Company registration number 03635298 (England and Wales)
GREEN HILLS SOFTWARE LTD.
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
PAGES FOR FILING WITH REGISTRAR
GREEN HILLS SOFTWARE LTD.
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 1 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
5
7,247
15,699
Current assets
Debtors
6
1,953,008
2,345,078
Cash at bank and in hand
1,021,472
274,730
2,974,480
2,619,808
Creditors: amounts falling due within one year
7
(729,671)
(553,836)
Net current assets
2,244,809
2,065,972
Net assets
2,252,056
2,081,671
Capital and reserves
Called up share capital
9
10,000
10,000
Other reserves
83,599
79,071
Profit and loss reserves
13
2,158,457
1,992,600
Total equity
2,252,056
2,081,671
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 13 September 2024 and are signed on its behalf by:
Mr J Hazarian
Director
Company Registration No. 03635298
GREEN HILLS SOFTWARE LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
1
Accounting policies
Company information
Green Hills Software Ltd. is a private company limited by shares incorporated in England and Wales. The registered office is 2 Minton Place, Victoria Road, Bicester, Oxfordshire, OX26 6QB. The trading address is 1 Goodson Mews, Wellington Street, Thame, Oxfordshire, OX9 3BX.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
The company shall be supported financially by the parent company, Green Hills Software LLC, until such time that the company is able to support itself and appropriate letters of support have been obtained to confirm this. The parent company has confirmed to the directors that it will continue to support the company and will not recall any intercompany debts for a period of at least 12 months after the date of signing the financial statements.
1.3
Turnover
The company is controlled by its ultimate parent, Green Hills Software Inc., to provide sales services within specific contracted regions. The company is remunerated by its parent for these services. The total turnover of the company for the year has been derived from its principal activity undertaken in the UK and the rest of Europe.
Intercompany revenue is based on a cost plus service agreement with its parent and is recognised at a 7.5% margin.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold improvements
20% straight line
Plant and machinery
33% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
GREEN HILLS SOFTWARE LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 3 -
1.6
Cash at bank and in hand
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
GREEN HILLS SOFTWARE LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 4 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and 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. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
GREEN HILLS SOFTWARE LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 5 -
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
Share-based payments
The company participates in a share-based payment arrangement granted to its employees and employees of its fellow subsidiaries from its parent company Green Hills Software LLC. Where material, the company has elected to recognise and measure its share-based payment expense on the basis of a reasonable allocation of the expense from the group recognised in its consolidated accounts.
The expense in relation to options over the company’s shares granted to employees from its parent is recognised by the company as a capital contribution, and represents an increase in the parents investment in the company.
For share based payments the company elected to take a transition exemption when transitioning to new UK GAAP. Therefore, the fair value adjustments for share based payments are only recognised for grants which occurred after 31st December 2015, the last reporting date under old UK GAAP.
1.13
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.14
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
GREEN HILLS SOFTWARE LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
9
8
4
Directors' remuneration
2023
2022
£
£
Remuneration paid to directors
1,116,047
988,409
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).
5
Tangible fixed assets
Leasehold improvements
Plant and machinery
Total
£
£
£
Cost
At 1 January 2023 and 31 December 2023
13,090
175,372
188,462
Depreciation and impairment
At 1 January 2023
13,090
159,673
172,763
Depreciation charged in the year
8,452
8,452
At 31 December 2023
13,090
168,125
181,215
Carrying amount
At 31 December 2023
7,247
7,247
At 31 December 2022
15,699
15,699
6
Debtors
2023
2022
Amounts falling due within one year:
£
£
Amounts owed by group undertakings
1,822,182
2,264,730
Other debtors
22,320
19,411
Prepayments and accrued income
83,893
39,611
1,928,395
2,323,752
Deferred tax asset (note 8)
20,099
14,824
1,948,494
2,338,576
GREEN HILLS SOFTWARE LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Debtors
(Continued)
- 7 -
2023
2022
Amounts falling due after more than one year:
£
£
Prepayments and accrued income
4,514
6,502
Total debtors
1,953,008
2,345,078
Amounts due from group companies are repayable on demand, free from interest and unsecured.
