Registered number:
FOR THE YEAR ENDED 31 MARCH 2024
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GLASSWALL HOLDINGS LIMITED
COMPANY INFORMATION
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GLASSWALL HOLDINGS LIMITED
CONTENTS
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GLASSWALL HOLDINGS LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
The directors present their strategic report of the company and the group for the year ended 31 March 2024.
Glasswall Holdings Limited Group (“Glasswall”) is a zero-trust file protection software company that enables both governmental and commercial organisations to protect themselves from both known and unknown file-based threats and compliance risks, utilizing Glasswall Content Disarm and Reconstruction (“CDR”) technology.
Glasswall sells its CDR software in the form of subscription contracts, via technology partners, channel partners and directly to end customers. Glasswall’s key financial indicators are Annual Recurring Revenue (“ARR”), Revenue, and Profitability. The results for the year ended 31 March 2024. These are indicated below: 2024 2023 Change £000's £000's % Annual Recurring Revenue (“ARR”) 7,188 5,987* 20% Revenue 7,657 7,198 6% Loss after tax (2,975) (3,903) (24%) *Adjusted to normalise FX rates. 92% of Glasswall’s ARR is denominated in USD. Sales growth was impacted during the financial year by budgetary uncertainty in the United States Government (USG), which was a result of a number of short term funding measures, known as Continuing Resolutions (CR), being in place for most of the USG financial year. A CR is a temporary funding measure used by USG to keep federal agencies and programs operating when the formal appropriations bills (which set the annual budget) have not been passed by Congress before the start of the fiscal year on October 1st. This meant many expected new sales were not completed, due new projects being delayed until greater certainty and full finding had been approved by the USG. As a result, Revenue growth at 6% was lower than expectations set at the beginning of the financial year. Despite this, Glasswall did make progress towards its long-term revenue growth targets by diversifying its sales profile into a larger number of partners and customers, as well as showing a strong Gross Renewal Rate (“GRR”) renewal rate of greater than 90% throughout the period. Sales growth was predominately driven by the US market, particularly by USG end-users. The US remains Glasswall’s dominant market, and significant growth in this region is expected to continue, but there are also significant opportunities developing for Glasswall within the UK, Canadian, Australian, and APAC public and private markets. The budgetary uncertainty issues in USG have subsequently been resolved for the 2024/25 USG fiscal year. ARR growth was 20% (when normalised for FX rates), which again was below expectations at the start of the financial year. This growth was impacted by the USG budgetary uncertainty noted above. The Directors anticipate strong ARR growth throughout the year ended 31 March 2025, with a growth rate of circa 50% being targeted. Operating losses decreased by 24%. This was a result of Glasswall’s cost base being maintained at an operationally efficient level. This allows any increase in revenues to make their way directly to the bottom line, a trend that the Directors expect to continue in the near term. The Directors expect Glasswall to be profitable and cash positive in the year ended 31 March 2025. Glasswall continues to invest heavily in research and development of its zero trust CDR technology, focusing on enhancing its capabilities further, particularly via the use of AI technology. This is reflected in the research and development tax claim value, as detailed in Note 10 of the financial statements.
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GLASSWALL HOLDINGS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
Glasswall is affected by several risks and uncertainties, not all of which are wholly within Glasswall’s control. Many of the risks and uncertainties influencing Glasswall’s performance are macroeconomic and are not specific to the Group.
Foreign exchange risk The majority of Glasswall’s sales are in foreign currencies, predominantly USD, yet the majority of its cost base is made up of GBP-denominated expenses. Therefore, Glasswall could be materially exposed to GBP/USD FX rate movements. This could impact company profitability. Glasswall actively manages its foreign currency positions with the aim being to match monetary assets against known liabilities, so that the Group always limits its non-GBP exposures, paying particular attention to its USD exposures. Cash flow risk Cash flow risk is the risk that working capital levels are not sufficient to finance day-to-day operations. Glasswall secured new debt finance during the year ended 31 March 2024, as detailed in note 18, which has bolstered operational cash levels. Glasswall manages cash flow carefully through negotiating terms with partners, customers, and suppliers, as well as performing frequent cash flow forecast modelling. Credit risk Credit risk is the risk that a partner or customer may not settle their obligations with Glasswall as they fall due. Glasswall manages this by assessing the credit worthiness of partners and customers in advance of signing contracts and adjusting credit terms as appropriate. The majority of Glasswall’s partners and customers are government organisations and large commercial enterprises, that are financially robust. Macroeconomic and geopolitical risk Macroeconomic risks (e.g., high inflation, volatile energy prices, rising interest rates, etc.) and geopolitical instability will all negatively affect the global economy and growth outlook. Glasswall therefore will experience some inflationary increases in its cost base. However, cybersecurity remains a top priority for both governmental and commercial organisations, despite the wider economic outlook, so it’s expected that Glasswall will continue see increasing adoption of its technology, as organisations seek to mitigate cyber risks.
Given the straightforward nature of the business the directors are of the opinion that annual recurring revenue, revenues and profitability, as set out above, can be considered the key performance indicators of the group.
This report was approved by the board and signed on its behalf.
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GLASSWALL HOLDINGS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
The directors present their report and the financial statements for the year ended 31 March 2024.
The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group'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 Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the year, after taxation, amounted to £2,974,898 (2023 - loss £3,903,095).
No dividends were declared and paid during the year (2023 - £Nil).
The directors who served during the year were:
The Group does not expect there to be any material changes in the continuing operations of the business in the future, other than continued growth in its sales and annual recurring revenues. The Group is focused on growing its partner and customer base via its existing, and future, product offerings in relation to its CDR technology. The Group will continue to invest in research and development to further advance its CDR technology.
