REG - Glantus Holdings PLC - Full Year Results & Availability of Annual Report
30/06/2023 07:00
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RNS Number : 4721E Glantus Holdings PLC 30 June 2023
30 June 2023
Glantus Holdings plc
(''Glantus'' or the ''Company'' or the "Group")
Full Year Results
Availability of Annual Report
Glantus (AIM: GLAN), the provider of Accounts Payable ("AP") automation and
analytics solutions, is pleased to announce its final results for the twelve
months to 31 December 2022 (FY22).
Copies of the Company's full Annual Report and Financial Statements for the
period ended 31 December 2022 will today be made available on the Company's
website at: https://www.glantus.com/investors/reports-documents
(https://www.glantus.com/investors/reports-documents) .
2022 Summary of Performance
2022 was a challenging year for our company. Integration issues with an
acquisition and a downturn in our productivity in the U.S. market while we
transitioned our operations to Costa Rica, meant that our run-rate billing had
reduced from an expected €1.5m per month to €1m per month. With a cost
base structured for a higher revenue than what was being achieved, we were
running at a considerable loss. Accordingly, the management team set about
adjusting the cost base to align with our run-rate billing. Over the final
three months of 2022, we removed €4.2m from our annualised costs and in the
first quarter of 2023 we saw the benefits of this work as we returned to
profitability.
The company expects to give an H1 trading update in week commencing 24 July
2023.
Financial Summary
€'000 FY22 FY21 YoY Change %
Revenue including other incomes 10,493 10,740 (3%)
Adjusted EBITDA (1,782) 3,103 (157%)
Adjusted EBITDA % (18%) 29% (162%)
Adjusted operating (loss)/profit (4,137) 1,676 (347%)
Adjusted (loss)/profit before tax (5,583) 709 (887%)
Adjusted basic EPS (cents) (4.71) 9.36 (150%)
Closing cash and cash equivalents 342 2,353 (85%)
Post Year End Highlights and Outlook
· Trading in the new financial year has been ahead of management's
expectations (all figures for 2023 below are unaudited):
o Jan - Apr 2023 revenues of c.€4.558m, adjusted EBITDA profit of
c.€1.3m
o Momentum has continued with revenues for May 2023 being ahead of budget at
€1.1m
o Realignment of cost base in 2022 has delivered much improved adjusted
EBITDA so far in 2023
· Successful €1.4m (gross) fundraising through a subscription of
new shares in February 2023
· Costa Rica operations now fully functional and delivering growth
in our audit revenues and improved margins
Board and Management Changes
o After over five years with Glantus, Gráinne McKeown resigned as Executive
Director and Chief Financial Officer on 9 Dec 2022, having made a very
valuable contribution to the growth and success of the company
o Thomas Brooke was appointed as a Non-Executive Director on 8 December 2022
o After supporting the Company during a challenging period, Diane
Gray-Smith, Executive Director and Interim Chief Financial Officer, stepped
down from the Board on 16 May 2023
o Susan O'Connor, who previously worked with Glantus at the time of its IPO,
assumed the role of Chief Financial Officer on 16 May 2023
Enquiries:
Glantus Holdings
Maurice Healy, CEO + 353 86 267 7800
ir@glantus.com
(https://url.avanan.click/v2/___mailto:ir@glantus.com___.YXAxZTpzaG9yZWNhcDphOm86NjkwM2IwZGEyMzRkY2IyOGRjMjYxY2RjMmVjYjU2MDg6Njo3YjQ5OjdlMTU5OWY2NGMwYWFlM2VhMGU5M2UzNTIxOGFiYmVjMmVhNmQxMDg4YTMyMTRlZWVhZTQzNWFiMDY3NTc3YzE6cDpU)
Shore Capital
Nominated Advisor and Broker + 44 207 408 4090
Patrick Castle / Tom Knibbs
Yellow Jersey PR
Charles Goodwin / Annabelle Wills +44 7747 788 221
About Glantus Holdings plc
Glantus Holdings (AIM: GLAN) Glantus is a global provider of accounts payable
automation and analytics solutions. Glantus' mission is to harness technology
to drive innovation, unlocking efficiencies in AP to maximise working capital
for global enterprise organisations. The award-winning Glantus DataShark
Platform connects all AP systems and suppliers on one agile platform,
eliminating cost and delivering new revenue streams. We work in tandem with
our partners to deliver joint enterprise digital transformation solutions. For
more information see glantus.com
(https://url.avanan.click/v2/___https:/www.glantus.com/___.YXAxZTpzaG9yZWNhcDphOm86NjkwM2IwZGEyMzRkY2IyOGRjMjYxY2RjMmVjYjU2MDg6Njo2Y2U0OmE2NjAwNTA5MDhkYTRhMDMyODJkN2Y5YTY3ZDZmNGJiYzg1NjRmMzU2NzkxNmU1NTcyODU0YzE4OTRmMzcxZjQ6cDpU)
.
Founded in 2014 and headquartered in Dublin, Glantus has offices in the United
States, United Kingdom, Poland and Costa Rica.
Chief Executive Statement
The results presented above reflect the tumult in the latter part of 2022. I
am extremely proud of the work performed by our executive team during this
difficult period. Their professionalism and commitment to the Company and its
shareholders brought about a remarkable turnaround in a short timeframe.
I would like to thank my fellow directors, Chairman Barry Townsley,
non-executive directors Tom Price and Thomas Brooke, executive director Geoff
Keating and former executive directors Gráinne McKeown and Diane Gray-Smith
for their invaluable contributions during this period as we steered the
Company to firmer ground. Their dedication and commitment have been very much
appreciated.
Having overcome the challenges we faced, our teams are committed to supporting
our expanding service offering and achieving operational efficiencies, whilst
remaining focussed on delivery to our customers and shareholders.
We look forward to the rest of 2023 with renewed energy and confidence.
Strategy
Glantus operates in the very exciting AP market. This market continues to grow
and as we leave the Covid pandemic behind and large organisations return to
growth, opportunities will continue to open up for Glantus.
Glantus' target customer is any organisation with an annual spend of over
$500m and in excess of 4,000 suppliers.
Our technology works by integrating with our clients' ERP systems to discover
and recover lost working capital, improve efficiency, minimise errors, measure
performance and mitigate risk. Our award-winning Glantus Data Platform is
deployed around existing transactional systems to provide a single platform
for Accounts Payable transformation with the simple mission of simplifying
data to drive constant innovation.
People
In challenging times, we depend even more on our people. I am very proud of
all our teams globally, adapting to new ways of doing business and the new
technologies we introduced this year.
This is a rapidly changing market and I thank each and every one of our people
for their professionalism, enthusiasm and their commitment to making Glantus
the leading provider of AP services in the market.
Outlook
Following the restructuring of the business, we have seen significant cost
savings through the reduction in headcount and operational infrastructure
costs. Paired with our efforts to consolidate operations globally to re-focus
on our technology to encourage margins whilst scaling the business has meant
trading in the new financial year has been ahead of management's expectations
and the business model and strategy provides a strong platform for significant
growth.
Beach Point Capital (BPC) has confirmed that its €5m loan to Glantus is now
not repayable until August 2024 and €7.35m is repayable in August 2025. The
legal paperwork is in process to formalise this extension.
We look forward to 2023 with increased confidence and determination to grow
our organisation and provide an exceptional return to our shareholders.
Maurice Healy, CEO
29 June 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Note Year Ended Year Ended
31 December 31 December
2022 2021
€ €
Revenue 4 9,798,212 10,523,198
Cost of sales (3,289,804) (2,178,431)
Gross profit 6,508,408 8,344,767
Income from sale of legacy software and contracts 600,000 -
Administrative expenses (8,985,378) (5,458,039)
Exceptional items 5 (1,339,224) (2,947,986)
Share based payments 19 (56,661) (23,512)
Amortisation 12 (2,211,004) (1,229,276)
Depreciation 13 (144,189) (198,266)
Other income 7 94,625 216,740
Operating Loss (5,533,423) (1,295,572)
Finance costs 8 (1,444,983) (967,214)
Loss on ordinary activities before taxation 9 (6,978,406) (2,262,786)
Income tax credit/(charge) 10 258,482 (22,006)
Loss for the financial year (6,719,924) (2,284,792)
Other comprehensive loss for the year 8,890 126,299
Total comprehensive loss for the year attributable to the owners of the group (6,711,034) (2,158,493)
Loss per share - basic and diluted (cent) 11 (17.76) (6.89)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Note 31 December 31 December
2022 2021
€ €
Assets
Non-current assets
Intangible assets 12 16,767,710 17,508,858
Property, plant and equipment 13 335,708 240,271
17,103,418 17,749,129
Current assets
Trade and other receivables 14 4,760,993 6,750,691
Cash and cash equivalents 15 341,590 2,353,130
5,102,583 9,103,821
Total assets 22,206,001 26,852,950
Equity and liabilities
Equity
Called up share capital presented as equity 17 37,833 37,833
Share premium 18 12,082,742 12,082,742
Reorganisation reserve 18 656,060 656,060
Foreign exchange reserve 18 (34,921) (43,811)
Share option reserve 18 171,173 114,512
Retained earnings 18 (9,510,799) (2,790,875)
Total equity 3,402,088 10,056,461
Current liabilities
Trade and other payables 16 11,072,652 6,268,454
Non-current liabilities
Long term liabilities 16 7,731,261 10,528,035
Total liabilities 18,803,913 16,796,489
Total liabilities and equity 22,206,001 26,852,950
The financial statements were approved and authorised for issue by the board.
____________________________________
____________________________________
Maurice
Healy
Geoff Keating
Director
Director
29 June
2023
29 June 2023
COMPANY STATEMENT OF FINANCIAL POSITION
Note 31 December 31 December
2022 2021
€ €
Assets
Non-current assets
Financial assets 23 16,185,275 16,093,702
Property, plant and equipment 13 1,144 242
16,186,419 16,093,944
Current assets
Trade and other receivables 14 6,283,583 4,708,843
Cash and cash equivalents 15 82,220 584,902
6,365,803 5,293,745
Total assets 22,552,222 21,387,689
Equity and liabilities
Equity
Called up share capital presented as equity 17 37,833 37,833
Share premium 18 12,082,742 12,082,742
Share option reserve 18 171,173 114,512
Retained earnings 18 (4,263,305) (2,634,784)
Total Equity 8,028,443 9,600,303
Current liabilities
Trade and other payables 16 6,873,779 1,851,460
Non-current liabilities
Long term liabilities 16 7,650,000 9,935,926
Total liabilities 14,523,779 11,787,386
Total liabilities and equity 22,552,222 21,387,689
The financial statements were approved and authorised for issue by the board.