7
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
29,053
28,640
Corporation tax
38,246
23,153
Other taxation and social security
63,706
82,236
Other creditors
598,666
419,807
729,671
553,836
8
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Assets
Assets
2023
2022
Balances:
£
£
Accelerated capital allowances
(1,680)
(3,765)
Retirement benefit obligations
452
-
Employee remuneration
21,327
18,589
20,099
14,824
2023
Movements in the year:
£
Asset at 1 January 2023
(14,824)
Credit to profit or loss
(5,275)
Asset at 31 December 2023
(20,099)
GREEN HILLS SOFTWARE LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
8
Deferred taxation
(Continued)
- 8 -
Included in the deferred tax asset set out above is £20,422 which is expected to reverse within 12 months. Therefore, carried forward beyond 12 months is a deferred tax liability of £323 which is in relation to accelerated capital allowances.
9
Called up share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
10,000
10,000
10,000
10,000
10
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
21,758
21,096
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
As at the balance sheet date, the company had unpaid contributions of £4,223 (2022: £Nil).
11
Share-based payment transactions
The parent company, Green Hills Software LLC, operates an employee stock option plan for it's worldwide employees including those of Green Hills Software Ltd. During the year Green Hills Software LLC. recharged employee expenses totalling £nil, (2022: £nil) to Green Hills Software Ltd. The expense for the year relating to share grants after the date of transition, amounted to £4,528 (2022: £10,436).
The share option plan is an equity settled plan. The board of directors of Green Hills Software LLC is authorised to grant options to employees, directors, consultants and advisors of the group collectively known as the ''grantees''. The option may only be exercised if the grantees remain employed by the group. The option will terminate in the event of the grantees leaving employment, death or termination for cause.
The vesting conditions are that of annually over 4 years for initial grants, and quarterly for annual grants.
The maximum term of the options granted is 10 years.
During the year no options were granted or exercised, this was also the case in the prior year.
Information relating to the exercise of share options is provided in the group accounts.
These financial statements depart from the requirements of the FRS by that the company has not disclosed information relating to Section 26 'Share Based Payments' paragraphs 26.18(b), 26.19-26.21 and 26.23. Management have concluded that the financial statements prepared provide a true and fair view of the business.
GREEN HILLS SOFTWARE LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
12
Other Reserves
2023
2022
£
£
At the beginning of the year
79,071
68,635
Additions
4,528
10,436
At the end of the year
83,599
79,071
Other reserves represent capital contributions from the Parent company in respect of group share based payment plans.
13
Profit and loss reserves
2023
2022
£
£
At the beginning of the year
1,992,600
1,848,122
Profit for the year
165,857
144,478
At the end of the year
2,158,457
1,992,600
14
Directors' transactions
The directors have made interest free advances to the company as follows:
Description
% Rate
Opening balance
Amounts repaid
Closing balance
£
£
£
Mr J Flann -
-
4,402
(4,402)
-
4,402
(4,402)
-
15
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2023
2022
£
£
Within one year
40,561
55,724
Between two and five years
2,253
28,559
42,814
84,283
GREEN HILLS SOFTWARE LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
16
Related party transactions
The company has taken advantage of the exemption available per paragraph 33.1A of FRS 102 whereby it has not disclosed transactions with the ultimate parent company or any wholly owned subsidiary undertaking of the group.
17
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
The senior statutory auditor was Sarah Flint BSc FCA.
The auditor was Benee Consulting Limited.
18
Parent company
The company is controlled by Green Hills Software LLC by virtue of its 100% shareholding.
Green Hills Software LLC is a company incorporated in the United States of America.
Group accounts can be obtained from 30 West Sola Street, Santa Barbara, California, USA.
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