REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
AUDITED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2022 |
FOR |
SNOW SOFTWARE LIMITED |
REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
AUDITED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2022 |
FOR |
SNOW SOFTWARE LIMITED |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
CONTENTS OF THE FINANCIAL STATEMENTS |
for the Year Ended 31 December 2022 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 6 |
Independent Auditors' Report | 8 |
Income Statement | 12 |
Other Comprehensive Income | 13 |
Balance Sheet | 14 |
Statement of Changes in Equity | 15 |
Notes to the Financial Statements | 16 |
SNOW SOFTWARE LIMITED |
COMPANY INFORMATION |
for the Year Ended 31 December 2022 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Statutory Auditors |
Herschel House |
58 Herschel Street |
Slough |
Berkshire |
SL1 1PG |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
STRATEGIC REPORT |
for the Year Ended 31 December 2022 |
The directors present their strategic report for the year ended 31 December 2022. |
REVIEW OF BUSINESS |
Sales for the year ended 31 December 2022 were £37,547,554 (2021: £29,340,766) and the gross margin was 75.66% (2021: 77.01%). |
Operating loss is £9,759,396 (2021: £4,121,947) and profit after tax for the financial year was £1,356,137 (2021: loss for the year of £4,046,265). |
Continued investment throughout the year has ensured that the company can deliver quality products and services to its customers. |
The directors have not identified any uncertainties that might affect the operations of the business in the future. They believe it is well positioned to achieve growth in coming years. |
Strategic restructure |
In 2021, the Snow Group underwent a global restructuring. As a result of these restructuring activities: |
The Group redomiciled to the United States. In December 2021, Snow Software US, Inc. became the parent Company of Snow Software Ltd and the ultimate parent company in the Snow Software Group. |
During 2022, management also implemented a restructuring of the Company's business operations, including the elimination of 14 positions. These changes were implemented to optimize the Company business operations, organizational structure and headcount to management's current expectations of business performance and align to changes in the Company business. Management expects these changes to improve operational and financial performance in future periods. |
PRINCIPAL RISKS AND UNCERTAINTIES |
The Company is exposed, due to its business, to various kinds of financial risks: credit risk, market risks of foreign currency and interest rate changes, liquidity risk and capital risk. The Company is included in the Group's overall risk management which seeks to minimise any potential adverse effects on the Group's financial results. All risks referred to below are managed by the company by means of an evaluation by the Board of Directors, along with management, of whether significant measures need to be adopted. |
Any financial transactions are handled centrally by the Group's finance function. The finance function provides the most cost-effective financing and cash management to the company. |
Credit risk and estimated credit loss in accounts receivable |
Credit risk is the risk that the Group's counterparty to a financial instrument fails to meet its obligation and through that causes the Group to suffer a financial loss. |
The Company follows the guidelines established by the Group to ensure that sales of products and services are made to customers with an appropriate credit background. The standard payment terms are 20-60 days depending on the counterparty. |
In the assessment of the Company's expected credit loss rate used to calculate expected credit losses, the following has been taken into consideration: |
- The Company's historical credit loss rate is close to zero, i.e. the Company has not recorded any material credit losses in prior years |
- At each period end a review of the outstanding receivables balance customer-by-customer and invoice-by-invoice level is completed. |
- A customer/industry analysis shows that the Company's standard customer is a larger, mature company. These are deemed to be relatively good payers compared to smaller entities or individuals. |
- A review of subsequent cash receipts shows that the collection process has been effective. |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
STRATEGIC REPORT |
for the Year Ended 31 December 2022 |
PRINCIPAL RISKS AND UNCERTAINTIES (CONT.) |
The conclusion of the above assessment is that there are no significant expected credit losses to be recognised. |
An age analysis for external accounts receivable, including a roll-forward of the provision for doubtful receivables, is shown below. |
31.12.2022 | 31.12.2021 |
Age distribution trade accounts receivable (gross) | £ | £ |
Accounts receivable not overdue | 7,478,827 | 6,078,590 |
Overdue receivables 1-30 days | 399,330 | 340,306 |
Overdue receivables 31-90 days | 328,241 | 134,200 |
Overdue receivables >90 days | 38,648 | 30,104 |
-------------------------- | -------------------------- |
Outstanding trade accounts receivable gross | 8,245,046 | 6,583,200 |
Provision for doubtful trade receivables |
Opening carrying amount | 66,909 | 177,213 |
Write-off of prior year overdue receivables/reversal of provisions |
- |
(110,304) |
Provisions for the year | 35,017 | - |
-------------------------- | -------------------------- |
Provision for doubtful trade receivables | 101,926 | 66,909 |
-------------------------- | -------------------------- |
Trade receivables carrying amount (net) | 8,143,120 | 6,516,291 |
-------------------------- | -------------------------- |
Market risks |
Market risk is the risk that the fair value or future cash flows of a financial instrument may fluctuate because of changes in market prices. The primary market risks affecting the Group are currency risk, i.e. the risk that future cash inflows fluctuate because of changes in foreign exchange rates and interest rate risk, i.e. the risk that the fair value of financial instruments and cashflows of interest income and interest expense fluctuate due to changes in market interest rates. The Company is exposed to both these risks as it i) enters into transactions in multiple currencies in addition to its own functional currency, the GBP, and ii) the Company has material interest bearing assets and liabilities. The Company's Board of Directors and treasury department closely monitors these market risks. |