The Group’s going concern risk is discussed within these financial statements.
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GLASSWALL HOLDINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
There have been no significant events affecting the company since year end.
The auditors, Barnes Roffe LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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GLASSWALL HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF GLASSWALL HOLDINGS LIMITED
We have audited the financial statements of Glasswall Holdings Limited (the 'parent company') and its subsidiaries (the 'Group') for the year ended 31 March 2024, which comprise the Consolidated statement of comprehensive income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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GLASSWALL HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF GLASSWALL HOLDINGS LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group 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 Group strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group strategic report or the Directors' report.
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GLASSWALL HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF GLASSWALL HOLDINGS LIMITED (CONTINUED)
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GLASSWALL HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF GLASSWALL HOLDINGS LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with law and regulations, was as follows: • The engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; • We identified the laws and regulations applicable to the group through discussion with directors and other management, and from our commercial knowledge and experience of the software and technology in which the group operates; • The specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the group, are as follows; o Companies Act 2006 o FRS102 o Health and Safety legislation o Employment legislation o Tax legislation • We assessed the extent of compliance with the laws and regulations identified above through making enquiries of management, reviewing board minutes and inspecting relevant legal and other correspondence; • Laws and regulations were communicated within the audit team at the planning meeting, and during the audit as any further laws and regulation were identified. The audit team remained alert to instances of non-compliance throughout the audit; and • As auditor of all the UK subsidiaries and from audit work carried out on the US subsidiary, we were able to cover the above matters at a group and component level and thereby ensure the audit team were aware of the above matters across the group. We assessed the susceptibility of the group’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur by: • Making enquires of management as to where they consider there was susceptibility to fraud and their knowledge of actual suspected and alleged fraud; • Considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations; • Reviewing the financial statements and testing the disclosures against supporting documentation; • Performing analytical procedures to identify any unusual or unexpected trends or anomalies; • Inspecting and testing journal entries to identify unusual or unexpected transactions; • Assessing whether judgment and assumptions made in determining significant accounting estimates, including the carrying value of investments and any impairment, and certain year end accruals, were indicative of management bias; and • Investigating the rationale behind significant transactions, or transactions that are unusual or outside the
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GLASSWALL HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF GLASSWALL HOLDINGS LIMITED (CONTINUED)
group’s usual course of business.
The areas that we identified as being susceptible to misstatement through fraud were: • Management bias in the estimates and judgments made; • Management override of controls; and • Posting of unusual journals or transactions. 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.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants & Statutory Auditors
1st Floor
73-81 Southwark Bridge Road
SE1 0NQ
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GLASSWALL HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
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GLASSWALL HOLDINGS LIMITED
REGISTERED NUMBER: 05610051
CONSOLIDATED BALANCE SHEET
AS AT 31 MARCH 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 16 to 30 form part of these financial statements.
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GLASSWALL HOLDINGS LIMITED
REGISTERED NUMBER: 05610051
COMPANY BALANCE SHEET
AS AT 31 MARCH 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 16 to 30 form part of these financial statements.
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GLASSWALL HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
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GLASSWALL HOLDINGS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
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GLASSWALL HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
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GLASSWALL HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Glasswall Holdings Limited is a private limited company limited by shares, incorporated in England and
Wales. The address of the registered office is 85 Great Portland Street, London, W1W 7LT. The company's principal activity is that of a holding company, and the group`s principal activity continued to be the design, production and marketing of computer software.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
The financial statements have been prepared on the going concern basis, which is dependent on the successful development and marketing of new products, and the ability of the group to raise funds to support this. The group obtained a £5m loan in the year to finance the next stage of the group's business plan, which is to continue to market and deliver the product for sale. The group is confident the loan will be sufficient to finance the company for the next few years and therefore the directors expect the group to continue as a going concern for the foreseeable future.
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GLASSWALL HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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GLASSWALL HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2.Accounting policies (continued)
The group also claims research and development tax credits in respect of this expenditure and any refunds received are recognised on receipt of the funds.
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GLASSWALL HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2.Accounting policies (continued)
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GLASSWALL HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2.Accounting policies (continued)
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
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.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Investments are assessed at each balance sheet date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each balance sheet date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.
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GLASSWALL HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2.Accounting policies (continued)
The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
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.
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GLASSWALL HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
The whole of the turnover is attributable to the group's principal business activity.
Analysis of turnover by country of destination:
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GLASSWALL HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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GLASSWALL HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
The group has taxable losses carried forward to future years amounting to £43,533,201 (2023: £39,408,981).
The group expects to submit a research and development tax claim in relation to expenditure incurred in the year ended 31 March 2024 and any refund due will be recognised in next year's accounts.
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GLASSWALL HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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GLASSWALL HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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GLASSWALL HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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GLASSWALL HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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GLASSWALL HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
During the year, the group borrowed £5m from the bank. The loan is repayable in June 2026 with an annual interest rate of 5.75% over Bank of England Base Rate payable. Issue costs of £217,800 were incurred, which have been deducted from the initial carrying value and will be charged to profit and loss as part of the interest charge calculated using the effective interest rate method.
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GLASSWALL HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
During the year 15,000 Ordinary £0.01 shares, were alloted and fully paid in various tranches for a total consideration of £7,500. On 8 November 2023, 6 B Ordinary £1 shares were alloted and fully paid for a consideration of £1,465. On 4 January 2024, the company bought back 42 B Ordinary £1 shares with a total consideration of £1,038.
The group operates defined contribution pension schemes. The scheme's assets are held separately from those of the group in independently administered funds. The pension charge represents contributions payable by the group to the funds and amounted to £271,331 (2023: £262,167). Outstanding contributions at the year end were £47,053 (2023: £36,037).
There is no one controlling party.
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