables
Other receivables
Loan to Employee Benefit Trust
Prepayments and accrued income
2020
£
427,458
102,704
65,148
95,204
690,514
2019
£
425,636
67,380
46,849
141,805
681,670
Contractual payment terms with the Group’s customers are typically 30 to 90 days.
There are no provisions for impairment losses in respect of trade and other receivables. There are no trade receivables past due and not
impaired and there is no provision for impaired receivables in either 2020 or 2019. The credit quality of those trade receivables not past due and
not impaired is considered good. The Directors believe that the carrying value of trade and other receivables represents their fair value. In
determining the recoverability of trade receivables, the Board considers any change in the credit quality of the receivable from the date credit
was granted up to the reporting date. For details on credit risk management policies, refer to note 3(i).
14 Cash and cash equivalents
Bank credit rating:
A+
BBB+
BBB-
Cash and cash equivalents
2020
£
2,660,809
93,465
—
2019
£
3,754,036
—
4,122,598
2,754,274
7,876,634
The above gives an analysis of the credit rating of the financial institutions where cash balances are held.
All of the Group’s cash and cash equivalents at 30 September 2020 are held in instant access current accounts or short-term deposit accounts.
Balances are denominated in UK sterling (£) and US dollars ($) as follows:
Denominated in UK sterling
Denominated in US dollars
Cash and cash equivalents
2020
£
2019
£
2,482,598
271,676
7,015,209
861,425
2,754,274
7,876,634
The Directors consider that the carrying value of cash and cash equivalents approximates to their fair value. For details of credit risk
management policies, refer to note 3.
15 Trade and other payables
Trade payables
Other tax and social security
Other creditors
Accruals
Deferred income
2020
£
116,155
122,541
44,965
194,582
41,150
519,393
2019
£
176,648
136,374
48,042
296,260
32,102
689,426
Trade and other payables principally comprise amounts outstanding for trade purchases and ongoing costs. They are non-interest bearing and
are normally settled on 30 to 45 days terms.
The Directors consider that the carrying value of trade and other payables approximate their fair value.
The Group has financial risk management policies in place to ensure that all payables are paid within the credit time frame and no interest has
been charged by any suppliers as a result of late payment of invoices during the year.
16 Financial instruments
The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:
• Trade and other receivables
• Trade and other payables
• Cash and cash equivalents
• Loan to Employee Benefit Trust
Investments – term deposits
•
64
Actual Experience plc Annual Report 2020
2020
£
2019
£
2,754,274
427,458
18,662
7,876,634
425,636
26,832
3,200,394
8,329,102
2020
£
2019
£
116,155
112,302
280,697
509,154
114,281
114,281
370,445
370,445
234,451
234,451
176,648
107,493
376,404
660,545
111,343
111,343
357,917
357,917
396,874
396,874
1,228,331
1,526,679
The carrying values of trade and other receivables, trade and other payables and cash and cash equivalents approximate their fair values due
to their relatively short periods to maturity.
Financial assets
The Group held the following financial assets:
Due within three months
Cash and cash equivalents
Trade receivables
Other receivables
Financial liabilities
The Group held the following financial liabilities held at amortised cost (non-derivatives):
Non-derivative financial liabilities
Due within one year
Trade payables
Lease liabilities
Other payables
Total due within one year
Due between one and two years
Lease liabilities
Total due between one and two years
Due between two and five years
Lease liabilities
Total due between two and five years
Due after five years
Lease liabilities
Total due after five years
Total financial liabilities
17 Equity
17(a) Share capital and share premium
Ordinary shares
Fully paid
2020
Shares
2019
Shares
2020
£
2019
£
47,642,124
47,124,561
34,863,633
34,800,651
Total share capital and share premium
47,642,124
47,124,561
34,863,633
34,800,651
Movements in ordinary shares
Details
Opening balance at 1 October 2018
Placing of shares
Less: transaction costs arising on share issues
Balance at 30 September 2019
Issue of shares from exercises of share options
Issue of shares from employee share schemes
Number of
shares
44,902,338
2,222,223
—
47,124,561
512,250
5,313
Share
capital
£
89,805
4,444
—
94,249
1,024
11
Share
premium
£
31,928,013
2,995,557
(217,168)
34,706,402
56,273
5,674
Total
£
32,017,818
3,000,001
(217,168)
34,800,651
57,297
5,685
Balance at 30 September 2020
47,642,124
95,284
34,768,349
34,863,633
Ordinary shares have a par value of 0.2 pence. They entitle the holder to participate in dividends, and to share in the proceeds of winding up
the Company in proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present
at a meeting, in person or by proxy, is entitled to one vote, and on a poll each share is entitled to one vote.
As permitted by the provisions of the Companies Act 2006, the Company does not have a limited amount of authorised share capital.