____________________________________
____________________________________
Maurice
Healy
Geoff Keating
Director
Director
29 June
2023
29 June 2023
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Note Called up share capital presented as equity Share premium account Reorganisation reserve Foreign exchange reserves arising on translation Share option reserve Retained earnings Total
At 1 January 2021 1,275 999,791 656,060 (170,110) 91,000 (1,480,874) 97,142
Share based payment charge - - - - 23,512 - 23,512
Reorgansiation for AIM listing 18 25,000 (999,791) - - - 974,791 -
Issue of shares 18 11,558 12,082,742 - - - - 12,094,300
Total comprehensive loss for the year - - - 126,299 - (2,284,792) (2,158,493)
At 31 December 2021 37,833 12,082,742 656,060 (43,811) 114,512 (2,790,875) 10,056,461
At 1 January 2022 37,833 12,082,742 656,060 (43,811) 114,512 (2,790,875) 10,056,461
Share based payment charge 56,661 56,661
Total comprehensive loss for the year 8,890 (6,719,924) (6,711,034)
At 31 December 2022 37,833 12,082,742 656,060 (34,921) 171,173 (9,510,799) 3,402,088
COMPANY STATEMENT OF CHANGES IN EQUITY
Called up share capital presented as equity Share Premium account Share Option reserve Retained earnings Total
Note € € € € €
At 1 January 2021 1,275 999,792 91,000 (1,583,436) (491,369)
Share based payment charge - - 23,512 - 23,512
Reorganisation for AIM Listing 18 25,000 (999,792) - 974,792 -
Issue of shares 18 11,558 12,082,742 - - 12,094,300
Total comprehensive loss for the period - - - (2,026,140) (2,026,140)
At 31 December 2021 37,833 12,082,742 114,512 (2,634,784) 9,600,303
At 1 January 2022 37,833 12,082,742 114,512 (2,634,784) 9,600,303
Share based payment charge 56,661 56,661
Total comprehensive loss for the year (1,628,521) (1,628,521)
At 31 December 2022 37,833 12,082,742 171,173 (4,263,305) 8,028,443
CONSOLIDATED STATEMENT OF CASH FLOWS
Year Ended Year Ended
31 December 31 December
2022 2021
€ €
Cash flows from operating activities
Group loss after tax (6,719,924) (2,284,792)
Adjusted for:
Interest payable 1,444,983 967,214
R&D tax credit income (83,626) (72,180)
Income tax expense (258,482) 22,006
Depreciation 144,189 198,266
Amortisation 2,211,004 1,229,276
Movement in trade and other receivables 1,537,323 (2,339,028)
Movement in trade and other payables 3,111,289 1,795,343
Loss on disposal of tangible assets 17,855 17,180
Net tax (paid)/received - (3,852)
R&D refund (paid)/received - (71,596)
Share-based payment expense 56,661 23,512
Effects of movement in exchange rates 8,881 126,389
Net cash flows generated from/(used in) operating activities 1,470,153 (392,262)
Cash flows from investing activities
Purchase of property, plant and equipment (257,460) (37,405)
Payment for acquisition of subsidiaries, net of cash acquired - (6,853,315)
Payment of deferred consideration (836,833) (2,363,482)
Payment for software development asset (1,469,859) (1,189,195)
Net cash used in investing activities (2,564,152) (10,443,397)
Cash flow from financing activities
Loans received 1,866,666 4,536,666
Interest payable (1,444,983) (967,214)
Exceptional costs (including IPO in prior year) (1,339,224) (2,947,986)
Equity (Proceeds from issue of shares) - 11,613,587
Equity (IPO costs against share premium) - (936,985)
Net cash generated (used in)/from financing activities (917,541) 11,298,068
Net (decrease)/increase in cash and cash equivalents (2,011,540) 462,409
Cash and cash equivalents at the beginning of the year 2,353,130 1,890,721
Cash and cash equivalents at the end of the year 341,590 2,353,130
COMPANY STATEMENT OF CASH FLOWS
31 December 31 December
2022 2021
€ €
Cash flows from operating activities
Company loss after tax (1,628,521) (2,026,140)
Adjusted for:
Interest payable 1,188,521 937,787
Income tax expense - 2,567
Depreciation 587 241
Movement in trade and other receivables 4,524 (21,940)
Movement in trade and other payables 1,036,181 -
Loss on disposal of tangible assets 1,155 1,916,680
Share-based payment expense 56,661 23,512
Net cash flows generated from operating activities 659,108 832,707
Cash flows from investing activities
Purchase of property, plant and equipment (2,644) -
Payment of deferred consideration - (2,026,685)
Net cash used in investing activities (2,644) (2,026,685)
Cash flow from financing activities
Amounts (advanced to) group companies (1,496,299) (11,025,793)
Loans received 1,908,426 4,550,000
Interest payable (1,188,521) (937,787)
Exceptional costs (including IPO in prior year) (382,752) (1,912,031)
Equity (Proceeds from issue of shares) - 11,590,075
Equity (IPO costs against share premium) - (936,985)
Net cash (used in)/generated from financing activities (1,159,146) 1,327,479
Net (decrease)/increase in cash and cash equivalents (502,682) 133,501
Cash and cash equivalents at the beginning of the year 584,902 451,401
Cash and cash equivalents at the end of the year 82,220 584,902
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL INFORMATION
Glantus Holdings Plc ("the Company") is a public limited company incorporated
in the Republic of Ireland. The registered office is Marina House, Block V,
Eastpoint Business Park, Dublin, D03 AX24.
The principal activity of the Group is a provider of software as a service
("SaaS") solutions, which assists global corporates analyse, automate and
digitise their accounts payable function on its proprietary platform to
recover lost working capital. Foreign operations are included in accordance
with the policies set out in Note 3.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation
Compliance with IFRS, new standards and interpretation
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards ('IFRS') and interpretations
issued by the IFRS Interpretations Committee ('IFRS IC') applicable to
companies reporting under IFRS. The financial statements comply with IFRS as
issued by the International Accounting Standards Board and as adopted by the
EU, and the Companies Act 2014. The consolidated financial statements of the
group are presented in Euro ("€").
Under the Companies Act 2014 the company is exempt from the requirement to
present its own profit and loss account. The company's loss for the year ended
2022 was €1,628,521 (2021: €2,026,140).
The IFRS accounting policies adopted are consistently applied for the previous
financial year.
There are no changes to IFRS which became effective for the company during the
financial year which resulted in material changes to the financial statements.
New standards and interpretations
The company financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) and their interpretations
issued by the International Accounting Standards Board (IASB) as adopted by
the EU.
The following new standards or interpretations issued by the International
Accounting Standards Board (IASB) and the International Financial Reporting
Interpretations Committee (IFRIC) were effective in the current financial year
and did not result in a material impact to the company's results:
· Amendments to IAS 37 - Onerous Contracts: Cost of Fulfilling
a Contract
· Amendments to IAS 16 - Property, Plant and Equipment:
Proceeds before Intended Use
· Amendments to IFRS 1 First-time Adoption of International Financial
Standards, IFRS 9 Financial Instruments, IFRS 16 Leases and IAS 41
Agriculture: Annual Improvements to IFRS Standards 2018-2020
· Amendments to IFRS 3 - Business Combinations: References to
Conceptual Framework
The IASB and IFRIC have issued the following standards and interpretations
with an effective date after the date of the Financial Statements which the
company has not early adopted.
New/Revised International Financial Reporting Standards Description Effective Date - periods beginning on or after
IFRS 17 Insurance Contracts 1 January 2023
IFRS 10 and IAS 28 Amendment to Sale or Contribution of Assets between an Investor and its 1 January 2023
Associate or Joint Venture
IAS 1 Amendment to Classification of Liabilities as Current or Non-current 1 January 2024
IAS 8 Amendment to Definition of Accounting Estimates 1 January 2023
IAS 12 Amendment to Deferred Tax related to Assets and Liabilities arising from a 1 January 2023
Single Transaction
IFRS 16 Amendment to Sale and Lease buyback 1 January 2024
The Directors anticipate that the adoption of the above standards and
interpretations issued by the IASB and the IFRIC will not have a material
impact on the Company's Financial Statements.
.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
(b) Going concern
Management have prepared projections and forecasts taking account of
reasonably possible changes in trading performance and the funding facilities
available from the date of approval of the financial statements.
The directors therefore have reasonable expectations that the Group has
adequate resources to continue in operational existence for the foreseeable
future. Accordingly, they continue to adopt the going concern basis in
preparing the financial statements.
(c) Basis of consolidation
The financial statements of the Group incorporate the financial information of
the Company (the parent) and entities controlled by the Company (its
subsidiaries) made up to 31 December each year.
Control is achieved when the Company:
· has the power over the subsidiary entity;
· is exposed, or has rights, to variable returns from its
involvement with the subsidiary entity; and
· has the ability to use its power to affect those returns.
The Group reassesses whether it controls the subsidiaries if facts and
circumstance indicate that there are changes to their control.
When the Company has less than a majority of the voting rights of an investee,
it considers that it has power over the investee when the voting rights are
sufficient to give it the practical ability to direct the relevant activities
of the investee unilaterally. The Company considers all relevant facts and
circumstances in assessing whether or not the Company's voting rights in an
investee are sufficient to give it power, including:
· the size of the Company's holding of voting rights relative to
the size and dispersion of holdings of the other vote holders;
· potential voting rights held by the Company, other vote holders
or other parties;
· rights arising from other contractual arrangements; and
· any additional facts and circumstances that indicate that the
Company has, or does not have, the current ability to direct the relevant
activities at the time that decisions need to be made, including voting
patterns at previous shareholders' meetings.
