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Registered number: 05297929









GOODSHAPE UK LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 
GOODSHAPE UK LIMITED
 
 
COMPANY INFORMATION


Directors
B R Cole 
N P L Ketvel 
E E J Radkiewicz 




Registered number
05297929



Registered office
28 Clarendon Road
Watford

WD17 1JJ




Independent auditors
Haysmacintyre LLP

10 Queen Street Place

London

EC4R 1AG





 
GOODSHAPE UK LIMITED
 

CONTENTS



Page
Strategic Report
 
1 - 2
Directors' Report
 
3 - 4
Independent Auditors' Report
 
5 - 8
Statement of Comprehensive Income
 
9
Balance Sheet
 
10
Statement of Changes in Equity
 
11
Notes to the Financial Statements
 
12 - 25


 
GOODSHAPE UK LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Business review
 
2023 was a transformational year, we transitioned the business onto our new proprietory technology platform, creating a data-led Software as a Servce (SAAS) business enhancing efficiency, scalability, improving our gross margin by 46%, gross profit by 60% and reducing quarterly losses by two-thirds. The combination of these factors has meant that the business is now well on track regarding profitability with expected breakeven mid 2024.
All of our existing customers were migrated onto the new platform and digitally-enabled within a 6-month window. This also coincided with winning several awards including the prestigious UK Business Tech Awards - App of the Year.  
The main target market continues to be both public and private sector organisations in the United Kingdom, the need for the GoodShape proven proposition has been recently stimulated by extensive media coverage and Government intervention on sickness absence and its effect on productivity. The new platform has significantly enhanced the overall appeal of the proposition with added features such as digital content and AI data analytics providing unique accurate predictive forecasting, all contributing to enhancing employee wellbeing, reducing costs and mitigating risks for the clients.
This has resulted in a more strategic and unique positioning for GoodShape and direct engagement at C-Suite level, which has accelerated pipeline growth and created valuable commercial relationships with insurers, employee benefits advisors and large consultancies.
The business continues to invest in the new platform, Goodshape Central, to enhance service capabilities, create additional data products and prepare for international growth. 

Principal risks and uncertainties
 
The Company has identified the following factors as potential risks to, and uncertainties concerning the successful operation of the business:

Finance Risk
 
The company is reliant on a related party loans funded by external bank debt. The company prepares long-term cashflow and financing forecasts to de-risk its long term strategy, forecast future working capital and long-term financing needs. These are reviewed regularly by management and updated as necessary. The wider Group has secured additional funding in 2023, which together with the significantly improving financial profile, being on track, satisfies future funding requirements.

Interest Risk

The interest rate is fixed on the related party loans and the loans attract payment-in-kind interest. No material impact has been considered and the rate has not been hedged.

Market Risk
 
We feel we are able to ride a down-turn in the market as our proposition supports productivity issues highlighted by the government, especially as regards getting long-term sick back to work. We have a strong ROI from our proposition and have a broad mix of industries for our customer base. This balanced porfolio of private and public sector organisations helps mitigate risk. 

Page 1

 
GOODSHAPE UK LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Key performance indicators

The directors have reviewed the KPIs and are targeting a revenue and margin growth strategy. As such, the main metrics are Revenue £6.1M (2022: £5.6M) +8% (as the majority of the year was dedicated to transformation projects), AAOV (Average annual order value) £88k (2022: £75k) Gross Profit £3.3M (2022: £2.1M) a 60% increase and 54% gross margin in year (2022: 37%) a 46% increase. These metrics have all improved in the year and we are looking to significantly improve these over 2024.


This report was approved by the board on 28 June 2024 and signed on its behalf.



B R Cole
Director

Page 2

 
GOODSHAPE UK LIMITED
 
 
 
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.

Directors' responsibilities statement

The directors are responsible for preparing the Strategic Report, the 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Company's financial statements 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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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 directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Results and dividends

The loss for the year, after taxation, amounted to £4,956,886 (2022 - loss £7,733,697).

The loss reduction was because of a 60% increase in gross profit to £3.3M. This was because of an 8% revenue improvement of £0.4M and a reduction in cost of sales of £0.8M, this improved gross margin by 18 percentage points to 54%, £1.2M. Overheads reduced by £1.6M which was over £2.5M but included an increase in one-time expenditure linked with restructuring of £0.9M. The savings were due to an efficiency programme to better resource the business to meet its strategic goals and to achieve cashflow breakeven in 2024.