Actual Experience plc Annual Report 2020
65
Other informationStrategic reportFinancial statementsGovernance 2020
£
2019
£
(24,795,182)
(4,681,488)
(15,350)
(174,842)
(18,959,190)
(5,911,950)
(7,241)
83,199
(29,666,862)
(24,795,182)
2020
£
2019
£
2,754,274
(831,479)
7,876,634
(973,627)
1,922,795
6,903,007
2,754,274
(831,479)
7,876,634
(973,627)
1,922,795
6,903,007
Leases
£
(1,077,570)
138,630
—
(34,687)
Cash
£
10,776,516
(2,904,232)
4,350
—
Total
£
9,698,946
(2,765,602)
4,350
(34,687)
(973,627)
7,876,634
6,903,007
173,288
—
(31,140)
(5,119,015)
(3,345)
—
(4,945,727)
(3,345)
(31,140)
(831,479)
2,754,274
1,922,795
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 SEPTEMBER 2020
17 Equity continued
17(b) Accumulated losses
The movement in accumulated losses is as follows:
Balance at 1 October
Loss for the year
Items of other comprehensive expense recognised directly in accumulated losses
Share-based payment (credit)/charge
Balance at 30 September
18 Cash flow information
Net funds reconciliation
This section sets out an analysis of net funds and the movement in net funds for each of the periods presented.
Net funds
Cash and cash equivalents
Lease liabilities
Net funds
Cash and cash equivalents
Gross debt – variable interest rates
Net funds
Net funds at 1 October 2018
Cash flows
Foreign exchange adjustments
Other changes
Net funds at 30 September 2019
Cash flows
Foreign exchange adjustments
Other changes
Net funds at 30 September 2020
Other changes include non-cash movements and interest expenses arising on lease liabilities.
19 Commitments
19(a) Capital commitments
The Group had no capital commitments at 30 September 2020 (2019: none).
19(b) Non-cancellable operating leases
The Group does not have any short-term operating leases.
66
Actual Experience plc Annual Report 2020
20 Share-based payments
Share options
The Company has a share option plan under which it grants options over ordinary shares to certain employees. Options are exercisable at a
price equal to the estimated market price of the Company’s shares on the date of the grant. The vesting period for shares is usually four years.
The options are settled in equity once exercised. If the options remain unexercised for a period after ten years from the date of grant, the
options expire. Options are forfeited if the employee leaves the Group before the options vest.
Details of the number of share options and the weighted average exercise price outstanding during the year are as follows:
At 1 October 2018
Granted in the year
Forfeited in the year
At 30 September 2019
Granted in the year
Exercised in the year
Forfeited in the year
Transfer
At 30 September 2020
Number of share interests
EMI
options
Unapproved
options
1,838,300
72,500
(82,500)
1,828,300
—
(512,250)
(290,500)
(30,000)
360,000
—
(50,000)
310,000
70,000
—
(85,000)
30,000
CSOP
options
137,500
172,500
(42,500)
Total
2,335,800
245,000
(175,000)
267,500
2,405,800
50,000
—
—
—
120,000
(512,250)
(460,500)
—
995,550
325,000
232,500
1,553,050
Weighted
average
exercise price
per share
(pence)
164.29
192.50
233.70
163.09
58.25
11.18
266.07
—
174.55
There were 1,220,925 share options outstanding at 30 September 2020 (30 September 2019: 1,806,925), which were eligible to be exercised.
The remaining options were not eligible to be exercised as these are subject to employment period vesting conditions, some of which had not
been met at 30 September 2020.
Options have a range of exercise prices from 9.09 pence per share to 302.5 pence per share and have a weighted contractual life of 5.44 years.