Interest rate risk |
A significant factor affecting interest risk is the fixed interest period. The Company's external financing is subject to variable interest rates, and so the fair value of debt outstanding is not impacted by changes in interest rates, although interest expense incurred by the Company is impacted. |
The Company's interest bearing loan notes receivable are subject to interest rates that are reset on a periodic basis (typically annually). The periodic reset of interest rates to market rates, mitigates the risk of interest rates impacting the principal value receivable, although interest income is impacted by changes in interest rates. |
Liquidity risk |
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. The Group manages liquidity risks in specific operating entities through intercompany funding. The need for funding is monitored through the preparation of cash flow analyses and forecasts. These analyses and forecasts are prepared centrally by the finance department. On a Group level, the liquidity risk can be managed through, to some extent, changes to the rate at which investments are made, and there is also a revolving credit facility in place through which additional funding can be drawn. |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
STRATEGIC REPORT |
for the Year Ended 31 December 2022 |
Capital management risk |
"Capital" is defined as shareholders' equity. The Group's target is to maintain an optimal asset and capital structure in each Company in the Group over time. This structure should be well aligned to each group company's operations. The capital structure of each of the affiliates owned by Snow Software Ltd is closely monitored by management on a regular basis, and additional capital investments are made where necessary to support the operations and growth of the subsidiary entities. In addition, the Board of directors and management closely monitor the capital position of the Company to ensure that Snow Software Ltd has appropriate net shareholders' equity. |
SECTION 172(1) STATEMENT |
This section describes how the directors have had regard to the matters set out in the Companies Act S172(1) (a) to (f) in exercising their duty to promote the success of the company for the benefit of its members as a whole. |
Having regard to the likely consequences of any decision in the long term |
Within a fast-moving world, our customers' needs from our software solutions is constantly evolving. As new technologies impact our customers' IT environments (expansion of SaaS software solutions and Cloud services), we expect the way our customers use our software solutions to evolve and to offer us new opportunities. While the Company needs to remain agile to adapt the business to short term demands, the directors remain mindful that their strategic decisions can have long term implications for the business and its stakeholders, and these implications are carefully assessed. |
Having regard to the interests of the Company's employees |
The directors ensure that the suggestions, views, and interests of the workforce are captured and considered in their decision making. For that they can rely on various HR initiatives and programs put in place to ensure, amongst others, meaningful performance and development conversations between managers and teams, appropriate learning and development programs, constructive feedback from individuals, appropriate health, safety and wellbeing risk assessment and initiatives. The directors are also very attached to maintain diversity in the Company. Diversity is part of the DNA of the group. It made it successful over the years, our own diversity reflecting the very diverse customers we serve. |
Having regard to the need to foster the Company's business relationships with suppliers, customers and others |
Throughout the year the directors are briefed by business executives on sales performance figures including both our UK domestic and export sales and on customer satisfaction and customer retention metrics. Customer feedback and management's view of the market allows the directors to take decisions with the interests of customers and suppliers in mind. The directors are also regularly informed on the relationships the company maintains directly or indirectly with our banking partners that have provided Snow Software Ltd with its financing facility, which is key to our ability to provide our goods/services. The directors can rely on an experienced group compliance team to ensure compliance with all relevant legislation and regulations. |
Having regard to the impact of the Company's operations on the community and the environment |
The directors ensure that the impact of the Company's operations on the community and environment are considered in their decision making. The Company has programs in place to encourage our workforce to give back to the communities in which we operate. In addition, management monitors the impact of our operations on the environment. |
Having regard to the desirability of the Company maintaining a reputation for high standards of business contact |
The directors recognize the importance of operating a robust corporate governance framework that will integrate in and support the corporate governance of the group it belongs to. The Company has put in place different initiatives to ensure that all employees and directors adhere to high standards of ethics in the conduct of business. |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
STRATEGIC REPORT |
for the Year Ended 31 December 2022 |
KEY PERFORMANCE INDICATORS |
The company monitors its performance using key performance indicators: |
a) Sales have increased by 27.97% (2021: increased 2.55%) |
b) Working capital at the year end was £28,955,634 (2021: £20,810,446) |
c) There were 159 employees at the year end (2021: 151 employees) |
The key performance indicators are monitored through monthly management accounts and these are reviewed in comparison to prior periods and budgets. Any adverse trends are identified at an early stage and investigated. |
COMPLIANCE WITH MODERN SLAVERY ACT |
