Company registration number 04062177 (England and Wales)
COLVIR SOFTWARE SOLUTIONS LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
COLVIR SOFTWARE SOLUTIONS LTD
COMPANY INFORMATION
Directors
Mr Johan Brynte
Mr F L Dos Santos
Mr J Krehovetski
Company number
04062177
Registered office
Building 3, Chiswick Park
566 Chiswick High Road
Chiswick
London
W4 5YA
Auditors
Nyman Libson Paul LLP
Chartered Accountants & Statutory Auditors
124 Finchley Road
London
NW3 5JS
COLVIR SOFTWARE SOLUTIONS LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 5
Independent auditor's report
6 - 10
Consolidated statement of comprehensive income
11
Consolidated statement of financial position
12 - 13
Consolidated statement of changes in equity
14
Consolidated statement of cash flows
15
Notes to the consolidated financial statements
16 - 39
Company statement of financial position
40 - 41
Company statement of changes in equity
42
Notes to the company financial statements
43 - 50
COLVIR SOFTWARE SOLUTIONS LTD
STRATEGIC REPORT true
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

Review of the business

Colvir Software Solution Ltd ("the company") together with its subsidiaries and associates ("Colvir" or "the group") is a computer software developer and technical support service provider. Colvir's core products comprise: Colvir Banking Systems (“CBS”), Colvir Postal Systems (“CPS”), Colvir Treasury Systems (“CTS”) and Colvir ERP solutions.

 

Results and performance

The results of the group for the year and its financial position are set out on pages 11 and 13, and show a profit on ordinary activities before taxation of $15.8 million (2022: $19.1 million) and net assets of $93.6 million (2022: $80.7 million).

 

During 2023 the group continued demonstrating stable performance despite challenges brought in by the global economic downturn. This has been in great part due to continuous strong relationships with the existing customers and further investments into the group's new software solutions. The group continues to maintain its market share amongst financial institutions using CBS and CPS solutions in key revenue generating territories being Kazakhstan, Uzbekistan, Turkmenistan and Kyrgyzstan.

Principal risks and uncertainties

The process of risk acceptance and risk management is addressed through a framework of policies, procedures, internal controls, mitigating actions and development plans. All policies are subject to board approval and ongoing review by management. Compliance with regulations, legal and ethical standards is a high priority for the group, its management team and the finance department, all of which take on an important oversight role in this regard.

 

The principal risks for the CBS, ERP and CTS software solutions arise from the instability of the financial services market, regulatory pressure on the banking sector which is diverting the banks' attention and resources from core technological innovations, and political / economic instability in developing countries where the group’s clients operate.

 

The principal risks for the CPS software solutions business arise from a low level of profitability and in some cases underfinancing (low level of subsidies provided by governments) to postal offices in developing countries thus limiting resourcing for modernisation and innovation.

Key performance indicators (‘KPIs')

The board monitors the progress of the group by reference to the following KPIs:

 

 

 

 

 

COLVIR SOFTWARE SOLUTIONS LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Future developments

Colvir is actively developing new software branded Colvir v.4 utilising state-of-the-art technologies. The new software is based on microservice architecture using Java Code and PostgreSQL database. The key advantage of the new software is a low code platform designed to significantly simplify and accelerate development of financial applications. It allows easy horizontal scaling, requires cheaper operating infrastructure and is supported on both desktop with web interface and mobile devices. The new software-based products will be sold along Colvir’s current Oracle-Delphi platform as additional modules.

 

In 2024 Colvir has signed its first contract related to Colvir v.4 implementation with one of the biggest banks in Kazakhstan. This sale demonstrates the growing market demand for the new class of software solutions especially amongst the big technologically advanced banks all of which wish to accelerate core banking upgrades to shorten time-to-market for their new banking products. Negotiations for the implementation of Colvir v.4 at other banks in Kazakhstan are underway and the big transformation programme moving current monolith core banking solution (CBS) to microservice architecture is anticipated to commence within 12 months. This will become Colvir’s key focus for the 18 to 24 months thereafter.

 

During 2025 Colvir will be rolling out forward sale contract option to its existing customer base for the implementation of the big transformation programme which will ensure smooth and speedy release of Colvir v.4 to the wider market.

On behalf of the board

Mr Johan Brynte
Director
16 December 2024
COLVIR SOFTWARE SOLUTIONS LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

The directors present their annual report and audited financial statements for the year ended 31 December 2023.

 

The group’s business activities, together with the factors likely to affect its future development, performance and position are set out in the strategic report and directors’ report. These reports also describe the financial position of the group, its cash flows and liquidity position, the group’s objectives, policies and processes for managing its financial risks objectives, details of its financial instruments, and its exposure to credit risk, currency and liquidity risk.

Results and dividends

The results for the year are set out on page 11.

No ordinary dividends were paid (2022: $nil). The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr Johan Brynte
Mr F L Dos Santos
Mr J Krehovetski
Qualifying third party indemnity provisions

The group has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.

Financial instruments

The group’s activities expose it to a variety of financial risks. The main financial risks managed by the group, under policies approved by the board, are credit risk, interest rate risk, liquidity risk and foreign currency risks.

 

The group has put in place a risk management programme that seeks to limit the adverse effects of the financial risks on the financial performance of the group as follows:

Credit risk

Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions as well as exposure to customers, including outstanding receivables and committed transactions. Cash is only lodged with reputable financial institutions with a high credit rating or significant government ownership where pre-approved by the board. New credit customers are only accepted if either externally or internally rated and approved by the board. Majority of the group's customers are reputable financial institutions or large corporations with high independent ratings. If there is no independent rating, then risk control assesses the credit quality of the customer by taking into account its financial position, past experience and other factors.

Interest rate risk

The group is not exposed to interest rate risk as its borrowings are issued at fixed rates and are not dependent on base rate fluctuations.

Liquidity risk

The group’s policy is to ensure that it has sufficient cash to allow it to meet its liabilities when they become due. To achieve this aim, it seeks to maintain cash balances (or agreed facilities) to meet expected requirements for a period of at least 90 days. The group further reduces its liquidity risk by fixing interest rates on its long-term borrowings. Cash flow forecasts identifying the group’s funding and liquidity requirements are reviewed regularly by management on 12-month rolling basis.

 

The contractual maturities of the group’s financial liabilities (which are all carried at amortised cost) are shown in the note 22.

COLVIR SOFTWARE SOLUTIONS LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
Foreign currency risk

The group's activities expose it to financial risks associated with changes in foreign currency exchange rates. The group's policy is, where possible, to maximise the matching of foreign currency receipts and payments and to hold sufficient reserves of foreign currency to settle its foreign currency obligations. The group does not hedge its exposure to foreign currency exchange rates.