Details of the outstanding share options are given below:
Grant date
22/06/2011
17/10/2011
01/10/2013
23/12/2013
09/07/2014
15/09/2014
24/10/2014
29/05/2015
05/06/2015
29/06/2015
24/07/2015
14/10/2015
07/03/2016
26/05/2016
19/01/2017
24/05/2017
01/08/2017
31/10/2017
18/01/2018
04/06/2018
04/10/2018
15/01/2019
17/05/2019
07/08/2019
01/10/2019
27/02/2020
Outstanding
Employees
entitled
Number of
options
Performance
conditions
1
2
1
1
2
2
1
2
1
4
1
4
1
3
11
8
1
8
9
2
6
3
11
4
3
6
4,700
60,600
227,250
22,500
140,000
80,000
50,000
80,000
20,000
55,000
30,000
70,000
15,000
60,000
120,000
77,500
25,000
60,000
48,000
10,000
30,000
20,000
85,000
42,500
20,000
100,000
1,553,050
Time served
Time served
Time served
Time served
Time served
Time served
Time served
Time served
Time served
Time served
Time served
Time served
Time served
Time served
Time served
Time served
Time served
Time served
Time served
Time served
Time served
Time served
Time served
Time served
Time served
Time served
Exercise
price(p)
9.091
9.091
14.255
54.500
186.500
184.000
175.000
207.500
207.500
212.500
212.500
262.500
277.500
282.500
277.500
302.500
290.000
270.000
299.000
275.000
270.000
210.000
185.000
135.000
112.000
47.500
Earliest
exercise
date
15/10/2011
17/10/2011
01/10/2014
01/10/2014
09/07/2015
06/01/2015
24/10/2015
25/11/2015
05/06/2016
29/05/2016
08/06/2016
17/08/2016
16/11/2016
07/03/2017
20/06/2017
01/01/2018
26/06/2018
31/10/2017
03/04/2018
04/09/2018
11/06/2019
06/11/2019
17/05/2019
04/10/2019
23/09/2020
04/11/2020
Expiry
date
22/06/2021
17/10/2021
01/10/2023
23/12/2023
09/07/2024
15/09/2024
24/10/2024
29/05/2025
05/06/2025
29/06/2025
24/07/2025
14/10/2025
07/03/2026
26/05/2026
19/01/2027
24/05/2027
01/08/2027
31/10/2027
18/01/2028
04/06/2028
04/10/2028
15/01/2029
17/05/2029
07/08/2029
01/10/2029
27/02/2030
Actual Experience plc Annual Report 2020
67
Other informationStrategic reportFinancial statementsGovernance NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 SEPTEMBER 2020
20 Share-based payments continued
The fair values were calculated using the Black-Scholes pricing model. The inputs into the model for options granted during the year were
as follows:
Dividend yield
Expected volatility
Risk-free interest rate (%)
Life of options (years)
Weighted average exercise price (pence)
Weighted average share price (pence)
Granted on
1 October
2019
Granted on
27 February
2020
0%
20.8%
1.50%
10
112.0p
112.0p
0%
20.8%
1.50%
10
47.5p
47.5p
The Group uses historical data to estimate option exercise and employee retention within the valuation model. Expected volatilities are based
upon an estimate by the Directors taking account of the implied volatility as determined from the Company’s historical share price movements.
The risk-free rate for the year within the contractual life of the option is based on the UK gilt yield curve at the time of the grant. Any share
options which are not exercised within ten years from the date of grant will expire.
The Group recognised a credit of £174,842 (2019: charge of £83,199) in the Consolidated Statement of Comprehensive Income in respect of
equity-settled share-based payment transactions in the year.
21 Related party transactions
Remuneration of key personnel
The remuneration of the Directors, who are the key management personnel of the Group and the Company, is shown below:
Executive Directors – aggregate
Short-term employment benefits*
Non-executive Directors – aggregate
Short-term employment benefits*
Total
2020
£
2019
£
445,142
439,182
111,544
556,686
133,427
572,609
*
In addition, certain Directors hold share options in the Company for which a fair value share-based charge of £3,650 has been recognised in the Consolidated Statement
of Comprehensive Income (2019: £3,384).
Amounts outstanding to key personnel
As at 30 September 2020, no amounts were due to Directors in relation to reimbursement of fees and expenses arising in the ordinary course
of business (30 September 2019: £nil).
Transactions with shareholders and other related parties
During the year the Group entered into transactions, in the ordinary course of business, with shareholders and other related parties.
Transactions entered into, along with trading balances outstanding, are as follows:
Related party:
IP Group plc (see note below)
Purchases – Non-executive Director fees
Note: IP Group plc is a shareholder of the Company.
Amounts
invoiced
to related
party
2020
£
—
—
Amounts
invoiced
by related
party
2020
£
4,435
4,435
Amounts
invoiced
to related
party
2019
£
—
—
Amounts
invoiced
by related
party
2019
£
26,383
26,383
There were no amounts outstanding due from or to the related parties at 30 September 2020 (2019: £0).
During the year ended 30 September 2020, the Company entered into numerous transactions with its subsidiary company, which net off on
consolidation – these have not been shown above.
Ultimate controlling party
The Company has no single ultimate controlling party.
22 Post balance sheet event
In January 2021, the Group successfully raised from existing and new shareholders gross proceeds of £10,000,000 through a share placing at
105p per share.
