Seismic Software UK Limited
Registered number: 11006147
Annual report
For the year ended 31 January 2023
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SEISMIC SOFTWARE UK LIMITED
COMPANY INFORMATION
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Chartered Accountants & Statutory Auditor
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SEISMIC SOFTWARE UK LIMITED
CONTENTS
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Independent Auditor's Report
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Statement of comprehensive income
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Statement of financial position
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Statement of changes in equity
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Notes to the financial statements
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SEISMIC SOFTWARE UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2023
The director presents their strategic report and the audited financial statements of the Company for the year ended 31 January 2023.
Principal Activity
The principal activity of the Company is that of providing sales and marketing support to the immediate parent company, Seismic Software Inc.
The previous accounting period was for 13 months and therefore the prior year results are not directly comparable.
During FY23, the macroeconomic headwinds driving cautionary investment decisions and tighter spending controls in its customer and prospect base, presented some challenges for the Company and reduced the growth outlook from anticipated levels to more modest growth trajectory.
The Company expects these headwinds to continue in FY24, to a greater or lesser degree, depending on macroeconomic interest rate and market optimism.
Principal risks and uncertainties
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Critical to the Company’s achievement of its objectives is effective risk management. The Company faces a number of risks and uncertainties including:
Uncertainties around when the European markets are ready to adopt and implement the solutions we sell, realizing our growth ambition in the European economy.
The Company is also focused on maintaining R&D investment such that it keeps abreast of the technological advancements especially with AI evolutions.
Our business could be susceptible to adverse changes in economic conditions and customer spending habits, which could impact our profitability and cash flow.
Financial key performance indicators
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With the support and backing of Permira, its other Investors, and along with its Board of Directors, the Company continues to focus on delivering profitable growth while realizing meaningful value for its clients through high quality innovative solutions. This core value of quality and innovation has allowed the Company to continue to secure ARR and Revenue growth both through new clients and industries and through its existing client base, with a ~90% client retention rate and many also increasing their Seismic solution footprint.
This report was approved by the board and signed on its behalf by:
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SEISMIC SOFTWARE UK LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 JANUARY 2023
The director presents his report and the audited financial statements for the year ended 31 January 2023.
The profit for the year, after taxation, amounted to £195,027 (2022: profit of £525,386).
The director did not recommend the payment of a dividend for the period (2022: £nil).
The director who served during the year and up to the date of this report was:
Director's responsibilities statement
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The director is responsible for preparing the Strategic report, the Director's report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is 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; and
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The director is 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 him to ensure that the financial statements comply with the Companies Act 2006. He is 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 director is not aware of any reason why the group recharge agreement in place, on which the Company is dependent for its sole revenue stream, should not continue into the future. Potential sources of uncertainty which are noted by the director include the long term impact of the withdrawal of the United Kingdom from the European Union. However at the date of this report these events are not considered to materially threaten the operations of the company. The director therefore has reasonable expectation that the Company will continue in operational existence for the foreseeable future and the financial statements have therefore been prepared on the going concern basis.
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SEISMIC SOFTWARE UK LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023
Economic impact of global events
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UK businesses are facing many uncertainties and challenges caused by political, economic, social, technological, legal and environmental factors. These uncertainties have contributed to an environment where there exists a range of issues and risks, including inflation, rising interest rates, labour shortages, disrupted supply chains and new ways of working.
The director has carried out an assessment of the potential impact of these uncertainties on the business, including the impact of mitigation measures, and concluded that the greatest impact on the business is expected to be from the economic ripple effect on the global economy. The director has taken account of these potential impacts in their going concern assessment.
The Company continues to work with its partners to minimise any impacts of these events and maximise the realisation of any opportunities they may provide to the business
Qualifying third party indemnity provisions
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The Company has indemnified the director and officers in respect of proceedings which may be brought by third parties and such indemnification was in place throughout the year, which is a qualifying third party indemnity of the purposes of the Companies Act 2006. Neither the company's indemnity nor insurance provinces cover in the event that a director or officer is proved to have acted fraudulently or dishonestly.