 

The group’s primary exposure is to the exchange rate movements of Euro. 10% weakening of Euro against US dollar would decrease the operating results by $123,000. 10% strengthening of Euro against US dollar would increase the operating results by $123,000.

Research and development

The group continues to invest in research and development, which has resulted in an improvement in its products and in its maintenance and support services. Where appropriate, the cost in respect of the new products or upgrades and improvements to the existing products has been capitalised in the statement of financial position.

 

Related parties

Transactions with related parties are disclosed in note 30.

Events after the reporting date

Events after the reporting date affecting the group financial statements are disclosed in note 32.

Future developments

Future developments in the business of the group are discussed in the strategic report.

Auditor

The auditor, Nyman Libson Paul LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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:

 

 

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.

COLVIR SOFTWARE SOLUTIONS LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
Statement of disclosure to auditor

Each director in office at the date of approval of this annual report confirms that:

 

 

This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.

Going concern

The directors have reviewed the group’s cash flow forecast for the period to 31 December 2025 and they believe that, taking account of global economic recession and challenges brought by war in Ukraine as well as reasonably possible changes in projected profitability, contracted recurring revenue, available liquid resources and scheduled repayment of credit line facility, the group has adequate resources to continue in operational existence for the foreseeable future.

On behalf of the board
Mr Johan Brynte
Director
16 December 2024
COLVIR SOFTWARE SOLUTIONS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF COLVIR SOFTWARE SOLUTIONS LTD
- 6 -

Opinion

We have audited the financial statements of Colvir Software Solutions Ltd (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, 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 the preparation of the Group financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom. The financial reporting framework that has been applied in the preparation of the parent Company financial statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (United Kingdom Generally Accepted Accounting Practice).

 

In our opinion, except for the effects of the matter described in the basis for qualified opinion section of our report:

 

Basis for qualified opinion

Colvir Software Solutions Ltd’s investment in JSC Rysgal Bank, a foreign associate accounted for by the equity method, is carried at $22,407,000 (2022: $22,407,000) on the Company’s Statement of Financial Position and $57,374,000 (2022: $53,484,000) on the Consolidated Statement of Financial Position as at 31 December 2023. Colvir Software Solutions Ltd’s share of JSC Rysgal Bank’s net profit after tax of $17,289,000 (2022: $14,962,000), adjustment in respect of prior years of $6,001,000 and exchange loss arising from the investment in foreign associate of $nil (2022: $nil) is included in the Consolidated Statement of Comprehensive Income.

 

The audit evidence available to us in respect of these balances was limited because we were denied access to the financial information of JSC Rysgal Bank. We were therefore unable to obtain sufficient information about the carrying amount of the group and parent investment in JSC Rysgal Bank as at 31 December 2023 and the group’s share of JSC Rysgal Bank’s profit/loss after tax, adjustment in respect of prior years and the exchange loss arising from the investment in foreign associate for the year. Consequently, we were unable to determine whether any adjustments to these amounts were necessary.

 

The audit opinion for the prior year was qualified on a similar basis and consequently we were unable to determine whether any adjustments to these amounts as at 31 December 2022 were necessary.

 

In additions, were any adjustments required to these balances, the strategic report would also need to be amended.

 

Further to the above, a prior period error of $6,001,000 has been corrected within the Group’s share of post-tax profits of equity accounted associates in the Consolidated Statement of Comprehensive Income for the year ended 31 December 2023 as detailed in note 13. This error arose as a result of changes to the reported profits of JSC Rysgal Bank in previous years and has been corrected in the year ended 31 December 2023.

 

IAS 8 prescribes that an entity shall correct material prior period errors retrospectively in the first set of financial statements authorised for issue after their discovery by:

 

COLVIR SOFTWARE SOLUTIONS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF COLVIR SOFTWARE SOLUTIONS LTD
- 7 -

The correction has been made in the Consolidated Statement of Comprehensive Income for the year ended 31 December 2023 and the opening balances of assets, liabilities and equity for the earliest prior period presented have not been restated.

 

IAS 1 prescribes that an entity shall present a third statement of financial position as at the beginning of the preceding period if:

 

 

The correction has been made in the Consolidated Statement of Comprehensive Income for the year ended 31 December 2023 and a third Statement of Financial Position for the year ended 31 December 2021 has not been presented as part of these financial statements.

 

In these respects only, the Group financial statements have not been properly prepared in accordance with IFRSs as adopted by the United Kingdom.

 

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 and the parent Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified 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.

 

Our evaluation of the directors' assessment of the Group's and the parent Company's ability to continue to adopt the going concern basis of accounting included review and assessment of:

 

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.

COLVIR SOFTWARE SOLUTIONS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF COLVIR SOFTWARE SOLUTIONS LTD
- 8 -

Other information

The other information comprises the information included in the Annual Report, other than the financial statements and our auditors' report thereon. The directors are responsible for the other information contained within the Annual 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.

 

As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves regarding the group’s and parent investment in JSC Rysgal Bank, the group’s share of JSC Rysgal Bank’s profit/loss after tax and the exchange loss arising from the investment in foreign associate for the year for both the current and prior year, and consequently, we are unable to determine whether adjustments might be necessary in respect of this. We have concluded that where the other information refers to these balances are related balances, it may be materially misstated for the same reason.

Opinions on other matters prescribed by the Companies Act 2006

Except for the possible effects of the matter described in the basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of the audit:

 

Matters on which we are required to report by exception

Except for the matter described in the basis for qualified section of our report, 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.

 

Arising solely from the limitation on the scope of our work relating to the Group's and parent Company's investments in JSC Rysgal Bank referred to above:

 

 

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:

 

Responsibilities of directors

As explained more fully in the directors' responsibilities statement in the Directors’ Report, 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 Group's and 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 Group or the parent Company or to cease operations, or have no realistic alternative but to do so.

COLVIR SOFTWARE SOLUTIONS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF COLVIR SOFTWARE SOLUTIONS LTD
- 9 -
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 auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

 

Irregularities, including fraud, are instances of non compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

 

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:

 

 

- identifying, evaluating and complying with laws and regulations and whether they were aware of

any instances of non-compliance;

- detecting and responding to the risks of fraud and whether they have knowledge of any actual,

suspected or alleged fraud;

- the internal controls established to mitigate risks of fraud or non-compliance with laws and

regulations;

- the matters discussed among the audit engagement team regarding how and where fraud might

occur in the financial statements and any potential indicators of fraud.

 

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in relation to timing of revenue recognition and manipulation of accounting entries to improve the results for the year. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

 

We also obtained an understanding of the legal and regulatory frameworks that the Group and parent Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included IFRS as adopted by the UK, the UK Companies Act and local tax legislation.