68
Actual Experience plc Annual Report 2020
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2020
At 1 October 2018
Loss and total comprehensive expense for the year
Issue of shares
Expenses of share issues
Share-based payment expense
Share-based payment credit in respect of services provided to
subsidiary undertaking
At 30 September 2019
Loss and total comprehensive expense for the year
Issue of shares
Share-based payment credit
Share-based payment credit in respect of services provided to
subsidiary undertaking
At 30 September 2020
Share
capital
£
89,805
—
4,444
—
—
Share
premium
£
31,928,013
—
2,995,557
(217,168)
—
Accumulated
losses
£
(19,163,949)
(5,995,642)
—
—
97,165
Total
equity
£
12,853,869
(5,995,642)
3,000,001
(217,168)
97,165
—
—
(13,966)
(13,967)
94,249
34,706,402
(25,076,392)
9,724,259
—
1,035
—
—
—
61,947
—
(4,693,883)
—
(117,827)
(4,693,883)
62,982
(117,827)
—
(57,248)
(57,248)
95,284
34,768,349
(29,945,350)
4,918,283
Actual Experience plc Annual Report 2020
69
Other informationStrategic reportFinancial statementsGovernance COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2020
ASSETS
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Investments
TOTAL NON-CURRENT ASSETS
Current assets
Trade and other receivables
Income tax receivable
Cash and cash equivalents
TOTAL CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
Non-current liabilities
Lease liabilities
Deferred tax
TOTAL NON-CURRENT LIABILITIES
Current liabilities
Trade and other payables
Lease liabilities
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Share capital
Share premium
Accumulated losses
TOTAL EQUITY
Note
C3
11
12
C4
C5
C10
C6
2020
£
2019
£
58,950
782,606
1,972,781
42,986
140,691
894,398
1,792,465
100,234
2,857,323
2,927,788
683,178
295,550
2,660,809
673,914
296,866
7,801,487
3,639,537
8,772,267
6,496,860
11,700,055
11
C10
(719,177)
(7,079)
(866,134)
(14,317)
(726,256)
(880,451)
C7
11
(740,019)
(112,302)
(987,852)
(107,493)
(852,321)
(1,095,345)
(1,578,577)
(1,975,796)
4,918,283
9,724,259
17(a)
17(a)
C8
95,284
34,768,349
(29,945,350)
94,249
34,706,402
(25,076,392)
4,918,283
9,724,259
The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the parent company’s
statement of comprehensive income. The parent company’s result for the year ended 30 September 2020 was a loss of £4,693,883
(2019: loss of £5,995,642).
Approved by the Board of Directors and authorised for issue on 24 February 2021.
70
Actual Experience plc Annual Report 2020
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Cash flows from operating activities
Loss before tax
Adjustment for non-cash items:
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Amortisation of intangible assets
Non-cash employee benefits (credit)/expense — share based payments (credit)/expense
Finance income
Finance expense
Operating cash outflow before changes in working capital
Movement in trade and other receivables
Movement in trade and other payables
Cash flows used in operations
Tax received
Net cash outflow from operating activities
Cash flows from investing activities
Development of intangible assets
Purchases of property, plant and equipment
Finance income
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from issue of share capital, net of costs
Principal element of lease payments
Employee Benefit Trust — loan (repayment)/advance
Net cash (outflow)/inflow from financing activities
Decrease in cash and cash equivalents
Cash and cash equivalents at start of year
Cash and cash equivalents at end of year
2020
£
2019
£
(4,996,671)
(6,335,965)
97,395
111,788
952,124
(117,827)
(13,915)
31,140
(3,935,966)
9,035
(247,829)
(4,174,760)
296,866
124,191
111,788
982,808
97,165
(54,130)
34,687
(5,039,456)
(23,580)
(118,562)
(5,181,598)
766,545
(3,877,894)
(4,415,053)
(1,132,440)
(15,654)
13,915
(1,196,046)
(15,612)
54,130
(1,134,179)
(1,157,528)
62,982
(173,288)
(18,299)
2,782,833
(138,630)
27,101
(128,605)
2,671,304
(5,140,678)
7,801,487
(2,901,277)
10,702,764
2,660,809
7,801,487
Actual Experience plc Annual Report 2020
71
Other informationStrategic reportFinancial statementsGovernance NOTES TO THE COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
C1. Principal accounting policies
The financial statements of the Company are presented as required by the Companies Act 2006 and in accordance with IFRS.
The principal accounting policies adopted are the same as for those set out in the Group’s financial statements.
C2. Company results
The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the parent company’s statement
of comprehensive income. The parent company’s result for the year ended 30 September 2020 was a loss of £4,693,883 (2019: loss of
£5,995,642).
The audit fee for the Company is set out in note 5 of the Group’s financial statements.
C3. Property, plant and equipment
Leasehold
improvements
£
Fixtures,
fittings and
equipment
£
Computer
equipment
£
Cost
At 1 October 2018
Additions
At 30 September 2019
Additions
Disposals
At 30 September 2020
Accumulated depreciation
At 1 October 2018
Charge for the year
At 30 September 2019
Charge for the year
Disposals
At 30 September 2020
Net book value
At 30 September 2020
At 30 September 2019
At 30 September 2018
173,909
—
173,909
—
—
173,909
82,655
34,782
117,437
34,781
—
81,270
4,737
86,007
1,200
—
87,207
36,394
16,812
53,206
16,159
—
Total
£
574,417
15,612
590,029
15,836
(7,540)
319,238
10,875
330,113
14,636
(7,540)
337,209
598,325
206,098
72,597
278,695
46,455
(7,358)
325,147
124,191
449,338
97,395
(7,358)
152,218
69,365
317,792
539,375
21,691
56,472
91,254
17,842
32,801
44,876
19,417
51,418
113,140
58,950
140,691
249,270
C4. Investments
At 30 September 2020, the Company held the following investments in subsidiary companies:
Undertaking
Sector
Share of
issued
capital and
voting rights
2020
Actual Experience Inc.