Consolidation of a subsidiary begins when the Company obtains control over the
subsidiary and ceases when the Company loses control of the subsidiary.
Intra-group assets and liabilities, equity, income, expenses and cashflows
relating to intra-group transactions are eliminated on consolidation. Where
necessary, the accounting policies of subsidiaries have been changed to ensure
consistency with the policies adopted by the Group.
When the Group loses control over a subsidiary, the profit or loss on disposal
is calculated as the difference between (i) the aggregate of the fair value of
the consideration received and the fair value of any retained interest and
(ii) the previous carrying amount of the assets (including goodwill), and
liabilities of the subsidiary and any non-controlling interests. Amounts
previously recognised in other comprehensive income in relation to the
subsidiary are accounted for (i.e. reclassified to profit or loss or
transferred directly to retained earnings) in the same manner as would be
required if the relevant assets or liabilities were disposed of.
The fair value of any investments retained in the former subsidiary at the
date when control is lost is regarded as the fair value on initial recognition
for subsequent accounting or, when applicable, the cost on initial recognition
of an investment in an associate or jointly controlled entity.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
(d) Business combinations and goodwill
Business combinations are accounted for by applying the purchase method.
The cost of a business combination is the fair value of the consideration
given, liabilities incurred or assumed and of equity instruments issued. Where
control is achieved in stages the cost is the consideration at the date of
each transaction.
On acquisition of a business, fair values are attributed to the identifiable
assets, liabilities and contingent liabilities unless the fair value cannot be
measured reliably, in which case the value is incorporated in goodwill.
Where the fair value of contingent liabilities cannot be reliably measured,
they are disclosed on the same basis as other contingent liabilities.
Goodwill recognised represents the excess of the fair value and directly
attributable costs of the purchase consideration over the fair value to the
Group's interest in the identifiable net assets, liabilities and contingent
liabilities acquired.
On acquisition, goodwill is allocated to cash-generating units that are
expected to benefit from the combination. Goodwill is assessed for impairment
when there are indicators of impairment and any impairment is charged to the
statement of comprehensive income.
(e) Revenue recognition
Revenue is measured based on the consideration to which the Group expects to
be entitled in a contract with a customer and excludes amounts collected on
behalf of third parties. The Group recognises revenue when it transfers
control of a product or service to a customer. An analysis of the revenue
recognition principles applied in each of the Group's operating segments is
provided below:
Subscriptions
Annual subscriptions are recognised on a straight-line basis, for the right to
continued access to the licensed intellectual property and the support and
maintenance services for the licences held, in accordance with the licence
agreement in place. Annual subscriptions include all support, maintenance,
software updates and other services provided to the customers.
Income arising on support contracts and subscription sales where the provision
of the service has not been completed at the year-end date is deferred and
recognised as the service is provided.
Transactional
Revenue is generated from the provision vendor credit recovery services to its
customers and earn a fixed contractual percentage on the amount of vendor
credits approved by the customer. Upon the customer's acceptance of the vendor
credits identified, revenue is recognised at that point in time, net of
discounts and provided that the company has no significant related obligations
or collection uncertainties remaining.
Rendering of professional services and licences
Professional services are customer-specific services which are provided for
specific needs of individual customers with no alternative uses for the Group.
The Group has an enforceable right to payment for performance towards the
performance obligation completed to date.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
(e) Revenue recognition (continued)
Revenue from rendering of services is recognised over time in the accounting
period in which the services are rendered by applying the input method of
measuring progress toward complete satisfaction of the performance obligation;
primarily on a time and materials basis. Revenue is recognised based on the
amount of fees that the Group is entitled to invoice for services performed to
date based on the pre-agreed contracted rates.
On the basis of the input method as described above, the time and materials
costs incurred to fulfil a contract are recognised as revenue and a subsequent
contract asset is recorded, if and only if all of the following criteria are
met:
· the costs relate directly to a contract;
· the costs generate or enhance resources of the entity that will
be used in satisfying performance obligations in the future; and
· the costs are expected to be recovered.
These include costs such as direct labour, direct materials, and the
allocation of overheads that relate directly to the contract. Contract assets
are disclosed separately as unbilled receivables in Trade and other
receivables (Note 14).
Revenue generated from the sale of software licenses and other ready-made
products is recognised at a point in time upon delivery of the software and/or
product to the customer, provided that the Group has no significant related
obligations or collection uncertainties remaining.
(f) Leases
At inception of a contract, the Group assesses whether a contract is, or
contains, a lease. A contract is, or contains, a lease if the contract conveys
the right to control the use of an identified asset for a period of time in
exchange for consideration.
The Group recognises a right-of-use asset and a
lease liability at the lease commencement date. The right-of-use asset is
initially measured at cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or before the commencement
date, plus any initial direct costs incurred and an estimate of costs to
dismantle and remove the underlying asset or to restore the underlying asset
or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently
depreciated using the straight-line method from the commencement date to the
earlier of the end of the useful life of the right-of-use asset or the end of
the lease term. The estimated useful lives of right-of-use assets are
determined on the same basis as those of property and equipment. In addition,
the right-of-use asset is periodically reduced by impairment losses, if any,
and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at
the present value of the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease or, if that
rate cannot be readily determined, the Group's incremental borrowing rate.
Generally, the Group uses its incremental borrowing rate as the discount rate.
Lease payments included in the measurement of
the lease liability comprise:
· fixed payments, including in-substance fixed payments;
· variable lease payments that depend on an index or a rate,
initially measured using the index or rate as at the commencement date; and
· amounts expected to be payable under a residual value guarantee.
The lease liability is measured at amortised
cost using the effective interest method. It is remeasured when there is a
change in future lease payments arising from a change in an index or rate, if
there is a change in the Group's estimate of the amount expected to be payable
under a residual value guarantee.
When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying amount of the right-of-use
asset or is recorded in profit or loss if the carrying amount of the
right-of-use asset has been reduced to zero.
The Group presents right-of-use assets that do not meet the definition of
investment property in 'property, plant and equipment', and lease liabilities
in trade and other payables in the statement of financial position.
Right-of-use asset of office rentals is presented under 'property, plant and
equipment'. The movement of right-of-use of the assets of the Group during the
years is disclosed in Notes 13.
Short-term leases and leases of low-value assets
The Group has elected not to recognise
right-of-use assets and lease liabilities for short-term leases of offices and
licenses that have a lease term of 12 months or less and leases of low-value
assets. The Group recognises the lease payments associated with these leases
as an expense on a straight-line basis over the lease term.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
(g) Foreign currencies
Foreign currency transactions are translated
into the individual entities' respective functional currencies at the exchange
rates prevailing on the date of the transaction. At the end of each financial
year, monetary items denominated in foreign currencies are retranslated at the
rates prevailing as of the end of the financial year. Non-monetary items
carried at fair value that are denominated in foreign currencies are
retranslated at the rates prevailing on the date when the fair value was
determined. Non-monetary items that are measured in terms of historical cost
in a foreign currency are not retranslated.
Exchange differences arising on the settlement
of monetary items, and on retranslation of monetary items are included in
profit or loss for the year. Exchange differences arising on the retranslation
of non-monetary items carried at fair value are included in profit or loss for
the year except for differences arising on the retranslation of non-monetary
items in respect of which gains, and losses are recognised directly in equity.
For such non-monetary items, any exchange component of that gain or loss is
also recognised directly in other comprehensive income.
For the purpose of presenting consolidated financial statements, the assets
and liabilities of the Group's foreign operations (including comparatives) are
expressed in Euro using exchange rates prevailing at the end of the financial
year. Income and expense items (including comparatives) are translated at the
average exchange rates for the period, unless exchange rates fluctuated
significantly during that period, in which case the exchange rates at the
dates of the transactions are used. Exchange differences arising, if any, are
classified as equity and transferred to the Group's translation reserve. Such
translation differences are recognised in profit or loss in the period in
which the foreign operation is disposed of.
On consolidation, exchange differences arising from the translation of the net
investment in foreign entities (including monetary items that, in substance,
form part of the net investment in foreign entities), and of borrowings and
other currency instruments designated as hedges of such investments, are taken
to the foreign currency translation reserve.
Goodwill and fair value adjustments arising on the acquisition of a foreign
operation are treated as assets and liabilities of the foreign operation and
translated accordingly.
(h) Employee benefits
The Group provides a range of benefits to employees, including bonus
arrangements, paid holiday arrangements and defined contribution pension
plans.
Short term benefits
Short term benefits, including holiday pay and other similar non-monetary
benefits, are recognised as an expense in the period in which the service is
received. A provision is made for the estimated liability for annual leave as
a result of services rendered by employees up to the end of the financial
year.
Defined contribution pension plans
The Group operates a defined contribution plan for certain employees. A
defined contribution plan is a pension plan under which the Group pays fixed
contributions into a separate entity. Once the contributions have been paid
the Group has no further payment obligations.
The contributions are recognised as an expense when they are due. Amounts not
paid are shown in accruals in the statement of financial position. The assets
of the plan are held separately from the Group in independently administered
funds.
Share-based payments
The Group issues equity-settled share-based payments to certain employees.
Equity-settled share-based payments are measured at fair value of the equity
instruments (excluding the effect of non-market-based vesting conditions) at
the date of grant. Details regarding the determination of the fair value of
equity-settled share-based transactions are set out in Note 19. The cost of
equity-settled transactions with employees is recognised as an expense over
the vesting period, which ends on the date on which the relevant employees
become fully entitled to the award. Fair value is determined by an external
valuer using an appropriate pricing model. No expense is recognised for awards
that do not ultimately vest, except for awards where vesting is conditional
upon a market condition, which are treated as vesting irrespective of whether
or not the market condition is satisfied, provided that all other performance
conditions are satisfied.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
(h) Employee benefits (continued)
At each year end date before vesting, the cumulative expense is calculated,
representing the extent to which the vesting period has expired and
management's best estimate of the achievement or otherwise of non-market
conditions, the number of equity instruments that will ultimately vest, or in
the case of an instrument subject to a market condition, be treated as vesting
as described above. The movement in the cumulative expense since the previous
year end date is recognised in the statement of comprehensive income, with a
corresponding entry in 'share option reserves'.