 

In addition, we considered other laws and regulations that could have an effect on the Group and parent Company and result in the imposition of financial or other penalties and litigation. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. These limited procedures did not identify actual or suspected non-compliance.

 

All matters in relation to non-compliance with laws and regulations and potential fraud risks were communicated to all members of the engagement team and we remained alert to any indications of non-compliance throughout the audit.

 

COLVIR SOFTWARE SOLUTIONS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF COLVIR SOFTWARE SOLUTIONS LTD
- 10 -

Our procedures to respond to risks identified included the following:

 

 

We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

 

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.

Use of our report

This report is made solely to the parent 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 parent 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 parent Company and the parent Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

Hetal Mistry (Senior Statutory Auditor)
For and on behalf of
Nyman Libson Paul LLP
Chartered Accountants
Statutory Auditor
124 Finchley Road
London
NW3 5JS
16 December 2024
COLVIR SOFTWARE SOLUTIONS LTD
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
Notes
$'000
$'000
Revenue
4
20,142
17,357
Cost of sales
(10,369)
(9,381)
Gross profit
9,773
7,976
Administrative expenses
(4,405)
(4,078)
Operating profit
5
5,368
3,898
Share of post-tax profits of equity accounted associates
13
11,912
15,473
Finance costs
9
(1,471)
(275)
Profit before taxation
15,809
19,096
Income tax (expense)/income
10
(2,841)
315
Profit for the year
25
12,968
19,411
Other comprehensive income:
Items that may be reclassified to profit or loss
Currency translation differences:
- Translation loss arising in the year
(61)
(46)
Total items that may be reclassified to profit or loss
(61)
(46)
Total other comprehensive expense for the year
(61)
(46)
Total comprehensive income for the year
12,907
19,365
Profit for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the financial year is all attributable to the owners of the parent company.

The consolidated statement of comprehensive income has been prepared on the basis that all operations are continuing operations.

The accompanying notes on pages 16 to 39 form part of these financial statements.

COLVIR SOFTWARE SOLUTIONS LTD
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 12 -
2023
2022
Notes
$'000
$'000
Non-current assets
Intangible assets
11
29,088
24,358
Property, plant and equipment
12
2,477
1,843
Investments
13
57,586
53,773
Other receivables
17
8,170
-
0
97,321
79,974
Current assets
Trade and other receivables
17
1,219
5,182
Current tax recoverable
1,203
1,202
Cash and cash equivalents
1,290
1,349
3,712
7,733
Current liabilities
Trade and other payables
19
1,512
2,769
Borrowings
20
-
0
300
1,512
3,069
Net current assets
2,200
4,664
Non-current liabilities
Borrowings
20
4,205
3,923
Deferred tax liabilities
23
1,694
-
0
5,899
3,923
Net assets
93,622
80,715
Equity attributable to owners of the parent company
Share capital
24
2,053
2,053
Currency translation reserve
25
(4,388)
(4,327)
Retained earnings
25
95,957
82,989
Total equity
93,622
80,715
COLVIR SOFTWARE SOLUTIONS LTD
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT
31 DECEMBER 2023
31 December 2023
- 13 -

The accompanying notes on pages 16 to 39 form part of these financial statements.

The financial statements were approved by the board of directors and authorised for issue on 16 December 2024 and are signed on its behalf by:
Mr Johan Brynte
Director
Company registration number 04062177 (England and Wales)
COLVIR SOFTWARE SOLUTIONS LTD
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
Share capital
Currency translation reserve
Retained earnings
Total equity
$'000
$'000
$'000
$'000
Balance at 1 January 2022
2,053
(4,281)
63,578
61,350
Year ended 31 December 2022:
Profit for the year
-
-
19,411
19,411
Other comprehensive income:
Currency translation differences
-
(46)
-
0
(46)
Total comprehensive income for the year
-
(46)
19,411
19,365
Balance at 31 December 2022
2,053
(4,327)
82,989
80,715
Year ended 31 December 2023:
Profit for the year
-
-
12,968
12,968
Other comprehensive income:
Currency translation differences
-
(61)
-
0
(61)
Total comprehensive income for the year
-
(61)
12,968
12,907
Balance at 31 December 2023
2,053
(4,388)
95,957
93,622

The accompanying notes on pages 16 to 39 form part of these financial statements.

COLVIR SOFTWARE SOLUTIONS LTD
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
2023
2022
Notes
$'000
$'000
$'000
$'000
Cash flows from operating activities
Cash generated from operations
28
9,022
7,924
Income taxes paid
(1,147)
(403)
Net cash inflow from operating activities
7,875
7,521
Cash flows from investing activities
Purchase of intangible assets
(7,491)
(7,766)
Purchase of property, plant and equipment
(1,860)
(612)
Investments in associates
-
0
(69)
Dividends received from associates
1,761
223
Net cash used in investing activities
(7,590)
(8,224)
Cash flows from financing activities
Proceeds from borrowings
7,015
3,728
Repayment of borrowings
(7,033)
(3,505)
Interest paid
(326)
(275)
Net cash used in financing activities
(344)
(52)
Net decrease in cash and cash equivalents
(59)
(755)
Cash and cash equivalents at beginning of year
1,349
2,104
Cash and cash equivalents at end of year
1,290
1,349

The accompanying notes on pages 16 to 39 form part of these financial statements.

COLVIR SOFTWARE SOLUTIONS LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
1
Accounting policies
General information

Colvir Software Solutions Limited is a private company limited by shares, domiciled and incorporated in England and Wales. The registered office is Building 3, Chiswick Park, 566 Chiswick High Road, Chiswick, London, United Kingdom, W4 5YA. The company's principal activities and nature of its operations are disclosed in the strategic report.

 

The group consists of Colvir Software Solutions Limited and all of its subsidiaries and associates.

 

The group’s business activities, together with the factors likely to affect its future development, performance and position are set out in the strategic report and directors’ report. These reports also describe the financial position of the group, its cash flows and liquidity position, the group’s objectives, policies and processes for managing its financial risks objectives, details of its financial instruments, and its exposure to credit risk, currency and liquidity risks.

1.1
Basis of preparation

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 presented in US dollars ($), which is the functional and presentation currency of the company. Monetary amounts in these financial statements are rounded to the nearest $'000.

 

The exchange rate of $/£ at the reporting date was 1.2747 (2022: 1.2039) and the average rate of $/£ for the year was 1.2434 (2022: 1.2362).

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below. These policies have been applied consistently to all years presented, unless otherwise stated.

1.2
Basis of consolidation

The consolidated financial statements consist of the financial statements of the parent company Colvir Software Solutions Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

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.

 

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.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

COLVIR SOFTWARE SOLUTIONS LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -

Investments in joint ventures and associates are carried in the group statement of financial position at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value.

 

If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

 

Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.