Matters covered in the Strategic report
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As permitted by Paragraph 1A of Schedule 7 to the Large and Medium-sized Companies and Group (Accounts and Reports) Regulations 2008 certain matters which are required to be disclosed in the Directors' report have been omitted as they are included in the Strategic report.
Disclosure of information to the auditor
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The director at the time when this Director's report is approved has confirmed that:
∙so far as he is aware, there is no relevant audit information of which the Company's auditor is unaware, and
∙he has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
Post balance sheet events
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There have been no significant events affecting the Company since the year end.
During the year, Forvis Mazars were appointed as auditors.
The auditor, Forvis Mazars, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
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SEISMIC SOFTWARE UK LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2023
This report was approved by the board and signed on its behalf by:
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SEISMIC SOFTWARE UK LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SEISMIC SOFTWARE UK LIMITED
Opinion
We have audited the financial statements of Seismic Software UK Limited (the ‘Company’) for the year ended 31 January 2023 which comprise the Statement of comprehensive income, the Statement of financial position, the Statement of changes in equity and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
∙give a true and fair view of the state of the Company’s affairs as at 31 January 2023 and of its profit 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 Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's 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 director with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The director is 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.
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SEISMIC SOFTWARE UK LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SEISMIC SOFTWARE UK LIMITED
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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Director's Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Director's 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 director's remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
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SEISMIC SOFTWARE UK LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SEISMIC SOFTWARE UK LIMITED
Responsibilities of the Director
As explained more fully in the Director's Responsibilities Statement set out on page 2, the director is 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 director determines 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 director is 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 director intends either to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
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.
Based on our understanding of the company and its industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: employment regulation, health and safety regulation, anti-money laundering regulation.
To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
∙Inquiring of management and, where appropriate, those charged with governance, as to whether the company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;
∙Inspecting correspondence, if any, with relevant licensing or regulatory authorities;
∙Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and
∙Considering the risk of acts by the company which were contrary to applicable laws and regulations, including fraud.
We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as tax legislation, pension legislation, the Companies Act 2006.
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SEISMIC SOFTWARE UK LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SEISMIC SOFTWARE UK LIMITED
In addition, we evaluated the director's and 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 manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, in particular in relation to revenue recognition (which we pinpointed to the insert the assertion(s) subject to your revenue recognition significant fraud risk, and significant one-off or unusual transactions.
Our audit procedures in relation to fraud included but were not limited to:
∙Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
∙Gaining an understanding of the internal controls established to mitigate risks related to fraud;
∙Discussing amongst the engagement team the risks of fraud; and
∙Addressing the risks of fraud through management override of controls by performing journal entry testing.
There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.
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 auditor’s report.
Use of the audit report
This report is made solely to the Company's members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body for our audit work, for this report, or for the opinions we have formed.
Austin Sammon (Senior statutory auditor)
for and on behalf of Forvis Mazars
Chartered Accountants and Statutory Auditor
Mayoralty House
Galway
Ireland
H91 P8PR
1 October 2024
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SEISMIC SOFTWARE UK LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JANUARY 2023
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Year ended 31 January 2023
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13 month period ended 31 January 2022
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Profit for the financial year/period
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Other comprehensive income
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Income for the year/period
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The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
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The notes on pages 12 to 25 form part of these financial statements.
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SEISMIC SOFTWARE UK LIMITED
REGISTERED NUMBER: 11006147
STATEMENT OF FINANCIAL POSITION
AS AT 31 JANUARY 2023
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Provisions for liabilities
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 12 to 25 form part of these financial statements.
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SEISMIC SOFTWARE UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2023
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Comprehensive income for the period
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Other comprehensive income for the period
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Total comprehensive income for the period
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Share based payment-reclassification
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Comprehensive income for the year
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Other comprehensive income for the year
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Total comprehensive income for the year
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The notes on pages 12 to 25 form part of these financial statements.