Where the terms of an equity-settled award are modified or a new award is
designated as replacing a cancelled or settled award, the cost based on the
original award terms continues to be recognised over the original vesting
period. In addition, an expense is recognised over the remainder of the new
vesting period for the incremental fair value of any modification, based on
the difference between the fair value of the original award and the fair value
of the modified award, both as measured on the date of the modification. No
reduction is recognised if this difference is negative.
(i) Borrowing costs
Borrowing costs are recognised in profit or
loss in the period in which they are incurred.
(j) Interest income
Interest income comprises of income on cash
held on interest-bearing bank deposits. Interest income is recognised as it
occurs in the statement of comprehensive income, using the effective interest
rate method.
(k) Income tax
The taxation expense for the period comprises current and deferred tax
recognised in the reporting period. Tax is recognised in the statement of
comprehensive income, except to the extent that it relates to items recognised
in other comprehensive income or directly in equity. In this case tax is also
recognised in other comprehensive income or directly in equity, respectively.
Current tax
The tax currently payable is based on taxable
profit for the year. Taxable profit differs from net profit as reported in
profit or loss because it excludes items of income or expense that are taxable
or deductible in other years and it further excludes items that are never
taxable or deductible. The Group's liability for current tax is calculated
using tax rates that have been enacted or substantively enacted by the end of
the reporting period.
A provision is recognised for those matters for
which the tax determination is uncertain but it is considered probable that
there will be a future outflow of funds to a tax authority. The provisions are
measured at the best estimate of the amount expected to become payable. The
assessment is based on the judgement of tax professionals within the Group
supported by previous experience in respect of such activities and in certain
cases based on specialist independent tax advice.
Deferred tax
Deferred tax is the tax expected to be payable
or recoverable on differences between the carrying amounts of assets and
liabilities in the financial information and the corresponding tax bases used
in the computation of taxable profit and is accounted for using the liability
method.
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from the initial recognition of
goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit. In addition, a deferred
tax liability is not recognised if the temporary difference arises from the
initial recognition of goodwill.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
(k) Income tax (continued)
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries, except where the Group is able to
control the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future. Deferred tax
assets arising from deductible temporary differences associated with such
investments and interests are only recognised to the extent that it is
probable that there will be sufficient taxable profits against which to
utilise the benefits of the temporary differences and they are expected to
reverse in the foreseeable future.
The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or
part of the asset to be recovered.
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 based on tax laws and rates that have been enacted or
substantively enacted at the reporting date.
The measurement of deferred tax liabilities and
assets reflects the tax consequences that would follow from the manner in
which the Group expects, at the end of the reporting period, to recover or
settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset
when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to income taxes levied by
the same taxation authority and the Group intends to settle its current tax
assets and liabilities on a net basis.
(l) Research and development tax credit
Research and development tax credits are recognised as a gain, set against the
related expenditure in the year to which they relate. To the extent that the
related expenditure is capitalised the tax credit is deferred on the statement
of financial position.
(m) Intangible assets
Intangible assets acquired are stated at cost less any accumulated
amortisation and any accumulated impairment losses. Cost comprises purchase
price and other directly attributable costs.
Intangible assets are amortised on a straight-line basis over its useful
economic life, which is considered to be 3-5 years.
Internally‑generated intangible assets
Research and development expenditure
Expenditure on research activities is recognised as an expense in the period
in which it is incurred.
An internally-generated intangible asset arising from development (or from the
development phase of an internal project) is recognised if, and only if, all
of the following conditions have been demonstrated:
· the technical feasibility of completing the intangible asset so
that it will be available for use or sale;
· the intention to complete the intangible asset and use or sell
it;
· the ability to use or sell the intangible asset;
· how the intangible asset will generate probable future economic
benefits;
· the availability of adequate technical, financial and other
resources to complete the development and to use or sell the intangible asset;
and
· the ability to measure reliably the expenditure attributable to
the intangible asset during its development.
The amount initially recognised for internally-generated intangible assets is
the sum of the expenditure incurred from the date when the intangible asset
first meets the recognition criteria listed above. Where no
internally-generated intangible asset can be recognised, development
expenditure is recognised in profit or loss in the period in which it is
incurred.
Development expenditure is amortised on a straight-line basis over its useful
economic life, which commences when the asset is brought into use, and is
considered to be over 3 years.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
(m) Intangible assets (continued)
Intellectual property and customer relationships intangible assets
The amount initially recognised for intellectual property and customer
relationships acquired on Technology Insights Corporation acquisition was the
valuation at the date of acquisition.
Intellectual property is amortised on a straight-line basis over its useful
economic life, which commences when the asset was purchased, and is considered
to be over 5 years. Customer relationships are amortised on a straight-line
basis over its useful economic life, which is considered to be 8 years.
Derecognition of intangible assets
An intangible asset is derecognised on disposal, or when no future economic
benefits are expected from use or disposal. Gains or losses arising from
derecognition of an intangible asset, measured as the difference between the
net disposal proceeds and the carrying amount of the asset, are recognised in
profit or loss when the asset is derecognised.
(n) Property, plant and equipment
Property, plant and equipment are stated at
cost less accumulated depreciation and accumulated impairment losses. Cost
includes the original purchase price, costs directly attributable to bringing
the asset to its working condition for its intended use, dismantling and
restoration costs, and borrowing costs capitalised.
Depreciation
Depreciation is calculated using the straight-line method to write off the
cost of property, plant and equipment over their expected useful lives as
follows:
Office
equipment
15% - 20%
Fixtures and
fittings
12.5% - 20%
Computer
equipment
25%
Right of use
assets
Lower of the useful life of the asset or the lease term
The estimated useful lives, residual values and
depreciation method are reviewed at the end of each reporting period, with the
effect of any changes in estimate accounted for on a prospective basis.
Subsequent additions
Subsequent costs are included in the assets carrying amount or recognised as a
separate asset, as appropriate, only when it is probable that economic
benefits associated with the item will flow to the Group and the cost can be
measured reliably.
The carrying amount of any replaced component is derecognised. Major
components are treated as a separate asset where they have significantly
different patterns of consumption of economic benefits and are depreciated
separately over its useful life.
Repairs, maintenance and minor inspection costs are expensed as incurred.
Derecognition
An item of property, plant and equipment is derecognised upon disposal or when
no future economic benefits are expected to arise from the continued use of
the asset. The gain or loss arising on the disposal or retirement of an asset
is determined as the difference between the sales proceeds and the carrying
amount of the asset and is recognised in profit or loss.
(o) Impairment of tangible and intangible assets
The Group reviews the carrying amounts of its
tangible and intangible assets as at each reporting date to assess for any
indication of impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of the
impairment loss (if any). Where it is not possible to estimate the recoverable
amount of an individual asset, the Group estimates the recoverable amount of
the cash-generating unit to which the asset belongs.
Irrespective of whether there is any indication of impairment, the Group also
tests its intangible assets with indefinite useful lives and intangible assets
not yet available for use for impairment annually by comparing their
respective carrying amounts with their corresponding recoverable amounts.
The recoverable amount of an asset or cash-generating unit is the higher of
its fair value less costs to sell and its value in use. In assessing value in
use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset.
An impairment loss for the amount by which the asset's carrying amount exceeds
the recoverable amount is recognised immediately in profit or loss, unless the
relevant asset is carried at a revalued amount, in which case the impairment
loss is treated as a revaluation decrease.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
(o) Impairment of tangible and intangible assets
(continued)
Where an impairment loss subsequently reverses, the carrying amount of the
asset (cash-generating unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss
been recognised for the asset (cash-generating unit) in prior years. A
reversal of an impairment loss is recognised immediately in profit or loss,
unless the relevant asset is carried at a revalued amount, in which case the
reversal of the impairment loss is treated as a revaluation increase.
(p) Financial instruments
Financial assets and financial liabilities are recognised when the Group
becomes a party to the contractual provisions of the instrument.
Effective interest method
The effective interest method is a method of calculating the amortised cost of
a financial instrument and allocating the interest income or expense over the
relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash receipts or payments (including all fees on
points paid or received that form an integral part of the effective interest
rate, transaction costs and other premiums or discounts) through the expected
life of the financial instrument, or where appropriate, a shorter period, to
the net carrying amount of the financial instrument. Income and expense are
recognised on an effective interest basis for debt instruments other than
those financial instruments at fair value through profit or loss.
Financial assets
Financial assets and financial liabilities are initially measured at fair
value. Transaction costs that are directly attributable to the acquisition or
issue of financial assets and financial liabilities (other than financial
assets and financial liabilities at fair value through profit or loss) are
added to or deducted from the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition. Transaction costs
directly attributable to the acquisition of financial assets or financial
liabilities at fair value through profit or loss are recognised immediately in
profit or loss.
All financial assets are recognised on a trade date - the date on which the
Group commits to purchase or sell the asset. They are initially measured at
fair value, plus transaction costs, except for those financial assets
classified as at fair value through profit or loss, which are initially
measured at fair value.
Financial assets are classified into the following specified categories:
financial assets at fair value through profit or loss; held-to-maturity
investments; loans and receivables; and available-for-sale financial assets.
The classification depends on the nature and purpose for which these financial
assets were acquired and is determined at the time of initial recognition.
Loans and receivables
The Group's loans and receivables comprise trade and other receivables,
amounts due from contract customers and bank balances.
Such loans and receivables are non-derivatives with fixed or determinable
payments that are not quoted in an active market. They are measured at
amortised cost, using the effective interest method less impairment. Interest
is recognised by applying the effective interest rate, except for short-term
receivables when the recognition of interest would be immaterial.
Impairment of financial assets
The Group recognises a loss allowance for
expected credit losses on investments in debt instruments that are measured at
amortised cost or at FVTOCI, lease receivables, trade receivables and contract
assets, as well as on financial guarantee contracts. The amount of expected
credit losses is updated at each reporting date to reflect changes in credit
risk since initial recognition of the respective financial instrument.
