DIRECTORS' REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2023 |
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COMPANY INFORMATION
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CONTENTS
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STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The Anvil Group (International) Limited is a leading risk management company delivering advanced technology-led business resilience solutions for globally operating organisations. Our mission is to protect our clients’ brand reputation and shareholder value by keeping their people safe and other business assets secure.
The Company is part of a group owned by Everbridge Inc., a company incorporated in the United States of America. The results of the group are included in the consolidated financial statements of Everbridge inc. which are available from 25 Corporate Drive, 4th Floor, Burlington, MA 01803. Everbridge is a global software company that empowers resilience by leveraging intelligent automation technology to enable customers to anticipate, mitigate, respond to, and recover from critical events to keep people safe and organizations running. Boston Consulting Group defines resilience as ‘a company’s capacity to absorb stress, recover critical functionality, and thrive in altered circumstances.’ The group mission is that of empowering organizations to anticipate, mitigate, respond to, and ultimately emerge stronger from critical events with the industry’s only end-to-end critical event management platform. It delivers reliability, security and compliance, creating measurable business advantage for customers with the objective of keeping people safe and organization running. The Anvil Group (International) Limited complements this offering and is a key member of the Everbridge group. Our Vision To be recognized as the vital enabler of global business. Our Core Values Anvil Group is a people business. Our corporate values reflect our approach to delivering services and solutions to our clients. This includes a focus, demonstrating an entrepreneurial approach and an appetite for positive change. Our core values are reflected in all our activities across the Group: Supportive environment: We are supportive of and collaborative with all our colleagues; our highly motivated management team is focused on creating an environment within which our people can thrive. Excellence in people: We recruit, develop and recognise talent throughout the Group, ensuring that we promote an inclusive and diverse environment. Long-term client relationships: We adopt a long-term mindset with our clients, constantly seeking opportunities that are beneficial in the longer term. High-quality work: We deliver professional, high-quality, consistent and compliant work at all times. Group-wide entrepreneurship: We have a willingness and desire to seek out Group-wide business development opportunities and respond to these opportunities with agility and pace. Appetite for change: We are instigators of, and receptive to, positive change. Our Global Presence Risk management is a global business and our offices and partner network are strategically located to deliver our services and solutions, wherever they are required. Our head office in the UK serves clients based in Europe and the Middle East and our office in the US serves our clients based in North America. Additionally, in order to support those clients whose operational footprint is truly worldwide, we have developed a robust global network of accredited partners to provide the specialist services required in the realm of health, security and general logistics.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Our proposition to clients spans five areas:
• Risk Management Technology • Threat Monitoring and Risk Intelligence Gathering, Reporting & Analysis • 24/7 International Medical and Security Assistance • Operational Resilience (Corporate Security and Protection Services) • Occupational Health
Our Business Strategy
For our clients:
We provide an extensive range of complementary professional services and technology solutions, backed by world class technical expertise, global presence and 100% focus on mitigating risks. For our people: We offer high-quality, stimulating and exciting work, in a supportive, entrepreneurial environment with competitive, meritocratic rewards, personal recognition and professional development opportunities.
Our Business Model for Continued Growth
We target reliable, sustainable year-on-year underlying earnings growth, while investing for the future in order to achieve a step change in the Group's future earnings.
Our business model is designed to continually develop, enhance and deliver our extensive range of professional services and technologies to clients across all industry sectors. This model is based on a clear growth strategy, delivered through the exceptional capabilities of our people, and underpinned by well-established and efficient organisational mechanisms and processes.