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SEISMIC SOFTWARE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
Seismic Software UK Limited is a private company limited by shares incorporated in England and Wales. The address of its registered office is The Pinnacle, 160 Midsummer Boulevard, Milton Keynes, Buckinghamshire, United Kingdom, MK9 1FF.
The principal activity of the Company is that of providing sales and marketing support to the immediate parent company, Seismic Software Inc.
The previous accounting period was for 13 months and therefore the prior year results are not directly comparable.
2.Accounting policies
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Basis of preparation of financial statements
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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 financial statements have been prepared in Pounds Sterling as this is the currency of the primary economic environment in which the company operates and are rounded to the nearest pound.
The following principal accounting policies have been applied:
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Financial Reporting Standard 102 - reduced disclosure exemptions
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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.
This information is included in the consolidated financial statements of Seismic Software, Inc. as at 31 January 2023 and these financial statements may be obtained from www.seismic.com.
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SEISMIC SOFTWARE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
2.Accounting policies (continued)
The director is not aware of any reason why the group recharge agreement in place, on which the Company is dependent for its sole revenue stream, should not continue into the future. Potential sources of uncertainty which are noted by the director include the long term impact of the withdrawal of the United Kingdom from the European Union. However at the date of this report these events are not considered to materially threaten the operations of the company. The director therefore has reasonable expectation that the Company will continue in operational existence for the foreseeable future and the financial statements have therefore been prepared on the going concern basis.
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentation currency is Pound Sterling.
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.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
Foreign exchange gains and losses are presented in the Statement of Comprehensive Income within 'administrative expenses'.
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:
Rendering of services
Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of turnover can be measured reliably;
∙it is probable that the Company will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
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SEISMIC SOFTWARE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
2.Accounting policies (continued)
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
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 Statement of financial position. The assets of the plan are held separately from the Company in independently administered funds.
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 the statement of comprehensive income when they fall due. Amounts not paid are shown in other creditors as a liability in the Statement of Financial Position. The assets of the plan are held separately from the company in independently administered funds.
Where share options are awarded to employees, the fair value of the options at the date of grant is charged to profit or loss over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (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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SEISMIC SOFTWARE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
2.Accounting policies (continued)
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
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. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
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.
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SEISMIC SOFTWARE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
2.Accounting policies (continued)
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Tangible fixed assets (continued)
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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:
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In line with the life of the relevant lease
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In line with the life of the relevant lease
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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.
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.
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Cash and cash equivalents
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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.
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.
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Provisions for liabilities
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Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year or period that the Company becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of financial position.
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SEISMIC SOFTWARE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 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.
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. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
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 reporting date.
Financial assets and liabilities are offset and the net amount reported in the Statement of financial position when there is an 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.
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Judgements in applying accounting policies and key sources of estimation uncertainty
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In applying the company’s accounting policies, the director makes judgements, estimates and assumptions in determining the carrying amounts of assets and liabilities that are not readily available from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant, including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates and assumptions.
An estimate or judgement may be considered critical if it involves matters that are highly uncertain or where different estimation methods could reasonably have been used, or if changes in the estimate that would have a material impact on the company's results are likely to occur from period to period.
Share based payments
Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which depends on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option or appreciation right, volatility and dividend yield and making assumptions about them. For the measurement of the fair value of equity-settled transactions with employees at the grant date, the company uses a Black-Scholes model.
- 17 -
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SEISMIC SOFTWARE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
Analysis of turnover by country of destination:
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The Company has taken advantage of the exemption not to disclose amounts paid for non audit services as these are disclosed in the group accounts of the parent Company.
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Staff costs were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the year was 93 (2022: 70).