251 Little Falls Drive, Wilmington, Delaware, Newcastle, USA, 19808
Sales and marketing services
100%
Cost
At 1 October 2018
Disposals
At 30 September 2019
Disposals
At 30 September 2020
Impairment
At 1 October 2018, 30 September 2019
and 30 September 2020
Carrying value at 30 September 2020
Carrying value at 30 September 2019
Carrying value at 30 September 2018
£
114,201
(13,967)
100,234
(57,248)
42,986
—
42,986
100,234
114,201
Movements in the year arise from adjustments for share-based payment charges for the Group’s subsidiary undertaking which are accounted
for as capital contributions.
72
Actual Experience plc Annual Report 2020
C5. Trade and other receivables
Trade receivables
Other receivables
Loan to Employee Benefit Trust
Prepayments and accrued income
2020
£
427,458
102,704
65,148
87,868
683,178
2019
£
425,636
67,380
46,849
134,049
673,914
Contractual payment terms with the Company’s customers are typically 30 to 90 days.
There are no receivables for which allowance has been made. There are no provisions for impairment losses in respect of trade and other
receivables. There are no receivables at any of the year ends which were considered to be past due. The Directors believe that the carrying
value of trade and other receivables represents their fair value. In determining the recoverability of trade receivables the Board considers any
change in the credit quality of the receivable from the date credit was granted up to the reporting date. For details on credit risk management
policies, refer to note 3(i).
C6. Cash and cash equivalents
Bank credit rating:
A+
BBB-
Cash and cash equivalents
2020
£
2019
£
2,660,809
—
3,678,889
4,122,598
2,660,809
7,801,487
The above gives an analysis of the credit rating of the financial institutions where cash balances are held.
All of the Company’s cash and cash equivalents at 30 September 2020 are held in instant access current accounts or short-term deposit
accounts. Balances are denominated in UK sterling (£) and US dollars ($) as follows:
Denominated in UK sterling
Denominated in US dollars
Cash and cash equivalents
2020
£
2019
£
2,482,599
178,210
7,015,209
786,278
2,660,809
7,801,487
The Directors consider that the carrying value of cash and cash equivalents approximates to their fair value. For details of credit risk
management policies, refer to note 3(i).
C7. Trade and other payables
Trade payables
Other tax and social security
Other creditors
Amounts due to subsidiary undertakings
Accruals and deferred income
2020
£
105,064
122,541
41,235
236,181
234,998
740,019
2019
£
164,046
136,374
44,121
315,656
327,655
987,852
Trade and other payables principally comprise amounts outstanding for trade purchases and ongoing costs. They are non-interest bearing and
are normally settled on 30 to 45 days terms.
The Directors consider that the carrying value of trade and other payables approximate their fair value.
The Company has financial risk management policies in place to ensure that all payables are paid within the credit time frame and no interest
has been charged by any suppliers as a result of late payment of invoices during the year.
Actual Experience plc Annual Report 2020
73
Other informationStrategic reportFinancial statementsGovernance NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 30 SEPTEMBER 2020
C8. Accumulated losses
At 1 October 2018
Loss for the year
Share-based payment charge
Share-based payment credit in respect of services provided to subsidiary undertaking
At 30 September 2019
Loss for the year
Share-based payment credit
Share-based payment credit in respect of services provided to subsidiary undertaking
At 30 September 2020
C9. Employee costs
The average monthly number of persons (including Directors) employed by the Company during the year was:
Directors
Sales and support
Software development
Administration
The aggregate remuneration, including Directors, comprised:
Wages and salaries
Social security costs
Other pension costs
Share-based (credit)/expense (note 20)
Directors’ remuneration comprised:
Emoluments for qualifying services
Accumulated
losses
£
(19,163,949)
(5,995,642)
97,165
(13,966)
(25,076,392)
(4,693,883)
(117,827)
(57,248)
(29,945,350)
2020
Number
2019
Number
5
38
29
9
81
2020
£
6
41
33
10
90
2019
£
4,625,397
555,564
294,084
(117,827)
4,885,948
576,620
252,793
97,165
5,357,218
5,812,526
543,327
539,183
Directors’ emoluments disclosed above include £154,982 paid to the highest paid Director (2019: £154,211); this Director did not exercise any
share options in the year and no options are due under incentive plans.
The Directors’ remuneration report on pages 43 and 44 details the Directors’ interests in share options.
