Company Registration No. 06751660 (England and Wales)
Vizion Network Limited
Annual report and financial statements
for the year ended 31 December 2022
Vizion Network Limited
Company information
Directors
E J Dunne
P A Austin
M W Bourke
G J Eyles
C A Mckie
Secretary
E J Dunne
Company number
06751660
Registered office
The Deep Business Centre
Tower Street
Hull
East Yorkshire
HU1 4BG
Independent auditor
Saffery LLP
Kintail House
Beechwood Park
Inverness
IV2 3BW
Vizion Network Limited
Contents
Page
Strategic report
1 - 8
Directors' report
9 - 16
Directors' responsibilities statement
17
Independent auditor's report
18 - 21
Statement of comprehensive income
22
Statement of financial position
23
Statement of changes in equity
24
Statement of cash flows
25
Notes to the financial statements
26 - 39
Vizion Network Limited
Strategic report
For the year ended 31 December 2022
Page 1
The directors present the strategic report for the year ended 31 December 2022.
Fair review of the business
2022 saw a significant upturn in fortunes compared to the two previous years, which were severely affected by Covid and global manufacturing issues such as car supply, associated parts, and semiconductors. Whilst the impact of Covid has long subsided, the supply chain issues continued to plague the industry throughout the year though thankfully on a lesser scale compared to 2021.
Turnover increased to £321 million in 2022, up £135 million (73%) on the prior year, which was principally due to the accounting treatment associated with new service contracts with clients that have been keen to take on Vizion’s new proprietary software products.
Business volumes were up by 19% in 2022 compared with the previous year due to a combination of new business contracts and natural recovery with existing clients. Gross Profit for the year was £12.1 million, up £2.75 million (29.4%) on the prior year and principally reflects increased business volumes and the continued expansion of Vizion’s software product portfolio.
Recent times have presented challenges far above those expected by any business, but they have shown us how resilient our collaborations are and must be. These partnerships have meant that we have been able to make complex changes at speed, and on a national scale. Nothing is impossible when Vizion, customers, repairers and partners work together in harmony.
Vizion's team contains expert knowledge and lifetimes of experience, understanding the needs of repairers alongside the needs of the industry and the customer. We embrace our responsibility, endeavouring to lead by example, to drive positive change through cooperative, innovative efforts. This philosophy has helped us to overcome challenges and create opportunities that will help our network and customers to respond, recover and thrive in a forever changing future. Vizion ensures all our partners have access to the future and the tools to help them embrace and benefit from it.
Focus and collaboration is the key to success, something we embraced long before the needs of recent times. Teams across Vizion prioritise support and resources to help repairers build resilience, and to revitalise and redefine their businesses for these uncertain times.
Vizion Network Limited
Strategic report (continued)
For the year ended 31 December 2022
Page 2
Vizion have always maintained a watchful eye on the horizon; embracing the need for change and taking these opportunities to evolve, whilst respecting the disruption change can bring. This philosophy of proactive as opposed to reactive change through understanding and collaboration, has delivered many firsts for Vizion. In recent times we were the first to add Covid support; the first to provide meaningful financial support to parts and rates; the first to support repairer energy costs with energy support payments. These actions have paved the way for wider industry change in others, and there will be many other ‘firsts' to come. We have been able to collaborate to make changes sustainable, to increase profitability, to add other commercial benefits to all parties, reduce admin costs through better systems and thinking. Providing lasting support - not just support tailored for short-term disruptions – mutating negative elements in to catalysts for positive and permanent change, making the entire chain stronger for a sustainable future.
We have made it our priority to support our repairers, customers, and the industry. Whether through technology, knowledge, or partnerships, Vizion has risen to the challenge, and through honest collaboration, has continued to expand in terms of network solutions and products.
Vizion's clients have continued to experience strong growth post Covid. Vizion's transformative approach to digital and data utilisation has assisted some of these processes and produced significant operational savings, along with leading revenue generation. Client growth and success has provided aligned benefit to Vizion in terms of additional business and contractual security.
Surges created by the return of claims volumes and bottle necks from a damaged automotive infrastructure, have proved challenging in terms of parts logistics and available repair capacity. But these factors have also continued to create opportunities, and to spite these challenges and through extensive planning and expert delivery, results have exceeded expectations and those of the market in general.
The introduction of new systems, people, and products to resolve historical and also new problems within the industry, have been transformative for our business. This proactive performance has been achieved where the wider and generally more reactive industry continues to struggle, where lack of investment and preparation have left competitors in a far less advantageous position. Our goal remains to be recognised as best in class, to be a force of positive influence and change within the automotive and insurance sectors both in the UK and abroad.
Leading with new thinking and innovative strategies, products, and a business blueprint of ethical and sustainable trading has made us not only the partner of choice, but the right choice. We were again recognised by the Financial Times 1000 Fastest Growing Companies in Europe, which we are very proud of.
Vizion continues to be committed to investment in innovation through R&D, both in historic terms of concept and design, but also in regard to much wider experimentation opportunities, including our human resources, structures and our processes, and has started several new major developments within a number of our frameworks such as Nucleus™ and Triage+™, and also in our primary infrastructure, including the way in which we communicate, in an expensive reinvention we refer to as omni-channel. FinTech systems continue to grow exponentially and now incorporate expansive parts supply solutions via our Arcus™ product, attached to its associated business, AutoFlow, the leading supplier of body shop management IT systems in the UK. Maintaining not only our leading position in collision management but creating wider opportunities with each new iteration for Vizion Network and client benefits.
Vizion Network Limited
Strategic report (continued)
For the year ended 31 December 2022
Page 3
Progress in automated rules-based validation and processes, has been strong during the period and this is expected to continue for the foreseeable future. Increased use of advanced predictive analytics and automation is delivering market leading enhancements in the general and subrogated claims processes. Vastly reducing administrative cost, effort, risk, and inconvenience in these key areas, whilst reducing direct and operational cost and increasing revenues and profitability.