The Group always recognises lifetime Expected Credit Losses ("ECL") for trade
receivables. The ECL on these financial assets are estimated using a provision
matrix based on the Group's historical credit loss experience, adjusted for
factors that are specific to the receivables, general economic conditions and
an assessment of both the current as well as the forecast direction of
conditions at the reporting date, including time value of money where
appropriate. When there has not been a significant increase in credit risk
since initial recognition, the Group measures the loss allowance for that
financial instrument at an amount equal to 12-month ECL which represents the
portion of lifetime ECL that is expected to result from default events on a
financial instrument that are possible within 12 months after the reporting
date; except for assets for which simplified approach was used.
The Group assumes that the credit risk on a financial instrument has not
increased significantly since initial recognition if the financial instrument
is determined to have low credit risk at the reporting date. A financial
instrument is determined to have low credit risk if:
(a) The financial instrument has a low risk of default,
(b) The debtor has a strong capacity to meet its contractual cash flow
obligations in the near term, and
(c) Adverse changes in economic and business conditions in the longer
term may, but will not necessarily, reduce the ability of the borrower to
fulfil its contractual cash flow obligations.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
(p) Financial instruments (continued)
The Group considers a financial asset to have low credit risk when the asset
has external credit rating of 'investment grade' in accordance with the
globally understood definition or if an external rating is not available, the
asset has an internal rating of 'performing'. Performing means that the
counterparty has a strong financial position and there is no past due amounts.
Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to
the cash flows from the asset expire, or it transfers the financial asset and
substantially all the risks and rewards of ownership of the asset to another
entity. If the Group neither transfers nor retains substantially all the risks
and rewards of ownership of the financial asset and continues to control the
transferred asset, the Group recognises its retained interest in the asset and
an associated liability for amounts it may have to pay. If the Group retains
substantially all the risks and rewards of ownership of a transferred
financial asset, the Group continues to recognise the financial asset and also
recognises a collateralised borrowing for the proceeds receivables.
Financial liabilities and equity
Classification of debt or equity
Debt and equity instruments are classified as
either financial liabilities or as equity in accordance with the substance of
the contractual arrangements and the definitions of a financial liability and
an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the
assets of the Group after deducting all of its liabilities. Equity instruments
are recorded at the proceeds received, net of direct issue costs.
Ordinary share capital
Ordinary share capital is classified as equity. Incremental costs directly
attributable to the issue of ordinary shares and share options are recognised
as a deduction from equity.
Preference shares
The dividend rights of the preference shares are cumulative, and payment is
non-discretionary. The preference shares do not carry any voting rights at
meetings. Based on their characteristics the directors consider that these
shares should be regarded as a financial liability rather than an equity
instrument.
Share premium
The share premium reserve contains the premium arising on issue of equity
shares, net of issue expenses.
Financial liabilities
Financial liabilities are classified as either financial liabilities at fair
value through profit or loss or other financial liabilities.
Financial liabilities are classified as at fair value through profit or loss
if the financial liability is either held for trading or it is designated as
such upon initial recognition.
Other financial liabilities
Trade and other payables
Trade and other payables are initially measured at fair value, net of
transaction costs, and are subsequently measured at amortised cost, where
applicable, using the effective interest method, with interest expense
recognised on an effective yield basis.
Borrowings
Interest-bearing bank loans and overdrafts are initially measured at fair
value, and are subsequently measured at amortised cost, using the effective
interest method. Any difference between the proceeds (net of transaction
costs) and the settlement or redemption of borrowings is recognised over the
term of the borrowings.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group's
obligations are discharged, cancelled or they expire.
(q) Provisions and contingencies
Provisions
Provisions are recognised when the Group has a
present obligation (legal or constructive) as a result of a past event, it is
probable that the Group will be required to settle that obligation and a
reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration
required to settle the present obligation at the reporting date, taking into
account the risks and uncertainties surrounding the obligation.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
(q) Provisions and contingencies (continued)
Where a provision is measured using the cash
flows estimated to settle the present obligation, its carrying amount is the
present value of those cash flows (when the effect of the time value of money
is material).
When some or all of the economic benefits
required to settle a provision are expected to be recovered from a third
party, a receivable is recognised as an asset if it is virtually certain that
reimbursement will be received and the amount of the receivable can be
measured reliably.
Contingencies
Contingent liabilities, arising as a result of past events, are not recognised
when (i) it is not probable that there will be an outflow of resources or that
the amount cannot be reliably measured at the reporting date or (ii) when the
existence will be confirmed by the occurrence or non-occurrence of uncertain
future events not wholly within the Group's control. Contingent liabilities
are disclosed unless the probability of an outflow of resources is remote.
Contingent assets are not recognised. Contingent assets are disclosed when an
inflow of economic benefits is probable.
(r) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits and other
short-term highly liquid investments which are readily convertible to known
amounts of cash and are subject to insignificant risk of changes in value.
(s) Related party transactions
Transactions with entities not wholly group owned are disclosed in accordance
with IFRS.
(t) Segmental information
Segmental information is presented in respect of the Group's geographical
regions and operating segments. The operating segments are based on the
Group's management and internal reporting requirements.
3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND
ASSUMPTIONS
In preparing this consolidated financial information, the
Group makes judgements, estimates and assumptions concerning the future that
impact the application of policies and reported amounts of assets,
liabilities, income and expenses.
The resulting accounting estimates calculated using these
judgements and assumptions are based on historical experience and expectations
of future events and may not equal the actual results. Estimates and
underlying assumptions are reviewed on an ongoing basis, and revisions to
estimates are recognised prospectively. The judgements and key sources of
assumptions and estimation uncertainty that have a significant effect on the
amounts recognised in the financial information are discussed below.
Critical judgements made in applying the Group
accounting policies
Information about judgements made in applying
accounting policies that have the most significant effects on the amounts
recognised in this consolidated financial information are below:
(a) Intangible assets: Development expenditure
The Group capitalises a proportion of costs
related to software development in accordance with its accounting policy.
The Group regularly reviews the carrying value of capitalised development
costs, which are amortised over 3 years, to ensure they are not impaired, and
the amortisation period is appropriate. Management makes judgements about
the technical feasibility and economic benefit of completed products, as well
as the period of time over which the economic benefit will cease. The carrying
value of the internally generated intangible asset held by the Group at each
year end is shown in Note 12.
(b) Carrying value of goodwill
The Group tests annually whether the goodwill has suffered any impairment. An
impairment loss is recognised for the amount by which the asset's carrying
amount exceeds its recoverable amount. The recoverable amount is the higher of
an asset's fair value less costs of disposal and value in use. The carrying
value of the goodwill held by the Group at each year end is shown in Note 12.
(c) Carrying value of intellectual property acquired
The Group regularly reviews the carrying value of intellectual property
acquired, which are amortised over 5 years, to ensure they are not impaired,
and the amortisation period is appropriate. Management makes judgements
about the period of time over which the economic benefit will cease. The
carrying value of the intangible asset held by the Group at each year end is
shown in Note 12.
3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND
ASSUMPTIONS (continued)
(d) Carrying value of Customer Relationships
The Group regularly reviews the carrying value of customer relationships,
which are amortised over 8 years, to ensure they are not impaired, and the
amortisation period is appropriate. Management makes judgements about the
period of time over which the economic benefit will cease. The carrying value
of the intangible asset held by the Group at each year end is shown in Note
12.
(e) Revenue recognition
The Group recognises revenue in line with IFRS 15 Revenue recognition.
Management applies judgement in determining the nature, variable
considerations, and timing of satisfaction of promises in the context of the
contract that meet the basis of revenue recognition criteria. Significant
judgements include identifying performance obligations, identifying distinct
intellectual property licenses, and determining the timing of satisfaction and
approach in recognising the revenue of those identified performance
obligations; whether a point in time or a passage of time approach to be
adopted. See applied revenue recognition criteria for each revenue streams
within note 2(e) for details on the Group's revenue recognition policies
adopted. The amount of the Group's revenue recognised in each year is shown in
Note 4.
4. REVENUE
Segmental information
Segmental information is presented in respect of the Group's geographical
regions and operating segments in accordance with IFRS 8 'Operating Segments'.
The Board considers that there is one identifiable business segment being the
provision of software solutions including related recovery audit services.
Recurring revenue is the revenue that annually repeats either under
contractual subscription or predicable transactional billing.
2022 2021
€ €
Recurring Revenue 7,951,661 9,050,442
Non-recurring revenue 1,846,551 1,472,756
Reported revenue 9,798,212 10,523,198
Recurring as % of total revenue 80% 86%
2022 2021
€ €
Amount of revenue by class of activity:
Recurring subscriptions revenue 5,070,508 3,857,381
Recurring transactional revenue 2,881,153 5,193,061
Professional services and licences revenue 1,846,551 1,472,756
Reported revenue 9,798,212 10,523,198
Geographical
analysis
The Group operates in three principal geographical regions being Republic of
Ireland, the United Kingdom and the United States of America. The Group has
customers in other countries such as Singapore, Australia, Spain, Switzerland,
Canada, Mexico and the Netherlands, which are not material for separate
identification.
4. REVENUE (Continued)
2022 2021
Amount of revenue by region: € €
United Kingdom 2,639,756 3,877,673
United States of America 3,879,503 3,678,896
Republic of Ireland 2,796,926 2,478,427
Others 482,027 488,202
Reported Revenue 9,798,212 10,523,198
Contract assets and contract liabilities
Contract assets
Contract assets are disclosed separately as unbilled receivables in trade and
other receivables amounting to €1,835,263 (2021: €3,715,891) (Note 14).
Contract liabilities
Contract liabilities are disclosed separately as deferred income in trade and
other payables amounting to €1,054,800 (2021: €723,764) (Note 16). The
Group is availing of the practical expedient which exempts the disclosure of
unsatisfied performance obligations to date since both of the following
criteria are met:
· The performance obligations are part of contracts which have an
original expected duration of one year or less;
· The Group recognises revenue from the satisfaction of the performance
obligations which has been completed to date and to which the Group has a
right to invoice.
5. EXCEPTIONAL COSTS
The exceptional items include IPO costs, acquisition costs and costs incurred
in post-acquisition restructuring.