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- 18 -
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SEISMIC SOFTWARE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
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Current tax on profits for the year
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Adjustments in respect of previous periods
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Origination and reversal of timing differences
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Adjustments in respect of prior periods
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Effect of increased/decreased tax rate on opening balance
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Factors affecting tax charge for the year
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The tax assessed for the year is higher than (2022: lower than) the standard rate of corporation tax in the UK of19% (2022: 19%). The differences are explained below:
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Profit on ordinary activities before tax
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(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2022: 19%)
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Expenses not deductible for tax purposes
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Remeasurement of deferred tax for changes in tax rates
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Adjustments to tax charge in respect of prior periods - deferred tax
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Movement in deferred tax not recognised
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Adjustments to tax charge in respect of prior periods
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Total tax charge for the year
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- 19 -
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SEISMIC SOFTWARE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
7.Taxation (continued)
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Factors that may affect future tax charges
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The UK Government announced in the 2021 budget that from 1 April 2023, the rate of corporation tax in the United Kingdom has increased from 19% to 25%. Companies with profits of £50,000 or less will continue to be taxed at 19%, which is a new small profits rate. Where taxable profits are between £50,000 and £250,000, the higher 25% rate will apply but with a marginal relief applying as profits increase
- 20 -
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SEISMIC SOFTWARE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
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Amounts owed by group undertakings
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Prepayments and accrued income
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Amounts owed by group undertakings are unsecured, interest free and payable on demand.
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- 21 -
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SEISMIC SOFTWARE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income
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Amounts owed to group undertakings are unsecured, interest free and repayable on demand.
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Charged to profit or loss
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- 22 -
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SEISMIC SOFTWARE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
13.Deferred taxation (continued)
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The provision for deferred taxation is made up as follows:
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Fixed asset timing differences
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Short term timing differences
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Allotted, called up and fully paid
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1 (2022: 1) ordinary share of £1
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Each ordinary share entitles the holder to one voting right and no right to fixed income.
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- 23 -
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SEISMIC SOFTWARE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
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The Company operates an employee share option plan, under which 98,500 (2022: 98,500) have been granted to 24 (2022: 24) individuals in the period at an exercise price equal to an agreed price of the Company's shares on the date of the grant. In the period, 34,585 (2022: 59,585) options were forfeited in respect of 1 staff (2022: 0).
Options grant the holder the option to cash returns in the ultimate parent company, Seismic Software, Inc.
As at 31 January 2023, the number of employees that benefit from the plan is 32. The following table summarises the activity for the current and preceding period
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Weighted average exercise price (pence)
2023
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Weighted average exercise price
(pence)
2022
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Outstanding at the beginning of the year/period
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Reorganisation during the period
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Granted during the period
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Forfeited during the period
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Exercised during the period
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Outstanding at the end of the year
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The fair value of the share options grants in previous financial years was calculated using the Black Scholes model at the grant date. Share options granted during the year ended 31 December 2020 were valued at unrestricted market value on the date of grant. These are considered to be appropriate method of calculating fair value based on information which was available at the time of valuation.
Equity settled share based payments costs were as follows:
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The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension charge during the year was 865 (2022: 9,541). Contributions totalling £13,099 (2022: £12,235) were payable to the fund at the balance sheet date and are included in creditors.
- 24 -
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SEISMIC SOFTWARE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2023
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Commitments under operating leases
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At 31 January 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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“Not later than 1 year” includes a rent relief catch-up payment in February 2023 due to COVID of £132,453.
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Post balance sheet events
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There have been no significant events affecting the company since the year end.
The immediate and ultimate parent undertaking and controlling party is Seismic Software, Inc., a company incorporated in the United States of America. The address of its registered office is 12390 El Camino Real, San Diego, CA 92130.
The smallest and largest group in which the results of Seismic Software UK Limited are consolidated is that headed by Seismic Software, Inc. Copies of the consolidated financial statements of Seismic Software, Inc. are available at www.seismic.com.
- 25 -
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