Our increased capabilities in terms of SaaS products over the period and the wider application of big data analytics has brought Vizion and its clients into a new era of risk and outcome management. Introduced in 2019, our data research division continues to factor highly in our future development strategies, for both Vizion and its clients in the UK and abroad.
Vizion continues to be the largest and most diverse entity of its kind, growing and maturing year-on-year, diversifying into many areas of the industry. Ensuring future proofing, continued resilience, and stability by being the partner of choice for our clients now and in the future.
A growing range of products, services, and collaborations, under constant improvement cycles, remain unmatched in the sector. Keeping Vizion at the forefront of collision management, with clients taking full advantage of the benefits of a fully integrated, highly motivated team, spanning all vehicle types and complexities, alongside digital systems, operational automation, supply, repair, mobility, and vehicle replacement bringing digital delivery with consumer duty together seamlessly.
Vizion's market share of the UK and Ireland collision repair market continues to represent more than 11% of available volumes, with the Vizion Network repairing more than 1.6m vehicles annually.
Principal risks and uncertainties
The Company's system of internal control is developed through processes which are designed to identify and evaluate the nature and extent of the risks to which the Company could be exposed. The purpose is to help manage and control risk, rather than eliminate it at the expense of opportunity, as the generation of income and the achievement of other business objectives is, in part, the reward for successful and sensible risk taking.
The principal elements of the company's system of internal control are as follows:
Control environment
The Company has an organisational structure with clearly defined levels of responsibility and authority and appropriate operation and financial reporting procedures. The Company's employees perform their duties with reference to agreed policies and operating procedures and control are documented for key business processes.
Financial reporting and information systems
The Company has and continues to develop comprehensive planning and financial reporting procedures, which include the preparation of an annual budget, cash flow projections and a strategic plan, all of which are approved by the board of directors. Monthly trading results and expenditure are reported against budget. Significant variances to budget and key performance indicators are examined monthly by Management to assess progress towards objectives and appropriate action is taken where required. Forecasts are regularly updated throughout the year, considering the financial performance for the year to date and these are also approved by the board of directors.
Vizion Network Limited
Strategic report (continued)
For the year ended 31 December 2022
Page 4
Risk Management
Management have conducted a review of the major risks to which the Company is exposed to ensure that risks arising from new activities or changes in external risk factors had been properly evaluated. Management have compiled a formalised Risk Register which is reviewed and updated on a regular basis.
Employment policies
Vizion is committed to Equal Opportunities and all appointments and promotions are on merit. Applications for positions are invited from all sections of the community through recruitment agencies, advertisements placed in national, local and specialist media and on the internet. All staff receive an annual review to assess performance and to identify career development opportunities and training requirements. Employment policies are communicated to all staff and are incorporated in a Staff Handbook.
Staff consultation is a key element of Vizion Network's employment policy with several channels of communication including regular departmental meetings and more recently the development of a company Intranet which keeps employees informed of the activities and objectives of the Company and to discuss other matters of interest or concern.
Training and career development
Vizion remains fully committed to the development of its biggest assets, its people. The insurer claims and collision market is technically driven by a number of complex factors therefore expert knowledge for internal and external staff greatly assists in supporting our sales and product offer.
We also continue to provide our staff with supplementary training both internally and externally covering areas such as IT, finance, personal development, management and compliance with GDPR, Modern Slavery and Health & Safety requirements.
Corporate Social Responsibility Statement
Vizion strives to maintain the highest standards of ethical conduct and corporate responsibility. We dedicate resources to several industry and national projects to help give back to the local and wider communities. From local charities and the sponsorship of youth football teams to our national School of Thought platform. Bringing over 500 businesses together to educate and assist 12 to 13 year olds both in the value of working and to provide them with the skills and confidence to engage with employers.
All employees have a duty and desire to follow the principles set out in this policy statement. It is the responsibility of directors and senior management to ensure that all employees who directly or indirectly report to them are fully aware of Vizion's policies and values in the conduct of the Company's business. It is also the responsibility of directors and senior management to lead by example and to demonstrate the highest standards of integrity in carrying out their duties on behalf of the Company. These issues are further safeguarded through corporate government processes and monitoring by the board and sub-committees to the board.
Vizion Network Limited
Strategic report (continued)
For the year ended 31 December 2022
Page 5
Key performance indicators
As mentioned earlier, Vizion’s turnover increased by 73% year-on-year, which is mainly associated to the take up of the new ‘Lenz’ Fintech products by clients, to optimise operational and revenue benefits. This required a change in the contractual terms and the accounting need to establish a principal as opposed to agent relationship between the parties.
As a result of these contractual changes and resulting increase in turnover, the Gross Profit percentage has dropped superficially to 3.8% (2021 – 5.0%) although it remains clear that Vizion’s underlying Gross Profit margin i.e., after adjusting for these presentational changes, remains strong and continues to grow year-on-year, due principally to increased income from its Fintech products.
The Vizion Board is pleased with the outcome of this year’s targets and objectives, seeing financial, general growth and overall performance as ahead of plan for the accounting period. Growth being one of our highest priorities, which has exceeded all expectations in real terms. Our steadfast strategy to continue enhancing our operational delivery, whilst maturing our compliance and resilience, has enabled the business to quickly realise new opportunities arising from the recovery phases of post Covid. Current opportunities continue to mature and new ones are manifesting, both at pace.
Administrative costs increased by £1.8 million (19.3%) due to continued investment in staff and IT development. The challenges associated with supply chain issues, which resulted in a significant increase in hire costs during the year, was also a contributory factor.
Operating profit rose by 270% to £1,278,867 (2021 - £345,635).
Vizion Network Limited
Strategic report (continued)
For the year ended 31 December 2022
Page 6
Modern Slavery Statement
Our statement is made in accordance with section 54 of the Modern Slavery Act 2015.
Vizion is the largest vehicle body repair network in the UK and Ireland, incorporating British Standard accredited collision repairers and Vehicle Manufacturer approved body shops. We employ over 250 people within our organisation and engage with approximately 16,500 individuals throughout our supply chain. Most of our clients are major motor insurers and vehicle manufacturers.