1.3
Going concern

The directors have reviewed the group’s cash flow forecast for the period to 31 December 202true5 and they believe that, taking account of global economic recession and challenges brought by war in Ukraine as well as reasonably possible changes in projected profitability, contracted recurring revenue, available liquid resources and scheduled repayment of credit line facility, the group has adequate resources to continue in operational existence for the foreseeable future.

1.4
Revenue

Revenue represents the fair value of consideration to which the group expects to be entitled to under the terms of a contract with customer, net of discounts and value added taxes.

 

Revenue is recognised when all performance obligations are satisfied and when the customer obtains control of the transferred product or services. If performance obligations are satisfied over time, revenue is also recognised over time when one of the following criteria are met:

 

 

In determining the amount of revenue to be recognised, management exercise judgement, and also adopt estimates in reaching certain conclusions.

The group recognises revenue from the following major sources:

 

The nature, timing of satisfaction of performance obligations and significant payment terms of the group's major sources of revenue are as follows:

Professional Services

Professional Services revenue is generated from the provision of training, consulting, implementation and change requests services. These services are reflected either within a licence contract or in a separate contract and can be either on a time-and-material or fixed-price basis. Revenue recognition for professional services is dependent on the contract-specific facts and circumstances and is based upon the satisfaction of specific performance obligations/milestones.

COLVIR SOFTWARE SOLUTIONS LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
Licensed Software Fees

Revenue from Licenced Software Fees (“LSF”) arises from granting customers the right to use Colvir’s and certain third party software products, including significant upgrades pertaining to customers purchasing new modules or user rights.

 

LSF are treated as a single deliverable and their revenue is recognised on a delivery of the software to the customer at which point control of the product has been transferred to the customer.

Maintenance fees

Maintenance of software is often covered by the separate Maintenance and Support Agreement. The pricing is usually based on a percentage of the LSF, which is common industry practice. The Maintenance fee provides customers with the rights to unspecified product upgrades, enhancements and help desk access during a defined support period. This revenue is recognised over time based on the terms of the maintenance contract.

1.5
Intangible assets other than goodwill

The group's intangible assets comprise computer software and licences. Externally acquired software and licences are initially recognised at cost and subsequently amortised over their useful economic life. Internal development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the group are recognised as intangible assets when the following criteria are met:

 

 

Other development expenditure that does not meet these criteria is expensed as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.

 

Computer software and licences recognised as assets are amortised using 10% reducing balance method.

1.6
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:

Computers
2-5 years
Motor vehicles
25% reducing balance

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.

1.7
Non-current investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

COLVIR SOFTWARE SOLUTIONS LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -

A subsidiary is an entity controlled by the parent company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the group holds a long-term interest and has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.8
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.

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.

 

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.

1.9
Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term liquid investments with original maturities of three months or less.

1.10
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 or 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 or loss are initially measured at fair value plus transaction costs.

 

The group does not hold any financial assets measured at fair value through profit or loss, or at fair value through other comprehensive income.

COLVIR SOFTWARE SOLUTIONS LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
Financial assets held at amortised cost

Financial instruments are classified as financial assets measured at amortised cost 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 (eg 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

The group recognises a loss allowance for expected credit losses (“ECL”) on financial assets that are measured at amortised cost which comprise mainly trade receivables. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument. The group always recognises lifetime ECL on trade receivables. The expected credit losses on these financial assets are estimated using a provision matrix based on the group’s historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

1.11
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'.

 

The group does not hold any financial liabilities measured at fair value through profit or loss.

Other financial liabilities

Other financial liabilities, including borrowings, trade 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, and only when, the group’s obligations are discharged, cancelled, or they expire.

1.12
Equity instruments

Equity instruments issued by the parent company are recorded at the proceeds received, net of direct issue costs.

 

Dividends payable on equity instruments are recognised as liabilities once they are no longer payable at the discretion of the company.

1.13
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

COLVIR SOFTWARE SOLUTIONS LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -
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.

Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary 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.

Withholding tax and royalties

Certain countries in which the group operates, levy royalty and other withholding taxes on gross revenue receivable from licences and services provided to clients in those territories. The UK has concluded double taxation treaties with most countries in which the group operates. These treaties either eliminate or reduce such royalty and other withholding taxes to a rate between 5% and 20%. The effect of the royalty and other withholding taxes in these territories are accounted for as part of the current tax in the consolidated income statement.

1.14
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.

1.15
Leases

At inception, the group assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the group recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment.

The group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less, or for leases of low-value assets. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.

COLVIR SOFTWARE SOLUTIONS LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 22 -
1.16
Foreign exchange

Transactions entered by group entities in a currency other than the currency of the primary economic environment in which they operate (their 'functional currency') are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the reporting date. Exchange differences arising on the translation of unsettled monetary assets and liabilities are recognised immediately in profit or loss.

 

On consolidation, the results of overseas operations are translated into US dollars (the 'presentation currency'), at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rates ruling at the reporting date. Exchange differences arising on translating the opening assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income and accumulated in the currency translation reserve.

Exchange differences recognised in profit or loss in group entities' separate financial statements on the translation of long-term monetary items forming part of the group's net investment in the overseas operation concerned are reclassified to other comprehensive income and accumulated in the currency translation reserve.

 

On disposal of foreign operation, the cumulative exchanges differences recognised in the currency translation reserve relating to that operation up to the date of disposal are transferred to the consolidated income statement as part of the profit or loss on disposal.

1.17

Dividend income

Dividend income is recognised when the right to receive payment is established.

2
Adoption of new and revised standards and changes in accounting policies

Standards, amendments and interpretations effective in 2023

A number of new and amended standards and interpretations issued by IASB have become effective for the first time for financial periods beginning on (or after) 1 January 2023 and have been applied by the group in these financial statements. None of these new and amended standards and interpretations had a significant effect on the group because they are either not relevant to the group’s activities or require accounting which is consistent with the group’s current accounting policies.

 

Standards, amendments and interpretations that are not yet effective and have not been early adopted

There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future accounting periods and which have not been adopted early. None of these are expected to have a significant effect on the group.

COLVIR SOFTWARE SOLUTIONS LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
3
Critical accounting estimates and judgements

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, 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:
Capitalised development costs

The group has to apply judgement in determining whether costs in relation to the development of the software provided to its clients should be capitalised within intangible assets or expensed. The development of software costs are accounted for as intangible assets where the criteria of IAS 38 Intangible Assets have been met. The development costs not satisfying these criteria on the research phase of the projects are recognised in the income statement as incurred. The total value of the development costs capitalised as at each of the reporting dates is set out in note 11.

Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows:
Useful economic lives of tangible and intangible non-current assets

Tangible and intangible non-current assets are depreciated/amortised 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, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values. Carrying values of tangible and intangible assets are disclosed in notes 11, 12, 35 and 36.

