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COMPANY REGISTRATION NUMBER: 08164975
River Software (Holdings) Limited
Financial Statements
30 September 2023
River Software (Holdings) Limited
Financial Statements
Year ended 30 September 2023
Contents
Page
Strategic report
1
Directors' report
3
Independent auditor's report to the members
5
Consolidated statement of comprehensive income
9
Consolidated statement of financial position
10
Company statement of financial position
11
Consolidated statement of changes in equity
12
Company statement of changes in equity
13
Consolidated statement of cash flows
14
Notes to the financial statements
15
River Software (Holdings) Limited
Strategic Report
Year ended 30 September 2023
Introduction The River group designs and delivers Business Performance Management and Employee Engagement & Benefits solutions for both market leading blue-chip customers and smaller enterprises. Almost every programme is delivered via a mobile optimised website and native mobile apps. Throughout the Financial Year ending September 2023 we have continued to invest extensively in our two core products "Loop" and "Rippl". We continue to listen to our customers, evolving both products not just to lead the market, but also to actively build the features and functionality that adds real world impact and value to customers. The performance of the business for the period ending FY23 continues to reflect the significant investment in the two products. Business Review Everything we do at River is always through the lens of improving both the experience of our users and delivering the most meaningful impact to their business and their employees. We are thankful to our customers for the stories they share, which help us to continue to evolve our offerings. Our previous transition to a subscription-based service continues to sit well with customers, with six new logos onboarded throughout the year. Many of our existing customers have kindly shared the very high level of return achieved on their investment, not just in monetary terms, but also in non-financial areas such as improved performance, employee engagement and retention. As well as heavy product development, we also continue to invest in our customer support teams. This has included investment in both the size of the teams and also with customer focussed and technical training. We strive to ensure our customers are delighted at every step of their journey with us and receive the very best service in the industry. The Group has grown turnover to an all-time high of just under £14m, up £1.5m on the previous year, evidencing our strategy to continue to invest in product development and the very best customer experience is the right approach. Since the financial year end, we are heartened that the group has won a significant number of major new customers, which we are currently busy rolling out. This is already starting to have a transformational impact on our financial results for FY24. Rippl was short listed for a number of industry awards throughout the year and won three prestigious titles of "Employee Benefits Provider of the Year", "Best Technology Provider of the Year" and "Best Use of Technology in a Programme". Finalists and winners were selected by a diverse selection of People, Reward, and Commercial leaders from organisations worldwide, so these were significant wins for Rippl and affirmation of our market-leading product and the positive impact we are having on our customers.
Strategy & Future Developments Our existing strategy of delivering the market-leading solution in our chosen sectors and delighting customers is clearly working and continues to be our chosen path. We are excited to further accelerate our plans in FY24, both in terms of further investment in our offering and also onboarding recent significant customer wins. As our eco-system continues to grow, the additional investment and scale this brings will trickle through to all customers. Rippl's award winning Employee Benefits feature continues to attract new types of customers, making it possible to onboard quickly and cost efficiently, ensuring rapid impact and return to the customer. This will make the objective of onboarding higher volumes of customers throughout the year achievable. Loops native app which has offline capabilities is just one of the many features that will help attract new customers. The team are focusing on diversifying into new sectors as the product suite is now almost ubiquitous across the automotive industry, evidencing the very positive impact this is having on our customers businesses. There are many other industries that follow a similar business model where Loop can prove a huge benefit. Financial Key Performance Indicators River continues to work closely with the principal shareholder, Percipient Capital, and has their support in the business objectives. Focus on increasing Recurring Revenues for both products remains a key objective for the business. Following a very strong FY23, we expect the pace at which this will happen in FY24 to accelerate as a result of recent customer wins and the momentum gained through evidencing such clear value to new prospects. £000'S FY23 FY22 Change Turnover 13,874 12,365 1,509 Gross Profit 1,980 2,166 (186) Gross Profit margin 14% 17% (3%) EBITDA after exceptional costs (228) 85 (313)
This report was approved by the board of directors on 29 November 2023 and signed on behalf of the board by:
C A West
Director
Registered office:
Griffin House
135 High Street
Crawley
West Sussex
England
RH10 1DQ
River Software (Holdings) Limited
Directors' Report
Year ended 30 September 2023
The directors present their report and the financial statements of the group for the year ended 30 September 2023 .