Included within total employee costs of £5,357,218 (2019: £5,812,526) is £1,132,440 (2019: £1,196,046) which has been capitalised within
development costs in accordance with IAS 38 (see note 12). The remaining £4,224,778 (2019: £4,616,480) has been expensed in the
Consolidated Statement of Comprehensive Income.
C10. Taxation
Deferred tax
Deferred tax relates to the following:
Accelerated depreciation for tax purposes
Deferred tax liability
Reconciliation of deferred tax liabilities
Balance at the beginning of the year
Credit to the Consolidated Statement of Comprehensive Income
Balance at the end of the year
74
Actual Experience plc Annual Report 2020
2020
£
7,079
7,079
2020
£
14,317
(7,238)
7,079
2019
£
14,317
14,317
2019
£
26,863
(12,546)
14,317
Unrecognised deferred tax assets/(liabilities)
The Company had unrecognised deferred tax assets/(liabilities) as follows:
At 1 October 2019
Deferred tax asset
Deferred tax liability
Net unrecognised asset/(liability)
At 30 September 2020
Deferred tax asset
Deferred tax liability
Net unrecognised asset/(liability)
Tax
losses
£
Lease
liability
£
Right-of-use
assets
£
Total
£
5,160,000
—
5,160,000
Tax
losses
£
6,608,000
—
6,608,000
165,517
—
165,517
—
(152,048)
5,325,517
(152,048)
(152,048)
5,173,469
Lease
liability
£
Right-of-use
assets
£
Total
£
157,981
—
157,981
—
(148,695)
6,765,981
(148,695)
(148,695)
6,617,286
The Company has not recognised the net deferred tax asset in respect of tax losses in the Statement of Financial Position due to the
uncertainty in the timing of when it is probable that future taxable profit will be available against which the unused tax losses and unused tax
credits can be utilised. The Company has not recognised the net deferred tax asset of £9,286 (2019: £13,469) arising on the recognition of
right-of-use assets and the associated lease liability following the adoption of IFRS 16 on the basis that it is not material.
The Company has incurred qualifying expenditure on research and development projects which has given rise to tax credits due from
HM Revenue and Customs to the Company. At 30 September 2020, an amount of £295,550 was due from HMRC (2019: £296,866).
C11. Related party transactions
Details of external related party transactions are set out in note 21. The Company has entered into transactions with its wholly-owned
subsidiary undertaking, Actual Experience Inc. during the year. The Company incurred costs of £283,657 charged by Actual Experience Inc.
during the year (2019: £827,798). At 30 September 2020, an amount of £236,181 was due to the subsidiary company (30 September 2019:
£315,656 due to the subsidiary company).
Actual Experience plc Annual Report 2020
75
Other informationStrategic reportFinancial statementsGovernance NOTICE OF ANNUAL GENERAL MEETING
Notice is given that the Annual General Meeting of Actual
Experience plc (the Company) will be held virtually at 11am on
Monday 29 March 2021 for the purposes below. In light of public
health advice in response to the COVID-19 outbreak, including to limit
public gatherings, which would prohibit shareholders attending the
meeting, the Company, with regret, has determined that, in
accordance with the Corporate Insolvency and Governance Act 2020
(as amended), the Annual General Meeting will be held virtually as a
closed meeting with the minimum number of members legally
required to be present.
To consider and, if thought fit, to pass the following
resolutions as ordinary resolutions:
1. To receive the Company’s Annual Financial Statements, Strategic
Report and Directors’ and auditors’ reports for the year ended
30 September 2020.
2. To re-elect Stephen Davidson as a Director.
3. To re-elect Dave Page as a Director.
4. To re-elect Steve Bennetts as a Director.
5. To re-elect Sir Bryan Carsberg as a Director.
6. To re-elect Kirsten English as a Director.
7. To reappoint PricewaterhouseCoopers LLP as auditors of
the Company.
8. To authorise the Directors to determine the remuneration of
the auditors.
9. That, pursuant to section 551 of the Companies Act 2006 (Act),
the Directors be and are generally and unconditionally authorised
to exercise all powers of the Company to allot Relevant Securities
up to an aggregate nominal amount of £38,123 provided that
(unless previously revoked, varied or renewed) these authorities
shall expire at the conclusion of the next Annual General Meeting
of the Company after the passing of this resolution or on the date
falling 18 months after the passing of this resolution (whichever is
the earlier), save that, in each case, the Company may make an
offer or agreement before the authority expires which would or
might require Relevant Securities to be allotted after the authority
expires and the Directors may allot Relevant Securities pursuant
to any such offer or agreement as if the authority had not expired.
In this resolution, ‘Relevant Securities’ means shares in the
Company or rights to subscribe for or to convert any security into
shares in the Company; a reference to the allotment of Relevant
Securities includes the grant of such a right; and a reference to
the nominal amount of a Relevant Security which is a right to
subscribe for or to convert any security into shares in the
Company is to the nominal amount of the shares which may be
allotted pursuant to that right.