We operate several internal policies to ensure we are conducting business in an ethical and transparent manner. These include our Modern Slavery and Human Trafficking Policy, our Recruitment Policy, Whistleblowing Policy, and our Vizion Values/ Code of Conduct.
We conduct due diligence on all suppliers before and after they become active. This includes onsite audits to review working conditions. We also require that suppliers confirm to us that:
a) they have taken steps to eradicate modern slavery within their business;
b) they hold their own suppliers to account over modern slavery;
c) they pay their employees at least the national minimum wage/national living wage (as appropriate); and
d) we may terminate the contract at any time should any instances of modern slavery come to light.
In identifying and addressing risks, we set out to identify the extent of any slavery and human trafficking in our supply chains by:
a) conducting internal spot-checks at suppliers across the UK;
b) interviewing individuals to discuss their conditions and their rights;
c) collaborating with our suppliers to develop an awareness plan to address related issues; and
d) instituting an annual review questionnaire for existing suppliers to self-assess against the issues.
We measure activity and will know the effectiveness of the steps we are taking when:
a) no reports are received to indicate that modern slavery practices have been identified;
b) we measure the number of people completing training and passing post training questionnaires;
c) supplier self-assessment responses show no activity; and
d) due diligence spot checks reveal no signs of activity.
We have promoted cultural change through training and in the last financial year we:
a) delivered online training modules to Vizion employees;
b) distributed posters on slavery and human trafficking and workers' rights;
c) ran training seminars for our supplier managers at our offices in Hull and Wellingborough; and
d) started development of a dedicated Vizion training and knowledge resource webpage.
Vizion Network Limited
Strategic report (continued)
For the year ended 31 December 2022
Page 7
Section 172 statement
The Vizion Board considers, both individually and collectively, that they have acted in a way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members (having regard to the stakeholders and matters set out in s.172 (a-f) of the Companies Act 2006) in the decisions taken during the year ended 31 December 2022.
Long-term consequences
We want to satisfy our customers, employees, shareholders, and society in equal measure. In our industry sector we believe we are leaders, in terms of both technology and organization and aim to achieve continuous growth that is above the average. We equally aim for an appropriate return on capital that enables us to afford our balanced expenditure on research and development as well as investments made by our own efforts.
Investment decisions undertaken in the year are covered above in pages 1-8 of our Strategic Report.
In making these material decisions, the Board took conscious steps to identify and take account of the potential impact (both positively and negatively) on key stakeholder groups (such as shareholders, employees, suppliers, customers, and society as a whole) and concluded that the decisions taken, and the anticipated outcomes were aligned with promoting the success of the company for the benefit of its members.
Interest of employees
The same high performance and quality expectations followed by the Company are also placed on our employees. The safeguarding of jobs is a high priority for us, as is a fair system of remuneration. We promote our employees' personal and professional competence. Creative freedom is just as important as a readiness to express, and constructive criticism and debate are seen as opportunities.
We endeavour to provide conditions that enable our employees to perform well in safe environments. This includes a healthy work life balance, health and mental wellbeing and the pursuit of diversity among our employees. We have also worked with our employees to put in place safe working practices in line with government guidance to.
Please also refer to comments made in the Directors’ Report: sub section: Future developments.
Foster business relationships
Our services are known in the market to be innovative and reliable as well as tried and tested in industry conditions. With the continuous development of our software solutions, we develop and maintain strong relationships with both suppliers and customers alike.
Impact of operations
Our corporate responsibility is to handle resources carefully and to avoid negative impact on the environment as much as possible coupled with a conscious approach to plan for the long-term and to actively involve ourselves in shaping the conditions in which we operate.
Vizion Network Limited
Strategic report (continued)
For the year ended 31 December 2022
Page 8
Maintaining reputation
Vizion's position as a market leader is embedded in the culture of the company. Our drive to provide innovative and reliable products to our customers is at the forefront of our business decisions making process.
Acting fairly
Our intention is to behave responsibly towards our stakeholders and treat them fairly and equally, so they too may benefit from the successful delivery of our long-term plans.
E J Dunne
Director
28 September 2023
Vizion Network Limited
Directors' report
For the year ended 31 December 2022
Page 9
The directors present their annual report and financial statements for the year ended 31 December 2022.
Principal activities
The principal activities of the Company are handling vehicle accidental damage repair, via digitally integrated network solutions. Utilising and licencing, B2B and B2C facing digital systems with advanced claims integrations, analytics, and financial management solutions.
Results and dividends
The results for the year are set out on page 22.
No ordinary dividends were paid (2021: £Nil). The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
E J Dunne
P A Austin
M W Bourke
G J Eyles
C A Mckie
Research and development
R&D remains a key part of Vizion's strategic planning. Dedicated teams have been assembled to review and improve operational efficiencies and affect change in the wider market, creating opportunities, whilst others are dedicated to the developmental work of new product lines in several existing and new areas of the business.
Direct expenditure regarding HMRC definable R&D during the year amounted to £0.7 million, with a significant amount more being invested in the wider reinvention of the business’s operational elements. We expect to exceed this level significantly again in 2023.
Vizion Network Limited
Directors' report (continued)
For the year ended 31 December 2022
Page 10
Future developments
Our digital world continues to evolve, we are on a journey changing customer engagement forever. Adapting to these new dynamics before the fact is essential, recognising the requirements of Claims and Collision 2.0 are business critical. Vizion remains at the forefront of the digital revolution with consistent pro-active focused innovation. Continually evolving to be future ready, in all areas of operation, ready to respond to changing customer and repairer needs, as well as developing solutions for new world challenges that continue to change and shape our industry.
Technology should never be a blunt instrument, Vizion uses targeted utilisation of the right services at the right time to build greater customer engagement, providing convenience and accessibility for users to interact over the channels that they want to use at a time to suit them. Ensuring service delivery and consumer duty, work seamlessly and not forgetting that people are important too, some things cannot be automated, and some customers may want a more human experience, that which is truly valuable is not always automated. New initiatives and benefits from group partners, such as Drive, Cornerstone and AutoFlow bring even greater depth to the Vizion Network and our combined solution capabilities, accentuating and improving the entire customer experience.