Principal activities and review of the business
The principal activity of the business continues to be the provision of travel risk management and crisis avoidance services incorporating a range of physical, technological, information and medical services to corporations in the United Kingdom and internationally. The Company’s key performance indicators during the year were as follows: (As restated) 2023 2022 £ £ Turnover 10,623,734 15,831,729 Gross Profit 2,071,932 2,191,644 (Loss)/profit for the year (27,918) (2,288,870) Net current assets 3,749,798 3,669,664 Average number of employees 2 99 The directors believe that the company is in a strong position to improve profitability and to increase its global revenue stream related to its core products. The decrease in staff numbers arises as part of a group wide re-organisation of the payroll to reduce the administrative costs and burden on the group and so all employees in the Company have been transferred to fellow subsidiary, Everbridge Europe Limited on 01 January 2023 and any work done by these employees for the Company is recharged through management charges. The remaining employees are the directors.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
General Risks
Commercial Risks: Risks and uncertainties that are largely within the control of the company include the maintenance of our competitive position to ensure the achievement and collection of sufficient revenue to meet the company’s objectives. The company maintains significant cash reserves both to mitigate against the possibility of periods of reduced working capital and to ensure adequate working capital is available to meet any sudden increase in the level of response work clients may require. Other normal business risks include dependence on the continued availability of key personnel to ensure that our clients receive the level of service they are entitled to expect, and the ability of the company to continue to provide that level of service. The reputation of the company is critical to its continued success and it works hard to develop and protect that reputation by ensuring that it only associates itself with activities that are appropriate for a business in its sector. The group continues to abide by all areas of legislation, which remains a major burden on organizations. Financial Risks: The decision for the UK to leave the EU has resulted in implications for the relative value of sterling, which is our functional and reporting currency. The past two years have seen significant growth in our dollar revenues and costs. The impact of currency movements on our earnings cannot be reliably forecast and remains an area of uncertainty, though the company does seek to reduce uncertainty by entering into hedging arrangements to minimise risk where possible. Maintaining margins whilst containing operating costs is the major risk. New customers are assessed for credit risks and credit limits are applied where necessary. All risks are constantly monitored and appropriate action taken where necessary. Cash flow is monitored daily and professional staff are employed to ensure new legislation is complied with.
Key performance indicators for the Company are;
Financial: Turnover, gross margins, operating costs and profitability. Clients: Winning new long-term clients and additional new business, client retention and expansion of existing contracts. Products: Developing new business lines and services, whilst continuously improving existing market offerings. Key Performance Indicators: Internal KPI’s both for the business and individuals who work within the business. Staff: Staff retention, personal development and internal careers paths. All these performance indicators are regularly reported and reviewed by the board of Directors.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
This section forms our Section 172 disclosure, describing how, the Directors considered the matters set out in section 172(1)(a) to (f) of the Companies Act 2006. The Directors also took into account the views and interests of a wider set of stakeholders, including regulators.
The Directors have acted in a way that they considered, in good faith, to be most likely to promote the success of the company and its group for the benefit of its stakeholders, and in doing so had regard, amongst other matters, to:
This report was approved by the board and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙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 to 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.
The loss for the year, after taxation, amounted to £27,918 (2022 - loss £2,288,870).
Dividends paid in the year amounted to £nil (2022: £nil).
The directors who served during the year were:
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THE ANVIL GROUP (INTERNATIONAL) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
In February 2024, the ultimate parent company, Everbridge Inc. announced it would be taken private in an all-cash purchase by Thoma Bravo, LP. The acquisition was finalised on 02 July 2024.
The directors have the intention to sell the subsidiary, The Anvil Group Japan LLC to a non-related party. There have been no further significant events affecting the Company since the year end.
This report was approved by the board and signed on its behalf.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THE ANVIL GROUP (INTERNATIONAL) LIMITED
We have audited the financial statements of The Anvil Group (International) Limited (the 'Company') for the year ended 31 December 2023, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of changes in equity 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 Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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 United Kingdom, including the Financial Reporting Council'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.
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.
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THE ANVIL GROUP (INTERNATIONAL) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THE ANVIL GROUP (INTERNATIONAL) LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. 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. 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 course of 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 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 material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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.
In the light of the knowledge and understanding of the 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.
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THE ANVIL GROUP (INTERNATIONAL) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THE ANVIL GROUP (INTERNATIONAL) LIMITED (CONTINUED)
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.
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:
We obtained a general understanding of the Company’s legal and regulatory framework through enquiry of management concerning their understanding of relevant laws and regulations, the entity’s policies and procedures regarding compliance, and how they identify, evaluate and account for litigation claims. We also drew on our existing understanding of the Company’s industry and regulation. We understand that the Company complies with the framework through:
∙Outsourcing accounting services, accounts preparation and tax compliance to external experts.
∙Subscribing to relevant updates from external experts, and making changes to internal procedures and controls as necessary.
In the context of the audit, we considered those laws and regulations which determine the form and content of the financial statements, which are central to the Company’s ability to conduct its business, and/or where there is a risk that failure to comply could result in material penalties. We identified the following laws and regulations as being of significance in the context of the Company:
∙The Companies Act 2006 and FRS 102 in respect of the preparation and presentation of the financial statements.
∙UK taxation law.
The senior statutory auditor led a discussion with senior members of the engagement team regarding the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur. The areas identified in this discussion were:
∙Share based payment calculation estimation and disclosure due to the complex nature of these transactions.
∙Manipulation and management override of the financial statements, especially revenue, via fraudulent journal entries.
∙Related party transactions not being fully disclosed given there are now a large number of entities within the Everbridge group.
The procedures we carried out to gain evidence in the above areas included:
∙Challenging management regarding the assumptions used in the estimates identified above, and comparison to market data and post-year-end data as appropriate.