These authorities are in substitution for all existing authorities
under section 551 of the Act (which, to the extent unused at the
date of this resolution, are revoked with immediate effect from the
passing of this resolution).
To consider and, if thought fit, to pass the following
resolution as a special resolution:
10. That, subject to the passing of resolution 9 and pursuant to section
570 of the Act, the Directors be and are generally empowered to
allot equity securities (within the meaning of section 560 of the
Act) for cash pursuant to the authorities granted by resolution 9 as
if section 561(1) of the Act did not apply to any such allotment,
provided that this power shall be limited to:
10.1 the allotment of equity securities in connection with an offer
of equity securities (whether by way of a rights issue, open
offer or otherwise):
10.1.1
to holders of ordinary shares in the capital of the
Company in proportion (as nearly as practicable) to
the respective numbers of ordinary shares held by
them; and
10.1.2 to holders of other equity securities in the capital of the
Company, as required by the rights of those securities
or, subject to such rights, as the Directors otherwise
consider necessary, but subject to such exclusions or
other arrangements as the Directors may deem
necessary or expedient in relation to treasury shares,
fractional entitlements, record dates or any legal or
practical problems under the laws of any territory or
the requirements of any regulatory body or stock
exchange; and
10.2 the allotment of equity securities otherwise than pursuant to
paragraph 10.1 of this resolution) up to an aggregate nominal
amount of £11,436, and (unless previously revoked, varied or
renewed) this power shall expire at the conclusion of the next
Annual General Meeting of the Company after the passing of
this resolution or on the date falling 18 months after the
passing of this resolution (whichever is the earlier), save that
the Company may make an offer or agreement before this
power expires which would or might require equity securities
to be allotted for cash after this power expires and the
Directors may allot equity securities for cash pursuant to any
such offer or agreement as if this power had not expired.
This power is in substitution for all existing powers under section 570
of the Act (which, to the extent unused at the date of this resolution,
are revoked with immediate effect from the passing of this resolution).
By order of the Board
Roy Stephen (Steve) Bennetts
Company Secretary
24 February 2021
Registered office
Quay House
The Ambury
Bath
BA1 1UA
United Kingdom
Registered in England and Wales No. 06838738
76
Actual Experience plc Annual Report 2020
NOTES RELATING TO ANNUAL GENERAL MEETING
The following notes remain subject to UK Government restrictions
that may be in place at the time of the Annual General Meeting arising
out of the COVID-19 situation.
Entitlement to attend and vote
1. In light of public health advice in response to the COVID-19
outbreak, including to limit public gatherings, which would
prohibit shareholders attending the meeting, the Company,
with regret, has determined that, in accordance with the
Corporate Insolvency and Governance Act 2020 (as
amended), the Annual General Meeting will be held virtually
as a closed meeting with the minimum number of members
legally required to be present.
Proxies
2. A member entitled to attend and vote at the meeting may appoint
one or more proxies to exercise all or any of the member’s rights
to attend, speak and vote at the meeting. A proxy need not be a
member of the Company but must attend the meeting for the
member’s vote to be counted. If a member appoints more than one
proxy to attend the meeting, each proxy must be appointed to
exercise the rights attached to a different share or shares held by
the member. If a member wishes to appoint more than one proxy
they may do so at www.signalshares.com. The appointment of a
proxy will not preclude a shareholder from attending and voting in
person at the meeting.
3. You will not receive a proxy card in the post. You may vote your
shares electronically at www.signalshares.com. On the home page
search ‘Actual Experience plc’ and then log in or register using
your Investor Code. To vote, click on the ‘Vote Online Now’ button.
To be effective, the proxy vote must be submitted at www.
signalshares.com so as to have been received by the Company’s
registrars not less than 48 hours (excluding weekends and public
holidays) before the time appointed for the meeting or any
adjournment of it. By registering on the Signal shares portal at
www.signalshares.com, you can manage your shareholding,
including:
− cast your vote;
− change your dividend payment instruction;
− update your address;
− select your communication preference.
4. Any power of attorney or other authority under which the proxy
is submitted must be returned to the Company’s Registrars,
Link Group, PXS 1, Central Square, 29 Wellington Street, Leeds,
LS1 4DL. If a paper form of proxy is requested from the registrar,
it should be completed and returned to Link Group, PXS 1, Central
Square, 29 Wellington Street, Leeds, LS1 4DL to be received not
less than 48 hours before the time of the meeting.
If you need help with voting online, or require a paper proxy form,
please contact our Registrar, Link Group, by email at enquiries@
linkgroup.co.uk, or you may call Link on 0371 664 0391 if calling
from the UK, or +44 (0) 371 664 0391 if calling from outside of the
UK. We are open between 9.00 a.m. – 5.30 p.m., Monday to Friday
excluding public holidays in England and Wales.