Directors
The directors who served the company during the year were as follows:
C A West
N L Di Luzio
P Dunk
Dividends
The directors do not recommend the payment of a dividend.
Disclosure of information in the strategic report
The company has chosen in accordance with section 414C(11) of the Companies Act 2006(Strategic Report and Directors' Report) Regulations 2013 to set out in the company's strategic report information required by schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008.
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, directors' report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 group and the company and the profit or loss of the group for that period. In preparing these financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgments 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. Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the group and the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the group and the company's auditor is aware of that information.
This report was approved by the board of directors on 29 November 2023 and signed on behalf of the board by:
C A West
Director
Registered office:
Griffin House
135 High Street
Crawley
West Sussex
England
RH10 1DQ
River Software (Holdings) Limited
Independent Auditor's Report to the Members of River Software (Holdings) Limited
Year ended 30 September 2023
Opinion
We have audited the financial statements of River Software (Holdings) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 September 2023 which comprise the consolidated statement of comprehensive income, consolidated statement of financial position, company statement of financial position, consolidated statement of changes in equity, company statement of changes in equity, consolidated statement of cash flows and the related notes, 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 FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion the financial statements: - give a true and fair view of the state of the group's and of the parent company's affairs as at 30 September 2023 and of the group's loss for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - 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 auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 group's or the parent 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 other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. 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 materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: - adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or - the parent company financial statements are not in agreement with the accounting records and returns; or - certain disclosures of directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the group's and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: Our approach was as follows: We obtained an understanding of the legal and regulatory requirements applicable to the company and considered the most significant are the Companies Act 2006 and UK Financial reporting Standards. We obtained an understanding of how the company complies with these regulations by discussions with management. We assessed the risk of material misstatement of the financial statements, including the risk of material missstatement due to fraud and how it might occur, by holding discussions with management. We inquired of management as to any known instances of non-compliance or suspected non-compliance with laws and regulations. Based on this understanding, we designed specific audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and obtaining corroborative evidence as required. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group's internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group's or the parent company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group or the parent company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. - Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. 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 auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
James Harper
(Senior Statutory Auditor)
For and on behalf of
Harper Sheldon Limited
Chartered accountants & statutory auditor
Midway House
Staverton Technology Park
Herrick Way, Staverton
Cheltenham, Glos.
GL51 6TQ
19 November 2023
River Software (Holdings) Limited
Consolidated Statement of Comprehensive Income
Year ended 30 September 2023
2023
2022
Note
£
£
Turnover
4
13,874,471
12,365,840
Cost of sales
11,894,704
10,200,098
-------------
-------------
Gross profit
1,979,767
2,165,742
Administrative expenses
2,737,216
2,572,996
Other operating income
5
8,006
Exceptional administration expenses
93,097
71,894
------------
------------
Operating loss
6
( 850,546)
( 471,142)
Interest payable and similar expenses
9
58,836
33,936
------------
------------
Loss before taxation
( 909,382)
( 505,078)
Tax on loss
10
( 289,096)
( 365,650)
---------
---------
Loss for the financial year and total comprehensive income
( 620,286)
( 139,428)
---------
---------
All the activities of the group are from continuing operations.
River Software (Holdings) Limited
Consolidated Statement of Financial Position
30 September 2023
2023
2022
Note
£
£
Fixed assets
Intangible assets
11
1,654,920
1,983,790
Tangible assets
12
30,198
28,731
------------
------------
1,685,118
2,012,521
Current assets
Debtors
14
2,014,504
1,686,920
Cash at bank and in hand
184,834
330,116
------------
------------
2,199,338
2,017,036
Creditors: amounts falling due within one year
15
3,336,025
2,702,170
------------
------------
Net current liabilities
1,136,687
685,134
------------
------------
Total assets less current liabilities
548,431
1,327,387
Creditors: amounts falling due after more than one year
16
267,915
Provisions
17
27,882
40,976
---------
------------
Net assets
520,549
1,018,496
---------
------------
Capital and reserves
Called up share capital
22
29
29
Share premium account
23
2,076,286
2,076,286
Other reserves, including the fair value reserve
23
416,506
294,167
Profit and loss account
23
( 1,972,272)
( 1,351,986)
------------
------------
Shareholders funds
520,549
1,018,496
------------
------------
These financial statements were approved by the board of directors and authorised for issue on 29 November 2023 , and are signed on behalf of the board by:
C A West
Director
Company registration number: 08164975
River Software (Holdings) Limited
Company Statement of Financial Position
30 September 2023
2023
2022
Note
£
£
Fixed assets
Investments
13
2,810,661
2,810,661
Current assets
Debtors
14
193,898
230,719
Cash at bank and in hand
708
2,238
---------
---------
194,606
232,957
Creditors: amounts falling due within one year
15
611,114
306,641
---------
---------
Net current liabilities
416,508
73,684
------------
------------
Total assets less current liabilities
2,394,153
2,736,977
Creditors: amounts falling due after more than one year
16
267,915
------------
------------
Net assets
2,394,153
2,469,062
------------
------------
Capital and reserves
Called up share capital
22
29
29
Share premium account
23
2,076,286
2,076,286
Other reserves, including the fair value reserve
23
416,506
294,167
Profit and loss account
23
( 98,668)
98,580
------------
------------
Shareholders funds
2,394,153
2,469,062
------------
------------
The loss for the financial year of the parent company was £ 197,248 (2022: £ 72,288 ).