Following the enactment of the Modern Slavery Act in October 2015 the Company has reviewed its procurement and human rights practices and those of its supply chain considering this act. Snow Software Limited's suppliers are primarily UK, US and EU based entities. Having reviewed the requirements of the Modern Slavery Act, the Company has taken action to comply with the regulations. Snow Software Limited does not support forced and compulsory labor or the exploitation of children. |
ON BEHALF OF THE BOARD: |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
REPORT OF THE DIRECTORS |
for the Year Ended 31 December 2022 |
The directors present their report with the financial statements of the company for the year ended 31 December 2022. |
PRINCIPAL ACTIVITIES |
The principal activities of the company in the year under review were those of consulting, training, software and intergroup revenues. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 December 2022 (2021: £nil). |
FUTURE DEVELOPMENTS |
The directors are satisfied with the results for the year and the business continues to perform well in what is a competitive market place. Continued investment throughout the year has ensured that the company can deliver quality products and service to its customers. |
The directors have not identified any uncertainties that might affect the operations of the business in the future, and believe that it is well positioned to achieve growth in the coming years. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 January 2022 to the date of this report. |
GOING CONCERN |
The Directors have received confirmation from the Company's parent undertaking that it will, in the event that it becomes necessary, provide the Company with financial assistance to meets its financial liabilities as they fall due for a period of at least 12 months and one day from the date of the signing of the audit report. The Directors have assessed the ability of the parent to provide this support and, on the basis of this confirmation of support, the Directors have concluded that it is appropriate to prepare the annual report and financial statements on a going concern basis. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
REPORT OF THE DIRECTORS |
for the Year Ended 31 December 2022 |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
AUDITORS |
The auditors, Oury Clark Chartered Accountants, are deemed to be re-appointed under Section 487 (2) of the Companies Act 2006. |
ON BEHALF OF THE BOARD: |
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF |
SNOW SOFTWARE LIMITED |
Opinion |
We have audited the financial statements of Snow Software Limited (the 'company') for the year ended 31 December 2022 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 'Reduced Disclosure Framework' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion, the financial statements: |
- give a true and fair view of the company's affairs as at 31 December 2021 and of its loss for the year then ended; |
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be misstated. If we identify such inconsistencies or apparent misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF |
SNOW SOFTWARE LIMITED |
Matters on which we are required to report by exception |
In light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified any matters in the Strategic Report and Report of the Directors that are inconsistent with our overall view of the financial statements. |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page six, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. |
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF |
SNOW SOFTWARE LIMITED |
Auditors' responsibilities for the audit of the financial statements |
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
- Considering the nature of the industry, sector, control environment and current business activities, including possible performance targets and subsequent remuneration |
- Enquiring of management concerning policies and procedures relating to: |
1. Complying with laws and regulations and whether there were any instances of non-compliance |
2. Mitigating, detecting and responding to fraud risk and whether there has been any actual or possible instances of fraud |
- Evaluating revenue recognition systems and the controls in place over revenue recognition with the assistance of management |
- Discussing within the engagement team and internal specialists where necessary, regarding how and where fraud may occur in the financial statements along with the possible indicators of fraud. We identified the following areas most likely to be susceptible to fraud: |
1. Revenue recognition |
2. Management override |
- Discussing within the engagement team and internal specialists where necessary, the legal and regulatory framework in which the company operates and in particular those which would have an impact on the financial statements. The key laws and regulations considered were the Companies Act 2006, UK tax legislation and UK employment law. |
Audit response to the risks identified |
As noted above, we identified revenue recognition and management override as matters that would most likely be susceptible to fraud. Our procedures to respond to these risks included the following: |
- Viewing sales invoices and ensuring that revenue has been posted correctly in line with IFRS 15; |
- Reviewing a sample of journals posted and ensuring they have adequate business rationale and there was no evidence of management override. |
Further, we also identified compliance with the Companies Act 2006, UK tax legislation and employment law as being key areas where there may be possible non-compliance. Our procedures to respond to these risks included the following: |
- Review the financial statement disclosures and testing to supporting documentation to assess compliance with the Companies Act 2006 |
- Safeguard review of financial statements by an ACA qualified person and tax computation by a person qualified as a CTA or equivalent, not on the engagement team |
- We have checked a sample of compliance with right to work checks and reviewed legal fees for indications of material issues arising out of non-compliance with employment law. |
The above matters and identified laws and regulations and potential fraud risks were communicated to all engagement team members and internal specialists where necessary, in order to enable the team to have the ability to identify such risks. The whole team remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. |