We continue to work tirelessly to bring advantages to our network, customers, and partners. To deliver industry leading services, dynamic business environments, focused on outcomes, through collaboration, expertise, and technology. To provide true connected and end to end solutions, able to elevate the customer environment and deliver cutting edge solutions, that delivers real business value to our network, satisfaction to our clients and their customers, with benefits to the industry as a whole.
The effects of lock down and the pandemic continue to dissipate, but we believe that these will be noticeable for the majority of 2023 and in some ways will remain in our new normal. The geopolitical landscape continues to present its own challenges but significant changes in supply lines over the last four years continue to dull the effects of these factors from a business perspective. Identifying the wider risks and opportunity levers early and preparing accordingly, has been a very successful strategy for Vizion, and although circumstances remain difficult and changeable, the business, systems, and the investment in people have held up, and business momentum and resilience remains high.
Facing changes to data protection laws and an increased risk of cyber-attacks from state actors, Vizion formed a Client Advisory Group - a consortium of representatives consisting of leading insurers, cyber experts, and specialists from the Vizion team. This group created the ‘Vizion Standard' to support repairers that would continue to provide education, support, and resilience across the Vizion network via our Opus™ platform. The ‘Vizion Standard' is part of Vizion's commitment to the customer; assurance that we, our clients, and our repairer partners consider their privacy and protection of personal data to be a critical element of the consumer journey and duty.
In the recent past, the cyber landscape witnessed a seismic shift from small petty online crimes to large-scale ransomware attacks. Such attacks have brought some organisations to the brink of collapse. The thing is, it can happen to anyone, and as the web grows more dynamic and more connected, the ‘Vizion Standard' adapts to ever-evolving cyber security threats - delivering consistently updated certification and auditing to ensure that both Vizion and our clients stay ahead of virtual and physical security and privacy needs.
Vizion Network Limited
Directors' report (continued)
For the year ended 31 December 2022
Page 11
Our strategic planning continues to increase both in depth and breadth, we expect to move into even greater size potential and complexities in 2023 and beyond, forging relationships for growth and even greater diversification. Vizion systems strengthen our operational agility and those of our repairers and clients, providing high levels of portability. These digital systems provide Vizion and our clients with high resilience, tested to their extreme and validated by the ISO27001 standard.
Vizion Network has achieved widely recognised ISO/IEC 27001 security standard certification and ISO/IEC 23001 business continuity management, demonstrating the company's ongoing commitment to information security and risk management. The holistic approach of ISO/IEC 27001 and ISO/IEC 23001 means that the entire organisation, not just IT, is covered from cyber-threats, resulting in ongoing benefits to people, technology, and processes. By gaining this certification, Vizion has demonstrated to its clients and customers that it is committed to managing information and risk securely and safely.
This certification is the latest milestone in our information security roadmap, which continues to mature year-on-year, a continuous demonstration of our commitment to data security and providing client compliance and assurance that Vizion is the partner of choice in many ways and for many reasons.
These enhancements also work to help galvanise and substantiate our services and products, providing opportunities for operational improvements, also to engage with new clients and to take system connectivity and automation into new arenas. 2022 saw the launch of our omni channel communications spine, allowing unprecedented customer and claims management capabilities aligned to consumer duty, working across multiple business channels, in real time. Utilising our digital system solutions Nucleus™ and Cortex™ with these new services, we have gained two new insurer and three additional vehicle manufacturer agreements during the accounting period along with a number of new product lines with existing clients.
Parts supply can be notoriously difficult and expensive to manage for all parties. Being one of the largest contributors to cost and vehicle off-road time and the key to setting accurate customer expectations. Unknowns in availability and delivery, inconsistent communication and information formats are major drivers to operational friction and customer dissatisfaction. This has been greatly amplified in recent times with elevated supply issues linked to the pandemic and material shortages in general. This has provided the need for a more collaborative solution, where in the past, cost and effect for suppliers has been prohibitive, the current environment allows for this problem to be significantly reduced, maybe even eliminated.
Arcus™ is parts management re imagined, utilising Autoflow's™ NEW cloud-based solution. Redefining how repairers and suppliers manage parts together, reducing effort, waste, and failure, providing a better customer and staff experience, increased profitability through automation and ease of communication, for faster, better customer outcomes and demonstrating that good decisions have been made in good time to demonstrate consumer duty.
Seamlessly integrating with our systems and our clients, Arcus provides a cohesive and synchronised, connected, and real time process, aligned to all parties' core priorities across the supply chain. Bringing real time data on part requirements and statuses, enhanced information to plan and set correct expectations, operationally and for the customer, reducing friction, cost and negative impacts created by a generic lack of information.
Vizion Network Limited
Directors' report (continued)
For the year ended 31 December 2022
Page 12
The scalability, agility, and level of innovation offered by the Arcus™ platform makes it an essential enabler for repair centres, part manufacturers, and insurance companies to collaborate with Vizion on reducing mutual cost, effort, and friction. Whilst increasing staff and customer satisfaction, with high levels of automation and the delivery of greater positive customer outcomes and profitability via innovative user experiences. In turn, increasing all party efficiencies, decreasing operational costs and FTE requirements, and increasing customer satisfaction and retention.
Our long-term focus on connected car services and changes aligned to vehicles as a service (VaaS) continues to gain pace. We have seen significant progress in these areas in 2022 and expect even greater progress in 2023 and 2024, both in the UK and in our wider European operations.
Aligned with Cortex™ we launched our Green Earth Initiative™ in Q1 2022, a fully digital system that encourages and helps manage carbon reduction for both our partners and customers. Partnered with Trees for Life in the Caledonian restoration project and several other businesses, we planted 7,800 trees in 2022, by customers utilising our digital carbon exchange platform. Looking at new and innovative ways to reduce stresses within our business and our staff, remain core priorities, as does our drive to minimise our stress we place on the environment and how we can maximise our positive influence via collaborative and better thinking.