These financial statements were approved by the board of directors and authorised for issue on 29 November 2023 , and are signed on behalf of the board by:
C A West
Director
Company registration number: 08164975
River Software (Holdings) Limited
Consolidated Statement of Changes in Equity
Year ended 30 September 2023
Called up share capital
Share premium account
Other reserves, including the fair value reserve
Profit and loss account
Total
£
£
£
£
£
At 1 October 2021
29
2,076,286
294,167
( 1,212,558)
1,157,924
Loss for the year
( 139,428)
( 139,428)
----
------------
---------
------------
------------
Total comprehensive income for the year
( 139,428)
( 139,428)
At 30 September 2022
29
2,076,286
294,167
( 1,351,986)
1,018,496
Loss for the year
( 620,286)
( 620,286)
----
------------
---------
------------
------------
Total comprehensive income for the year
( 620,286)
( 620,286)
Equity-settled share-based payments
122,339
122,339
----
----
---------
----
---------
Total investments by and distributions to owners
122,339
122,339
----
------------
---------
------------
---------
At 30 September 2023
29
2,076,286
416,506
( 1,972,272)
520,549
----
------------
---------
------------
---------
River Software (Holdings) Limited
Company Statement of Changes in Equity
Year ended 30 September 2023
Called up share capital
Share premium account
Other reserves, including the fair value reserve
Profit and loss account
Total
£
£
£
£
£
At 1 October 2021
29
2,076,286
294,167
170,868
2,541,350
Loss for the year
( 72,288)
( 72,288)
----
------------
---------
---------
------------
Total comprehensive income for the year
( 72,288)
( 72,288)
At 30 September 2022
29
2,076,286
294,167
98,580
2,469,062
Loss for the year
( 197,248)
( 197,248)
----
------------
---------
---------
------------
Total comprehensive income for the year
( 197,248)
( 197,248)
Equity-settled share-based payments
122,339
122,339
----
----
---------
----
---------
Total investments by and distributions to owners
122,339
122,339
----
------------
---------
--------
------------
At 30 September 2023
29
2,076,286
416,506
( 98,668)
2,394,153
----
------------
---------
--------
------------
River Software (Holdings) Limited
Consolidated Statement of Cash Flows
Year ended 30 September 2023
2023
2022
£
£
Cash flows from operating activities
Loss for the financial year
( 620,286)
( 139,428)
Adjustments for:
Depreciation of tangible assets
15,020
15,408
Amortisation of intangible assets
328,870
387,802
Government grant income
( 8,006)
Interest payable and similar expenses
58,836
33,936
Equity-settled share-based payments
122,339
Tax on loss
( 289,096)
( 365,650)
Accrued (income)/expenses
( 251,054)
439,840
Changes in:
Trade and other debtors
( 262,860)
483,316
Trade and other creditors
766,556
( 772,523)
---------
---------
Cash generated from operations
( 131,675)
74,695
Interest paid
( 58,836)
( 33,936)
Tax received
276,002
339,976
---------
---------
Net cash from operating activities
85,491
380,735
---------
---------
Cash flows from investing activities
Purchase of tangible assets
( 16,487)
( 13,527)
Purchase of intangible assets
( 120,457)
---------
---------
Net cash used in investing activities
( 16,487)
( 133,984)
---------
---------
Cash flows from financing activities
Proceeds from borrowings
( 214,286)
( 221,658)
Government grant income
8,006
---------
---------
Net cash used in financing activities
( 214,286)
( 213,652)
---------
---------
Net (decrease)/increase in cash and cash equivalents
( 145,282)
33,099
Cash and cash equivalents at beginning of year
330,116
297,017
---------
---------
Cash and cash equivalents at end of year
184,834
330,116
---------
---------
River Software (Holdings) Limited
Notes to the Financial Statements
Year ended 30 September 2023
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is Griffin House, 135 High Street, Crawley, West Sussex, RH10 1DQ, England.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.