2022 2021
€ €
Acquisition costs - 1,014,864
Restructuring costs 1,317,706 489,297
AIM Admission costs - 902,104
Fee to Beach Point Capital on IPO admission - 1,000,000
Other exceptional costs/(income) 21,518 (458,279)
Total exceptional items 1,339,224 2,947,986
The majority of the restructuring costs of €1.3m consist of redundancy costs
of €0.8m
6. EMPLOYEES
The average monthly number of persons employed by the Group (including
directors) during the year was as follows:
2022 2021
Product development and delivery 82 58
Sales and Marketing 5 12
Administration 19 15
106 85
6. EMPLOYEES (Continued)
2022 2021
The Staff costs comprise: € €
Wages and salaries 7,766,473 4,789,145
Redundancy costs 791,247
Social welfare costs 757,867 493,688
Pension costs 162,582 71,765
9,478,169 5,354,598
Directors' remuneration 2022 2021
Directors' remuneration in respect of qualifying € €
services in respect of the Group:
Emoluments 685,943 485,434
Pensions 52,043 36,965
737,986 522,399
The number of directors to whom retirement benefits are accruing under defined
contribution scheme pension costs noted above is 4 (2021: 3).
Staff costs as qualifying development expenditure
The qualifying development expenditure generating an asset as shown in Note 12
consists of qualifying staff costs incurred in relation to the development of
the group's projects. During the current period, qualifying costs amounted to
€905,727 (2021: €610,984).
7. OTHER INCOME
2022 2021
€ €
Credit card cashback 10,999 -
Research and development tax credit 83,626 72,180
Grant income - 144,560
94,625 216,740
8. FINANCE
COSTS
2022 2021
€ €
Loan interest 1,444,983 961,902
Interest on preference shares - 5,312
1,444,983 967,214
9. LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION
The loss on ordinary activities before taxation is stated after charging/
(crediting):
2022 2021
€ €
Auditor's remuneration - Audit of group companies 80,000 110,000
- Other assurance services - 192,500
- Tax advisory services - 66,750
- Other non-Audit services 15,000 20,400
Directors' remuneration (Note 6) 737,986 522,399
Depreciation (Note 13) 144,189 198,266
Amortisation (Note 12) 2,211,004 1,229,276
Research and development tax credit (Note 7) (83,626) (72,180)
Grant income - (144,560)
Loss on disposal of fixed assets 17,855 17,180
Foreign exchange loss/(gain) 151,813 (235,371)
3,274,221 1,904,660
Other assurance services in 2021 very substantially relate to advisory
services work in connection with the IPO.
10. TAX ON LOSS ON ORDINARY ACTIVITIES
(a) Tax on loss on ordinary activities
The current tax charge for the year differs from the amount computed by
applying the standard rate of corporation tax in the Republic of Ireland to
the (loss) on ordinary activities before taxation. The sources and tax effects
of the differences are explained below:
2022 2021
€ €
Loss on ordinary activities before tax (6,978,406) (2,262,786)
Loss on ordinary activities multiplied by the standard rate of tax of 12.5% (872,301)
(282,848)
Effects of:
Depreciation/amortisation greater than capital allowances 135,280 71,220
Non-deductible expenses 181,697 394,528
Disallowable loan interest 19,449 117,161
Higher rates of tax on foreign income 30,306 72,052
Research and development tax credits income 1,153 (44,127)
Tax adjustments in respect of previous years - (15,134)
Tax relief at source/income tax 1,793 395
Deferred tax (286,815) (234,537)
Share options expense not allowable - 2,939
Profit on disposal 123,000 -
Losses carried forward 381,712
Loss utilised 26,244 (59,643)
Total tax (credit)/charge (258,482) 22,006
10. TAX ON LOSS ON ORDINARY ACTIVITIES (Continued)
(b) Deferred tax
asset
2022 2021
€ €
At beginning of year (net) 238,797 4,260
Released/(charged) to the statement of comprehensive income (Note 10(a)) 286,815 234,537
At end of year (net) 525,612 238,797
2022 2021
The deferred tax asset (Note 14) is analysed as follows: € €
Timing difference between depreciation and capital allowances 101,584 (77,883)
Timing differences between losses forward and utilised 424,028 252,244
Other timing differences 64,436
At end of year 525,612 238,797
The deferred tax liability (Note 16) is analysed as follows:
Timing differences arising on change in accounting standards - -
11. Earnings per share
Basic earnings per share is calculated by dividing the net loss for the year
attributable to ordinary shareholders by the weighted average number of
ordinary shares outstanding during the year.
2022 2021
€ €
Loss for the year (6,719,924) (2,284,792)
Taxation (258,482) 22,006
Amortisation 2,211,004 1,229,276
Depreciation 144,189 198,266
Exceptional items 1,339,224 2,947,986
Share based payments 56,661 23,512
Finance costs 1,444,983 967,214
Adjusted Earnings (1,782,345) 3,103,468
Number Number
Weighted average number of ordinary shares
Total shares in issue (weighted) 37,833,316 33,168,289
Total diluted shares (weighted) 40,026,532 35,547,510
EPS Cent Cent
Basic and diluted EPS (17.76) (6.89)
Adjusted EPS Cent Cent
Adjusted basic EPS (4.71) 9.36
Adjusted diluted EPS (4.71) 8.73
Adjusted EPS is not a defined performance measure in IFRS. The Group's
definition of adjusted EPS may not be comparable with similarly titled
performance measures disclosures by other entities.
12. INTANGIBLE ASSETS
GROUP 2022
Development expenditure Intellectual Property Acquired on Acquisition Customer Relationships Goodwill Total
€ € € € €
Cost
At 31 December 2021 3,271,085 3,812,913 2,796,136 10,162,379 20,042,513
Additions 1,472,175 - - 66,517 1,538,692
Disposals - - - (69,934) (69,934)
At 31 December 2022 4,743,260 3,812,913 2,796,136 10,158,962 21,511,271
Amortisation
At 31 December 2021 (1,714,535) (317,931) (182,458) (318,731) (2,533,655)
Charged in year (1,041,511) (763,035) (406,458) - (2,211,004)
Translation adjustment - - 1,098 - 1,098
At 31 December 2022 (2,756,046) (1,080,966) (587,818) (318,731) (4,743,561)
Net book amounts
At 31 December 2021 1,556,550 3,494,982 2,613,678 9,843,648 17,508,858
At 31 December 2022 1,987,214 2,731,947 2,208,318 9,840,231 16,767,710
GROUP 2021
Development expenditure Intellectual Property Acquired on Acquisition Customer Relationships Goodwill Total
€ € € € €
Cost
At 31 December 2020 1,897,040 - - 6,473,451 8,370,491
Reclassification 184,850 - - - 184,850
Additions on acquisition - 3,812,913 2,796,136 3,744,338 10,353,387
Additions 1,189,195 - - - 1,189,195
Adjustments - - - (55,410) (55,410)
At 31 December 2021 3,271,085 3,812,913 2,796,136 10,162,379 20,042,513
Amortisation
At 31 December 2020 (800,798) - - (318,731) (1,119,529)
Reclassification (184,850) - - - (184,850)
Charged in year (728,887) (317,931) (182,458) - (1,229,276)
At 31 December 2021 (1,714,535) (317,931) (182,458) (318,731) (2,533,655)
Net book amounts
At 31 December 2020 1,096,242 - - 6,154,720 7,250,962
At 31 December 2021 1,556,550 3,494,982 2,613,678 9,843,648 17,508,858
Development expenditure
In total, research and development costs for the Group qualifying for
capitalisation under IAS38 "intangible assets" amounted to €1,472,175 (2021:
€1,189,195). Qualifying development expenditure is amortised on a
straight-line basis over its useful economic life, which is considered to be 3
years. The amortisation expense amounting to €1,041,511 (2021: €728,887)
is included in the consolidated statement of comprehensive income.
Intellectual property Acquired on Acquisition
IP is amortised on a straight-line basis over its useful economic life, which
is considered to be 5 years. The amortisation expense amounting to €763,035
(2021: €317,931) is included in the consolidated statement of comprehensive
income.
Customer Relationships Acquired on Acquisition
Customer relationships are amortised on a straight-line basis over their
useful economic lives, which is considered to be 8 years. The amortisation
expense amounting to €406,458 (2021: €182,458) is included in the
consolidated statement of comprehensive income.
Impairment testing of goodwill
Goodwill is not amortised but it is tested for impairment annually, or more
frequently if events or changes in circumstances indicate that it might be
impaired, and is carried at cost less accumulated impairment losses. An
impairment loss is recognised for the amount by which the carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an
asset's fair value less costs of disposal and value in use. For the purposes
of assessing impairment, assets are grouped at the lowest levels for which
there are separately identifiable cash inflows which are largely independent
of the cash inflows from other assets or groups of assets (cash-generating
units "CGU").
12. INTANGIBLE ASSETS (Continued)
Sensitivity analysis
Sensitivity analysis was performed by applying
reductions to expected growth in revenue and also applying a percentage
increase to the weighted average cost of capital used to calculate the fair
value less costs of disposal. This analysis resulted in an excess in the
recoverable amount over their carrying amount under each approach for the
CGUs. Management believe that any reasonable change in any of the key
assumptions would not cause the carrying value of goodwill to exceed the
recoverable amount.