There are inherent limitations in the audit procedures described above and the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report. |
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF |
SNOW SOFTWARE LIMITED |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Statutory Auditors |
Slough |
Berkshire |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
INCOME STATEMENT |
for the Year Ended 31 December 2022 |
31.12.22 | 31.12.21 |
Notes | £ | £ | £ | £ |
TURNOVER | 3 |
Cost of sales |
GROSS PROFIT |
Administrative expenses |
(9,759,396 | ) | (4,563,750 | ) |
Other operating income |
OPERATING LOSS | ( |
) | ( |
) |
Income from shares in group undertakings |
Interest receivable and similar income |
11,021,957 | 430,550 |
1,262,561 | (3,691,397 | ) |
Gain/(loss) on revaluation of |
investments | - | (914,350 | ) |
PROFIT/(LOSS) BEFORE TAXATION | 5 | ( |
) |
Tax on profit/(loss) | 6 | (93,576 | ) | (559,482 | ) |
PROFIT/(LOSS) FOR THE FINANCIAL YEAR |
( |
) |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
OTHER COMPREHENSIVE INCOME |
for the Year Ended 31 December 2022 |
31.12.22 | 31.12.21 |
Notes | £ | £ |
PROFIT/(LOSS) FOR THE YEAR | ( |
) |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
( |
) |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
BALANCE SHEET |
31 December 2022 |
31.12.22 | 31.12.21 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Owned |
Intangible assets | 7 | 19,506,800 | 22,150,476 |
Tangible assets | 8 | 79,542 | 107,136 |
Right-of-use |
Tangible assets | 8, 14 | 725,211 | 927,596 |
Investments | 9 |
CURRENT ASSETS |
Debtors: amounts falling due within one year | 10 |
Debtors: amounts falling due after more than one year |
10 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 11 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year | 12 |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 15 |
Share premium | 16 |
Share option reserve | 16 |
Retained earnings | 16 | ( |
) | ( |
) |
SHAREHOLDERS' FUNDS | 19 |
The financial statements were approved by the Board of Directors and authorised for issue on |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
STATEMENT OF CHANGES IN EQUITY |
for the Year Ended 31 December 2022 |
Called up | Share |
share | Retained | Share | option | Total |
capital | earnings | premium | reserve | equity |
£ | £ | £ | £ | £ |
Balance at 1 January 2021 |
Changes in equity |
Issue of share capital | - | - |
Total comprehensive income | - | ( |
) | - | ( |
) |
Capital contribution for equity settled share based payments |
- |
- |
- |
(57,183 |
) |
(57,183 |
) |
Return of capital contribution for equity settled share based payments |
- |
- |
- |
57,183 |
57,183 |
Balance at 31 December 2021 | (3,635,575 | ) |
Changes in equity |
Total comprehensive income | - | - | - |
Share based payment transactions | - | - | - | 837,515 | 837,515 |
Balance at 31 December 2022 | ( |
) |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
NOTES TO THE FINANCIAL STATEMENTS |
for the Year Ended 31 December 2022 |
1. | STATUTORY INFORMATION |
Snow Software Limited is a |
2. | ACCOUNTING POLICIES |
Basis of preparation |
The company's financial statements are presented in sterling. |
Going concern |
The Directors are satisfied given the performance of the business and the debt finance available that it is appropriate to prepare the annual report and financial statements on a going concern basis. |
Preparation of consolidated financial statements |
The financial statements contain information about Snow Software Limited as an individual company and do not contain consolidated financial statements as the parent of a group. The company is exempt under Section 401 of the Companies Act 2006 from the requirements to prepare consolidated financial statements as it and its subsidiary undertaking are included by full consolidation in the consolidated financial statements of its parent undertakings, Snow Software US Inc., a company registered in the United States of America. |
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 101 "Reduced Disclosure Framework": |
• | the requirements of paragraphs 45(b) and 46 to 52 of IFRS 2 Share-based Payment; |
• | the requirements of IFRS 7 Financial Instruments: Disclosures; |
• | the requirements of paragraph 52, the second sentence of paragraph 89, and paragraphs 90, 91 and 93 of IFRS 16 Leases; |
the requirements of paragraph 58 of IFRS 16; |
• | the requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15 Revenue from Contracts with Customers; |
• | the requirement in paragraph 38 of IAS 1 Presentation of Financial Statements to present comparative information in respect of: |
- | paragraph 79(a)(iv) of IAS 1; |
• | the requirements of IAS 7 Statement of Cash Flows; |
• | the requirements of paragraphs 17 and 18A of IAS 24 Related Party Disclosures; |
• | the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group. |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2022 |
2. | ACCOUNTING POLICIES - continued |
Critical accounting judgements and key sources of estimation uncertainty |
Revenue from contracts with customers |
The Group's revenue stems from complex contracts with customers, where the more complex contracts include revenues in relation to several different revenue streams, such as license revenue, subscription and maintenance revenue, as well as professional services. In these contracts, the executive management estimates how the revenues should be allocated to each performance obligation, and different principles for the revenue recognition can be applied for different performance obligations. These principles include full revenue recognition up-front at the start of the contract, over-time revenue recognition over the term of the contract, and progressive settlement of earnings as services are delivered during the term of the contract. |
The allocation of the contract value to each performance obligation is based on the respective component's stand-alone selling price. Since the Group's products do not have obvious stand-alone selling prices, management has assessed that these can be estimated by multiplying the product's list price by the average discount that the product was sold at during the previous reporting period. |