Impairment of investments

The group makes an estimate of the recoverable value of its investments. Where an indication of impairment is identified the estimation of the recoverable value is made by reference to the estimated future cash flows from the investment and also selection of appropriate discount rates in order to calculate the net present value of those cash flows. Carrying values of investments are disclosed in notes 13 and 37.

Revenue recognition

The group accounts for its revenue from professional services depending on the contract-specific facts and circumstances, and is based upon the satisfaction of specific performance obligations/milestones. Estimates may be required when determining the service performed as proportion of the total services to be provided. When carrying out the assessment various factors are considered including time and material spent, milestones achieved and schedules of completed works.

COLVIR SOFTWARE SOLUTIONS LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
4
Revenue
2023
2022
$'000
$'000
Revenue analysed by class of business
Licence Software Fees (“LSF”)
5,475
1,741
Professional fees
4,916
5,849
Maintenance fees
9,751
9,767
20,142
17,357
2023
2022
$'000
$'000
Revenue analysed by geographical market
Kazakhstan
13,712
10,168
Turkmenistan
741
3,218
Uzbekistan
2,728
1,382
Kyrgyzstan
933
1,235
Azerbaijan
802
739
Rest of the world
1,226
615
20,142
17,357
5
Operating profit
2023
2022
Operating profit for the year is stated after charging:
$'000
$'000
Exchange (gains)/losses
(93)
278
Fees payable to the company's auditors and associates
91
63
Depreciation of owned property, plant and equipment
1,226
1,067
Amortisation of intangible assets
2,844
2,276
6
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
$'000
$'000
For audit services
Audit of the financial statements of the group and company
91
63
Audit of the financial statements of the company's subsidiaries
1
1
92
64
COLVIR SOFTWARE SOLUTIONS LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
7
Employees

The average monthly number of persons (including directors) employed by the group during the year was:

2023
2022
Number
Number
Administration
5
5

Their aggregate remuneration comprised:

2023
2022
$'000
$'000
Wages and salaries
56
52

The group engages external workforce which comprises third party overseas consultants and agency personnel. The total cost of the external workforce for the year amounted to $10,622,000 (2022: $13,846,000).

 

8
Directors' remuneration
2023
2022
$'000
$'000
Remuneration for qualifying services
56
52
9
Finance costs
2023
2022
$'000
$'000
Interest on borrowings
326
275
Fair value adjustment of other receivables attributable to time value of money risk (note 17)
1,145
-
0
Total interest expense
1,471
275
COLVIR SOFTWARE SOLUTIONS LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
10
Income tax
2023
2022
$'000
$'000
Current tax
Foreign withholding taxes and royalties
1,147
1,018
1,147
1,018
Deferred tax
Origination and reversal of temporary differences
943
(1,333)
Adjustment in respect of prior years
751
-
0
1,694
(1,333)
Total tax charge/(credit)
2,841
(315)

With effect from 1 April 2023, the UK corporation tax rate increased from 19.00% to 25.00%. The new blended rate for the year is 23.52% (2022: 19.00%).

 

The charge for the year can be reconciled to the loss per the income statement as follows:

2023
2022
$'000
$'000
Profit before taxation
15,809
19,096
Expected tax charge based on a corporation tax rate of 23.52% (2022: 19.00%)
3,718
3,628
Effect of expenses not deductible in determining taxable profit
246
212
Income not taxable
(2,847)
(2,940)
Utilisation of tax losses not previously recognised
71
(505)
Capital allowances in excess of depreciation
11
1,197
Research and development enhance deductions
-
(2,732)
Deferred tax adjustments in respect of prior years
751
-
Foreign withholding taxes and royalties
891
825
Taxation charge/(credit) for the year
2,841
(315)
COLVIR SOFTWARE SOLUTIONS LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
11
Intangible assets
Software and licences
$'000
Cost
At 1 January 2022
28,584
Additions - internally developed
7,766
At 31 December 2022
36,350
Additions - internally developed
7,063
Additions - purchased
511
At 31 December 2023
43,924
Accumulated amortisation
At 1 January 2022
9,716
Charge for the year
2,276
At 31 December 2022
11,992
Charge for the year
2,844
At 31 December 2023
14,836
Carrying amount
At 31 December 2023
29,088
At 31 December 2022
24,358
At 31 December 2021
18,868

Amortisation charge for the year of £2,844,000 (2022: £2,276,000) is included in the statement of comprehensive income within administrative expenses.

COLVIR SOFTWARE SOLUTIONS LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 28 -
12
Property, plant and equipment
Computers
Motor vehicles
Total
$'000
$'000
$'000
Cost
At 1 January 2022
2,967
326
3,293
Additions
612
-
0
612
At 31 December 2022
3,579
326
3,905
Additions
1,860
-
0
1,860
Eliminated
-
0
(136)
(136)
At 31 December 2023
5,439
190
5,629
Accumulated depreciation
At 1 January 2022
806
189
995
Charge for the year
1,033
34
1,067
At 31 December 2022
1,839
223
2,062
Charge for the year
1,183
43
1,226
Eliminated
-
0
(136)
(136)
At 31 December 2023
3,022
130
3,152
Carrying amount
At 31 December 2023
2,417
60
2,477
At 31 December 2022
1,740
103
1,843

During the year a number of old vehicles were fully written off and eliminated from the books as they are no longer in use.

COLVIR SOFTWARE SOLUTIONS LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
13
Investments
Current
Non-current
2023
2022
2023
2022
$'000
$'000
$'000
$'000
Investments in associates (note 15)
-
0
-
0
57,586
53,773
Movements in non-current investments
Investments in associates
$'000
Cost or valuation
At 1 January 2023
53,773
Adjustment in respect of prior years*
(6,001)
Share of post-tax profits
17,913
11,912
Currency translation reserve movements
(61)
Dividends declared
(7,996)
Disposals
(42)
At 31 December 2023
57,586
Carrying amount
At 31 December 2023
57,586
At 31 December 2022
53,773

*Adjustment in respect of prior years relates to the historic reserves adjustment of Rysgal bank.

 

Following a strategic review a decision was made to exit the Joint Venture Agreement with Colvir Balkans AD. In December 2023 all the shares held by the parent company in Colvir Balkans AD were transferred to the remaining shareholder at nil consideration and the carrying amount of the group's investment in Colvir Balkans AD was fully written off.

