EXHIBIT 99.2
Company Registration No. 2567531
GUILDSOFT LIMITED
Report and Financial Statements
30 September 1996
Deloitte & Touche
Queen Anne House
69-71 Queen Square
Bristol
BS1 4JP
GUILDSOFT LIMITED
REPORT AND FINANCIAL STATEMENTS 1996
CONTENTS
Page
Officers and professional advisers 1
Directors' report 2
Statement of directors' responsibilities 3
Auditors' report 4
Profit and loss account 5
Balance sheet 6
Notes to the accounts 7
Additional information 11
GUILDSOFT LIMITED
REPORT AND FINANCIAL STATEMENTS 1996
OFFICERS AND PROFESSIONAL ADVISERS
DIRECTORS
J F Cave
S J Cave (resigned 7 November 1996)
M A Holman (resigned 7 November 1996)
B Gardner (appointed 7 November 1996)
SECRETARY
J F Cave
REGISTERED OFFICE
The Software Centre
East Way
Lee Mill Industrial Estate
Ivybridge
Nr Plymouth
PL21 9PE
BANKERS
Barclays Bank Plc
19 Princess Street
Plymouth
Devon
PL1 2HA
AUDITORS
Deloitte & Touche
Queen Anne House
69-71 Queen Square
Bristol
BS1 4JP
GUILDSOFT LIMITED
DIRECTORS REPORT
The directors present their annual report and the audited financial statements
for the year ended 30 September 1996.
ACTIVITIES
The principal activity of the company continues to be the import and sale of
computer software.
DIRECTORS AND THEIR INTERESTS
The present membership of the Board is set out on page 1.
The directors held no beneficial interests in the company during the year. Their
interest in the ultimate parent company, Guildsoft Holdings Limited, are shown
in the financial statements of that company.
None of the directors had an interest in any material contract during the year
relating to the business of the company.
AUDITORS
A resolution for the reappointment of Deloitte & Touche as auditors of the
company is to be proposed at the forthcoming Annual General Meeting.
Advantage has been taken in the preparation of this report of the special
exemptions applicable to small companies under Part II of Schedule 8 to the
Companies Act 1985.
Approved by the Board of Directors
and signed on behalf of the Board
/s/ J F Cave
- ------------
J F Cave
Secretary
GUILDSOFT LIMITED
STATEMENT OF DIRECTORS' RESPONSIBILITIES
Company law requires the directors to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the
company as at the end of the financial year and of the profit or loss of the
company for that period. In preparing those financial statements, the directors
are required to
__ select suitable accounting policies and then apply them consistently;
__ make judgements and estimates that are reasonable and prudent;
__ prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the company will
continue in business.
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company and to enable them to ensure that the financial statements comply with
the Companies Act 1985. 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.
--------------------------------------------------------------
Chartered Accountants
Deloitte & Touche Telephone: National 0117 921 1622
Queen Anne House International + 44 117 921 1622
69-71 Queen Square Fax (Gp.3): 0117 929 2801
Bristol BS1 4JP
AUDITORS' REPORT TO THE MEMBERS OF
GUILDSOFT LIMITED
We have audited the financial statements on pages 5 to 10 which have been
prepared under the accounting policies set out on page 7.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
As described on page 3 the company's directors are responsible for the
preparation of financial statements. It is our responsibility to form an
independent opinion, based on our audit, on those statements and to report our
opinion to you.
BASIS OF OPINION
We conducted our audit in accordance with Auditing Standards issued by the
Auditing Practices Board. An audit includes examination, on a test basis, of
evidence relevant to the amounts and disclosures in the financial statements. It
also includes an assessment of the significant estimates and judgements made by
the directors in the preparation of the financial statements, and of whether the
accounting policies are appropriate to the company's circumstances, consistently
applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
OPINION
In our opinion the financial statements give a true and fair view of the state
of the company's affairs as at 30 September 1996 and of its loss for the year
then ended and have been properly prepared in accordance with the provisions of
the Companies Act 1985 applicable to small companies.
/s/ Deloitte & Touche 20 January 1997
Chartered Accountants and
Registered Auditors
PROFIT AND LOSS ACCOUNT
YEAR ENDED 30 SEPTEMBER 1996 GUILDSOFT LIMITED
Note 1996 1995
(pound) (pound)
TURNOVER: continuing operations 2 1,223,948 1,204,523
Cost of sales (633,413) (502,874)
-------- --------
Gross profit 590,535 701,649
Distribution costs (47,574) (49,915)
Administrative expenses (585,815) (501,870)
-------- --------
OPERATING (LOSS)/PROFIT: continuing operations (42,854) 149,864
Interest receivable and similar income 2,456 1,582
Interest payable (21) (11)
--------- --------
(LOSS)/PROFIT ON ORDINARY ACTIVITIES 3 (40,419) 151,435
BEFORE TAXATION
Tax on (loss)/profit on ordinary activities 4 380 (42,160)
-------- --------
(LOSS)/PROFIT FOR THE FINANCIAL YEAR (40,039) 109,275
Dividends paid and proposed 5 (130,620) (30,000)
-------- --------
Retained (loss)/profit for the financial year 10 (170,659) 79,275
-------- --------
There are no recognized gains and losses for the current financial year and
preceding financial year, other than as stated in the profit and loss account.