Capitalised contract costs |
In accordance with IFRS 15, all costs directly attributable to obtaining a contract with a customer must be capitalised and expensed over the period of revenue recognition for the underlying contract. Within the Group, there are primarily direct contract costs in relation to commission for sales representatives and in some cases, commissions paid to the Group's partner network. |
In accordance with what is permitted by the standard, direct contract costs are capitalised and expensed at the portfolio level, and not contract by contract. The capitalised asset is expensed linearly over the calculated average customer relationship, i.e. the estimated "lifespan" of the customer relationship. The estimated lifespan has been evaluated and determined by management and is an assumption that requires continued ongoing evaluation. |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2022 |
2. | ACCOUNTING POLICIES - continued |
Turnover |
Revenue from contracts with customers |
The company's total revenue is distributed across license revenue, subscription revenue, maintenance revenue and professional services revenues. Revenue arises through direct sales to customers and sales via external partners. A contract may include various components of goods/services which may be separate performance obligations, or which are combined in a joint performance obligation. Revenue is recognised as the group's performance obligations are satisfied. |
Revenue is only reported if it is deemed probable that the group will benefit from the related financial benefits. If there is significant uncertainty regarding payment, related costs or the risk of returns, no revenue is recognised. Revenue is recognised at the fair value of what has been received, or is expected to be received, less discounts granted. Estimates of revenue, costs and percentage of completion are revised if circumstances change. Changes in estimates are reported in the income statement in the period information about the conditions that led to the change is received. |
License revenue |
License revenue entitles the customer to use a licensed product developed by the company. The group applies two different accounting policies for license revenue, depending on how its performance obligations are satisfied: |
(i) Licenses that entitle the customer to use the underlying product "as it is" at the time of delivery ("right-to-use"). For these licenses, the group has satisfied its performance obligations at the time of delivery and thus the revenue is also fully recognised at the point of delivery at which the customer is granted the right to use the license. |
(ii) Licenses that entitle the customer to access the underlying product during its useful life (right-to-access), but where the product is still dependent on the group to provide further development or maintenance in order to function as intended. In these cases, the group is considered to satisfy its performance obligations over time instead of at the point of delivery and the license revenue is thus recognised over time. |
Subscription and Maintenance revenue |
Subscription and maintenance revenue is recognised linearly (daily) as the performance obligation is satisfied, i.e. over the term of the subscription or maintenance contract. |
Revenue from services such as installation, implementation and training |
Revenue from consulting services is earned through service contracts at fixed or variable prices. In both cases, the revenue is reported as the work is performed. Percentage of completion is determined by setting incurred expenses in relation to the total estimated expenses, alternatively by milestone delivery approval from the customer. |
Contract with multiple performance obligations |
Some agreements include multiple performance obligations. A performance obligation that does not include a significant integration service in relation to other obligations in the contract, which does not imply a significant modification of other obligations in the contract and which is not significantly dependent on or linked to other obligations in the contract, is considered separately identifiable and constitutes a separate performance obligation. The total contract value is allocated to the individual performance obligations based on its relative stand-alone selling prices. Revenue from each performance obligation is reported when the performance obligation has been satisfied. |
Contract costs |
Incremental costs of obtaining and fulfilling a contract are recognised as an asset if the Group expects to recover these expenses. If the amortisation period for the asset that was to be recognised is less than one year, the incremental cost is expensed as incurred. Contract costs are capitalised and expensed at portfolio level. The asset is amortised linearly over the estimated average customer relationship, i.e. the estimated lifetime of the customer relationship. |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2022 |
2. | ACCOUNTING POLICIES - continued |
Significant financing components |
The company does not expect to have any material contracts where the period between satisfaction of the performance obligation and payment from the customer exceeds one year. Consequently, the Group does not adjust the transaction price for the time value of money. |
Intangible assets |
Patents and licenses relate to acquired intellectual property. Development costs relate to capitalised research and development costs. |
Intellectual property is amortised over 5 years. |
Research and development costs are amortised when the project is ready for use over 4 years. |
Tangible fixed assets |
Leasehold improvements | - |
Right of use asset | - |
Plant and machinery | - |
Taxation |
Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules, using tax rates enacted or substantially enacted by the balance sheet date. |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Foreign currencies |
Transactions denominated in foreign currencies are recorded at the rates of exchange ruling at the dates of the transactions, or at an average rate for the period if the rates do not fluctuate significantly. Monetary assets and liabilities are translated at year end exchange rates or, where appropriate, at rates of exchange fixed under the terms of the relevant transaction. The resulting exchange rate differences are charged to the profit and loss account. |