Directors

The directors who served during the year were:

B R Cole 
N P L Ketvel 
E E J Radkiewicz 

Page 3

 
GOODSHAPE UK LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Future developments

The directors intend to further grow the Company’s revenue from investing in sales & marketing activities and continued platform iteration.

Qualifying third party indemnity provisions

Directors’ and officers’ insurance cover has been established for all Directors to provide appropriate cover for their reasonable actions on behalf of the Company. The policy indemnities, which constitute a qualifying thirdparty indemnity provision as defined by section 234 of the Companies Act 2006, were in force during the 2023 financial year and remain in force for all current and past Directors of the Company.

Disclosure of information to auditors

The directors confirm that:
• so far as each director is aware, there is no relevant audit information of which the Company's auditor is unaware, and
• the directors have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Auditors


The auditor, Haysmacintyre LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 28 June 2024 and signed on its behalf.
 





B R Cole
Director

Page 4

 
GOODSHAPE UK LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF GOODSHAPE UK LIMITED
 

Opinion


We have audited the financial statements of Goodshape UK 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 policiesThe 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).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 December 2023 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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.


Conclusions relating to going concern


In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.


Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.


Page 5

 
GOODSHAPE UK LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF GOODSHAPE UK LIMITED (CONTINUED)


Other information


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 ReportOur 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.


Opinion 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 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, or returns adequate for our audit have not been received from branches not visited by us; or
the 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 set out on page 3, 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 Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.


Page 6

 
GOODSHAPE UK LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF GOODSHAPE UK LIMITED (CONTINUED)


Auditors' responsibilities for the audit of the financial statements
 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.


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:

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud.
Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to regulatory requirements for the Investment advisory business and trade regulations, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, income tax, payroll tax and sales tax.
We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to revenue and management bias in accounting estimates. Audit procedures performed by the engagement team included:
• inspecting correspondence with regulators and tax authorities;
• inquires with management including consideration of known or suspected instances of non-compliance with laws and regulations and fraud;
• evaluating management’s controls designed to prevent and detect irregularities;
• identifying and testing journals, in particular journal entries posted with unusual account combinations, postings with high value transactions or rounded entries; and
• challenging assumptions and judgements made by management in their critical accounting estimates.


Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


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.


Page 7

 
GOODSHAPE UK LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF GOODSHAPE UK LIMITED (CONTINUED)


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 2006Our 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.





David Cox (Senior Statutory Auditor)
for and on behalf of
Haysmacintyre LLP
Statutory Auditors
10 Queen Street Place
London
EC4R 1AG

28 June 2024
Page 8

 
GOODSHAPE UK LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

  

Turnover
 4 
6,082,630
5,641,394

Cost of sales
  
(2,782,240)
(3,574,873)

Gross profit
  
3,300,390
2,066,521

Administrative expenses
  
(7,924,924)
(8,975,709)

Onerous lease provision
  
-
(516,353)

Operating loss
 5 
(4,624,534)
(7,425,541)

Interest payable and similar expenses
 8 
(332,352)
(308,156)

Loss before tax
  
(4,956,886)
(7,733,697)

Tax on loss
 9 
-
-

Loss for the financial year
  
(4,956,886)
(7,733,697)

There was no other comprehensive income for 2023 (2022:£NIL).

The notes on pages 12 to 25 form part of these financial statements.

Page 9

 
GOODSHAPE UK LIMITED
REGISTERED NUMBER: 05297929

BALANCE SHEET
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 10 
727,110
635,576

Tangible assets
 11 
51,659
117,645

  
778,769
753,221

Current assets
  

Debtors: amounts falling due within one year
 12 
7,997,114
6,546,160

Cash at bank and in hand
 13 
580,471
654,358

  
8,577,585
7,200,518

Creditors: amounts falling due within one year
 14 
(2,030,244)
(1,974,018)

Net current assets
  
 
 
6,547,341
 
 
5,226,500

Total assets less current liabilities
  
7,326,110
5,979,721

Creditors: amounts falling due after more than one year
 15 
(3,533,854)
(3,201,500)

Provisions for liabilities
  

Onerous lease provision
 17 
(368,830)
(516,353)

  
 
 
(368,830)
 
 
(516,353)

Net assets
  
3,423,426
2,261,868


Capital and reserves
  

Called up share capital 
 18 
42,258
42,247

Share premium account
 19 
39,170,342
33,051,909

Profit and loss account
 19 
(35,789,174)
(30,832,288)

  
3,423,426
2,261,868


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 28 June 2024.




