Company registration number 10005328 (England and Wales)
APPRISS RETAIL (UK) HOLDINGS, LTD.
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
APPRISS RETAIL (UK) HOLDINGS, LTD.
COMPANY INFORMATION
Directors
H Magaro
(Appointed 22 June 2023)
M Osborne
(Appointed 22 June 2023)
K Beckman
(Appointed 27 October 2023)
Secretary
K Beckman
Company number
10005328
Registered office
8 Devonshire Square
London
United Kingdom
EC2M 4PL
Auditor
Azets Audit Services
Secure House
Lulworth Close
Chandlers Ford
Southampton
Hampshire
SO53 3TL
APPRISS RETAIL (UK) HOLDINGS, LTD.
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Group income statement
7
Group statement of comprehensive income
8
Group statement of financial position
9
Parent company statement of financial position
10
Group statement of changes in equity
11
Parent company statement of changes in equity
12
Group statement of cash flows
13
Notes to the group financial statements
15 - 36
APPRISS RETAIL (UK) HOLDINGS, LTD.
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Fair review of the business
Appriss Retail (UK) Holdings, Ltd. operating through it three subsidiaries, is a provider of solutions delivering advanced software, data and analytics that addresses challenging problems relating to global retail markets. The Group leverages Software-as-a-Service to both collect data and deliver information across the market segment via it's Secure TM suite of offerings. Utilizing Secure allows retailers to make better-informed, real time decisions with industry and data-science expertise lifting store performance by increasing sales, reducing loss and enhancing the customer experience. Additionally, the Group offers a light-weight, high performance data integration toolset Real Time Integration RM ("TRI"), allowing customer efficient, secure and stable connectivity between applications.
The Group's performance for the twelve months ended 31 December 2023 produced a profit before tax of $7.13m (2022: $5.59m).
Unit
2023
2022
2021
Profit before tax as a percentage of turnover
%
33.39
27.46
15.17
Operating expenses as a percentage of turnover
%
59.75
66.40
75.12
Revenue to employment cost
:1
2.74
2.38
2.36
Quick ratio (current assets/current liabilities)
:1
0.80
0.67
0.56
The Group intends to continue to invest in their current products, ensuring the functionality and return on investment continues to maintain the status of standard-bearer. The group built its next generation Secure platform, as announced mid-2017, and was made available in the market Autumn 2017. Secure Store platform engages retailers by providing analysis of billions of individual data points to identify trends in internal personnel, system or process anomalies. The platform delivers actionable information to the business user to entact change and avoid shrink through personnel and process disruptions. Secure is focused on providing meaningful data at retail store level, pharmacies, refund management and information management. Customers typically see ROI achieved within 12 months. As the retail market continues to transform, we are committed to ensuring our suite of products provides the insight and functionality needed to navigate a complex and evolving industry.
Principal risks and uncertainties
The principal risks faced by the Group are market uncertainties and foreign exchange rate fluctuations. Market uncertainties are managed by investing in our products to position the Group to provide high return on investments and improve profitability of our customers. Foreign exchange risks are managed partially through natural hedging from the sale and purchases within the same currency.
H Magaro
Director
25 November 2024
APPRISS RETAIL (UK) HOLDINGS, LTD.
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company is that of a holding company. The principal activity of the group is the provision of software services, support and licences.
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
T Laddusaw
(Resigned 21 April 2023)
D Moore
(Resigned 27 October 2023)
S Prebble
(Resigned 1 January 2023)
H Magaro
(Appointed 22 June 2023)
M Osborne
(Appointed 22 June 2023)
K Beckman
(Appointed 27 October 2023)
K Sastry
(Appointed 3 January 2023 and resigned 28 March 2023)
Post reporting date events
On 1 March 2024 a resolution to commence the liquidation of the subsidiary Appriss Sp Zoo was adopted. The liquidation process is expected to complete by 31 December 2024.
Statement of directors' responsibilities
The directors are responsible for preparing the annual 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 group and parent company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom. 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, International Accounting Standard 1 requires that directors:
properly select and apply accounting policies;
present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and
make an assessment of the company's ability to continue as a going concern.
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 enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
APPRISS RETAIL (UK) HOLDINGS, LTD.
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Statement of disclosure to auditor
Each director in office at the date of approval of this annual report confirms that:
so far as the directors are aware, there is no relevant audit information of which the company's auditor is unaware, and
the directors individually 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.
This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.
On behalf of the board
H Magaro
Director
25 November 2024
APPRISS RETAIL (UK) HOLDINGS, LTD.
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF APPRISS RETAIL (UK) HOLDINGS, LTD.
- 4 -
Opinion
We have audited the financial statements of Appriss Retail (UK) Holdings, Ltd. (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended 31 December 2023 which comprise the group income statement, the group statement of comprehensive income, the group and parent company statement of financial position, the group and parent company statement of changes in equity, the group and parent statement of cash flows and the group and parent company notes to the financial statements, including significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom and as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
In our opinion:
the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 31 December 2023 and of the group's profit for the year then ended;
the financial statements have been properly prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the UK; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
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 group and parent 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 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 and 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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's 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.