Leases |
The lease liability is initially recognised at the present value of the lease payments which have not yet been made and subsequently measured under the amortised cost method. The initial cost of the right-of-use asset comprises the amount of the initial measurement of the lease liability, lease payments made prior to the lease commencement date, initial direct costs and the estimated costs of removing or dismantling the underlying asset per the conditions of the contract. |
Where ownership of the right-of-use asset transfers to the lessee at the end of the lease term, the right-of-use asset is depreciated over the asset’s remaining useful life. If ownership of the right-of-use asset does not transfer to the lessee at the end of the lease term, depreciation is charged over the shorter of the useful life of the right-of-use asset and the lease term. |
Employee benefit costs |
The company operates a defined contribution scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. Contributions payable to the company's pension scheme are charged to the profit and loss account in the period to which they relate. |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2022 |
2. | ACCOUNTING POLICIES - continued |
Financial instruments |
Basic Financial Instruments are measured at amortised cost. The company does not have any Other Financial Instruments. |
Share based payments |
The group of which the company is a member provides share based payment arrangements to certain employees. |
The arrangements are measured at fair value (excluding the effect on non-market based vesting conditions) at the date of grant. The fair value is expensed on a straight-line basis over the vesting period. The amount recognised as an expense is adjusted to reflect the actual number of shares that will vest. |
Settlements and cancellations are treated as an acceleration of vesting and the unvested amount is recognised immediately in the income statement. |
3. | TURNOVER |
The turnover and profit (2021 - loss) before taxation are attributable to the principal activities of the company. |
An analysis of turnover by class of business is given below: |
31.12.22 | 31.12.21 |
£ | £ |
An analysis of turnover by geographical market is given below: |
31.12.22 | 31.12.21 |
£ | £ |
United Kingdom |
Europe |
Asia |
Northern America |
Oceania |
Africa |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2022 |
3. | TURNOVER - continued |
A further analysis of revenue by geographical market for the year ended 31 December 2022 is given below: |
External | Inter-company | Total |
£ | £ | £ |
United Kingdom | 22,503,766 | - | 22,503,766 |
Europe | 676,658 | 10,290,302 | 10,966,960 |
Asia | 748,019 | 37,954 | 785,973 |
Northern America | 244,667 | 780,469 | 1,025,136 |
Oceania | 9,175 | 952,672 | 961,847 |
Africa | 1,303,872 | - | 1,303,872 |
25,486,157 | 12,061,397 | 37,547,554 |
4. | EMPLOYEES AND DIRECTORS |
31.12.22 | 31.12.21 |
£ | £ |
Wages and salaries | 12,238,143 | 10,897,274 |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
31.12.22 | 31.12.21 |
Administration and sales |
The pension cost charge represents contributions payable by the company to the fund and amounted to £664,190 (2021: £523,467). At the balance sheet date £125,654 (2021: £89,186) was payable to the pension fund, with £61,218 (2021: £46,487) being employer contributions, which is included within Other creditors & accruals. |
There was a charge to the profit and loss account of £837,515 (2021 credit of £57,186) relating to share based payments. |
The emoluments of the directors have been borne by another group entity. The directors services to the company do not occupy a significant amount of their time. As such the directors do not consider that they have received any remuneration for their incidental services to the company for the year ended 31 December 2022, or for the prior year. |
31.12.22 | 31.12.21 |
£ | £ |
Directors' remuneration |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2022 |
5. | PROFIT/(LOSS) BEFORE TAXATION |
The profit before taxation (2021 - loss before taxation) is stated after charging: |
31.12.22 | 31.12.21 |
£ | £ |
Cost of inventories recognised as expense |
Depreciation - owned assets |
Depreciation - assets on finance leases |
Loss on disposal of fixed assets |
Patents and licences amortisation | 4,764,119 | 2,382,059 |
Development costs amortisation | 124,126 | - |
Foreign exchange differences |
Auditors' remuneration | 106,047 | 89,591 |
Right of use obligations released | - | (441,803 | ) |
6. | TAXATION |
Analysis of tax income |
31.12.22 | 31.12.21 |
£ | £ |
Current tax: |
Tax | ( |
) | ( |
) |
Additional prior year tax |
expense | - | 13,397 |
Total current tax | (93,576 | ) | (587,940 | ) |
Deferred tax |
Total tax income in income statement | (93,576 | ) | (559,482 | ) |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2022 |
6. | TAXATION - continued |
Factors affecting the tax expense |
The tax assessed for the year is lower (2021 - higher) than the standard rate of corporation tax in the UK. The difference is explained below: |
31.12.22 | 31.12.21 |
£ | £ |
Profit/(loss) before income tax | ( |
) |
Profit/(loss) multiplied by the standard rate of corporation tax in the UK of |
239,887 |
(875,092 |
) |
Effects of: |
Capital allowances less than depreciation | 41,078 | 230,326 |
Income not liable to corporation tax | (1,810,776 | ) | - |
Non-deductible expenses | 12,832 | 111,829 |
Share options not exercised in the year | 159,128 | (10,865 | ) |
IFRS 16 adjustment | (42,605 | ) | (42,604 | ) |
Withholding tax | 729 | - |
General bad debt provision | 8,511 | (1,534 | ) |
Deferred tax | - | 28,458 |
Loss carried forward | 1,391,945 | - |
Impact of 2021 loss carried back | (94,305 | ) | - |
Tax income | ( |
) | ( |
) |
The applicable tax rate varies as a result of the relevant UK tax legislation in force. |
7. | INTANGIBLE FIXED ASSETS |
Patents |
and | Development |
licences | costs | Totals |
£ | £ | £ |
COST |
At 1 January 2022 |
Additions |
At 31 December 2022 |
AMORTISATION |
At 1 January 2022 |
Amortisation for year |
At 31 December 2022 |
NET BOOK VALUE |
At 31 December 2022 |
At 31 December 2021 |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2022 |
8. | TANGIBLE FIXED ASSETS |
Leasehold | Right of | Plant and |