∙Substantive work on material areas affecting profits.
∙Testing journal entries, focusing particularly on postings to unexpected or unusual accounts and those posted at unusual times.
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.
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THE ANVIL GROUP (INTERNATIONAL) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THE ANVIL GROUP (INTERNATIONAL) LIMITED (CONTINUED)
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
Brockbourne House
77 Mount Ephraim
Kent
TN4 8BS
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STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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BALANCE SHEET
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 14 to 33 form part of these financial statements.
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The Anvil Group (International) Limited (the Company) is a company limited by shares which is domiciled and incorporated in England and Wales.
The address of its registered office is 17 Grosvenor Street, Mayfair, London, W1K 4QG. The principal place of business of the Company is Signal House, Grange Road, Christchurch, BH23 4JE. The principal activity of the Company is security risk management.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The Company extended its previous accounting period and reported its results for an 18-month period to 31 December 2022 in order to re-align its year-end with the wider Everbridge group. The results presented for the current period represent the 12-months to 31 December 2023 and therefore the comparative amounts are not entirely comparable. Monetary amounts in these financial statements are stated in pounds Sterling and are rounded to the nearest whole £1, except where otherwise stated.
The following principal accounting policies have been applied:
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
The Company has taken advantage of the exemption under section 401 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the Company as an individual entity and not about its group.
This information is included in the consolidated financial statements of Everbridge, Inc as at 31 December 2023 and these financial statements may be obtained from 25 Corporate Drive, 4th Floor, Burlington, MA 01803.
The Company has prepared a cash flow forecast for the period to 30 September 2025, being the going concern review period assessed by the directors, which shows the Company will have sufficient resources to settle their liabilities as they fall due. The directors have made enquiries of its ultimate parent and are comfortable it has sufficient resources to provide the necessary support to the Company if the need should arise.
The directors consider the going concern basis of preparation to be appropriate. Revenue from medical cases is recognised based on the estimated percentage completion of the case at the reporting date. Specifically, this results in any admin fees based on costs for medical services incurred being recognised on an accruals basis in line with when the service was provided and any fees for consultations being recognised once the consultation has been provided. Revenue from intra-group recharges is recognised in the period in which the services are provided.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
The Company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the Company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The Company only enters into basic financial instrument transactions that result in the recognition of
financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares. Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of comprehensive income. For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions. At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or 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, measured immediately before and after the modification, is also charged to 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 received.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Deferred income One key area of judgement and estimation is considered to be the measurement and recognition of deferred income. The Company has control and review procedures in place to ensure that estimates are made consistently and on an appropriate basis, in accordance with contractual terms. Share based payments The directors asses the estimated forfeiture rate of equity awards granted to employees based on historical and forecasted data relating to the likelihood of achieving any performance related targets as well as employee retention rates. In light of the post balance sheet event disclosed in Note 24, the directors currently consider that all outstanding share options will continue to vest in line with initial grant agreements. Bad debt provision The Company makes an estimate of the recoverable value of trade and other debtors. When assessing the impairment of trade and other debtors, management considers factors including the current credit rating of the debtorm, the ageing profile of debtors, whether the debtor is covered by insurance and historical experience. Revenue recognition - Software as a service Software licences and support sold for a pre-agreed period of time including those sold as ''software as a service'' are recognised evenly over the length of the licence. Where such sales are invoiced in advance, the residual amount is recognised as deferred revenue at the year-end. This is calculated by time-apportioning the revenue over the length of the licence. Revenue recognition - Medical case income Revenue from medical cases is recognised based on the estimated percentage completion of the case at the reporting date. Using historical knowledge of the customer base and of previous similar medical cases, management estimate an appropriate markup to apply to medical costs incurred that have not been re-invoiced to customers to reflect the expected unbilled administration and case fees which are recognised within accrued income. Balances owed to fellow group companies Management have presented balances due from fellow group companies gross of balances due from fellow group entities in the financial statements as they consider this is the most appropriate presentation given there is no formal legal right of set-off. However, should any of the debts become impaired in their own right, group management would likely choose to set these debts off against those owed to fellow group companies.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The whole of the turnover is attributable to the Group's principal activity, operational and travel risk management.
Analysis of turnover by country of destination:
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 22
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 23
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 24
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
As at 31 December 2022, the Company has tax losses available of £6,560,571 (2022 - £6,633,602 after corrections to the 2022 tax computation in 2023).
The main rate of corporation tax in the UK increased to 25% with effect from April 2023.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 26
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 27
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 28
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 29
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Other reserves
Profit and loss account
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
In the previous period, the Company operated a share based payment schemes, under which certain employees are granted options to acquire shares in the ultimate parent company, Everbridge Inc.