APPRISS RETAIL (UK) HOLDINGS, LTD.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF APPRISS RETAIL (UK) HOLDINGS, LTD.
- 5 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our 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 group and parent company and their 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company 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, 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 parent 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 parent company or to cease operations, or have 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.
A further description of our responsibilities is available on the Financial Reporting Council's website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
APPRISS RETAIL (UK) HOLDINGS, LTD.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF APPRISS RETAIL (UK) HOLDINGS, LTD.
- 6 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the entity through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
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 of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
Michael Wesley FCA (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
28 November 2024
Chartered Accountants
Statutory Auditor
Secure House
Lulworth Close
Chandlers Ford
Southampton
Hampshire
SO53 3TL
APPRISS RETAIL (UK) HOLDINGS, LTD.
GROUP INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
$
$
Revenue
4
21,340,252
20,348,166
Gross profit
21,340,252
20,348,166
Other operating expenses
(12,495)
414,651
Administrative expenses
(12,750,327)
(13,510,176)
Operating profit
5
8,577,430
7,252,641
Investment revenues
9
1,915
224
Finance costs
6
(1,454,214)
(1,664,583)
Profit before taxation
7,125,131
5,588,282
Income tax expense
11
(1,881,892)
(838,933)
Profit for the year
5,243,239
4,749,349
Profit for the financial year is all attributable to the owners of the parent company.
APPRISS RETAIL (UK) HOLDINGS, LTD.
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
$
$
Profit for the year
5,243,239
4,749,349
Other comprehensive income:
Items that will not be reclassified to profit or loss
Foreign currency translation gains/(losses)
462,592
(701,714)
Total comprehensive income for the year
5,705,831
4,047,635
Total comprehensive income for the year is all attributable to the owners of the parent company.
APPRISS RETAIL (UK) HOLDINGS, LTD.
GROUP STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
$
$
ASSETS
Non-current assets
Intangible assets
12
23,368,818
23,822,588
Property, plant and equipment
13
1,356,247
1,175,434
24,725,065
24,998,022
Current assets
Trade and other receivables
16
27,837,012
19,665,833
Cash and cash equivalents
7,198,983
9,919,255
35,035,995
29,585,088
Total assets
59,761,060
54,583,110
EQUITY
Share capital
19
2,791
2,791
Share premium
20
14,716,759
14,716,759
Foreign currency translation reserve
21
(340,076)
(802,668)
Capital contribution reserve
22
4,986,918
4,986,918
Retained earnings
(5,006,785)
(10,250,024)
Equity attributable to owners of the parent company
14,359,607
8,653,776
LIABILITIES
Non-current liabilities
Deferred tax liabilities
23
1,597,272
1,474,188
Current liabilities
Trade and other payables
24
36,177,161
38,520,286
Current tax liabilities
1,805,966
956,582
Provisions
27
35,621
81,025
Deferred revenue
28
5,785,433
4,897,253
43,804,181
44,455,146
Total liabilities
45,401,453
45,929,334
Total equity and liabilities
59,761,060
54,583,110
The financial statements were approved by the board of directors and authorised for issue on 25 November 2024 and are signed on its behalf by:
H Magaro
Director
APPRISS RETAIL (UK) HOLDINGS, LTD.
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
$
$
ASSETS
Non-current assets
Investments
14
44,037,226
44,037,226
Current assets
Trade and other receivables
17
1,952,859
1,952,859
Total assets
45,990,085
45,990,085
EQUITY
Share capital
18
2,791
2,791
Share premium
19
14,716,759
14,716,759
Capital contribution reserve
21
4,986,918
4,986,918
Retained earnings
(5,920,825)
(10,474,037)
Total equity
13,785,643
9,232,431
LIABILITIES
Current liabilities
Trade and other payables
25
32,204,442
36,757,654
Total liabilities
32,204,442
36,757,654
Total equity and liabilities
45,990,085
45,990,085
The financial statements were approved by the board of directors and authorised for issue on 25 November 2024 and are signed on its behalf by:
25 November 2024
H Magaro
Director
Company Registration No. 10005328
APPRISS RETAIL (UK) HOLDINGS, LTD.
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Share premium
Foreign currency translation reserve
Capital contribution reserve
Retained earnings
Total
$
$
$
$
$
$
Balance at 1 January 2022
2,791
14,716,759
(100,954)
4,986,918
(14,999,373)
4,606,141
Year ended 31 December 2022:
Profit for the year
-
-
-
-
4,749,349
4,749,349
Other comprehensive income:
Currency translation differences
-
-
(701,714)
-
-
(701,714)
Total comprehensive income for the year
-
-
(701,714)
-
4,749,349
4,047,635
Balance at 31 December 2022
2,791
14,716,759
(802,668)
4,986,918
(10,250,024)
8,653,776
Year ended 31 December 2023:
Profit for the year
-
-
-
-
5,243,239
5,243,239
Other comprehensive income:
Currency translation differences
-
-
462,592
-
-
462,592
Total comprehensive income for the year
-
-
462,592
-
5,243,239
5,705,831
Balance at 31 December 2023
2,791
14,716,759
(340,076)
4,986,918
(5,006,785)
14,359,607
APPRISS RETAIL (UK) HOLDINGS, LTD.