improvements | use asset | machinery | Totals |
£ | £ | £ | £ |
COST |
At 1 January 2022 |
Additions |
Disposals | ( |
) | ( |
) | ( |
) |
At 31 December 2022 |
DEPRECIATION |
At 1 January 2022 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) | ( |
) |
At 31 December 2022 |
NET BOOK VALUE |
At 31 December 2022 |
At 31 December 2021 |
Relating to the Right of use 'ROU' asset included within fixed assets are other capitalised costs incurred directly relating to the leased premises. These consisted of leasehold improvements costing £580,788 (disposed of in the year) with a net book value of £NIL, together with plant and machinery costing £83,347 (disposed of in the year), with a net book value of £NIL. |
9. | INVESTMENTS |
Unlisted |
investments |
£ |
COST |
At 1 January 2022 | 81,602,104 |
Additions | 77,092,998 |
Disposals | (77,084,800 | ) |
At 31 December 2022 | 81,610,302 |
PROVISIONS |
At 1 January 2022 |
and 31 December 2022 | 914,350 |
NET BOOK VALUE |
At 31 December 2022 | 80,695,952 |
At 31 December 2021 | 80,687,754 |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2022 |
9. | INVESTMENTS - continued |
The company's investments at the Balance Sheet date in the share capital of companies include the following: |
Registered office: Rotebulplatz 23, 70178 Stuttgart, Germany |
Nature of business: |
% |
Class of shares: | holding |
Registered office: Box 1033, 131 21 Solna, Sweden |
Nature of business: |
% |
Class of shares: | holding |
Registered office: Keizersgracht 555, Amsterdam, 1017 DR, The Netherlands |
Nature of business: |
% |
Class of shares: | holding |
Registered office: Spaces Brussel City Centre, Visverkopersstraat 13, 1000 Brussel, Belgium |
Nature of business: |
% |
Class of shares: | holding |
Registered office: 54 Rue De Londres, Paris, 75008, France |
Nature of business: |
% |
Class of shares: | holding |
Registered office: Tollbugata 8, Oslo, 0152, Norway |
Nature of business: |
% |
Class of shares: | holding |
Registered office: 60 Martin Place, Level 1, Sydney, New South Wales 2000, Australia |
Nature of business: |
% |
Class of shares: | holding |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2022 |
9. | INVESTMENTS - continued |
Registered office: Firdonkatu 2 T 63, Helsinki, 00520, Finland |
Nature of business: |
% |
Class of shares: | holding |
Registered office: Bastioni di Porta Nuova 21, Milano 20121, Italy |
Nature of business: |
% |
Class of shares: | holding |
Registered office: Ny Carlsberg Vej 80, Copenhagen, 1799, Denmark |
Nature of business: |
% |
Class of shares: | holding |
Registered office: Gran Via de les Corts Catalanes, 583, Barcelona, 08011, Spain |
Nature of business: |
% |
Class of shares: | holding |
Registered office: Lazada One, 51 Bras Basah Rd, £06-01, Singapore 189554 |
Nature of business: |
% |
Class of shares: | holding |
Registered office: 126/134 Marszalkowska Street, Warsaw, 00-008, Poland |
Nature of business: |
% |
Class of shares: | holding |
Registered office: Box 1033, 171 21 Solna, Sweden |
Nature of business: |
% |
Class of shares: | holding |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2022 |
9. | INVESTMENTS - continued |
During the year, Snow Software Limited made a capital contribution in New Snow Sweden AB, by transferring all outstanding shares in Snow Software AB. This effectively constitutes a disposal of Snow Software AB. |
The valuation of New Snow Sweden AB is driven by the value of its newly acquired subsidiary Snow Software AB. Therefore, this constitutes an addition in New Snow Sweden AB of the same value. |
10. | DEBTORS |
31.12.22 | 31.12.21 |
£ | £ |
Amounts falling due within one year: |
Trade debtors |
Amounts owed by group undertakings |
Capitalised commissions | 1,719,506 | 1,910,287 |
Tax | 710,971 | 616,666 |
Prepayments and accrued income |
Amounts falling due after more than one year: |
Amounts owed by group undertakings |
Capitalised commissions | 4,351,114 | 3,554,713 |
Aggregate amounts |
The amounts owed by group undertakings falling due after more than one year are as a result of loan agreements made between Snow Software Limited and other group companies. |
The loan in place with Snow Software AB for £18,618,683 (2021: £16,107,016) is repayable in 2025 and the loans in place with Snow Software US, Inc for £28,354,096 (2021: £nil) are repayable in 2032. These loans are interest bearing. |
All other amounts owed by group companies are repayable on demand and are interest free. |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2022 |
11. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
31.12.22 | 31.12.21 |
£ | £ |
Bank loans and overdrafts (see note 13) |
Leases (see note 13) |
Trade creditors |
Amounts owed to group undertakings |
Social security and other taxes |
VAT | 1,228,782 | 965,129 |
Other creditors |
Deferred income |
Accrued expenses |
Amounts owed to group companies are repayable on demand and are interest free. |
12. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
31.12.22 | 31.12.21 |
£ | £ |
Bank loans (see note 13) |
Leases (see note 13) |
Deferred income | 5,034,819 | 6,023,802 |
13. | FINANCIAL LIABILITIES - BORROWINGS |
31.12.22 | 31.12.21 |
£ | £ |
Current: |
Bank loans |
Leases (see note 14) | 272,913 | 258,443 |
Non-current: |
Bank loans - 1-2 years |
Leases (see note 14) | 778,893 | 1,105,361 |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2022 |
13. | FINANCIAL LIABILITIES - BORROWINGS - continued |
Terms and debt repayment schedule |
1 year or |
less | 1-2 years | 2-5 years | Totals |
£ | £ | £ | £ |
Bank loans | 219,167 | 43,812,009 | 44,433,526 |
Leases | 272,913 | 288,074 | 490,819 | 1,051,806 |
507,241 | 44,302,828 | 45,485,332 |
14. | LEASING |
Right-of-use assets |
Tangible fixed assets |
31.12.22 | 31.12.21 |
£ | £ |
COST |
At 1 January 2022 | 1,534,749 | 2,239,595 |
Disposals | - | (704,846 | ) |
1,534,749 | 1,534,749 |
DEPRECIATION |
At 1 January 2022 | 607,153 | 613,270 |
Charge for year | 202,385 | 202,384 |
Eliminated on disposal | - | (208,501 | ) |
809,538 | 607,153 |
NET BOOK VALUE | 725,211 | 927,596 |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2022 |
14. | LEASING - continued |
Lease liabilities |
Minimum lease payments fall due as follows: |
31.12.22 | 31.12.21 |
£ | £ |
Gross obligations repayable: |
Within one year | 325,000 | 325,000 |
Between one and five years | 840,867 | 1,219,422 |
1,165,867 | 1,544,422 |