The financial statements are prepared in sterling, which is the functional currency of the entity.
Share based payments
Where share options are awarded to employees, the fair value of the options at the date of grant is charged to profit & loss over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each Balance Sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party or factors which are within the control of one of other of the parties (such as the company keeping the scheme open or the employee maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options is also charged to the profit or loss over the remaining vesting period.
Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services supplied.
Going concern
At the balance sheet date the group had net assets of £520,549 (2022: £1,018,496) having made a loss for the year after taxation of £620,286 (2022: £139,428). The directors have considered the appropriateness of the going concern basis of preparation, bearing in mind the group's future trading prospects, current financial position and adequacy of existing and future financing facilities. The group has net current liabilities and is therefore reliant on its financing facilities, the group uses an invoice discounting facility and obtained a Coronavirus Business Interruption Loan (CBIL) in the previous year. The Directors are confident that the financing facilities are sufficient to meet the future financing needs and as such are confident the group will continue to trade for the foreseeable future.
Disclosure exemptions
The parent company satisfies the criteria of being a qualifying entity as defined in FRS 102. As such, advantage has been taken of the following reduced disclosures available under FRS 102:
(a) Disclosures in respect of each class of share capital have not been presented.
(b) No cash flow statement has been presented for the company.
(c) Disclosures in respect of financial instruments have not been presented.
(d) No disclosure has been given for the aggregate remuneration of key management personnel.
Consolidation
The financial statements consolidate the financial statements of River Software (Holdings) Limited and all of its subsidiary undertakings.
The results of subsidiaries acquired or disposed of during the year are included from or to the date that control passes.
The parent company has applied the exemption contained in section 408 of the Companies Act 2006 and has not presented its individual profit and loss account.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The judgements that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are as follows: Revenue recognition - Revenue and costs have been recognised based on management assessment of stage of completion for each project. Research and development - Development costs are capitalised in accordance with the accounting policy. Initial capitalisation of costs is based on management's judgement that technological feasibility is confirmed, usually when a product development project achieves a defined milestone. In determining the amounts to be capitalised, management make assumptions regarding expected future cash generation of the project, discount rate to be applied and expected period of benefits. Share based payments - Employees and Directors receive remuneration in the form of equity settled share based payments whereby employees render services in exchange for shares or rights over shares. The fair value of the services received in exchange for the grant of options or shares is recognised as an expense, recognised on a straight line basis over the vesting period, and determined by reference to the fair value of the options or shares determined at the grant date. Share options are valued using current market valuation or the Black-Scholes option pricing model where no such valuation exists. Non-market based vesting conditions are included in the assumptions about the number of options that are expected to become exercisable or the number of shares that the employee will ultimately receive. This estimate is revised at each Statement of financial position date to allow for leaving employees, and the difference is charged or credited to profit or loss, with a corresponding adjustment to to reserves.
Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts and Value Added Tax. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably. Revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that it is probable the expenses recognised will be recovered.
Income tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Foreign currencies
Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to the profit and loss account.
Goodwill
Goodwill arises on business acquisitions and represents the excess of the cost of the acquisition over the company's interest in the net amount of the identifiable assets, liabilities and contingent liabilities of the acquired business. Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. It is amortised on a straight-line basis over its useful life. Where a reliable estimate of the useful life of goodwill or intangible assets cannot be made, the life is presumed not to exceed ten years.
Intangible assets
Intangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses. Any intangible assets carried at revalued amounts, are recorded at the fair value at the date of revaluation, as determined by reference to an active market, less any subsequent accumulated amortisation and subsequent accumulated impairment losses. Intangible assets acquired as part of a business combination are only recognised separately from goodwill when they arise from contractual or other legal rights, are separable, the expected future economic benefits are probable and the cost or value can be measured reliably.
Amortisation
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:
Goodwill
-
13 Years
Development costs
-
3 Years
Patents, trademarks and licences
-
4 Years
If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.