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Share premium
Capital contribution reserve
Retained earnings
Total
$
$
$
$
$
Balance at 1 January 2022
2,791
14,716,759
4,986,918
(8,880,822)
10,825,646
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
-
-
(1,593,215)
(1,593,215)
Balance at 31 December 2022
2,791
14,716,759
4,986,918
(10,474,037)
9,232,431
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
-
4,553,212
4,553,212
Balance at 31 December 2023
2,791
14,716,759
4,986,918
(5,920,825)
13,785,643
APPRISS RETAIL (UK) HOLDINGS, LTD.
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
2023
2022
Notes
$
$
$
$
Cash flows from operating activities
Cash (absorbed by)/generated from operations
34
(966,981)
7,543,935
Interest paid
(20,410)
(42,333)
Income taxes paid
(909,424)
(55,569)
Net cash (outflow)/inflow from operating activities
(1,896,815)
7,446,033
Investing activities
Purchase of property, plant and equipment
(826,047)
(1,097,531)
Proceeds on disposal of property, plant and equipment
675
5,057
Interest received
1,915
224
Net cash used in investing activities
(823,457)
(1,092,250)
Financing activities
Payment of lease liabilities
-
(349,110)
Net cash used in financing activities
-
(349,110)
Net (decrease)/increase in cash and cash equivalents
(2,720,272)
6,004,673
Cash and cash equivalents at beginning of year
9,919,255
3,914,582
Cash and cash equivalents at end of year
7,198,983
9,919,255
APPRISS RETAIL (UK) HOLDINGS, LTD.
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
2023
2022
Notes
$
$
$
$
Cash flows from operating activities
Cash absorbed by operations
35
(6,000,000)
Net cash outflow from operating activities
(6,000,000)
-
Investing activities
Dividends received
6,000,000
Net cash generated from/(used in) investing activities
6,000,000
-
Net increase in cash and cash equivalents
-
-
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
APPRISS RETAIL (UK) HOLDINGS, LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
1
Accounting policies
Company information
Appriss Retail (UK) Holdings, Ltd. is a private company limited by shares incorporated in England and Wales. The registered office is 8 Devonshire Square, London, EC2M 4PL. The principal activity of the group is the provision of software services, support and licences.
The group consists of Appriss Retail (UK) Holdings, Ltd. and all of its subsidiaries.
1.1
Accounting convention
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the United Kingdom and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, except as otherwise stated.
The financial statements are prepared in US dollars, which is the functional currency of the group. Monetary amounts in these financial statements are rounded to the nearest $.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Basis of consolidation
In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.
Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.
The consolidated financial statements incorporate those of Appriss Retail (UK) Holdings, Ltd. and all of its subsidiaries (i.e. entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits).
All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
No income statement is presented for the company as permitted by section 408 of the Companies Act 2006. The company’s profit for the year was $4,553,212 (2022 - $1,593,215 loss).
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
APPRISS RETAIL (UK) HOLDINGS, LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value at the acquisition date. Any excess of the cost of the business combination over the acquirer's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.
1.3
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The directors have considered the likely cash flows of the business and have considered the balance sheet and the facilities available at this point in time.true
1.4
Revenue
The principles in IFRS are applied to revenue recognition criteria using the following 5 step model:
1. Identify the contracts with the customer
2. Identify the performance obligations in the contract
3. Determine the transaction price
4. Allocate the transaction price to the performance obligations in the contract
5. Recognise revenue when or as the entity satisfies its performance obligations
Revenue comprises the fair value of consideration received or receivable for the provision of software licences and support services. Revenue is shown net of sales/value added tax, returns, rebates and discounts.
The group recognises revenue for the provision of licences in full at the point of sale. Revenue for the provision of support services is recognised on a straight line basis over the term of the contract.
1.5
Goodwill
Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost accumulated impairment losses.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.6
Intangible assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and impairment losses.
Separately acquired trademarks and licences are shown at historical cost.
Trademarks, licences (including software) and customer-related intangible assets acquired in a business combination are recognised at fair value at the acquisition date.
Trademarks, licences (including software) and customer-related intangible assets have a finite useful life and are carried at cost less accumulated amortisation and impairment losses.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
APPRISS RETAIL (UK) HOLDINGS, LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
Internally generated software
33.33% straight line
Trademarks
50% straight line
Contractual customer relationships
5% straight line
1.7
Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold improvements
10% to 20% straight line
Furniture, fittings and equipment
14.29% to 20% straight line
Other property, plant and equipment
20% to 30% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.