The scheme is the 2016 Equity Incentive Plan and it is operated using the equity method of settlement accounting. The vesting conditions are based on the contractual terms of the option agreement which ranges between three and four years. The contractual life of the options awards is ten years. On 1 January 2023, the Company transferred all of its employees to Everbridge Europe Limited, a fellow 100% owned group company, to ease the payroll administrative burden by centralising payroll under a group wide scheme operated by Everbridge Europe Limited under identical terms. As a result the share based payment obligations were transferred to a different group company. During the period, the Company granted nil (2022: 59,890) restricted stock units to members of senior management. The shares were to vest after a period of three years from the start date of vesting noted in the award. Units vesting during the period were Nil (2022: 14,708) with Nil (2022: 7,215) units forfeited. Units transferred to a group company totalled 37,967 (2022: nil). The number of instruments at the period end was nil (2022: 37,967). There is no exercise price associated with the restricted stock units and the weighted average fair value per restricted stock unit issued was £nil (2022: £75.28). During the period, the Company granted Nil (2022:27,026) performance-based restricted stock units that vest upon satisfaction of certain performance-based conditions. The performance-based restricted stock units vest based on achieving certain revenue growth thresholds which range from 20% to 40% compounded annual growth over a measurement period of two years for the first 50% of each grant of performance-based restricted stock units and three years for the remaining PSUs. The vesting of the performance-based restricted stock units is subject to the employee’s continued employment through the date of achievement. Units vesting during the period were Nil (2022: Nil) with Nil (2022: 7,494) units forfeited. Units transferred to group company totalled 19,532 (2022: nil). The number of instruments at the period end was Nil (2022: 19,532). The share price of common stock on the date of issuance of the performance-based restricted stock units were £121.52 per share. The fair value is based on the value of common stock at the date of issuance and the probability of achieving the performance metric. The directors have assessed the probability of achievement of the award as highly probable based on past performance of achievement of the performance metric. Compensation cost is recognized under the accelerated method and is adjusted in future periods for subsequent changes in the expected outcome of the performance related conditions. During the year, the Company recognised equity share-based payment expenses of £nil (2022: £1,610,326) and cash settled share-based payments of £nil (2022: £143,428).
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 32
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Change in accounting policy - Medical case income
The directors have identified that the accounting policy for recognising medical case income was not in line with the revenue recognition criteria set out in FRS102 and have amended the accounting policy retrospectively to bring this in line with these criteria. The directors consider that the revised policy, as stated in note 2.4, shows more relevant financial information as it more accurately aligns the recognition of medical case revenue and expenditure to the point at which it was earned and incurred respectively. The impact of this change in accounting policy in aggregate for periods before those presented in these financial statements is an increase in retained earnings of £32,222, a decrease in prepayments of £84,797 and an increase in accrued income of £117,019 as at 01 July 2021. The impact of this change in accounting policy for the comparative period from 01 July 2021 to 31 December 2022 is an increase in revenue of £830,561 and an increase in costs of goods sold of £601,856, with a net increase in retained earnings of £228,705, a decrease in prepayments of £522,426, an increase in accruals of £79,430 and an increase in accrued income of £830,561 as at 31 December 2022. The impact of this change in accounting policy in the current period to 31 December 2023 is a decrease in revenue of £597,606 and a decrease in costs of goods sold of £433,048, with a net decrease in retained earnings of £164,558, an increase in prepayments of £353,619, a decrease in accruals of £79,430 and an increase in accrued income of £597,606 as at 31 December 2023. Intercompany recharge The directors identified that amounts recharged to fellow subsidiary company Everbridge Europe Limited in 2022 totalling £126,263 which were ommited from the 2022 accounts. These have now been included in the comparatives resulting in an increase in revenue and an increase in trade debtors of £126,263. The directors have the intention to sell the subsidiary, The Anvil Group Japan LLC to a non-related party.
The immediate parent company is Everbridge Holdings Limited, a private limited company incorporated in the United Kingdom. The registered office is 17 Grosvenor Street, Mayfair, London, W1K 4QG. Everbridge Holdings Limited in turn is a wholly owned subsidiary of Everbridge, Inc. a company incorporated in the United States of America. The results of the group are included in the consolidated financial statements of Everbridge, Inc. which are available from 25 Corporate Drive, 4th Floor, Burlington, MA01803.
Following the post-year-end acquisition by Thomas Bravo, LP a new ultimate parent company has been put in place, Everbridge Parent, LP and the ultimate controlling party became Thomas Bravo, LP.
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