14
Subsidiaries

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
BG Postal Technologies
5A Evagora Pallikaridi Street, Egkomi, Nicosia, Cyprus
Software development
Ordinary shares
100.00
COLVIR SOFTWARE SOLUTIONS LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 30 -
15
Associates

Details of the group's associates at 31 December 2023 are as follows:

Name of undertaking
Registered office
Principal activities
Class of
% Held
shares held
Direct
JSC Rysgal Bank
81 S. Turkmenbashy Av., Ashgabat, Turkmenistan
Financial services
Ordinary shares
37.36
Center for technological development of intellectual systems LLP ("CTDIS")
House 135, Zhibek Zholy Prospect, Almaty, Kazakhstan
Software development
Participating interest
50.10
Colvir Cenral Asia LLC
House 7, Driveway 1, S.Azimov Street, Vashnobod District, Tashkent, Uzbekistan
Software development
Ordinary shares
50.00

Set out below is the financial information of the group's material equity accounted associates.

Rysgal Bank

Joint-Stock Commercial Bank "Rysgal" ("Rysgal Bank") is incorporated and operates in Turkmenistan. It holds a licence issued by the Central Bank of Turkmenistan for banking operations in national currency. Rysgal Bank is a strategic partner for the group providing access to new customers and markets in Turkmenistan and the middle East region.

2023
2022
$'000
$'000
As at 31 December
Non-current assets
2,747,986
2,518,276
Current assets
1,183,926
921,495
Non-current liabilities
(2,548,873)
(2,179,350)
Current liabilities
(1,223,466)
(1,127,325)
For the year ended 31 December
Revenue
103,006
93,021
Profit before tax
50,997
43,726
Taxation
(4,720)
(3,679)
Profit after tax and total comprehensive income
46,277
40,047
Dividends receivable
7,397
1,036

All amounts from Turkmen Manat to US dollars were converted using an exchange rate equal to 3.50 as at 31 December 2023 (2022: 3.50) and average rate for the year equal to 3.50 (2022: 3.50).

 

Since 2017 Turkmenistan’s Government tightened foreign exchange regulations to conserve hard currency for priority projects. This has slowed down the Bank’s ability to transfer funds to the group in a form of cash dividend. At the reporting date $8,170,000 of previously declared dividends by Rysgal Bank remained outstanding (2022: $3,080,000) (note 17).

 

There are no contingent liabilities relating to the group's interest in the associate.

COLVIR SOFTWARE SOLUTIONS LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
15
Associates
(Continued)
- 31 -
CTDIS

In March 2020 Colvir together with Autonomous Cluster Fund “Park of Innovative Technologies” (“ACF”) established “Center for Technological Development of Intellectual Systems LLP” (“CTDIS”) which is a limited liability partnership registered under the laws of Republic of Kazakhstan. The main purpose of the partnership was provision of services for the design, development and implementation of IT software as well as modelling and digitalisation of technological processes.

 

Colvir had 50.1% participating interest in CTDIS with the remaining 49.9% held by ACF. The group had determined that despite Colvir having the majority of the participating interest, it was ACF who had the ability to exercise control over the policies and activities of CTDIS on the basis that it had a greater voting power and the practical ability to unilaterally direct the relevant activities of CTDIS. CTDIS was therefore accounted for as an associated undertaking of Colvir using equity accounting method.

Following significant legislative changes in the Republic of Kazakhstan the original objectives and activities of CTDIS are no longer align with those of Colvir Software Solutions Ltd. In 2023 a decision was made to exit the existing partnership arrangement and seek alterative opportunities in other territories. At 31 December 2023 the withdrawal from CTDIS Joint Venture was still ongoing and is expected to formally conclude in 2025. The carrying amount of the group's investment in CTDIS was $nil at 31 December 2023 (2022: $nil).

 

Following its decision to exit the Joint Venture, the group has lost its ability to influence the economic decisions of the CTDIS.

Colvir Cenral Asia LLC

Colvir Central Asia LLC is a joint venture in Uzbekistan established to provide support services to Colvir's Uzbekistani clients.

 

Colvir does not have a controlling stake in this joint venture and it does not have powers to direct the financial economic activity of the joint venture. The joint venture is therefore accounted for as an associated undertaking of Colvir using equity accounting method.

2023
2022
$'000
$'000
As at 31 December
Non-current assets
4
1,010
Current assets
444
507
Current liabilities
(23)
(1,001)
For the year ended 31 December
Revenue
1,308
606
Profit before tax
1,287
503
Taxation
(39)
(9)
Profit after tax and total comprehensive income
1,248
494
Dividends receivable
599
223
COLVIR SOFTWARE SOLUTIONS LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 32 -
16
Contracts with customers
2023
2022
2022
Period end
Period end
Period start
$'000
$'000
$'000
Contracts in progress
Contract assets (note 17)
253
732
524
Contract liabilities (note 19)
(646)
(1,536)
(164)

Contract assets arise when the group has right to consideration in exchange for product or services that it has transferred to a customer but not yet invoiced. They arise primarily from professional services contracts that can take several months or over a year to complete.

 

Contract liabilities arise when a customer pays consideration in advance before the product or service is transferred to the customer.

Significant changes in contract assets and liabilities

Contract assets have decrease due to a reduction in ongoing projects at 31 December 2023.

 

In 2022 contract liabilities included $1,000,000 prepayment for third party products, The order was subsequently cancelled and the amount was returned back to the customer in 2023. The remaining contract liabilities relate entirely to maintenance services which are typically invoiced in advance. The increase in this balance is attributed partly to new contracts and partly to changes in billing arrangements with certain customers.

 

Revenue recognised in relation to contract assets and liabilities

The following table shows how much of the revenue recognised in the reporting year relates to the brought forward contract assets and liabilities:

2023
2022
Contract assets
Contract liabilities
Contract assets
Contract liabilities
$'000
$'000
$'000
$'000
Maintenance fees
-
536
-
164
Professional services and licence fees
732
-
96
-

The group did not have any revenue in the current or prior year which related to performance obligations that were satisfied in prior years.

Unsatisfied long-term professional services contracts

The transaction price for unsatisfied professional contracts which are for periods of one year or less, or those that are billed based on time incurred are not disclosed, as permitted under IFRS 15.

 

The group did not have any unsatisfied professional contracts which were for periods longer than one year.

COLVIR SOFTWARE SOLUTIONS LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 33 -
17
Trade and other receivables
Current
Non-current
2023
2022
2023
2022
$'000
$'000
$'000
$'000
Trade receivables
855
1,277
-
-
Contract assets (note 16)
253
732
-
-
VAT recoverable
14
4
-
-
Amounts owed by associate undertakings
-
0
3,103
8,170
-
0
Prepayments
97
66
-
-
1,219
5,182
8,170
-

Amounts owed by associate undertakings comprise $8,170,000 (2022: $3,080,000) of dividends receivable from Rysgal Bank (note 15) and $nil (2022: $23,000) other loans receivable which are unsecure, interest free and repayable on demand.