1.8
Non-current investments
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.9
Impairment of tangible and intangible assets
At each reporting end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method are tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
APPRISS RETAIL (UK) HOLDINGS, LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.10
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.11
Financial assets
Financial assets are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.
At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.
Basic financial assets
Basic financial assets, which include trade and other receivables and cash and cash equivalents, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets held at amortised cost
Financial instruments are classified as financial assets measured at amortised costs where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (e.g. trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
APPRISS RETAIL (UK) HOLDINGS, LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
1.12
Financial liabilities
The group recognises financial debt when the group becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Other financial liabilities
Other financial liabilities, including trade and other payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Derecognition of financial liabilities
Financial liabilities are derecognised when the group’s obligations expire, are discharged or cancelled.
1.13
Equity instruments
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer payable at the discretion of the group.
1.14
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
APPRISS RETAIL (UK) HOLDINGS, LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.15
Provisions
Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event and it is probable that the group will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
1.16
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of inventories or non-current assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the group is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.17
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.18
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Adoption of new and revised standards and changes in accounting policies
In the current year, the following new and revised standards and interpretations have been adopted by the group and have an effect on the current period or a prior period or may have an effect on future periods:
APPRISS RETAIL (UK) HOLDINGS, LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Adoption of new and revised standards and changes in accounting policies
(Continued)
- 21 -
IFRS 17 Insurance Contracts
The group does not have any contracts that meet the definition of an insurance contract under IFRS 17.
IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements— Disclosure of Accounting Policies
The amendments change the requirements in IAS 1 with regard to disclosure of accounting policies. The amendments replace all instances of the term ‘significant accounting policies’ with ‘material accounting policy information’.
The supporting paragraphs in IAS 1 are also amended to clarify that accounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed.
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors—Definition of Accounting Estimates
The amendments replace the definition of a change in accounting estimates with a definition of accounting estimates. Under the new definition, accounting estimates are “monetary amounts in financial statements that are subject to measurement uncertainty”.
IAS 12 Income Taxes—Deferred Tax related to Assets and Liabilities arising from a Single Transaction
The amendments introduce a further exception from the initial recognition exemption. Under the amendments, an entity does not apply the initial recognition exemption for transactions that give rise to equal taxable and deductible temporary differences. Following the amendments to IAS 12, an entity is required to recognise the related deferred tax asset and liability, with the recognition of any deferred tax asset being subject to the recoverability criteria in IAS 12.
Standards which are in issue but not yet effective
At the date of authorisation of these financial statements, the following standards and interpretations, which have not yet been applied in these financial statements, were in issue but not yet effective:
Amendments to IAS 1
Classification of Liabilities as Current or Non-current
Amendments to IAS 1
Non-current Liabilities with Covenants
Amendments to IAS 7 and IFRS 7
Supplier Finance Arrangements
Amendments to IFRS 16
Lease Liability in a Sale and Leaseback
Amendments to IFRS 10 and IAS 28
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
APPRISS RETAIL (UK) HOLDINGS, LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
3
Judgements and key sources of estimation uncertainty
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Depreciation of property, plant and equipment
Items of property, plant and equipment are depreciated over their useful economic lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation and maintenance programmes are taken into account. Residual value assessments consider issues such as future market condition, the remaining life of the asset and projected disposal values.
Impairment of goodwill and other intangible assets
At the end of each accounting period the group assesses the recoverable amounts of goodwill and other intangible assets. Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The value in use calculation requires the directors to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Where the actual future cash flows are less than expected, a material impairment loss may arise.
Amortisation of intangible assets
Intangible assets are amortised over their useful economic lives. The useful economic life of the assets are reviewed annually an factors, including the expected product life cycles of internally generated software, are taken into account. The group considers trademarks to have an indefinite useful life on the basis that legal protection can be extended without significant legal or economic constraints, therefore economically these intangible assets will exist for as long as the underlying business.
4
Revenue
2023
2022
$
$
Revenue analysed by class of business
Rendering of services
21,340,252
20,348,166
APPRISS RETAIL (UK) HOLDINGS, LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
4
Revenue
(Continued)
- 23 -
2023
2022
$
$
Revenue analysed by geographical market
U.S.A
12,503,854
10,942,831
United Kingdom
5,760,572
6,685,261
E.U
1,337,108
1,176,307
Rest of the world
1,738,718
1,543,767
21,340,252
20,348,166
5
Operating profit/(loss)
2023
2022
$
$
Operating profit/(loss) for the year is stated after charging/(crediting):
Exchange losses/(gains)
192,936
(2,882)
Depreciation of property, plant and equipment
638,357
770,160
Loss on disposal of property, plant and equipment
41,217
2,300
Amortisation of intangible assets
453,770
453,770
6
Finance costs
2023
2022
$
$
Interest on bank overdrafts and loans
19,093
20,027
Interest on lease liabilities
-
22,306
Other interest payable
1,435,121
1,622,250
Total interest expense
1,454,214
1,664,583
7
Employees
The average monthly number of persons (including directors) employed by the group during the year was:
2023
2022
Number
Number
Adminstration and support
5
5
Research and development
25
22
Sales
4
8
Other
37
37
Directors
3
3
Total
74
75
APPRISS RETAIL (UK) HOLDINGS, LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Employees
(Continued)
- 24 -
Their aggregate remuneration comprised:
2023
2022
$
$
Wages and salaries
6,933,601
7,645,716
Social security costs
627,602
705,550
Pension costs
215,102
211,126
7,776,305
8,562,392
8
Directors' remuneration
The directors' remuneration for the year was $nil (2022 - $nil).