B R Cole
Director

The notes on pages 12 to 25 form part of these financial statements.

Page 10

 
GOODSHAPE UK LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023


Called up share capital
Share premium account
Profit and loss account
Total equity

£
£
£
£

At 1 January 2023
42,247
33,051,909
(30,832,288)
2,261,868


Comprehensive income for the year

Loss for the year
-
-
(4,956,886)
(4,956,886)
Total comprehensive income for the year
-
-
(4,956,886)
(4,956,886)

Shares issued during the year
11
6,118,433
-
6,118,444


Total transactions with owners
11
6,118,433
-
6,118,444


At 31 December 2023
42,258
39,170,342
(35,789,174)
3,423,426



STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022


Called up share capital
Share premium account
Profit and loss account
Total equity

£
£
£
£

At 1 January 2022
42,227
24,112,297
(23,098,591)
1,055,933


Comprehensive income for the year

Loss for the year
-
-
(7,733,697)
(7,733,697)
Total comprehensive income for the year
-
-
(7,733,697)
(7,733,697)

Shares issued during the year
20
8,939,612
-
8,939,632


Total transactions with owners
20
8,939,612
-
8,939,632


At 31 December 2022
42,247
33,051,909
(30,832,288)
2,261,868


The notes on pages 12 to 25 form part of these financial statements.

Page 11

 
GOODSHAPE UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Goodshape UK Limited is a private company limited by shares and incorporated in England and Wales. Its registered head office is located at 28 Clarendon Road, Watford, England, WD17 1JJ.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

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 judgment in applying the Company's accounting policies (see note 3).

The Company is exempt from preparing consolidated financial statements in accordance with section 400 of Companies Act 2006.

The following principal accounting policies have been applied:

  
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

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 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Goodshape UK Group Limited as at 31 December 2023 and these financial statements may be obtained from Companies House.



Page 12

 
GOODSHAPE UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.3

Going concern

The financial statements have been prepared on a going concern basis. The directors have reviewed the Company's business model including effects from arising macro-economic uncertainties such as impending recession, war in Ukraine and Gaza, Brexit and Covid-19 as well as the current growth stage of the company's business model. They have stress-tested cash flows with a number of sensitivities up until June 2025.
The Company has reviewed its cash flow forecasts, considering the impact on going concern it has concluded that the going concern basis remains an appropriate basis of preparation of these financial statements given the likely cash flow impact of operations 12 months from the date of signing this report.
Management will continue to review and stress test these forecasts on an ongoing basis to manage funds flow until such point as it is cash-generative on an on-going basis.

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts and value added tax. The following criteria must also be met before revenue is recognised:

Turnover is stated net of trade discounts and VAT and is recognised when the significant risk and rewards are transferred to the customer. Turnover from the supply of services represents the value of services provided under contracts to the extent that there is a right to consideration and is recorded at the fair value of the consideration received or receivable. Turnover for implementation services is recognised on commencement of delivery of the services. Where payments are received from customers in advance of services provided, the amounts are recorded as deferred income and included as part of creditors due within one year.

 
2.5

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives of 5 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

 
2.6

Interest income

Interest income is recognised in profit or loss using the effective interest method.

Page 13

 
GOODSHAPE UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.7

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.8

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.

 
2.9

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life.

 The estimated useful lives range as follows:

Computer Software Development
-
5
years

Page 14

 
GOODSHAPE UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.10

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

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:

Short-term leasehold property
-
20%
straight line
Office equipment
-
33%
straight line

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.

 
2.11

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.12

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 
2.13

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.14

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

Page 15

 
GOODSHAPE UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.15

Financial instruments

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 and loans to and from related parties.

Debt instruments (other than those wholly repayable or receivable within one year), including loans
and other accounts receivable and payable, are initially measured at present value of the future cash
flows and subsequently at amortised cost using the effective interest method. Debt instruments that
are payable or receivable within one year, typically trade debtors and creditors, are measured,
initially and subsequently, at the undiscounted amount of the cash or other consideration expected
to be paid or received.

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 amortised cost, the impairment loss is measured as the difference
between an asset's carrying amount and the present value of estimated cash flows discounted at the
asset's original effective interest rate. If a financial asset has a variable interest rate, the discount
rate for measuring any impairment loss is the current effective interest rate determined under the
contract.
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.