 

In 2023 $1,162,000 of the outstanding dividends receivable were received with the remaining balance expected to be paid within 4 years. The remaining balance is therefore presented as non-current receivable.

 

Included within the non-current dividends receivable amount is an adjustment for the expected phasing of the dividends receipts. A $1,145,000 credit adjustment against the dividends receivable balance was recognised in the year, representing the effect of time value of money on the receipts expected in the future. The credit adjustment was calculated by discounting the expected receipts over the next 4 years at the discount rate based on the US Treasury Bond risk free rate.

18
Trade receivables - credit risk
Fair value of trade and other receivables

The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.

Expected credit loss assessment
Balance
Expected loss rate
Loss allowance
Trade receivables
$'000
%
$'000
2023
855
-
Balance
Expected loss rate
Loss allowance
Trade receivables
$'000
%
$'000
2022
Trade receivables
1,277
0
-

No significant receivable balances were impaired at the reporting end date (2022: none).

 

Group's credit risk policies are disclosed in the directors' report.

COLVIR SOFTWARE SOLUTIONS LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 34 -
19
Trade and other payables
2023
2022
$'000
$'000
Trade payables
657
750
Contract liabilities (note 16)
646
1,536
Accruals
202
179
Other payables
7
304
1,512
2,769
20
Borrowings
Current
Non-current
2023
2022
2023
2022
$'000
$'000
$'000
$'000
Borrowings held at amortised cost:
Bank loans
-
-
4,205
3,923
Other loans
-
300
-
-

Bank loans

On 5 May 2022, the company entered into a revolving credit line facility for $4,000,000 with Halyk Bank of Kazakhstan. The facility provides additional working capital for operating purposes. It is for a 3-year term until 5 May 2025, bears annual interest of 7% and is secured over certain existing customer contracts. On 21 April 2023 the facility was increased to $5,000,000, with all other terms remaining unchanged.

 

On 13 May 2024, the facility has been extended to 5 May 2026 with all other terms remaining unchanged (note 32).

 

Other loans

On 9 August 2022, the company entered into a loan agreement with Mr Aben Bektasov for $300,000. The loan was unsecured, repayable any time by 1 August 2023 and bore an annual interest of 7%. The loan was repaid in full on 31 July 2023.

 

On 10 May 2024, the company entered into another loan agreement with Mr Aben Bektasov for $300,000. The loan is unsecured, repayable on 31 May 2025 and bears an annual interest of 7% (note 32).

21
Fair value of financial liabilities

The directors consider that the carrying amounts of financial liabilities carried at amortised cost in the financial statements approximate to their fair values.

COLVIR SOFTWARE SOLUTIONS LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 35 -
22
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.

6 months or less
6 - 12 months
1 - 3 years
Total
$'000
$'000
$'000
$'000
At 31 December 2022
Trade and other payables
1,233
-
-
1,233
Borrowings
148
439
4,289
4,876
1,381
439
4,289
6,109
At 31 December 2023
Trade and other payables
866
-
-
866
Borrowings
147
147
4,303
4,597
1,013
147
4,303
5,463

Group's liquidity risk policies are disclosed in the directors' report.

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.

ACAs
Tax losses
Other*
Total
$'000
$'000
$'000
$'000
Liability at 1 January 2022
399
(1,342)
2,276
1,333
Deferred tax movements in prior year
Charge/(credit) to profit or loss
(92)
(2,403)
1,162
(1,333)
Liability at 1 January 2023
307
(3,745)
3,438
-
0
Deferred tax movements in current year
Charge/(credit) to profit or loss
177
2,104
(587)
1,694
Liability at 31 December 2023
484
(1,641)
2,851
1,694

* Other category relates to temporary differences on intangible assets.

 

Deferred tax assets are recognised for taxable losses carried forward to the extent that the realisation of the related tax benefit through future taxable profits is probable.

 

At 31 December 2023, the group did not have any unrecognised tax losses carried forward (2022: $376,000 with a tax value, at the standard rate of corporation tax in the UK of 25%, of $94,000).

COLVIR SOFTWARE SOLUTIONS LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 36 -
24
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
$'000
$'000
Authorised
Ordinary shares of £1 each
1,000,000
1,000,000
-
-
Issued and fully paid
Ordinary shares of £1 each
1,000,000
1,000,000
2,053
2,053
25
Reserves

The group's and company's reserves comprise the following:

 

Share capital

Amounts subscribed for share capital at proceeds received.

 

Currency translation reserve

The foreign currency translation reserve includes movements that relate to the retranslation of the subsidiaries whose functional currencies are not US dollar.

 

Retained earnings

Cumulative net gains and losses recognised in the income statement and the statement of other comprehensive income less any amounts reflected directly in other reserves.

26
Other leasing information
Lessee

Amounts recognised in profit or loss as an expense during the period in respect of lease arrangements are as follows:

2023
2022
$'000
$'000
Expense relating to short-term leases
11
10
27
Capital risk management

The group is not subject to any externally imposed capital requirements.

COLVIR SOFTWARE SOLUTIONS LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 37 -
28
Cash generated from operations
2023
2022
$'000
$'000
Profit for the year before income tax
15,809
19,096
Adjustments for:
Share of post-tax profits of equity accounted associates
(11,912)
(15,473)
Finance costs
1,471
275
Amortisation of intangible assets
2,844
2,276
Depreciation of property, plant and equipment
1,226
1,067
Movements in working capital:
Decrease/(increase) in contract assets
479
(208)
Decrease in trade and other receivables
362
492
(Decrease)/increase in contract liabilities
(890)
1,372
Decrease in trade and other payables
(367)
(973)
Cash generated from operations
9,022
7,924
29
Analysis of changes in net debt
1 January 2023
Cash flows
31 December 2023
$'000
$'000
$'000
Cash at bank and in hand
1,349
(59)
1,290
Borrowings excluding overdrafts
(4,223)
18
(4,205)
(2,874)
(41)
(2,915)
1 January 2022
Cash flows
31 December 2022
Prior year:
$'000
$'000
$'000
Cash at bank and in hand
2,104
(755)
1,349
Borrowings excluding overdrafts
(4,000)
(69)
(4,223)
(1,896)
(824)
(2,874)
COLVIR SOFTWARE SOLUTIONS LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 38 -
30
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel, including directors, is set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures.

2023
2022
$'000
$'000
Short-term employee benefits
56
52
Other transactions with related parties

During the year the group entered into the following transactions with related parties:

Sale of services
Purchase of services
2023
2022
2023
2022
$'000
$'000
$'000
$'000
Subsidiaries
-
0
-
0
-
0
1
Associates
149
1,338
44
-
0
Key management personnel
-
0
-
0
44
33
Other related parties
-
0
-
0
-
0
298
149
1,338
88
332
Dividends receivable
2023
2022
$'000
$'000
Associates
7,996
17,270

During the year $7,397,000 dividends were declared by Rysgal Bank and $599,000 by Colvir Cenral Asia LLC to the company (note 15). .