9
Investment income
2023
2022
$
$
Interest income
Financial instruments measured at amortised cost:
Bank deposits
1,915
224
10
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
$
$
For audit services
Audit of the financial statements of the group and company
33,000
31,400
Audit of the financial statements of the company's subsidiaries
12,000
11,400
45,000
42,800
11
Income tax expense
2023
2022
$
$
Current tax
UK corporation tax on profits for the current period
3,726
38,933
Foreign taxes and reliefs
1,755,082
910,564
1,758,808
949,497
APPRISS RETAIL (UK) HOLDINGS, LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
11
Income tax expense
2023
2022
$
$
(Continued)
- 25 -
Deferred tax
Origination and reversal of temporary differences
(72,396)
(110,564)
Adjustment in respect of prior periods
195,480
123,084
(110,564)
Total tax charge
1,881,892
838,933
As of 1 April 2023, the main rate of UK corporation tax increased from 19% to 25%. As the company's financial year straddles the date of the change in corporation tax rates, a blended corporation tax rate of 23.52% has been applied which is calculated by apportioning the two tax rates on a weighted basis for the proportion of the financial year for which each main tax rate was applicable.
The charge for the year can be reconciled to the loss per the income statement as follows:
2023
2022
$
$
Profit before taxation
7,125,131
5,588,282
Expected tax charge based on a corporation tax rate of 23.52% (2022: 19.00%)
1,675,831
1,061,774
Effect of expenses not deductible in determining taxable profit
4,397
3,451
Utilisation of tax losses not previously recognised
(213,908)
(253,311)
Unutilised tax losses carried forward
102,054
-
Change in unrecognised deferred tax assets
3,394
(73,831)
Amortisation on assets not qualifying for tax allowances
84,115
-
Other permanent differences
(23,358)
-
Effect of overseas tax rates
(173,585)
86,265
Deferred tax adjustments in respect of prior years
195,480
-
Differences in deferred tax rate
(201)
(24,348)
Foreign withholding tax
3,726
38,933
State taxes
223,947
-
Taxation charge for the year
1,881,892
838,933
At the balance sheet date, the company had unrelieved tax losses of $6,518,473 (2022 - $6,084,561) available to carry forward against future trading profits.
APPRISS RETAIL (UK) HOLDINGS, LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
12
Intangible assets - group
Goodwill
Trademarks
Contractual customer relationships
Internally generated software
Total
$
$
$
$
$
Cost
At 1 January 2022
17,772,326
6,058,000
9,075,395
16,008,231
48,913,952
At 31 December 2022
17,772,326
6,058,000
9,075,395
16,008,231
48,913,952
At 31 December 2023
17,772,326
6,058,000
9,075,395
16,008,231
48,913,952
Amortisation and impairment
At 1 January 2022
6,058,000
2,571,363
16,008,231
24,637,594
Charge for the year
-
453,770
-
453,770
At 31 December 2022
6,058,000
3,025,133
16,008,231
25,091,364
Charge for the year
-
453,770
-
453,770
At 31 December 2023
6,058,000
3,478,903
16,008,231
25,545,134
Carrying amount
At 31 December 2023
17,772,326
-
5,596,492
-
23,368,818
At 31 December 2022
17,772,326
-
6,050,262
-
23,822,588
At 31 December 2021
17,772,326
-
7,411,572
-
25,183,898
The company had no intangible fixed assets at 31 December 2023 or 31 December 2022.