  
2.16

Operating leases

Leases that do not transfer all the risks and rewards or ownership are classified as operating leases. Payments under operating leases are charges to profit or loss account on a straight-line basis over the period of time.

  
2.17

Share capital

Ordinary shares are classified as equity.

  
2.18

Related party transactions

Related party transactions are recorded on an arms-length basis and are detailed in the notes to these accounts.

Page 16

 
GOODSHAPE UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of financial statements in conformity with generally accepted accounting practice requires the directors to make estimates and judgements that affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and liabilities at the reporting date and the reported amounts of revenues and expenses during the reporting period.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Assumptions and accounting estimates are subject to regular review. Any revisions required to accounting estimates are recognised in the period in which the revisions are made including all future periods affected.
The following are the significant estimates used in applying the accounting policies of the Company that have the most significant effect on the financial statements:
Intangible assets capitalisation policy
The Company establishes a reliable capitalisation policy for costs which are directly attributable to the development of the new software platform. This estimate is based on a variety of factors such as payroll costs, project development and third party costs.
For all projects that have been capitalised, their economic benefits are assessed alongside the technical feasibility of completing the projects. All projects capitalised are intended to be used in the manner set out in the project plan. It has been noted that obsolete software has been written off in the year as it has been replaced within our Goodshape Central Platform.
Useful lives of depreciable assets
Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technological obsolescence that may change the utility of certain software.


4.


Turnover

Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
6,082,630
5,641,394



5.


Operating loss

The operating loss is stated after charging:

2023
2022
£
£

Depreciation of tangible fixed assets
64,388
77,308

Amortisation of intangible assets
177,176
206,873

Page 17

 
GOODSHAPE UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

6.


Auditors' remuneration

2023
2022
£
£

Fees payable to the Company's auditor and its associates for the audit of
the Company's annual financial statements
90,000
80,000


7.


Employees

Staff costs were as follows:


2023
2022
£
£

Wages and salaries
3,369,727
3,254,972

Social security costs
424,045
466,878

Cost of defined contribution scheme
103,351
119,991

3,897,123
3,841,841


The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Employees
173
228


8.


Interest payable and similar expenses

2023
2022
£
£


Loans from group undertakings
332,352
299,925

Other interest payable
-
8,231

332,352
308,156

Page 18

 
GOODSHAPE UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

9.


Taxation


2023
2022
£
£



Current tax on profits for the year
-
-


Total current tax
-
-


Factors affecting tax charge for the year

The tax assessed for the year is lower than (2022 - lower than) the standard rate of corporation tax in the UK of 19% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Loss on ordinary activities before tax
(4,956,886)
(7,733,697)


Loss on ordinary activities multiplied by standard rate of corporation tax of 19% (2022 - 19%)
(941,808)
(1,432,183)

Effects of:


Non-tax deductible amortisation of goodwill and impairment
33,663
-

Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
14,242
-

Capital allowances for year in excess of depreciation
(45,405)
-

Unrelieved tax losses carried forward
939,308
1,432,183

Total tax charge for the year
-
-


Factors that may affect future tax charges

As at 31 December 2023 the company had £15,157,951 of pre-1 April 2017 trade losses (2022: £15,157,951) and £28,218,082 of post-1 April 2017 trading losses (2022: £23,261,196) to offset against future profits. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the company can utilise the benefits therefrom.

Page 19

 
GOODSHAPE UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

10.


Intangible assets




Computer software development

£



Cost


At 1 January 2023
1,204,186


Additions
328,620


Disposals
(274,280)



At 31 December 2023

1,258,526



Amortisation


At 1 January 2023
568,610


Charge for the year on owned assets
177,176


On disposals
(214,370)



At 31 December 2023

531,416



Net book value



At 31 December 2023
727,110



At 31 December 2022
635,576

Amortisation on intangible assets is charged to admin expenses.
The Intangible assets disposed of in the year relate to obsolete software which has been subsequently replaced in Goodshape Central, the company's platform.



Page 20

 
GOODSHAPE UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

11.


Tangible fixed assets





Short-term leasehold property
Office equipment
Total

£
£
£



Cost or valuation


At 1 January 2023
314,968
518,768
833,736


Disposals
(264,587)
(155,876)
(420,463)



At 31 December 2023

50,381
362,892
413,273



Depreciation


At 1 January 2023
290,407
425,684
716,091


Charge for the year on owned assets
8,341
56,047
64,388


Disposals
(263,187)
(155,678)
(418,865)



At 31 December 2023

35,561
326,053
361,614



Net book value



At 31 December 2023
14,820
36,839
51,659



At 31 December 2022
24,561
93,084
117,645


12.