Accordingly, no statement of total recognized gains and losses has been given.
GUILDSOFT LIMITED
BALANCE SHEET
30 SEPTEMBER 1996
Note 1996 1995
(pound) (pound)
FIXED ASSETS
Tangible assets 6 54,631 49,532
-------- --------
CURRENT ASSETS
Stocks 142,785 93,317
Debtors 7 327,118 254,584
Cash at bank and in hand 88,672 94,498
-------- --------
558,575 442,399
-------- --------
CREDITORS: amounts falling
due within one year
Trade creditors 317,501 127,220
Other creditors including
taxation and social security 8 188,080 85,330
Accruals and deferred income 27,793 28,890
-------- --------
(533,374) (241,440)
-------- --------
NET CURRENT ASSETS 25,201 200,959
-------- --------
NET ASSETS 79,832 250,491
-------- --------
CAPITAL AND RESERVES
Called up share capital 9 3,000 3,000
Profit and loss account 76,832 247,491
-------- --------
TOTAL EQUITY SHAREHOLDERS' FUNDS 10 79,832 250,491
-------- --------
Advantage has been taken in the preparation of these accounts of the special
exemptions available to small companies under Part 1 of Schedule 8 to the
Companies Act 1985. In the opinion of the directors of the company is entitled
to these exemptions on the grounds that it has met the qualifications for a
small company specified in sections 246 and 247 of the Companies Act 1985.
These financial statements were approved by the Directors on 20 January, 1997.
Signed on behalf of the Board of Directors
/s/ J F Cave
- -------------
J F Cave
Director
GUILDSOFT LIMITED
NOTES TO THE ACCOUNTS
Year ended 30 September 1996
1. ACCOUNTING POLICIES
The financial statements are prepared in accordance with applicable
accounting standards. The particular accounting policies adopted are
described below.
Accounting convention
The financial statements are prepared under the historical cost
convention.
Tangible fixed assets
Depreciation is provided on cost in equal annual installments over the
estimated lives of the assets. The rates of depreciation are as
follows:
Equipment 25% straight line
Fixtures and fittings 20% straight line
Stocks
Stocks are stated at the lower of cost and net realisable value. Cost
represents materials, direct labour and appropriate production
overheads.
Deferred taxation
Deferred taxation is provided at the anticipated tax rates on
differences arising from the inclusion of items of income and
expenditure in taxation computations in periods different from those in
which they are included in the financial statements to the extent that
it is probable that a liability will crystallise in the future.
Foreign exchange
Transactions denominated in foreign currencies are translated into
sterling at the rates ruling at the dates of the transactions. Monetary
assets and liabilities denominated in foreign currencies at the balance
sheet date are translated at the rates ruling at that date. These
translation differences are dealt with in the profit and loss account.
GUILDSOFT LIMITED
NOTES TO THE ACCOUNTS
Year ended 30 September 1996
2. TURNOVER
Turnover comprises the invoiced value of goods and services supplied by
the company to third parties net of value added tax.
3. (LOSS)/PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
(Loss)/profit on ordinary activities before taxation is after charging:
1996 1995
(pound) (pound)
Depreciation written off tangible fixed assets:
Own assets 27,686 27,176
Directors' remuneration 88,455 74,250
Auditors' remuneration 5,400 4,750
Loss on disposal of fixed assets 788 843
-------- --------
4. TAX ON (LOSS)/PROFIT ON ORDINARY ACTIVITIES
1996 1995
(pound) (pound)
United Kingdom corporation tax at 24.5% (1995 - 25%) (380) 42,160
based on the (loss)/profit for the year -------- --------
5. DIVIDENDS 1996 1995
Per share Total Per share Total
(pound) (pound) (pound) (pound)
Dividends paid and proposed 43.54 130,620 10 30,000
--------- ------- --------- -------
6. TANGIBLE FIXED ASSETS Fixtures
Equipment & fittings Total
(pound) (pound) (pound)
Cost
at 1 October 1995 75,289 30,102 105,391
Additions 33,563 -- 33,563
Disposals (3,622) (1,877) (5,499)
--------- --------- ---------
at 30 September 1996 105,230 28,225 133,455
--------- --------- ---------
Accumulated depreciation
at 1 October 1995 44,182 11,677 55,859
Charge in year 22,041 5,645 27,686
Disposals (3,622) (1,099) (4,721)
--------- -------- --------
at 30 September 1996 62,601 16,223 78,824
--------- -------- --------
Net book value
at 30 September 1996 42,629 12,002 54,631