APPRISS RETAIL (UK) HOLDINGS, LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
13
Property, plant and equipment - group
Leasehold improvements
Furniture, fittings and equipment
Other property, plant and equipment
Total
$
$
$
$
Cost
At 1 January 2022
2,824,836
266,394
3,600,237
6,691,467
Additions
1,097,531
1,097,531
Disposals
(1,671,222)
(42,489)
(19,043)
(1,732,754)
Foreign currency adjustments
(41,824)
(17,951)
(144,699)
(204,474)
At 31 December 2022
1,111,790
205,954
4,534,026
5,851,770
Additions
826,047
826,047
Disposals
(410,076)
(65,506)
(475,582)
Foreign currency adjustments
11,605
9,809
182,312
203,726
At 31 December 2023
713,319
150,257
5,542,385
6,405,961
Accumulated depreciation and impairment
At 1 January 2022
2,404,835
186,182
3,202,106
5,793,123
Charge for the year
319,931
35,929
414,300
770,160
Eliminated on disposal
(1,671,222)
(42,489)
(11,686)
(1,725,397)
Foreign currency adjustments
(23,015)
(14,834)
(123,701)
(161,550)
At 31 December 2022
1,030,529
164,788
3,481,019
4,676,336
Charge for the year
29,927
28,310
580,120
638,357
Eliminated on disposal
(368,183)
(65,507)
(433,690)
Foreign currency adjustments
9,492
9,224
149,995
168,711
At 31 December 2023
701,765
136,815
4,211,134
5,049,714
Carrying amount
At 31 December 2023
11,554
13,442
1,331,251
1,356,247
At 31 December 2022
81,261
41,166
1,053,007
1,175,434
Leasehold improvements include right-of-use assets, as follows:
Right-of-use assets
2023
2022
$
$
Net values
Property
-
-
Depreciation charge for the year
Property
-
281,083
The company had no property, plant and equipment at 31 December 2023 or 31 December 2022.
APPRISS RETAIL (UK) HOLDINGS, LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 28 -
14
Investments - company
Current
Non-current
2023
2022
2023
2022
$
$
$
$
Investments in subsidiaries
44,037,226
44,037,226
Fair value of financial assets carried at amortised cost
The directors consider that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.
15
Subsidiaries - company
Details of the company's subsidiaries at 31 December 2023 are as follows:
Name of undertaking
Registered office
Principal activities
Class of
% Held
shares held
Direct
Appriss Retail Limited
United Kingdom
Provision of software licenses and support
Ordinary
100.00
Sysrepublic Inc
USA
Provision of software licenses and support
Ordinary
100.00
Appriss Sp. z.o.o
Poland
Provision of services to other group companies
Ordinary
100.00
16
Trade and other receivables - group
2023
2022
$
$
Trade receivables
4,744,983
4,716,437
Amounts owed by related parties
22,018,421
13,463,866
Other receivables
611,178
608,702
Prepayments and accrued income
462,430
876,828
27,837,012
19,665,833
Group
The fair value of those trade and other receivables classified as financial instrument loans and receivables are disclosed in the financial instruments note.
Included within prepayments are non-current prepayments amounting to $236,537 (2022: $152,242).
17
Trade and other receivables - company
2023
2022
$
$
Amounts owed by related parties
1,952,859
1,952,859
APPRISS RETAIL (UK) HOLDINGS, LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
18
Trade receivables - credit risk
Fair value of trade receivables - group
The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.
Before any significant work is undertaken for new customers, credit checks will be considered and a credit limit set. Separate departments have responsibility for the collection of debts and the directors are kept up to date with any issues. The group had bad debts this year totalling $6,880 (2022 - $86,971).
The group has assets subject to credit risk totalling $26,902,018 (2022 - $18,710,277) of which $22,018,421 (2022 - $13,463,866) is owed by related parties. Against this there is deferred income of $5,785,433 (2022 - $4,897,253).
19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
$
$
Issued and fully paid
Ordinary shares of $1.3955 each
2,000
2,000
2,791
2,791
Rights, preferences and restrictions
Ordinary shares have the following rights, preferences and restrictions:
a) Each share is entitled to vote in all circumstances
b) Each share is entitled pari passu to dividend payments or any other distribution
c) Each share is entitled pari passu to participate in a distribution arising from a winding up
d) The share are not redeemable or liable to be redeemed at the option of the company or the shareholder.
20
Share premium
2023
2022
$
$
At the beginning and end of the year
14,716,759
14,716,759
Share premium represents the premium between nominal value of shares issued and the price paid for shares on acquisition of shares.
21
Foreign currency translation reserve - group
2023
2022
$
$
At the beginning of the year
(802,668)
(100,954)
Currency translation differences
462,592
(701,714)
At the end of the year
(340,076)
(802,668)
Foreign currency translation reserve represents accumulated net gains and losses arising on the translation of foreign subsidiaries' net assets into the functional currency of the group upon consolidation.
APPRISS RETAIL (UK) HOLDINGS, LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 30 -
22
Capital contribution reserve
2023
2022
$
$
At the beginning and end of the year
4,986,918
4,986,918
Capital contribution reserve represents the fair value of exercised convertible debts on the date of exercise for shares issued in a parent company entity.
23
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the group and movements thereon during the current and prior reporting period.
Revaluation of intangibles
$
Liability at 1 January 2022
1,584,752
Deferred tax movements in prior year
Charge/(credit) to profit or loss
(110,564)
Liability at 1 January 2023
1,474,188
Deferred tax movements in current year
Charge/(credit) to profit or loss
123,084
Liability at 31 December 2023
1,597,272
The company has no deferred tax assets or liabilities.
24
Trade and other payables - group
2023
2022
$
$
Trade payables
103,019
304,744
Amounts owed to related parties
22,426,930
26,354,943
Accruals
13,148,756
11,496,777
Social security and other taxation
490,543
363,822
Other payables
7,913
36,177,161
38,520,286
The Group's exposure to market and liquidity risk, including maturity analysis, related to trade and other payables is disclosed in the financial review note.