As the UK's largest repair network, Vizion takes our environmental responsibility seriously, taking decisive action, working with our repairers, clients, and partners. As a wider application of our Green Earth initiative, we are providing services and information across the network. Extending engineer training and offering courses on ‘carbon to profit' via our partners Cornerstone. PAS2060, energy support via ECA and our hugely successful trees for hire car exchange has been extended to assist repairers with non Vizion repairs.
Our EV network and digital framework, EVizion, further enhances customer services and choice, providing comprehensive solutions for manufacturer and insurer partners and brings further business opportunities whilst driving the right behaviours, for the right reasons in the right way. The Green Earth Initiative is already driving several direct and indirect industry benefits, starting with reductions in mobility requirements, reduced energy consumption, improved repair methods and reduction in waste – which underlines how becoming more sustainable can also mean improving your business' overall performance. It is too often seen that being green is another cost, with better thinking, we would say it's a benefit in every way that's important, including profit and Vizion intends to remain at the forefront of that innovation and message.
Our Group Sustainability Strategy is simple, reinforce our efforts to make the world more resilient and sustainable, relentless in our focus, to drive positive change, to never accept that things are good enough, and to always look to the future together, to find a better tomorrow.
With travel and international operations now stable, our development in other markets has accelerated and France as our primary next target region has gone live. We have successfully launched our operations in France in Q4, securing offices in Paris, we are now contracted with Ford of France, managing their FCCN framework and customer collision assistance program. This mirrors what we do for Ford in the UK, and although still maturing, this presents significant progress for Vizion with a global manufacturing partner and one of the world's largest vehicle manufacturers, signalling huge growth potential going forward.
Vizion Network Limited
Directors' report (continued)
For the year ended 31 December 2022
Page 13
Vizion Opus™ launched a new operational standards module which is also being utilised by Ford, Renault, and Nissan on a SaaS basis, incorporating a powerful Carbon reduction framework, to assist Vizion, partners and clients in their Environmental, Social and Governance (ESG) requirements as well as GDPR and general compliance requirements and commitments. This model reimagines compliance and carbon management, becoming the backbone of our Carbon negative aspirations and a valuable business asset for now and the future.
Vizion Drive, our new car purchasing and leasing solution delivered by our partner, VRN, continues to gain ground as vehicle manufacturing continues to pick up pace and stock becomes more available. Allowing our repair centres and customers to access new and used cars, purchase outright, finance, or lease has been very successful during the period in solving mobility issues for customers, and to accelerate earning potential for repairers and Vizion by creating a faster route to market.
Already in use with the majority of the top 10 UK insurers and aligned to most vehicle manufacturers, we are very pleased with progress and the all-party benefits this continuously growing solution is now delivering. We expect strong growth to continue in to 2023 and well beyond, aligned to several new contract wins and more stability in general trading conditions going forward.
Development of inflight predictive analytics delivering real time decisions, and bi-directional functionality with global estimatics providers Solera and GT Motive, also integrations with global claims platforms such as Guidewire, via our comprehensive client base has been immensely powerful. Enabling the stripping out of cost and operational friction, taking waste and failure away and adding benefits to reduce nonproductive costs to all parties. Faster invoicing, enhanced reporting, and further parts system integrations are to follow, including growth in total loss avoidance to expand on already mature relationships with several blue-chip global manufacturers and insurers.
The story that is Vizion continues to be written, and with every new chapter comes an exciting new development. Solutions and processes are constantly evolving, embracing the digital evolution whilst ensuring the customer and end user needs are held in perfect balance with comprehensive solutions. Consistency in system compatibility provides better ways of working, greater operational efficiencies, propagating open collaboration, empowering limitless users to confidently engage with our solutions. Increasing responsiveness, interaction, productivity, and customer retention.
Combining our repair and service solutions with our digital platforms and proven technologies via agile connections, delivers greater scalability, higher availability, superb resilience, world class security and limitless opportunities.
In a world of infinite problems and finite resources, we bring infinite solutions together. The Vizion team has decades of industry and digital experience, expertise in all areas, working in symmetry to understand and deliver cutting edge solutions, specific to our partner and customer needs.
Vizion prides itself on the application of new and better thinking to change and improve processes, to deliver outcomes required for a newer world that expects and deserves better.
Our Vizion is clear, to always be at the forefront of innovation, providing proven solutions through trusted services and technology with infinite possibilities.
Vizion Network Limited
Directors' report (continued)
For the year ended 31 December 2022
Page 14
Energy and carbon report
The following applies to emissions from all operational and management activities for the year ending 31 December 2022.
We have followed the UK Government Environmental Reporting Guidance referencing the GHG Protocol and reported more fully on Scope 3 categories.
The environmental impacts of our organisation encompass mandatory Greenhouse Gas Protocol Scope 1, which are direct GHG emissions, e.g. from company cars, and gas heating boilers, and Scope 2, indirect emissions, e.g. emission released into the atmosphere associated with the purchase and use of electricity. We also include more detail on Scope 3 in relation to business use and staff owned vehicles, staff commuting and the wider upstream and downstream supply chain.
Purchase prices of fuel, gas and electricity and the equivalent kg per litre, and kWh, are used to calculate the associated metric tonnes of emissions produced.
Scope 1 emissions from activities for which the company own or control, including combustion of fuel from vehicles and gas emissions from the operation of our facilities, is calculated at 49 metric tonnes of CO2 in 2022, compared with 55 metric tonnes of CO2 in 2019, our base year.
Scope 2 emissions, associated with electricity purchased for facility use is the equivalent of zero metric tonnes of CO2 for 2022, compared with 41 metric tonnes of CO2 in 2019. This is due to a renewable energy guarantee and our leased office reporting CO2 themselves.
Scope 3 emission, which is as a consequence of our actions, but occur at sources which we do not own or control, i.e. within our supply chain, has been refined and re-calculated. This includes the purchase of goods and services, capital goods, business travel, employee commuting, upstream leased assets, but excludes Scope 3 categories where we have no trading activity. Further research of Scope 3 emissions means 2019 emissions have been revised to 523,052 metric tonnes, with 2022 calculated at 681,684 metric tonnes.