Research and development
Research expenditure is written off in the period in which it is incurred. Development expenditure incurred is capitalised as an intangible asset only when all of the following criteria are met: - It is technically feasible to complete the intangible asset so that it will be available for use or sale; - There is the intention to complete the intangible asset and use or sell it; - There is the ability to use or sell the intangible asset; - The use or sale of the intangible asset will generate probable future economic benefits; - There are adequate technical, financial and other resources available to complete the development and to use or sell the intangible asset; and - The expenditure attributable to the intangible asset during its development can be measured reliably. Expenditure that does not meet the above criteria is expensed as incurred.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Long leasehold property
-
20% straight line
Fixtures and fittings
-
25% straight line
Equipment
-
25 % straight line
Investments
Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.
Listed investments are measured at fair value with changes in fair value being recognised in profit or loss.
Investments in associates
Investments in associates are accounted for using the equity method of accounting, whereby the investment is initially recognised at the transaction price and subsequently adjusted to reflect the group's share of the profit or loss, other comprehensive income and equity of the associate.
Investments in joint ventures
Investments in joint ventures are accounted for using the equity method of accounting, whereby the investment is initially recognised at the transaction price and subsequently adjusted to reflect the group's share of the profit or loss, other comprehensive income and equity of the joint venture.
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets. For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units.
Government grants
Government grants are recognised at the fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and the grants will be received. Government grants are recognised using the accrual model and the performance model. Under the accrual model, government grants relating to revenue are recognised on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs are recognised in income in the period in which it becomes receivable. Grants relating to assets are recognised in income on a systematic basis over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income and not deducted from the carrying amount of the asset. Under the performance model, where the grant does not impose specified future performance-related conditions on the recipient, it is recognised in income when the grant proceeds are received or receivable. Where the grant does impose specified future performance-related conditions on the recipient, it is recognised in income only when the performance-related conditions have been met. Where grants received are prior to satisfying the revenue recognition criteria, they are recognised as a liability.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
Financial instruments
A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument. Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Debt instruments are subsequently measured at amortised cost. Where investments in non-convertible preference shares and non-puttable ordinary shares or preference shares are publicly traded or their fair value can otherwise be measured reliably, the investment is subsequently measured at fair value with changes in fair value recognised in profit or loss. All other such investments are subsequently measured at cost less impairment. Other financial instruments, including derivatives, are initially recognised at fair value, unless payment for an asset is deferred beyond normal business terms or financed at a rate of interest that is not a market rate, in which case the asset is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Other financial instruments are subsequently measured at fair value, with any changes recognised in profit or loss, with the exception of hedging instruments in a designated hedging relationship.
Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately. For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets are either assessed individually or grouped on the basis of similar credit risk characteristics. Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
Share-based payments
Where share options are awarded to employees, the fair value of the options at the date of grant is charged to profit & loss over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each Balance Sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition. The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party or factors which are within the control of one of other of the parties (such as the company keeping the scheme open or the employee maintaining any contributions required by the scheme). Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options is also charged to the profit or loss over the remaining vesting period. Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services supplied.
4. Turnover
Turnover arises from:
2023
2022
£
£
Rendering of services
13,874,471
12,365,840
-------------
-------------
The whole of the turnover is attributable to the principal activity of the group wholly undertaken in the United Kingdom.
5. Other operating income
2023
2022
£
£
Government grant income
8,006
----
-------
6. Operating profit
Operating profit or loss is stated after charging:
2023
2022
£
£
Amortisation of intangible assets
328,870
387,802
Depreciation of tangible assets
15,020
15,408
Equity-settled share-based payments expense
122,339
Foreign exchange differences
1,269
---------
---------
7. Staff costs
The average number of persons employed by the group during the year, including the directors, amounted to:
2023
2022
No.
No.