--------- -------- --------
at 30 September 1995 31,107 18,425 49,532
--------- -------- --------
GUILDSOFT LIMITED
NOTES TO THE ACCOUNTS
Year ended 30 September 1996
7. DEBTORS 1996 1995
(pound) (pound)
Due within one year:
Trade debtors 231,856 228,368
Other debtors 12,291 --
Prepayments and accrued income 49,963 11,216
Due from holding company -- 15,000
ACT recoverable 25,155 --
Corporation tax recoverable 7,853 --
-------- --------
327,118 254,584
-------- --------
8. OTHER CREDITORS INCLUDING TAXATION AND SOCIAL SECURITY
1996 1995
(pound) (pound)
This heading includes:
Taxation and social security 33,715 32,968
Corporation tax 32,655 42,187
Directors' current accounts 6,090 10,175
Due to holding company 115,620 --
-------- --------
188,080 85,330
-------- --------
9. SHARE CAPITAL 1996
No (pound)
Authorised
Ordinary shares of(pound)1 each 3,000 3,000
-------- --------
Allotted and fully paid
Ordinary shares of(pound)1 each 3,000 3,000
-------- --------
GUILDSOFT LIMITED
NOTES TO THE ACCOUNTS
Year ended 30 September 1996
10. COMBINED RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS AND
STATEMENT OF MOVEMENTS ON RESERVES
Called up share Profit and loss
capital account Total 1996 Total 1995(pound)
(pound) (pound) (pound)
At the beginning of the year 3,000 247,491 250,491 171,216
(Loss)/profit attributable to members - (40,039) (40,039) 109,275
of the company
Dividends paid and proposed - (130,620) (130,620) (30,000)
------------ --------- --------- ------------
At the end of the year 3,000 76,832 79,832 250,491
============ ========= ========= ============
11. OPERATING LEASE COMMITMENTS
At 30 September 1996 the company was committed to making the following
payments during the next year in respect of operating leases:
Land and
buildings
1996 1995
(pound) (pound)
Leases which expire:
Within one year - -
Within two to five years - -
After five years 27,500 27,500
------ ------
27,500 27,500
The land and buildings are leased from Guildsoft Holdings Limited, the
ultimate parent company.
12. ULTIMATE PARENT COMPANY
The ultimate parent company is Guildsoft Holdings Limited, which is
registered in England and Wales. Copies of the financial statements of
Guildsoft Holdings Limited can be obtained from Companies House,
Cardiff.
13. EVENT OCCURRING AFTER THE END OF YEAR
The ordinary shares of the parent company Guildsoft Holdings Limited
were acquired on 7 November 1996 by the Datawatch Corporation.
GUILDSOFT LIMITED
ADDITIONAL INFORMATION
The additional information on pages 12 and 13 has been prepared from the
accounting records of the company. While it does not form part of the statutory
financial statements, it should be read in conjunction with them and the
auditors' report thereon.
GUILDSOFT LIMITED
DETAILED TRADING, PROFIT AND LOSS ACCOUNT
Year ended 30 September 1996
1996 1995
(pound) (pound)
Turnover 1,012,447 937,415
Less: Cost of sales
Opening stock 93,317 70,613
Purchases 682,881 525,578
------- -------
776,198 596,191
Less: Closing stock 142,785 93,317
------- ------
633,413 502,874
------- -------
Gross profit 379,034 434,541
Commission income 211,501 267,108
Interest received 2,456 1,582
------- -------
592,991 703,231
Less: Overheads
Selling and distribution costs 47,574 49,915
Administrative expenses 585,815 501,870
Interest payable 21 11
------- -------
633,410 551,796
Net (loss)/profit for the year (40,419) 151,435
======== =======
GUILDSOFT LIMITED
DETAILED TRADING, PROFIT AND LOSS ACCOUNT
Year ended 30 September 1996
1996 1995
(pound) (pound)
SELLING & DISTRIBUTION COSTS
Carriage and packaging costs 47,574 49,915
------ ------
ADMINISTRATIVE EXPENSES
Directors' remuneration 88,455 74,250
Directors' employers NIC 8,988 7,573
Office wages 172,180 160,854
Rent 27,500 27,500
Rates and water 3,163 6,852
Light and heat 3,942 4,962
Insurance 11,903 8,672
Telephone and fax 18,573 11,787
Repairs and renewals 8,138 6,462
Motor, travelling and subsistence 28,683 29,389
Postage and stationery 27,019 22,507
Advertising and marketing expenses 84,917 86,667
Training costs 2,167 3,961
Sundry expenses 7,955 7,030
Accountancy and audit 5,400 4,750
Professional fees 4,469 (28)
Bad debts 8,000 2,268
Provision against debtors 22,605 -
Keyman insurance 2,795 2,795
Credit card charges 16,720 3,743
Bank charges 3,779 1,837
Depreciation 27,686 27,196
Loss on sale of fixed assets 778 843
-------- --------
585,815 501,870