Scope 1, 2 and 3 reportable data combined therefore produced 681,733 metric tonnes of CO2 in 2022, compared with 523,148 metric tonnes of CO2 in 2019.
Based on 2022 turnover, our intensity ratio across Scope 1 and 2 for 2022 is 0.1 metric tonnes per £million, compared with 1.1 in 2019. We have chosen the intensity measure of CO2 metric tonnes per £1million turnover as this best fits our industry sector.
The reduction in GHG emission across 2021 to 2022 is mainly due to the renewable energy guarantee for electricity, plus confirmation the Hull office building management company will take the CO2 element within their annual carbon emission reporting. Reducing business travel via use of video conferencing, increased numbers of employees working from home, electric hybrid company cars, cycling and walking to work where possible, are all areas we continue to encourage.
In addition, we are working with projects such as Trees for Life, and the Woodland Trust with verified programmes to replace the provision of a temporary courtesy car with planting a tree for customers that wish to take this option. 7800 trees were planted in 2022.
Vizion Network Limited
Directors' report (continued)
For the year ended 31 December 2022
Page 15
Verification of our action is important. We have partnered with ECA Business Energy to assist us and our vehicle accident repair network in saving money and our planet with better access to renewable energy and providing expert independent auditing.
Our repairer partners are working toward PAS 2060, the BSI specification for the demonstration of carbon neutrality. This provides a recognised method of substantiating carbon reduction claims are genuine. 50 were targeted for 2022 - 87 evidenced.
Vizion has joined the Science Based Targets Initiative, an organisation that promotes best practice in science-based target setting, independent assessment, and approval of targets in line with the Paris Agreement. The goal is to curb global temperature rise by halving GHG by 2030, dropping to net-zero by 2050.
We have a fixed base year of 2019 as it was the first year for which we considered that we had reliable data. There has been a need to recalculate our base year for Scope 3 as further interpretation and detail has become available.
Our target is to be carbon neutral across Scope 1 and 2 by 2025, and we will encourage our supply chain to do the same by 2030. This will involve the use of carbon offsetting.
Our emission reduction target is to reduce our global Scope 1 and 2 emissions in tonnes of CO2 per £1m turnover by 10% per annum, and we will work with our clients and supply chain to effect measurable reduction in Scope 3 emission.
Reference is made to ISO 14001 and PAS 2060 in developing our initiatives with consideration given to external verification and assurance, plus government guidelines.
As we now qualify for the mandatory Energy Savings Opportunity Scheme (ESOS), we will be undertaking independent verification and notifying the Environment Agency.
There are currently no carbon credits to report although our intention is to purchase Kyoto-compliant Certified Emission Reductions.
Our environmental impact on the use of water, treatment of waste, use of materials, pollution control, and protection of biodiversity are also being considered.
The Board is responsible for making this happen, and the initiative will be led by our Governance Group.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Auditor
The auditor, Saffery LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
Vizion Network Limited
Directors' report (continued)
For the year ended 31 December 2022
Page 16
On behalf of the board
E J Dunne
Director
28 September 2023
Vizion Network Limited
Directors' responsibilities statement
For the year ended 31 December 2022
Page 17
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Vizion Network Limited
Independent auditor's report
To the members of Vizion Network Limited
Page 18
Opinion
We have audited the financial statements of Vizion Network Limited (the 'company') for the year ended 31 December 2022 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Vizion Network Limited
Independent auditor's report (continued)
To the members of Vizion Network Limited
Page 19
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement set out on page 17, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the 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 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 company or to cease operations, or have no realistic alternative but to do so.
Vizion Network Limited
Independent auditor's report (continued)
To the members of Vizion Network Limited
Page 20
Auditor's 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 auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and by updating our understanding of the sector in which the company operates.
Laws and regulations of direct significance in the context of the company include The Companies Act 2006 and UK Tax legislation.
Audit response to risks identified
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
Vizion Network Limited
Independent auditor's report (continued)
To the members of Vizion Network Limited
Page 21
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Eunice McAdam (Senior Statutory Auditor)
For and on behalf of Saffery LLP
29 September 2023
Saffery LLP
Chartered Accountants
Statutory Auditors
Kintail House
Beechwood Park
Inverness
IV2 3BW
Vizion Network Limited
Statement of comprehensive income
For the year ended 31 December 2022
Page 22
2022
2021
Notes
£
£
Turnover
3
320,945,503
186,048,874
Cost of sales
(308,842,205)
(176,698,690)
Gross profit
12,103,298
9,350,184
Administrative expenses
(10,824,431)
(9,070,346)
Other operating income
65,797
Operating profit
4
1,278,867
345,635
Interest receivable and similar income
8
7,969
707
Profit before taxation
1,286,836
346,342
Tax on profit
9
(74,207)
105,563
Profit for the financial year
1,212,629
451,905
The income statement has been prepared on the basis that all operations are continuing operations.