Finance charges repayable: |
Within one year | 52,087 | 66,557 |
Between one and five years | 61,974 | 114,061 |
114,061 | 180,618 |
Net obligations repayable: |
Within one year | 272,913 | 258,443 |
Between one and five years | 778,893 | 1,105,361 |
1,051,806 | 1,363,804 |
15. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 31.12.22 | 31.12.21 |
value: | £ | £ |
Ordinary | £1 | 5,300 | 5,300 |
Ordinary shares carry full and equal rights to participate in voting in all circumstances, in dividends and in capital distributions, whether on a winding up or otherwise. The shares are not redeemable. |
16. | RESERVES |
Share |
Retained | Share | option |
earnings | premium | reserve | Totals |
£ | £ | £ | £ |
At 1 January 2022 | ( |
) | 77,961,329 |
Profit for the year | - | - |
Share based payment transactions | - | - | 837,515 | 837,515 |
At 31 December 2022 | ( |
) | 80,154,981 |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2022 |
16. | RESERVES - continued |
Share |
Retained | Share | option |
earnings | premium | reserve | Totals |
£ | £ | £ | £ |
At 1 January 2021 | 410,690 | - | - | 410,690 |
Deficit for the year | (4,046,265 | ) | - | - | (4,046,265 | ) |
Share issue | - | 81,596,904 | - | 81,596,904 |
Share based payment transactions | - | - | - | 837,515 |
Capital contribution for equity settled share based payments |
- |
- |
(57,183 |
) |
(57,183 |
) |
Return of capital contribution for equity settled share based payments |
- |
- |
57,183 |
57,183 |
At 31 December 2021 | (3,635,575 | ) | 81,596,904 | - | 78,798,844 |
17. | ULTIMATE PARENT COMPANY |
The company's current parent and ultimate parent company is Snow Software US, Inc. |
Snow Software US, Inc. prepares consolidated financial statements, including Snow Software Limited and its subsidiary companies, and these are publicly available from 1801 East 6th Street, Suite 350, Austin, TX 78702. |
18. | CONTINGENT LIABILITIES |
The company anticipates that many of its employees may defer exercise of their share options to when there is a liquidity transaction at the parent company level and exercise and sell in a "same-day sale transaction". Employers National Insurance Contributions would be payable by the Company on the intrinsic value at such date, being the difference between the sale price for the shares and the exercise price of the options. This liability will vary based on the fair market value of shares in the parent company, Snow Software US, Inc. |
During 2021, Snow Software Ltd entered into a Credit Agreement as a Co-Borrower with Snow Software Inc. Snow Software Ltd is jointly liable for borrowings under the Credit Agreement in accordance with the terms of the Credit Agreement. The Credit Agreement, as amended, provides for a USD 115 million Term Loan and a Revolving Credit Facility of an additional USD 40 million. In addition to the Term Loan, USD 19 million of the further USD 40 million revolving credit facility has been drawn. |
19. | RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS |
31.12.22 | 31.12.21 |
£ | £ |
Profit/(loss) for the financial year | ( |
) |
Increase in share capital | - | 5,200 |
Increase in share premium | - | 81,596,904 |
Share option reserve movement | 837,515 | - |
Net addition to shareholders' funds | 2,193,652 | 77,555,839 |
Opening shareholders' funds | 77,966,629 | 410,790 |
Closing shareholders' funds | 80,160,281 | 77,966,629 |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2022 |
20. | SHARE-BASED PAYMENT TRANSACTIONS |
The company operates various share option plans, authorising the grant of options to employees to purchase a number of shares of class A common stock in Snow Software US Inc, a company incorporated in the United States. |
Each grant has various vesting schedules between 12 months and 4 years and are exercisable for 10 years from the grant date. Fair value at the date of grant was calculated using the Black Scholes option pricing model. The settlement method for all plans is equity settled as cash. |
For periods up to and including 31 December 2021, the company reflected the expense in their income statement and the liability to pay the parent company for the shares in their balance sheet. As a result of the intercompany stock option cost recharge agreement being cancelled, from 1 January 2022 the company reflects the expense in their income statement and the related equity reserve is recognised on the balance sheet. |
Subject to the employees continuous employment the optioned shares shall vest in accordance with the following vesting schedule: |
The options will begin to vest on the first anniversary of the vesting commencement date, where 25% shall vest. A combined total of 25% of options will have vested. |
The options will continue to vest at the end of each quarter of a year thereafter, with 6.25% of options to vest. |
The options will continue to vest up until the 4th anniversary of the vesting commencement date when a combined total of 100% is vested. |
Notwithstanding the foregoing, the share options shall automatically become fully vested upon the earlier of the employees' disability, the employees' death and immediately prior to a change in control of the company. |
A summary of share-based incentive activity for UK employees under the share-option plan: |
Number of share options | Weighted average exercise price |
Outstanding at 1 January 2022 | 1,011,400 | $4.01 |
Granted during the year | 687,500 | $4.87 |
Forfeited during the year | (252,000) | $4.22 |
Outstanding at 31 December 2022 | 1,446,900 | $4.40 |
Exercisable at 31 December 2022 | 858,406 | $4.16 |
An expense to the profit and loss of £837,515 (2021 credit of £57,183) has been recognised as a staff cost; being the fair value of the options expected to vest, time apportioned over the vesting period. |
21. | SECURED DEBTS |
The company has created a fixed and floating charge over its assets and a negative pledge all in favour of Wells Fargo Bank. These charges are currently outstanding. |
The company has pledged its UK bank accounts to Citibank and J.P. Morgan. |
SNOW SOFTWARE LIMITED (REGISTERED NUMBER: 06380181) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 December 2022 |
22. | CONTINGENT ASSET |
Snow Software Limited will be making an R&D claim for FY21 and FY22 which it is anticipated will result in a significant reclaimable tax credit being received. |