Production staff
56
55
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
2023
2022
£
£
Wages and salaries
3,103,465
2,723,184
Social security costs
344,317
325,665
Other pension costs
110,361
115,399
------------
------------
3,558,143
3,164,248
------------
------------
8. Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
2023
2022
£
£
Remuneration
429,768
414,924
Company contributions to defined contribution pension plans
25,758
24,616
---------
---------
455,526
439,540
---------
---------
Remuneration of the highest paid director in respect of qualifying services:
2023
2022
£
£
Aggregate remuneration
211,251
197,688
---------
---------
9. Interest payable and similar expenses
2023
2022
£
£
Interest on banks loans and overdrafts
31,000
27,833
Other interest payable and similar charges
27,836
6,103
--------
--------
58,836
33,936
--------
--------
10. Tax on loss
Major components of tax income
2023
2022
£
£
Current tax:
UK current tax income
( 276,002)
( 347,264)
Adjustments in respect of prior periods
7,288
---------
---------
Total current tax
( 276,002)
( 339,976)
---------
---------
Deferred tax:
Origination and reversal of timing differences
( 13,094)
( 25,674)
---------
---------
Tax on loss
( 289,096)
( 365,650)
---------
---------
Reconciliation of tax income
The tax assessed on the loss on ordinary activities for the year is lower than (2022: lower than) the standard rate of corporation tax in the UK of 19 % (2022: 19 %).
2023
2022
£
£
Loss on ordinary activities before taxation
( 909,382)
( 505,078)
---------
---------
Loss on ordinary activities by rate of tax
( 134,467)
( 95,965)
Adjustment to tax charge in respect of prior periods
7,288
Effect of expenses not deductible for tax purposes
23,512
209
Effect of capital allowances and depreciation
37,907
42,816
Timing differences
(13,094)
(25,674)
R&D claim
(202,954)
(294,324)
---------
---------
Tax on loss
( 289,096)
( 365,650)
---------
---------
11. Intangible assets
Group
Goodwill
Development costs
Patents, trademarks and licences
Total
£
£
£
£
Cost
At 1 October 2022 and 30 September 2023
2,459,493
1,830,137
2,994
4,292,624
------------
------------
-------
------------
Amortisation
At 1 October 2022
664,560
1,641,966
2,308
2,308,834
Charge for the year
221,520
106,664
686
328,870
------------
------------
-------
------------
At 30 September 2023
886,080
1,748,630
2,994
2,637,704
------------
------------
-------
------------
Carrying amount
At 30 September 2023
1,573,413
81,507
1,654,920
------------
------------
-------
------------
At 30 September 2022
1,794,933
188,171
686
1,983,790
------------
------------
-------
------------
The company has no intangible assets.
12. Tangible assets
Group
Long leasehold property
Fixtures and fittings
Equipment
Total
£
£
£
£
Cost
At 1 October 2022
5,304
10,882
156,778
172,964
Additions
3,418
13,069
16,487
-------
--------
---------
---------
At 30 September 2023
5,304
14,300
169,847
189,451
-------
--------
---------
---------
Depreciation
At 1 October 2022
4,066
10,146
130,021
144,233
Charge for the year
1,061
970
12,989
15,020
-------
--------
---------
---------
At 30 September 2023
5,127
11,116
143,010
159,253
-------
--------
---------
---------
Carrying amount
At 30 September 2023
177
3,184
26,837
30,198
-------
--------
---------
---------
At 30 September 2022
1,238
736
26,757
28,731
-------
--------
---------
---------
The company has no tangible assets.
13. Investments
The group has no investments.
Company
Shares in group undertakings
£
Cost
At 1 October 2022 and 30 September 2023
2,810,661
------------
Impairment
At 1 October 2022 and 30 September 2023
------------
Carrying amount
At 1 October 2022 and 30 September 2023
2,810,661
------------
At 30 September 2022
2,810,661
------------
Subsidiaries, associates and other investments
Details of the investments in which the parent company has an interest of 20% or more are as follows:
Class of share
Percentage of shares held
Subsidiary undertakings
River Software Limited
Ordinary
100
River Marketing T&E Limited
Ordinary
100
14. Debtors
Group
Company
2023
2022
2023
2022
£
£
£
£
Trade debtors
1,051,429
683,310
Amounts owed by group undertakings
33,803
Prepayments and accrued income
437,615
368,401
304
314
Corporation tax repayable
276,003
347,264
Directors loan account
29,990
29,990
Other debtors
219,467
257,955
193,594
196,602
------------
------------
---------
---------
2,014,504
1,686,920
193,898
230,719
------------
------------
---------
---------
15. Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans and overdrafts
267,915
214,286
267,915
214,286
Trade creditors
119,061
322,333
5,389
8,392
Amounts owed to group undertakings
253,847
Accruals and deferred income
1,580,334
1,452,285
82,632
82,632
Social security and other taxes
429,246
523,196
Other creditors
314,089
55,653
1,331
1,331
Santander ID facility
625,380
134,417
------------
------------
---------
---------
3,336,025
2,702,170
611,114
306,641
------------
------------
---------
---------
16. Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans and overdrafts
267,915
267,915
----
---------
----
---------
17. Provisions
Group
Deferred tax (note 18)
£
At 1 October 2022
40,976
Charge against provision
( 13,094)
--------
At 30 September 2023
27,882
--------
The company does not have any provisions.