Vizion Network Limited
Statement of financial position
As at 31 December 2022
Page 23
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
11
292,989
369,378
Current assets
Debtors falling due after more than one year
12
4,882,262
8,035,000
Debtors falling due within one year
12
26,641,642
16,260,812
Cash at bank and in hand
23,509,019
13,525,470
55,032,923
37,821,282
Creditors: amounts falling due within one year
14
(45,887,406)
(30,316,391)
Net current assets
9,145,517
7,504,891
Total assets less current liabilities
9,438,506
7,874,269
Creditors: amounts falling due after more than one year
15
(5,405,568)
(4,703,249)
Net assets
4,032,938
3,171,020
Capital and reserves
Called up share capital
17
82
86
Capital redemption reserve
18
134
130
Profit and loss reserves
19
4,032,722
3,170,804
Total equity
4,032,938
3,171,020
The financial statements were approved by the board of directors and authorised for issue on 28 September 2023 and are signed on its behalf by:
C A Mckie
Director
Company Registration No. 06751660 (England and Wales)
Vizion Network Limited
Statement of changes in equity
For the year ended 31 December 2022
Page 24
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2021
95
121
4,718,899
4,719,115
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
-
451,905
451,905
Own shares acquired
-
-
(2,000,000)
(2,000,000)
Redemption of shares
17
9
9
Reduction of shares
17
(9)
-
(9)
Balance at 31 December 2021
86
130
3,170,804
3,171,020
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
1,212,629
1,212,629
Own shares acquired
-
-
(350,711)
(350,711)
Redemption of shares
17
4
4
Reduction of shares
17
(4)
-
(4)
Balance at 31 December 2022
82
134
4,032,722
4,032,938
Vizion Network Limited
Statement of cash flows
For the year ended 31 December 2022
Page 25
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
23
10,288,565
(1,815,135)
Income taxes refunded/(paid)
37,726
(1)
Net cash inflow/(outflow) from operating activities
10,326,291
(1,815,136)
Investing activities
Purchase of tangible fixed assets
(28,758)
Proceeds from disposal of tangible fixed assets
20,537
Interest received
7,969
707
Net cash generated from/(used in) investing activities
7,969
(7,514)
Financing activities
Purchase of own shares
(350,711)
(2,000,000)
Net cash used in financing activities
(350,711)
(2,000,000)
Net increase/(decrease) in cash and cash equivalents
9,983,549
(3,822,650)
Cash and cash equivalents at beginning of year
13,525,470
17,348,120
Cash and cash equivalents at end of year
23,509,019
13,525,470
Vizion Network Limited
Notes to the financial statements
For the year ended 31 December 2022
Page 26
1
Accounting policies
Company information
Vizion Network Limited is a private company limited by shares incorporated in England and Wales. The registered office is The Deep Business Centre, Tower Street, Hull, East Yorkshire, HU1 4BG.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured, Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:
Rendering of services
Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of turnover can be measured reliably;
it is probable that the Company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.
Vizion Network Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
1
Accounting policies (continued)
Page 27
The Company has multiple income streams.
Repairers pay a monthly membership fee for access to the Vizion network. Turnover is recognised within the month of the membership. Payment is made one month in advance and deferred at the year end.
Additional fees, collected from each repairer, are recognised once jobs are accepted and are in progress.
Income relating to the cost of replacement vehicles sourced for insurers is recognised as the associated costs are borne by the Company.
Income is also received where the Company manages claims on behalf of insurance companies. The Company is deemed to be acting as the principal when providing these services; being exposed to the risks and rewards associated with the sale.
Debtor and creditor balances relating to vehicle repair transactions undertaken on behalf of insurer clients are recognised in the Balance Sheet when the contractual relationship between the Company and the insurer is one of principal as opposed to agent.
Interest income is recognised in profit or loss using the effective interest method.
1.4
Research and development expenditure
The Company expenses research and development costs as incurred.
1.5
Intangible fixed assets other than goodwill
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Long-term leasehold property improvements
Over the expected term of the lease
Fixtures and fittings
20% straight line basis
Office equipment
33% straight line basis
Motor vehicles
20% straight line basis
Vizion Network Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
1
Accounting policies (continued)
Page 28
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors, are initially measured at transaction price, and are subsequently carried at amortised cost using the effective interest method. Financial assets classified as receivable within one year are not amortised. A provision is established when there is objective evidence that the Company will not be able to collect all amounts due.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, and other loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Vizion Network Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
1
Accounting policies (continued)
Page 29
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
1.11
Retirement benefits
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.
1.12
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease.
Vizion Network Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
Page 30
2
Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements in conformity with generally accepted accounting practice requires management to make estimates and judgements that affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the year.
The estimates that had a significant risk of causing a material adjustment to the carrying amount of the assets and liabilities of the Company is set out below:
Income recognition
Vizion receives income on various contracts at nil margin. In the judgement of the directors, for some of these income streams the Company is acting as a principal, and on some as agent. This assessment is based upon the contractual provisions in place, and the substance of the arrangement. A key factor in determining whether Company is acting as agent or principal is whether or not the credit risk sits with Vizion or another party.
Debtor recoverability
Vizion makes an estimate as to the recoverable value of the trade and other debtors. When assessing the impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of the debtors and historical experience. In the directors' judgement, a provision of £1,242,835 (2021 - £1,130,575) is required for other debtors, and a provision of £60,740 (2021 - £59,341) is required for the trade debtors.
3
Turnover
The whole of the turnover is attributable to the provision of services.
All turnover arose within the United Kingdom.
4
Operating profit
2022
2021
Operating profit for the year is stated after charging:
£
£
Research and development costs
675,596
761,478
Depreciation of owned tangible fixed assets
76,389
118,147
Bad debt expense
118,485
492,575
Operating lease charges
447,359
364,131
Vizion Network Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
Page 31
5
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
37,000
20,350
Audit of the financial statements of the company's subsidiaries
3,000
3,000
40,000
23,350
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Administrative staff
243
184
Directors
5
5
Total
248
189
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
6,545,918
5,350,296
Social security costs
673,305
514,875
Pension costs
121,977
94,287
7,341,200
5,959,458
7
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
593,295
599,269
Company pension contributions to defined contribution schemes
5,394
5,550
598,689
604,819
Vizion Network Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
7
Directors' remuneration (continued)
Page 32
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 5 (2021 - 5).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2022
2021
£
£
Remuneration for qualifying services
152,008
141,319
Company pension contributions to defined contribution schemes
1,320
1,319
8
Interest receivable and similar income
2022
2021
£
£
Interest income
Other interest income
7,969
707
9
Taxation
2022
2021
£
£
Current tax
Adjustments in respect of prior periods
(449)
Deferred tax
Origination and reversal of timing differences
74,207
(83,941)
Changes in tax rates
(21,173)
Total deferred tax
74,207
(105,114)
Total tax charge/(credit)
74,207
(105,563)
Vizion Network Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
9
Taxation (continued)
Page 33
The actual charge/(credit) for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Profit before taxation
1,286,836
346,342
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
244,499
65,805
Tax effect of expenses that are not deductible in determining taxable profit
17,158
61,968
Tax effect of utilisation of tax losses not previously recognised
450
Adjustments in respect of prior years
(449)
Capital allowances in excess of depreciation
1,051
(1,901)
Research and development tax credit
(166,872)
(187,453)
Other permanent differences
257
Other tax adjustments, reliefs and transfers
(635)
Chargeable gains
635
Remeasurement of defferred tax for changes in tax rates
30,263
(40,396)
Movement in deferred tax not recognised
(51,892)
(3,844)
Taxation charge/(credit) for the year
74,207
(105,563)
Finance Act 2021 includes legislation to increase the main rate of corporation tax from 19% to 25% from 1 April 2023. The full anticipated effect of these changes is reflected in the above deferred tax balances.