APPRISS RETAIL (UK) HOLDINGS, LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 31 -
25
Trade and other payables - company
2023
2022
$
$
Amounts owed to related parties
19,941,317
25,928,333
Accruals
12,263,125
10,829,321
32,204,442
36,757,654
26
Lease liabilities - group
2023
2022
Amounts recognised in profit or loss include the following:
$
$
Interest on lease liabilities
-
22,306
The group has elected not to recognise a lease liability for short term leases (leases with an expected term of 12 months or less) and leases where control of the asset does not pass to the lessee. Payment made under such leases are expensed on a straight-line basis. During the year, the expense relating to payments not included in the measurement of the lease liability was $288,737 (2022: $139,336). At 31 December 2023, the group's commitment to operating leases was $357,193 (2022: $160,918).
The company has no lease liabilities.
27
Provisions for liabilities - group
2023
2022
$
$
Onerous leases
35,621
81,025
All provisions are expected to be settled within 12 months from the reporting date.
Movements on provisions:
Onerous leases
$
At 1 January 2023
81,025
Change in provisions in the year
127,670
Utilisation of provision
(173,074)
At 31 December 2023
35,621
The onerous lease provision relates to management's best estimate of the group's liability for remaining property lease payments for property no longer used in the group's operations, less expected receipts for sub-leases.
The company had no provisions at 31 December 2023 or 31 December 2022.
APPRISS RETAIL (UK) HOLDINGS, LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 32 -
28
Deferred revenue - group
2023
2022
$
$
Arising from the group's principal activity
5,785,433
4,897,253
All deferred revenues are expected to be settled within 12 months from the reporting date.
29
Retirement benefit schemes - group
Defined contribution schemes
The group operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
The total costs charged to income in respect of defined contribution plans is $215,102 (2022 - $211,126). Contributions totalling $38,796 (2022 - $772) were payable to the scheme at the end of the year and are included in creditors.
30
Financial instruments
Carrying value
Fair value
2023
2022
2023
2022
$
$
$
$
Financial assets
Cash and cash equivalents
7,198,983
9,919,255
7,198,983
9,919,255
Trade and other receivables
27,374,582
18,789,005
27,374,582
18,789,005
34,573,565
28,708,260
34,573,565
28,708,260
Valuation methods and assumptions:
The directors believe that the fair value of financial assets approximates to the carrying value.
Carrying value
Fair value
2023
2022
2023
2022
$
$
$
$
Financial liabilties
Trade and other payables
23,028,405
27,203,509
23,028,405
27,203,509
23,028,405
27,203,509
23,028,405
27,203,509
Valuation methods and assumptions:
The directors believe that the fair value of financial liabilities approximates to the carrying value.
APPRISS RETAIL (UK) HOLDINGS, LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 33 -
31
Financial risk management and impairment of financial assets
Group
The group's activities expose it to a variety of financial risk, operational risk, credit risk, market risk (in particular foreign exchange risk) and liquidity risk.
Operational risk
Operational risks are mitigated by the appointment of external advisers and the employment of experienced, high quality managers to support them in their roles and ensure the quality of the service and products provided to customers.
Market risk
The group manages its market risk by building strong relationships with key customers and employees and monitoring activities of its competitors. By keeping up to speed with changes in customer requirements, the group is able to adapt its approach to achieve good customer retention rates.
Foreign exchange risk
The group's accounts include transactions and balances in Sterling, US Dollars and Polish Zloty. The group is predominantly exposed to fluctuations in the US Dollar/Sterling exchange rate.
The fact that the group trades in both the US and the UK markets acts as a natural hedge to mitigate foreign exchange risk through international diversification.
Sensitivity analysis
At 31 December 2023, the US Dollar/Sterling exchange rate was $1.2740 per £1 (2022 - $1.2098 per £1).
The balances denominated in Sterling can be summarised as follows:
Assets: £4,498,194 (2022: £7,237,700)
Liabilities: £2,904,157 (2022: £2,164,698)
In carrying out the sensitivity analysis we have considered only year end exchange rates and applied these to the balances denominated in the relevant currency.
A 5% depreciation of Sterling against the US Dollar at 31 December 2023 would have resulted in a decrease in the profit and in net assets of $101,540 (2022 - decrease in the profit and in net assets of $306,866). A 5% appreciation of Sterling against the US Dollar at 31 December 2023 would have resulted in an increase in profit and in net assets of $101,540 (2022 - increase in profit and in net assets of $306,866).
Interest rate risk
The group does not rely on external finance, not does it receive significant interest income. Until such time as the group either borrows funds or invests surplus cash, its exposure to interest rate risk is negligible.
Sensitivity analysis
There would be no significant difference to the reported profit or equity figures in the event of a 5% increase or decrease in interest rates.