18. Deferred tax
The deferred tax included in the statement of financial position is as follows:
Group
Company
2023
2022
2023
2022
£
£
£
£
Included in provisions (note 17)
27,882
40,976
--------
--------
----
----
The deferred tax account consists of the tax effect of timing differences in respect of:
Group
Company
2023
2022
2023
2022
£
£
£
£
Accelerated capital allowances
27,882
40,976
Unused tax losses
( 192,623)
( 192,623)
( 192,623)
( 192,623)
---------
---------
---------
---------
(164,741)
(151,647)
(192,623)
(192,623)
---------
---------
---------
---------
The deferred tax on unused losses is included within current assets.
19. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 110,361 (2022: £ 115,399 ).
20. Share-based payments
The company operates an Enterprise Management Incentive Share option Scheme ("EMI" scheme)and an Unapproved Share Option Scheme("unapproved" scheme). The shares under option are those of the parent company, River Software (Holdings) Limited . The company has granted options over £0.01 ordinary shares to employees under both the EMI and unapproved scheme. Options vest either through length of service or on a company exit event. Options expire 10 years from the date of grant. Options lapse when the option holder ceases employment with the company. During the year ended 30 September 2023 no share options were granted (2022: nil).
Details of the number and weighted average exercise prices (WAEP) of share options during the year are as follows:
Group and company
2023
2022
No.
WAEP
No.
WAEP
Outstanding at 1 October 2022 and 30 September 2023
2,040
60.34
2,040
88.00
-------
-------
-------
-------
The total expense recognised in profit or loss for the year is as follows:
Group
Company
2023
2022
2023
2022
£
£
£
£
Equity-settled share-based payments
122,339
122,340
---------
----
---------
----
For 2023 the fair value was derived from an independent valuation of the company; whereas no such data existed at 30 September 2022 and as such the Black Scholes methodology was used.
21. Government grants
The amounts recognised in the financial statements for government grants are as follows:
Group
Company
2023
2022
2023
2022
£
£
£
£
Recognised in other operating income:
Government grants released to profit or loss
8,006
----
-------
----
----
22. Called up share capital
Issued, called up and fully paid
2023
2022
No.
£
No.
£
Ordinary shares of £ 0.001 each
15,606
16
15,606
16
Ordinary A shares of £ 0.001 each
10,520
11
10,520
11
Ordinary B shares of £ 0.001 each
3,149
3
3,149
3
--------
----
--------
----
29,275
29
29,275
29
--------
----
--------
----
Shares issued and fully paid
2023
2022
No.
£
No.
£
Ordinary shares of £ 0.001 each
15,606
16
15,606
16
Ordinary A shares of £ 0.001 each
10,520
11
10,520
11
Ordinary B shares of £ 0.001 each
3,149
3
3,149
3
--------
----
--------
----
29,275
29
29,275
29
--------
----
--------
----
Shares issued and partly paid
2023
2022
No.
£
No.
£
23. Reserves
Share premium account - This reserve records the amount above the nominal value received for shares sold, less transaction costs. Share based payment reserve - This reserve records the accumulated charge in respect of share based payments recognised in the profit and loss. Profit and loss account - This reserve records retained earnings and accumulated losses.
24. Analysis of changes in net debt
At 1 Oct 2022
Cash flows
At 30 Sep 2023
£
£
£
Cash at bank and in hand
330,116
(145,282)
184,834
Debt due within one year
(214,286)
(53,629)
(267,915)
Debt due after one year
(267,915)
267,915
---------
---------
---------
( 152,085)
69,004
( 83,081)
---------
---------
---------
River Software (Holdings) Limited
Notes to the Financial Statements (continued)
Year ended 30 September 2023
25. Directors' advances, credits and guarantees
During the year the directors entered into the following advances and credits with the company and its subsidiary undertakings:
Balance brought forward and outstanding
2023
2022
£
£
C A West
9,990
9,990
P Dunk
20,000
20,000
--------
--------
29,990
29,990
--------
--------