Debtors

2023
2022
£
£


Trade debtors
324,815
295,659

Amounts owed by group undertakings
7,404,614
5,794,928

Other debtors
17,897
17,948

Prepayments and accrued income
249,788
437,625

7,997,114
6,546,160


Page 21

 
GOODSHAPE UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
580,471
654,358



14.


Creditors: Amounts falling due within one year

2023
2022
£
£

Trade creditors
484,138
774,473

Amounts owed to group undertakings
275,000
-

Other taxation and social security
339,639
317,318

Accruals and deferred income
931,467
882,227

2,030,244
1,974,018



15.


Creditors: Amounts falling due after more than one year

2023
2022
£
£

Amounts owed to group undertakings
3,533,854
3,201,500


The related party loans attract interest at 10%.


16.


Financial instruments

2023
2022
£
£

Financial assets


Financial assets measured at fair value through profit or loss
580,471
654,358




Financial assets measured at fair value through profit or loss comprise cash in bank and in hand.

Page 22

 
GOODSHAPE UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

17.


Provisions





Provisions

£





At 1 January 2023
516,353


Credited to profit or loss 
(147,523)



At 31 December 2023
368,830

A provision has been recognised for an onerous lease contract relating to the lease in place  for the office building of the company. Resulting payments are due to be made over the remaining life of the lease and there is no indication of any uncertainties around the timing of these outflows. There are also expected to be no reimbursements relating to this lease. The movement in the year relates to lease payments made in the year, with this credit posted to the profit or loss being fully offset by the rental payments made in the year, with a £nil net balance being recorded in the statement of comprehensive income.


18.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



4,138,330 (2022 - 4,137,230) Ordinary shares shares of £0.0100 each
41,383
41,372
149,479 (2022 - 149,479) Class B shares shares of £0.0059 each
875
875

42,258

42,247


Each ordinary share have attached to them full voting rights, dividend rights and capital distribution rights and rank equally on winding up; they do not confer any rights of redemption. The issued shares in the year were 1,100 1p shares for total consideration of £6,118,444 of which £6,118,433 went to the share premium account.
The ordinary B shares have attached to them full voting rights, dividend rights and capital distribution rights and rank equally on winding up; they do not confer any rights of redemption.


19.


Reserves

Share premium account

Includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium.

Profit and loss account

Includes all current and prior periods retained losses.

Page 23

 
GOODSHAPE UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

20.


Pension commitments

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £103,351 (2022: £119,991). Contributions totalling £47,336 (2022: £31,306) were payable to the fund at the balance sheet date and are included in creditors.


21.


Commitments under operating leases

At 31 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£


Not later than 1 year
147,523
147,523

Later than 1 year and not later than 5 years
221,307
368,830

368,830
516,353


22.


Related party transactions

The following related party transactions took place during the year. They are related by virtue of having the same controlling shareholders as the ultimate parent company.



 

.



2023
Expense
2023
Creditor
Balance o/s
2022
Expense
2022
Creditor
Balance o/s
£
£
£
£
Board fees, business development costs,monitoring fees, directors fees, headhunterfees & international fees.

72,598

39,183

284,330
 
14,029
 
Infrastructure personnel fees, hardware &software costs

983,679

121,408

740,118
 
113,216
 

Page 24

 
GOODSHAPE UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

Of the £983,679 (2022: £740,118) for infrastructure personnel fees, hardware and software costs, £289,930 (2022: £162,252) were capitalised. The creditor balance of £121,408 (2022: £113,216) is payable to Alltime Technologies Limited, which is related to the Company by virtue of having the same controlling shareholders as that of the ultimate parent company.
Total indebtedness for investment activities and loan arrangements to related parties as at 31 December 2023 was £160,591 (2022: £127,245).


.



2023
Expense
2023
Debtor
Balance o/s
2022
Expense
2022
Debtor
Balance o/s
£
£
£
£
Royalty fees and prepaid balance with Remedio Systems Development Limited

91,522

7,404,614

96,934
 
5,794,928
 


23.


Controlling party

The Company's immediate parent undertaking which provides group accounts is Goodshape UK Group
Limited. The registered office for this company is situated at 10 Upper Berkeley Street, London, United
Kingdom, W1H 7PE.
The Company's ultimate parent undertaking is MIHS No. 2 Limited, a company registered in England and Wales.

 
Page 25