APPRISS RETAIL (UK) HOLDINGS, LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 34 -
32
Liquidity risk
The following table details the remaining contractual maturity for the group's financial liabilities with agreed repayment periods. The contractual maturity is based on the earliest date on which the group may be required to pay.
Less than 1 month
Total
$
$
At 31 December 2022
Trade and other payables
38,520,286
38,520,286
At 31 December 2023
Trade and other payables
36,177,161
36,177,161
Liquidity risk management
The directors manage the liquidity risk faced by the group by ensuring prompt invoicing and collection of amounts owed to the group and by monitoring cash flow to ensure the funds will be available to settle the group's liabilities as they fall due.
Deferred income represents 13.21% (2022 - 11.02%) of the group's current liabilities. This is income that has been invoiced but not earned. Amounts due to related parties represents 51.20% (2022 - 60.50%) of the group's current liabilities. The group does not anticipate being required to settle these amounts in the short term future. At 31 December 2023, the group would need to collect 56.01% (2022 - 66.44%) of its trade and other receivables in order to settle the other remaining current liabilities.
33
Events after the reporting date
On 1 March 2024 a resolution to commence the liquidation of the subsidiary Appriss Sp Zoo was adopted. The liquidation process is expected to complete by 31 December 2024.
APPRISS RETAIL (UK) HOLDINGS, LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 35 -
34
Cash generated from operations - group
2023
2022
$
$
Profit for the year after tax
5,243,239
4,749,349
Adjustments for:
Taxation charged
1,881,892
838,933
Finance costs
1,454,214
1,664,583
Investment income
(1,915)
(224)
Loss on disposal of property, plant and equipment
41,217
2,300
Amortisation and impairment of intangible assets
453,770
453,770
Depreciation and impairment of property, plant and equipment
638,357
770,160
Foreign exchange on translation
427,577
(658,790)
Decrease in provisions
(45,404)
(123,807)
Movements in working capital:
(Increase)/decrease in trade and other receivables
(8,171,179)
355,631
Decrease in trade and other payables
(3,776,929)
(1,092,258)
Increase in deferred revenue outstanding
888,180
584,288
Cash (absorbed by)/generated from operations
(966,981)
7,543,935
35
Cash absorbed by operations - company
2023
2022
$
$
Profit/(loss) for the year after tax
4,553,212
(1,593,215)
Adjustments for:
Finance costs
1,433,804
1,622,250
Investment income
(6,000,000)
Movements in working capital:
Decrease in trade and other payables
(5,987,016)
(29,035)
Cash absorbed by operations
(6,000,000)
-
36
Analysis of changes in net debt - group
1 January 2023
Cash flows
31 December 2023
$
$
$
Cash at bank and in hand
9,919,255
(2,720,272)
7,198,983
APPRISS RETAIL (UK) HOLDINGS, LTD.
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
36
Analysis of changes in net debt - group
(Continued)
- 36 -
1 January 2022
Cash flows
31 December 2022
Prior year:
$
$
$
Cash at bank and in hand
3,914,582
6,004,673
9,919,255
Obligations under finance leases
(349,110)
349,110
-
3,565,472
6,353,783
9,919,255
37
Related party transactions
Summary of transactions with parent entities
Included within trade and other payables is a balance of $16,500,000 (2022 - $22,500,000) and accrued interest of $12,263,125 (2022 - $10,829,321) owed by the group to one of the joint holding companies. Interest on the balance is charged at 7.21%. The loan is repayable on demand. In the event that repayment is not demanded, the loan matures on 27 April 2026.
Also included within trade and other payables is a balance of $3,183,670 (2022 - $3,183,670) owed by the group to the ultimate parent entity. This interest-free loan is denominated in US Dollars and is repayable on demand.
Summary of transactions with other related parties
Included within revenue are amounts totalling $nil (2022 - $1,703,653) representing trading between Appriss Retail (UK) Holdings, Ltd. group and a company under common control.
Included within trade and other receivables is a balance of $22,455,064 (2022 - $13,463,866) owed to the group from a company under common control. This interest-free loan is denominated in US Dollars and is repayable on demand.
Included within trade and other payables is a balance of $2,036,731 (2022 - $nil) owed to the group from a company under common control. This interest-free loan is denominated in US Dollars and is repayable on demand.
Included within borrowings is a balance of $706,528 (2022 - $671,273) owed by the group to a company under common control. Interest on the balance is charged at 4% per year. The loan is repayable on demand.
38
Parent and ultimate parent undertaking
The company's immediate owners are Appriss Retail Holdings, Inc. and Appriss Retail Holdco, Inc. These companies each hold 50% of the share capital of the company.
The ultimate parent is Appriss Retail Holding Company LP.
The parent of the largest group for which consolidated financial statements are prepared is Appriss Retail Intermediate Holdings, Inc. incorporated in the United States of America.
The address from which consolidated financial statements can be obtained is 220 Progress Suite, 175 Irvine, CA 92618, USA.
Appriss Retail Holding Company LP.'s financial statements are prepared to 31 December.
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