Vizion Network Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
Page 34
10
Intangible fixed assets
Development costs
£
Cost
At 1 January 2022 and 31 December 2022
41,737
Amortisation and impairment
At 1 January 2022 and 31 December 2022
41,737
Carrying amount
At 31 December 2022
At 31 December 2021
11
Tangible fixed assets
Long-term leasehold property improvements
Fixtures and fittings
Office equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2022 and 31 December 2022
359,476
372,552
456,810
117,500
1,306,338
Depreciation and impairment
At 1 January 2022
110,682
355,386
445,434
25,458
936,960
Depreciation charged in the year
35,948
9,413
7,528
23,500
76,389
At 31 December 2022
146,630
364,799
452,962
48,958
1,013,349
Carrying amount
At 31 December 2022
212,846
7,753
3,848
68,542
292,989
At 31 December 2021
248,794
17,166
11,376
92,042
369,378
Vizion Network Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
Page 35
12
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
5,129,807
2,347,835
Corporation tax recoverable
453
38,179
Other debtors
9,379,113
7,334,127
Prepayments and accrued income
12,034,316
6,368,511
26,543,689
16,088,652
Deferred tax asset (note 16)
97,953
172,160
26,641,642
16,260,812
2022
2021
Amounts falling due after more than one year:
£
£
Prepayments and accrued income
4,882,262
8,035,000
Total debtors
31,523,904
24,295,812
13
Cash and cash equivalents
The total of cash at bank and in hand includes £18,076,944 (2021 - £11,889,935) of client funds held.
The bank holds security by way of an unlimited debenture dated 9 September 2018, incorporating a fixed and floating charge over Vizion's property.
14
Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
2,269,423
1,286,444
Taxation and social security
1,497,583
1,141,122
Other creditors
27,544,688
17,901,449
Accruals and deferred income
14,575,712
9,987,376
45,887,406
30,316,391
Vizion Network Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
Page 36
15
Creditors: amounts falling due after more than one year
2022
2021
Notes
£
£
Deferred income
5,405,568
4,703,249
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Assets
Assets
2022
2021
Balances:
£
£
Accelerated capital allowances
(26,554)
(34,990)
Tax losses
116,051
207,150
Short term timing differences
8,456
-
97,953
172,160
17
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 50p each
164
171
82
86
On 10 June 2022, the Company cancelled 7 ordinary shares with a nominal value of £0.50 each.
18
Capital redemption reserve
This reserve records the nominal value of shares repurchased by the Company.
19
Profit and loss reserves
This reserve records retained earnings and accumulated losses.
Vizion Network Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
Page 37
20
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2022
2021
£
£
Within one year
168,030
100,230
Between two and five years
165,043
111,264
333,073
211,494
21
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2022
2021
£
£
Aggregate compensation
732,758
648,762
Vizion Network Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
21
Related party transactions (continued)
Page 38
Other information
During the year Vizion Network Limited made sales of £1,369,090 (2021 - £647,408) to a number of companies under the common control of directors. At the year end, £692,256 (2021 - £256,734) remained outstanding and is presented within trade debtors.
During the year, the Company also made purchases or incurred expenses of £35,598,962 (2021 - £15,956,727) from the same companies under common control. At the year end, £1,093,009 (2021 - £146,586) remained outstanding and is presented within trade creditors.
Vizion is owed £6,142,262 (£8,035,000) from a company which is a related party to Vizion Network Limited. No interest accrues on this balance. It is, in substance, a prepayment for data transmission services and is presented within long-term debtors on the Balance Sheet. The other company is a related party by virtue of the significant influence that Vizion's owners have over its financial and operating policies. Additionally, an accrual of £Nil (2021 - £981,922) was made to a subsidiary of this company for the provision of data transmission services.
Vizion has a loan balance of £1,242,835 (2021 - £1,130,575) due from an entity related to Vizion by virtue of the significant influence that Vizion's owners have over the other entity. This loan is presented within short-term debtors, is fully provided for, is repayable on demand and accrues no interest.
In addition, two close family members of directors were remunerated for their services to the Company, with remuneration totalling £90,667 (2021 - £87,064) during the year. At the year end £Nil (2021 - £nil) remained outstanding.
Furthermore, a company under the common control of directors has provided security to a customer of Vizion Network Limited by means of a charge over its property. The contract held with this customer is presented as a £5,112,556 (2021 - £5,613,020) balance in deferred income.
22
Ultimate controlling party
The directors do not consider there to be an ultimate controlling party.
Vizion Network Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
Page 39
23
Cash generated from/(absorbed by) operations
2022
2021
£
£
Profit for the year after tax
1,212,629
451,905
Adjustments for:
Taxation charged/(credited)
74,207
(105,563)
Investment income
(7,969)
(707)
Depreciation and impairment of tangible fixed assets
76,389
118,147
Movements in working capital:
Increase in debtors
(7,340,025)
(5,896,895)
Increase in creditors
15,571,015
9,009,693
Increase/(decrease) in deferred income
702,319
(5,391,715)
Cash generated from/(absorbed by) operations
10,288,565
(1,815,135)
24
Analysis of changes in net funds
1 January 2022
Cash flows
31 December 2022
£
£
£
Cash at bank and in hand
13,525,470
9,983,549
23,509,019
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