TIDMGLAN
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 .
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 EUR1.5m per
month to EUR1m 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 EUR4.2m 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
EUR'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.EUR4.558m, adjusted EBITDA profit
of c.EUR1.3m
o Momentum has continued with revenues for May 2023 being ahead
of budget at EUR1.1m
o Realignment of cost base in 2022 has delivered much improved
adjusted EBITDA so far in 2023
-- Successful EUR1.4m (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
ir@glantus.com + 353 86 267 7800
Shore Capital
Nominated Advisor and Broker
Patrick Castle / Tom Knibbs + 44 207 408 4090
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 .
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 EUR5m loan to
Glantus is now not repayable until August 2024 and EUR7.35m 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
EUR EUR
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 600,000 -
and contracts
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
EUR EUR
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
EUR EUR
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 Share Reorganisation Foreign Share Retained Total
up share premium reserve exchange option earnings
capital account reserves reserve
presented arising
as equity on
translation
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 Premium Share Option Retained earnings Total
share capital account reserve
presented
as equity
Note EUR EUR EUR EUR EUR
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
EUR EUR
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
EUR EUR
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 ("EUR").
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 EUR1,628,521 (2021:
EUR2,026,140).
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 Description Effective Date
International - periods beginning
Financial Reporting on or after
Standards
IFRS 17 Insurance Contracts 1 January 2023
IFRS 10 and Amendment to Sale or Contribution 1 January 2023
IAS 28 of Assets between an Investor
and its Associate or Joint
Venture
IAS 1 Amendment to Classification 1 January 2024
of Liabilities as Current
or Non-current
IAS 8 Amendment to Definition of 1 January 2023
Accounting Estimates
IAS 12 Amendment to Deferred Tax 1 January 2023
related to Assets and Liabilities
arising from a Single Transaction
IFRS 16 Amendment to Sale and Lease 1 January 2024
buyback
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
EUR EUR
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
EUR EUR
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: EUR EUR
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 EUR1,835,263 (2021:
EUR3,715,891) (Note 14).
Contract liabilities
Contract liabilities are disclosed separately as deferred income
in trade and other payables amounting to EUR1,054,800 (2021:
EUR723,764) (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
EUR EUR
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 EUR1.3m consist of
redundancy costs of EUR0.8m
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: EUR EUR
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 EUR EUR
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 EUR905,727 (2021:
EUR610,984).
7. OTHER INCOME
2022 2021
EUR EUR
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
EUR EUR
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
EUR EUR
- Audit of group
Auditor's remuneration 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
EUR EUR
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
EUR EUR
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) EUR EUR
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
EUR EUR
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
Intellectual
Development Property Acquired
expenditure on Acquisition Customer Relationships Goodwill Total
EUR EUR EUR EUR EUR
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
Intellectual
Development Property Acquired Customer
expenditure on Acquisition Relationships Goodwill Total
EUR EUR EUR EUR EUR
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 EUR1,472,175 (2021: EUR1,189,195). 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 EUR1,041,511 (2021: EUR728,887)
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 EUR763,035 (2021: EUR317,931) 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 EUR406,458 (2021:
EUR182,458) 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 Office Computer Fixtures Leasehold Total
of use equipment equipment & fittings improvements
assets
EUR EUR EUR EUR EUR EUR
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 Office Computer Fixtures Leasehold Total
of use equipment equipment & fittings improvements
assets
EUR EUR EUR EUR EUR EUR
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 Office Computer Fixtures Leasehold Total
of use equipment equipment & fittings improvements
assets
Cost EUR EUR EUR EUR EUR EUR
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 Office Computer Fixtures Leasehold Total
of use equipment equipment & fittings improvements
assets
EUR EUR EUR EUR EUR EUR
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
EUR EUR
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
EUR EUR
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
EUR EUR
Cash and Cash Equivalents 341,590 2,353,130
======== ==========
COMPANY
2022 2021
EUR EUR
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
EUR EUR
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
EUR EUR
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
EUR EUR
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
EUR EUR
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: EUR EUR
250,000,000 Ordinary shares
of EUR0.001 each
Allotted, called up, fully
paid:
37,833,316 Ordinary shares of
EUR0.001 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 Vesting Contractual
settlement conditions life of options
accounting
Employees Equity Options vest after 7 years
12 months, or in
certain cases on
IPO (whichever is
sooner)
Share-based payments
The number and weighted average exercise prices of share options
are as follows:
Weighted average
exercise price Number of options
2022 2021 2022 2021
EUR EUR EUR EUR
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 EUR0.91 to
EUR7.05, 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
EUR EUR
Total share-based payment
recognised 56,661 23,512
20. BANK LOANS
GROUP
2022 2021
EUR EUR
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
EUR EUR
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 EUR5,000,000 and EUR7,350,000. 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 EUR1,700,000.
A further loan of EUR300,000 is from Enterprise Ireland and is
repayable in December 2025, with interest charged per annum of
4%.
The Bank of Ireland loan of EUR88,890 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
EUR EUR
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
EUR EUR
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
EUR EUR
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
EUR EUR
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
EUR EUR
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
EUR EUR
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 Between Over
1 1 - 5 5
31 December 2022 Total year years years
EUR EUR EUR EUR
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 Between Over
1 1 - 5 5
31 December 2021 Total year years years
EUR EUR EUR EUR
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 Between Over
1 1 - 5 5
31 December 2022 Total year years years
EUR EUR EUR EUR
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 Between Over
1 1 - 5 5
31 December 2021 Total year years years
EUR EUR EUR EUR
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
EUR EUR
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
EUR EUR
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
EUR EUR
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
EUR EUR
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:
EUR400,000 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 EUR737,986 (2021: EUR522,399).
The amount due to the directors at the statement of financial
position date is EURNil (2021: EURNil).
28. SUBSEQUENT EVENTS
Since 31 December 2022, the Company completed a successful
fundraising of EUR1.4m 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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR FLMJTMTBTTLJ
(END) Dow Jones Newswires
June 30, 2023 02:00 ET (06:00 GMT)
Glantus (LSE:GLAN)
Historical Stock Chart
From Jun 2024 to Jul 2024
Glantus (LSE:GLAN)
Historical Stock Chart
From Jul 2023 to Jul 2024