5. CREST members who wish to appoint a proxy or proxies for the
meeting (or any adjournment of it) through the CREST electronic
proxy appointment service may do so by using the procedures
described in the CREST Manual. CREST personal members or
other CREST sponsored members, and those CREST members
who have appointed a voting service provider(s), should refer to
their CREST sponsor or voting service provider(s), who will be able
to take the appropriate action on their behalf.
6. In order for a proxy appointment or instruction made using the
CREST service to be valid, the appropriate CREST message (a
‘CREST Proxy Instruction’) must be properly authenticated in
accordance with Euroclear UK & Ireland Limited’s specifications
and must contain the information required for such instructions,
as described in the CREST Manual. The message, regardless of
whether it constitutes the appointment of a proxy or is an
amendment to the instruction given to a previously appointed
proxy, must, in order to be valid, be transmitted so as to be
received by Link Group (ID RA10) no later than 11.00am
on 27 March 2021 (or, if the meeting is adjourned, no later than
48 hours before the time of any adjourned meeting). For this
purpose, the time of receipt will be taken to be the time (as
determined by the timestamp applied to the message by the
CREST Applications Host) from which Link Group is able to
retrieve the message by enquiry to CREST in the manner
prescribed by CREST. After this time, any change of instructions
to proxies appointed through CREST should be communicated to
the appointee through other means.
7. CREST members and, where applicable, their CREST sponsors or
voting service providers, should note that Euroclear UK & Ireland
Limited does not make available special procedures in CREST for
any particular messages. Normal system timings and limitations
will therefore apply in relation to the input of CREST Proxy
Instructions. It is the responsibility of the CREST member
concerned to take (or, if the CREST member is a CREST personal
member or sponsored member or has appointed a voting service
provider(s), to procure that his or her CREST sponsor or voting
service provider(s) take(s)) such action as shall be necessary to
ensure that a message is transmitted by means of the CREST
system by any particular time. In this connection, CREST members
and, where applicable, their CREST sponsors or voting service
providers are referred, in particular, to those sections of the CREST
Manual concerning practical limitations of the CREST system
and timings.
8. The Company may treat a CREST Proxy Instruction as invalid in
the circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001.
Corporate representatives
9. A shareholder which is a corporation may authorise one or more
persons to act as its representative(s) at the meeting. Each such
representative may exercise (on behalf of the corporation) the
same powers as the corporation could exercise if it were an
individual shareholder, provided that (where there is more than
one representative and the vote is otherwise than on a show of
hands) they do not do so in relation to the same shares.
10. Shareholders are encouraged to submit questions, at least 48
hours prior to the Annual General Meeting, relating to the business
to be dealt with at the Annual General Meeting to investors@
actual-experience.com. The Company will endeavour to publish
these questions and the Company’s responses on the Company’s
website (www.actual-experience.com/about/investors) as soon as
practicable after the Annual General Meeting.
Biographical details of Directors
11. Biographical details of all those Directors who are offering
themselves for reappointment at the meeting are set out on pages
34 and 35 of the enclosed Annual Report and Financial
Statements.
Actual Experience plc Annual Report 2020
77
Strategic reportGovernanceOther informationFinancial statements GLOSSARY OF TERMS
Actual Experience plc is our legal entity. Our brand name is
Actual Experience, without the plc. Once we have introduced our
brand name, we often shorten it to Actual.
Analytics as a Service (AaaS) – Often shortened to AaaS, Analytics
as a Service is the analysis of data (in our case, performance data) in
an application hosted on the web. These web-based solutions offer
businesses an alternative to developing internal hardware setups just
to perform business analytics.
Analytics Cloud – The Actual Experience Analytics Cloud receives
data from Digital Users, applies our algorithms to the data and
produces an objective score of digital experience quality and supply
chain diagnostics. Our patented technology is based on decades of
academic research.
ARR – Annual Recurring Revenue.
Business Impact Assessment (BIA) – The analysis of an individual
employees experience of business applications in order to understand
the impact on business metrics such as operational efficiency,
revenue, wellbeing, inequality and carbon footprint.
Continuous Improvement (CI) – The continuous analysis and
reporting of prioritised areas to improve as identified in a BIA.
CRM – Customer relationship management.
Digital Supply Chain – The combination of businesses and the
technologies they provide, including networks, IT infrastructure and
applications, that deliver a digital product or service.
Digital User (DU) is the measurement software that is downloaded
by an end user to collect the measurements.
Enterprise Customer – A large, typically multinational corporation
with hundreds or thousands of sites globally.
Human Experience Management (HXM) – The ability to review and
report on a customer’s digital ecosystem over a period of time to
identify issues.
MSA – Master Services Agreement.
PO – Purchase order.
POC – Proof of concept.
Production – When a customer of Actual Experience has DUs
deployed measuring a target.
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Actual Experience plc
Quay House, The Ambury, Bath, BA1 1UA
www.actual-experience.com