13. PROPERTY, PLANT AND EQUIPMENT
GROUP 2022
Right of use assets Office equipment Computer equipment Fixtures & fittings Leasehold improvements Total
€ € € € € €
Cost
At 31 December 2021 116,588 55,341 958,113 27,830 - 1,157,872
Additions 160,229 - 55,449 22,633 11,285 249,596
Disposals (116,588) (10,508) (139,042) (13,541) - (279,679)
Translation adjustment - (2,381) 4,423 (352) - 1,690
At 31 December 2022 160,229 42,452 878,943 36,570 11,285 1,129,479
Depreciation
At 31 December 2021 (116,588) (44,539) (734,726) (21,748) - (917,601)
Charge for the year (21,222) (3,817) (115,703) (2,157) (1,290) (144,189)
Disposals 116,588 10,395 123,368 12,055 - 262,406
Translation adjustment - 2,054 4,533 (974) - 5,613
At 31 December 2022 (21,222) (35,907) (722,528) (12,824) (1,290) (793,771)
Net book amounts
At 31 December 2021 - 10,802 223,387 6,082 - 240,271
At 31 December 2022 139,007 6,545 156,415 23,746 9,995 335,708
Group 2021
Right of use assets Office equipment Computer equipment Fixtures & fittings Leasehold improvements Total
€ € € € € €
Cost
At 31 December 2020 531,248 39,186 297,522 22,460 41,554 931,970
Reclassification (8,873) 9,506 2,904 (2,024) 7,064 8,577
Arising on acquisition - 17,824 583,705 81,410 51,278 734,217
Additions - 1,056 40,924 - - 41,980
Disposals (425,571) (15,027) - (75,173) (103,258) (619,029)
Translation adjustment 19,784 2,796 33,058 1,157 3,362 60,157
At 31 December 2021 116,588 55,341 958,113 27,830 - 1,157,872
Depreciation
At 31 December 2020 (368,921) (34,210) (148,628) (15,183) (9,570) (576,512)
Reclassification 8,790 (927) (11,690) 1,396 (6,231) (8,662)
Arising on acquisition - (15,993) (462,507) (78,811) (48,073) (605,384)
Charge for the year (92,886) (4,478) (94,137) (1,857) (4,908) (198,266)
Disposals 349,939 12,644 - 73,155 70,408 506,146
Translation adjustment (13,510) (1,575) (17,764) (448) (1,626) (34,923)
At 31 December 2021 (116,588) (44,539) (734,726) (21,748) - (917,601)
Net book amounts
At 31 December 2020 162,327 4,976 148,894 7,277 31,984 355,458
At 31 December 2021 - 10,802 223,387 6,082 - 240,271
13. PROPERTY, PLANT AND EQUIPMENT (Continued)
COMPANY 2022
Right of use assets Office equipment Computer equipment Fixtures & fittings Leasehold improvements Total
Cost € € € € € €
At 31 December 2021 - - 483 - - 483
Additions - - 2,644 - - 2,644
Disposals - - (1,386) - - (1,386)
At 31 December 2022 - - 1,741 - - 1,741
Depreciation
At 31 December 2021 - - (241) - - (241)
Charge for the year - - (587) - - (587)
Disposals - - 231 - - 231
At 31 December 2022 - - (597) - - (597)
Net book amounts
At 31 December 2021 - - 242 - - 242
At 31 December 2022 - - 1,144 - - 1,144
COMPANY 2021
Right of use assets Office equipment Computer equipment Fixtures & fittings Leasehold improvements Total
€ € € € € €
Cost
At 31 December 2020 - - 483 - - 483
Additions - - - - - -
At 31 December 2021 - - 483 - - 483
Depreciation
At 31 December 2020 - - - - - -
Charge for the year - - (241) - - (241)
At 31 December 2021 - - (241) - - (241)
Net book amounts
At 31 December 2020 - - 483 - - 483
At 31 December 2021 - - 242 - - 242
14. TRADE AND OTHER RECEIVABLES
GROUP
2022 2021
€ €
Trade receivables 2,032,430 2,244,243
Unbilled receivables 1,835,263 3,715,891
Prepayments and other receivables 173,147 354,821
Research and development tax credits 187,636 76,473
Corporation tax recoverable 6,905 120,466
Deferred tax asset (Note 10) 525,612 238,797
4,760,993 6,750,691
COMPANY
2022 2021
€ €
Amounts due from group companies 6,181,288 4,594,598
VAT asset 18,787 -
Prepayments 80,941 43,171
Accrued income - 71,074
Corporation Tax 2,567 -
6,283,583 4,708,843
14. TRADE AND OTHER RECEIVABLES (Continued)
Amounts due from group companies
The amounts due from group companies are unsecured, interest free and are
repayable on demand.
Trade and other receivables
The carrying amounts of trade receivables and
other receivables approximate their fair value largely due to the short-term
maturities and nature of these instruments. All trade receivables are due
within the Group's and Company's normal terms, which is 30 days. Trade
receivables are shown net of impairment in respect of doubtful debts.
Unbilled receivables
The terms of the accrued income are based on underlying invoices.
Taxes and tax credits
Taxes and social welfare costs are subject to
the terms of the relevant legislation.
15. Cash and cash equivalents
GROUP
2022 2021
€ €
Cash and Cash Equivalents 341,590 2,353,130
COMPANY
2022 2021
€ €
Cash and Cash Equivalents 82,220 584,902
There are no restrictions on the cash held.
16. TRADE AND OTHER PAYABLES
GROUP
Current
2022 2021
€ €
Bank loan (Note 20) 5,088,890 847,407
Trade payables 749,599 781,780
Lease liabilities (Note 22) 62,832 -
Deferred consideration on acquisition 1,026,471 1,387,272
Corporation tax 121,646 -
Value added tax 462,242 745,331
PAYE and PRSI 774,806 1,157,890
Research and development tax credit 107,619 52,894
Accruals and other creditors 1,623,747 572,116
Deferred revenue 1,054,800 723,764
11,072,652 6,268,454
16. TRADE AND OTHER PAYABLES (continued)
Non-current
2022 2021
€ €
Bank loan (Note 20) 7,650,000 10,024,815
Lease liability (Note 22) 81,261 -
Deferred consideration on acquisition - 476,032
Research and development tax credit - 27,188
7,731,261 10,528,035
COMPANY
Current
2022 2021
€ €
Amounts owed to group companies 506,581 416,191
Trade payables 422,137 471,648
Bank Loan (Note 20) 5,000,000 714,074
Corporation tax - 2,567
Value added tax - 9,993
PAYE and PRSI 30,148 64,382
Accruals and other creditors 914,913 172,605
6,873,779 1,851,460
Non-current
2022 2021
€ €
Bank loan (Note 20) 7,650,000 9,935,926
7,650,000 9,935,926
Trade and other payables
The carrying amounts of trade and other payables approximate their fair value
largely due to the short-term maturities and nature of these instruments. The
repayment terms of trade payables vary between on demand and 30 days. No
interest is payable on trade payables.
Reservation of title
Certain trade payables purport to claim a
reservation of title clause for goods supplied. Since the extent to which
these payables are secured at any time depends on
a number of conditions, the validity of some of which is not readily
determinable, it is not possible to indicate how much of the above was
effectively secured.
Taxes and social welfare costs
Taxes and social welfare costs are subject to the terms of the relevant
legislation. Interest accrues on late payments. No interest was due at the
financial year end date.
Accruals
The terms of the accruals are based on underlying invoices.
17. CALLED UP SHARE CAPITAL
GROUP and COMPANY
Shares presented as equity
2022 2021
Authorised Share Capital: € €
250,000,000 Ordinary shares of €0.001 each
Allotted, called up, fully paid:
37,833,316 Ordinary shares of €0.001 each 37,833 37,833
18. RESERVES
Share premium
The share premium reserve represents the premium on issue of the ordinary
shares.
Foreign exchange reserve
The foreign exchange reserve represents gains/losses arising on retranslating
the net assets of overseas operations into Euro.
Retained earnings
The retained earnings represent cumulative gains and losses recognised, net of
transfers to/from other reserves and dividends paid.
Reorganisation reserve
This reserve represents the difference between the nominal value of the shares
issued in the Company and the carrying value of the shares acquired arising
from a capital reorganisation.
Share option reserve
The share option reserve represents the movement in share-based payments. The
movement in the cumulative expense since the previous year end date is
recognised in the statement of comprehensive income, with a corresponding
entry in 'share option reserve'.
19. SHARE-BASED PAYMENTS
GROUP and COMPANY
The Company and Group offers a share option scheme to certain employees. The
terms and conditions of the options are as follows:
Persons entitled Method of settlement accounting Vesting Contractual life of options
conditions
Employees Equity Options vest after 12 months, or in certain cases on IPO (whichever is sooner) 7 years
Share-based payments
The number and weighted average exercise prices of share options are as
follows:
Weighted average Number of options
exercise price
2022 2021 2022 2021
€ € € €
Outstanding at beginning of year 0.30 2.92 2,781,064 113,875
Granted during the year - 0.32 - 2,667,189
Outstanding at end of year 0.30 0.30 2,781,064 2,781,064
Exercisable at end of year 0.33 0.33 568,093 568,093
The fair value of services received in return for share options granted are
measured by reference to the fair value of share options granted. The fair
value of employee share options is measured using a Black-Scholes model, which
takes into consideration the market values at grant date of €0.91 to
€7.05, expected term of 7 years, risk free rate of -0.29% to -0.56% and
volatility of 34.8% - 44.87%. Expected dividends is not applicable.
19. SHARE-BASED PAYMENTS (Continued)
The expected volatility is based on that of public companies in the same
industry as the Company. The total amount recognised for the year arising from
share-based payments is as follows:
2022 2021
€ €
Total share-based payment recognised 56,661 23,512
20. BANK LOANS
GROUP
2022 2021
€ €
Due within one year 5,088,890 847,407
Due between two and five years 7,650,000 10,024,815
12,738,890 10,872,222
COMPANY
2022 2021
€ €
Due within one year 5,000,000 714,074
Due between two and five years 7,650,000 9,935,926
12,650,000 10,650,000
Two loans due are in respect of BPC Ireland Lending DAC ("BPC") of
€5,000,000 and €7,350,000. The first BPC loan was repayable in 2023 but
since year-end BPC has approved the extension of the repayment date to 2024.
The second loan is repayable in 2025. Interest is charged on both at 10% per
annum. These loans are secured by way of fixed and floating charges over the
undertakings and assets of the Company and certain subsidiaries, in favour of
BPC Ireland Lending DAC. Any repayment or prepayment of the loans in full
shall incur an Exit Fee equal to €1,700,000.
A further loan of €300,000 is from Enterprise Ireland and is repayable in
December 2025, with interest charged per annum of 4%.
The Bank of Ireland loan of €88,890 incurs interest at 4% per annum and will
be fully repaid by August 2023.
21. COMMITMENTS AND CONTINGENCIES
GROUP
(a) Commitments
On 10 January 2020, BPC Ireland Lending DAC secured a fixed and floating
charge over the assets of the companies within the Group.
(b) Contingent liabilities
At the year end the Group had no contingent liabilities.
(c) Lease commitments
The Group has total future minimum lease payments under non-cancellable
operating lease commitments as follows:
At 31 December
Land and Buildings 2022 2021
€ €
Due within one year 75,276 -
Due within two to five years 87,767 -
Due after five years - -
163,043 -
22. LEASE LIABILITIES
Group 2022 2021
€ €
Current lease liabilities 62,832 -
Non-current lease liabilities 81,261 -
144,093 -
The Group's total lease liability over the years are as follows:
2022 2021
€ €
Opening liability - 180,451
Additions for the year 160,229 -
Arising on acquisition - -
Interest for the year 5,351 11,465
Operating lease expense for the year (21,487) (101,431)
Translation adjustment - 2,331
Termination of Lease Liability - (92,816)
Closing lease liability 144,093 -
Short term lease expenses through profit or loss 26,477 -
The Company had no lease commitments at the year end.
The Group's leases included rental of office spaces for business use and right
of use licences. All leases are on a fixed repayment basis and no arrangements
have been entered into for contingent rental repayments. The lease terms range
from 1 to 2 years depending on the term set in the contract. The effective
interest rates charged during the financial period is 12% per annum which
reflects the borrowing rate on the loan drawn by the parent Company in 2019.
Right of use asset of office rentals is classified as "property, plant and
equipment". The movement of the carrying amount of the right-of-use assets of
the Group at the start and end of each reporting period is disclosed in Note
13.
During 2021, it was agreed with the lessor that due to Covid-19 conditions it
would no longer be feasible for the Company to continue to rent out the office
space with the entire workforce operating on a work-from-home basis. As
such, the lease was terminated and there was no liability at year-end.
23. GROUP COMPANIES
The Company holds 100% of the ordinary share capital of Glantus Ireland
Limited, Glantus Limited, Glantus Inc., Glantus UK Limited and Tasnua
Limited. Glantus UK Limited owns 100% of the shares of Meridian Cost Benefit
Limited.
Subsidiary
Country of
Principal Registered
incorporation
activity address
Glantus Ireland Limited
Ireland Software
solutions Marina House,
Eastpoint Business Park, Dublin 3
Glantus Limited
United Kingdom Data
analytics Catherine Suite
solutions 40 London
Road
St Albans
Hertfordshire, AL1 1NG
Glantus UK Limited United
Kingdom Vendor recovery
Catherine Suite
solutions 40 London
Road
St Albans
Hertfordshire, AL1 1NG
Meridian Cost Benefit United
Kingdom Vendor recovery
Catherine Suite
solutions 40 London
Road
St Albans
Hertfordshire, AL1 1NG
23. GROUP COMPANIES (Continued)
Subsidiary
Country of
Principal Registered
incorporation
activity address
Glantus
Inc.
United States Vendor
recovery 99 South Almaden
services
Boulevard, Suite 600,
San Jose, California
Tasnua
Limited
Ireland
Inter-group Marina House,
trading
Eastpoint Business Park,
Dublin 3
Glantus Holdings PLC
United Kingdom UK
holding Catherine Suite
- UK
Branch
company 40 London
Road
St Albans
Hertfordshire, AL1 1NG
Technology Insight Inc. and Glantus Inc. merged
on 1(st) January 2022.
Shares in subsidiary undertakings
Company 2022 2021
€ €
At beginning of year 16,093,702 6,955,755
Acquisitions during the year - 2,762,377
Long term loans advanced for acquisitions (including interest) 91,573 6,438,681
Early payment discount - (63,111)
At end of year 16,185,275 16,093,702
24. ULTIMATE CONTROLLING PARTY
Maurice Healy, the Chief Executive, together with management are considered by
the directors to be the Company's ultimate controlling party.
25. PENSION COMMITMENTS
The Group operates defined contribution pension schemes. Pension benefits are
funded over the employee's period of service by way of contributions to an
insured fund. The Group's contributions are charged to the statement of
comprehensive income in the year to which they relate. The details of the
amount incurred during the year and the balance payable at the year-end is as
follows:
2022 2021
€ €
Incurred during the year 162,582 71,765
Payable at year end 28,491 37,497
26. FINANCIAL INSTRUMENTS
Financial risk factors
The Group's activities expose it to a variety
of financial risks including credit risk, currency risk, liquidity risk.
The Group uses different methods to measure
different types of risk to which it is exposed. Responsibility for managing
these risks rests with the Board.
(i) Credit risk
Credit risk refers to the loss that a group would incur if a debtor fails to
perform under its contractual obligations. Credit risks are mainly related to
cash and cash equivalents and trade debtors.
Exposure to credit risk is monitored on a
routine basis. The Group trade only with recognised, creditworthy third
parties. Receivable balances are monitored on an ongoing basis. As a result,
the Group's exposure to bad debts is not significant. Risk is managed by
maintaining close contact with each customer.
26. Financial instruments (Continued)
2022 2021
€ €
Ageing of past due but not impaired receivables
Current 503,927 1,044,907
1 - 3 months 1,189,844 720,240
4+ months 519,099 487,115
2,212,870 2,252,262
Movement in allowance for doubtful debt
Balance at 31 December (180,440) (8,019)
Trade receivable balance at 31 December (net of provision) 2,032,430 2,244,243
Based on prior experience and an assessment of the current economic
environment, the directors consider an impairment provision is required
against the trade receivables and consider that the carrying value of the
Group's trade and other receivables (net of provision) is a reasonable
approximation of their fair value.
(ii) Currency risk
The Group conducts its business primarily in Ireland, UK and USA. The Company
does not hedge its foreign exchange risk arising on transactions denominated
in foreign currencies. This is closely managed with part of the risk being
covered by the natural hedge of the non-euro denominated costs and other
overheads being paid in local currency.
(iii) Liquidity risk
Liquidity risk refers to the risk that the Group encounters difficulties in
meeting its short-term obligations. Liquidity risk is managed by matching the
payment and receipt cycle. The following table details the Group's remaining
contractual maturity for its liabilities. The table has been drawn up based on
contractual undiscounted cash flows of financial instruments based on the
earlier of the contractual date or when the Group is expected to receive or
(pay). The table includes both interest and principal cash flows.
GROUP
Within 1 Between 1 - 5 Over 5
31 December 2022 Total year years years
€ € € €
Financial liabilities 4,786,840 4,786,840 - -
Deferred consideration 1,026,471 1,026,471 - -
Lease liabilities 144,093 62,832 81,261 -
Research and development tax credit 107,619 107,619 - -
Bank loan 12,738,890 5,088,890 7,650,000 -
18,803,913 11,072,652 7,731,261 -
Within 1 Between 1 - 5 Over 5
31 December 2021 Total year years years
€ € € €
Financial liabilities 3,980,881 3,980,881 - -
Deferred consideration 1,863,304 1,387,272 476,032 -
Research and development tax credit 80,082 52,894 27,188 -
Bank loan 10,872,222 847,407 10,024,815 -
16,796,489 6,268,454 10,528,035 -
COMPANY
Within 1 Between 1 - 5 Over 5
31 December 2022 Total year years years
€ € € €
Financial liabilities 1,367,198 1,367,198 - -
Amounts owed to Group Companies 506,581 506,581 - -
Bank loan 12,650,000 5,000,000 7,650,000 -
14,523,779 6,873,779 7,650,000 -
26. Financial instruments (Continued)
Within 1 Between 1 - 5 Over 5
31 December 2021 Total year years years
€ € € €
Financial liabilities 721,195 721,195 - -
Amounts owed to Group Companies 416,191 416,191 - -
Bank loan 10,650,000 714,074 9,935,926 -
11,787,386 1,851,460 9,935,926 -
Fair values
The fair value of a financial instrument is the price that would be received
to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.
Financial instruments whose carrying amount
approximate fair value
Management has determined that the carrying amounts of cash and bank balances,
trade and other receivables and trade and other payables reasonably
approximate their fair values because these are mostly short-term in nature.
The fair values of other classes of financial assets and liabilities are
disclosed in their respective notes to these financial information.
The analysis of the carrying amounts of the financial instruments of the Group
required under IFRS 9 Financial Instruments is as follows:
Financial assets that are debt instruments measured at amortised cost
GROUP
2022 2021
€ €
Trade receivables 2,032,430 2,244,243
Unbilled receivables 1,835,263 3,715,891
Cash and cash equivalents 341,590 2,353,130
Prepayment 173,147 354,821
Corporation Tax Asset 6,905 120,466
COMPANY
2022 2021
€ €
Amounts owed from group companies 6,181,288 4,594,598
VAT Asset 18,787 -
Accrued income - 71,074
Prepayment 80,941 43,171
Corporation Tax Asset 2,567 -
Cash and cash equivalents 82,220 584,902
Financial liabilities at amortised cost
GROUP
2022 2021
€ €
Trade payables 749,599 781,780
Bank loan 12,738,890 10,872,222
Lease liabilities 144,093 -
Accruals & other payables 1,623,747 572,116
COMPANY
2022 2021
€ €
Amounts owed to group companies 506,581 416,191
Trade payables 422,137 471,648
Bank loan 12,650,000 10,650,000
Accruals and other payables 914,913 172,605
26. Financial instruments (Continued)
Capital management
The Group's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital. The capital structure of the
Group consists of debts, which includes the borrowings and equity attributable
to the shareholders, comprising issued capital and reserves.
27. RELATED PARTY TRANSACTIONS
In common with other companies, which are members of a group of companies, the
financial information reflects the effect of such membership. The Group is
availing of the exemption contained in IAS 24 Related Party Disclosures and is
not disclosing its transactions between wholly owned group companies.
There are no related party sales transaction in 2022 (2021: €400,000
excluding VAT relating to sales to Mendreo for software development and
consultancy services. One of the directors of Mendreo Limited is a related
party to Maurice Healy).
Key management personnel
The directors have authority and responsibility for planning, directing and
controlling the activities of the Company are considered to be key management
personnel. Total remuneration is respect of these individuals is €737,986
(2021: €522,399).
The amount due to the directors at the statement of financial position date is
€Nil (2021: €Nil).
28. SUBSEQUENT EVENTS
Since 31 December 2022, the Company completed a
successful fundraising of €1.4m through a subscription of new shares in
February 2023.
There have been no other post balance sheet
events that have occurred since the financial year end that require
disclosure.
29. APPROVAL OF FINANCIAL STATEMENTS
The financial statements were approved by the board on 29 June 2023.
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