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due to related parties
$'000
$'000
Subsidiaries
16
16
Associates
-
0
1,000
16
1,016
COLVIR SOFTWARE SOLUTIONS LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
30
Related party transactions
(Continued)
- 39 -

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due from related parties
$'000
$'000
Associates
8,170
3,165
Other information

All transactions carried out with related parties were made on terms equivalent to those that prevail in arm's length transactions.

31
Controlling party

Johan Anders Brynte is considered to be the ultimate controlling party of the company by virtue of his 40% shareholding in the company.

32
Events after the reporting date

On 13 May 2024, the revolving credit line facility with Halyk Bank has been extended to 5 May 2026 with all other terms remaining unchanged (notes 20 and 41).

 

On 10 May 2024, the company entered into a loan agreement with Mr Aben Bektasov for $300,000. The loan is unsecured, repayable on 31 May 2025 and bears an annual interest of 7% (notes 20 and 41).

COLVIR SOFTWARE SOLUTIONS LIMITED
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 40 -
2023
2022
Notes
$'000
$'000
Non-current assets
Intangible assets
35
29,088
24,441
Property, plant and equipment
36
2,477
1,843
Investments
37
22,425
22,569
Other receivables
39
8,170
-
62,160
48,853
Current assets
Trade and other receivables
39
1,219
5,182
Current tax recoverable
1,201
1,201
Cash and cash equivalents
1,286
1,344
3,706
7,727
Current liabilities
Trade and other payables
40
1,524
2,784
Borrowings
41
-
0
300
1,524
3,084
Net current assets
2,182
4,643
Non-current liabilities
Borrowings
41
4,205
3,923
Deferred tax liabilities
43
1,694
-
0
5,899
3,923
Net assets
58,443
49,573
Equity
Share capital
44
2,053
2,053
Currency translation reserve
44
(2,846)
(2,846)
Retained earnings
44
59,236
50,366
Total equity
58,443
49,573
COLVIR SOFTWARE SOLUTIONS LIMITED
COMPANY STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT
31 DECEMBER 2023
31 December 2023
- 41 -

The accompanying notes on pages 43 to 50 form part of these parent company financial statements.

As permitted by s408 Companies Act 2006, the company has not presented its own income statement and related notes. The company’s profit for the year was $8,870,000 (2022: $21,202,000 - profit).

The financial statements were approved by the board of directors and authorised for issue on
16 December 2024
16 December 2024
and are signed on its behalf by:
Mr Johan Brynte
Director
Company registration number 04062177 (England and Wales)
COLVIR SOFTWARE SOLUTIONS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 42 -
Share capital
Currency translation reserve
Retained earnings
Total equity
$'000
$'000
$'000
$'000
Balance at 1 January 2022
2,053
(2,846)
29,164
28,371
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
21,202
21,202
Balance at 31 December 2022
2,053
(2,846)
50,366
49,573
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
8,870
8,870
Balance at 31 December 2023
2,053
(2,846)
59,236
58,443

The accompanying notes on pages 43 to 50 form part of these parent company financial statements.

COLVIR SOFTWARE SOLUTIONS LIMITED
NOTES TO THE COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 43 -
33
Accounting policies - company
General information

Colvir Software Solutions Limited is a private company limited by shares, domiciled and incorporated in England and Wales. The registered office is Building 3, Chiswick Park, 566 Chiswick High Road, Chiswick, London, United Kingdom, W4 5YA. The company's principal activities and nature of its operations are disclosed in the strategic report.

33.1
Basis of preparation

The financial statements have been prepared on a going concern basis under the historical cost convention and in accordance with Financial Reporting Standard 101 'Reduced Disclosure Framework' (FRS 101) and the Companies Act 2006.

The financial statements are presented in US dollars ($), which is the functional and presentation currency of the company. Monetary amounts in these financial statements are rounded to the nearest $'000.

 

The exchange rate of $/£ at the reporting date was 1.2747 (2022: 1.2039) and the average rate of $/£ for the year was 1.2434 (2022: 1.2362).

The company applies accounting policies consistent with those applied by the group. To the extent that an accounting policy is relevant to both group and parent company financial statements, please refer to the group financial statements for disclosure of the relevant accounting policy.

 

The following exemptions from the requirements of IFRS have been applied in the preparation of these financial statements in accordance with FRS 101:

 

- paragraph 79(a)(iv) of IAS 1;

- paragraph 73(e) of IAS 16 Property, plant and equipment; and

- paragraph 118(e) of IAS 38 Intangible assets (reconciliations between the carrying amount at the beginning and end of the period.

- 10(d) (statement of cash flows);

- 16 (statement of compliance with all IFRS);

- 38A (requirement for minimum of two primary statements, including cash flow statements);

- 38B-D (additional comparative information);

- 111 (statement of cash flows information); and

- 134-136 (capital management disclosures).

33.2
Going concern

The directors have reviewed the company's cash flow forecast for the period to 31 December 2025 and they believe that, taking account of global economic recession and challenges brought by war in Ukraine as well as reasonably possible changes in projected profitability, contracted recurring revenue, available liquid resources and scheduled repayment of credit line facility, the company has adequate resources to continue in operational existence for the foreseeable future.

COLVIR SOFTWARE SOLUTIONS LIMITED
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 44 -
34
Employees - company

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Administration
3
3

Their aggregate remuneration comprised:

2023
2022
$'000
$'000
Wages and salaries
56
52

The company engages external workforce which comprises third party overseas consultants and agency personnel. The total cost of the external workforce for the year amounted to $10,622,000 (2022: $13,846,000).

35
Intangible assets - company
Software and licences
$'000
Cost
At 1 January 2022
28,667
Additions - internally developed
7,766
At 31 December 2022
36,433
Additions - internally developed
6,980
Additions - purchased
511
At 31 December 2023
43,924
Accumulated amortisation
At 1 January 2022
9,716
Charge for the year
2,276
At 31 December 2022
11,992
Charge for the year
2,844
At 31 December 2023
14,836
Carrying amount
At 31 December 2023
29,088
At 31 December 2022
24,441
At 31 December 2021
18,951
COLVIR SOFTWARE SOLUTIONS LIMITED
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 45 -
36
Property, plant and equipment - company
Computers
Motor vehicles
Total
$'000
$'000
$'000
Cost
At 1 January 2022
2,967
326
3,293
Additions
612
-
0
612
At 31 December 2022
3,579
326
3,905
Additions
1,860
-
0
1,860
Disposals
-
0
(136)
(136)
At 31 December 2023
5,439
190
5,629
Accumulated depreciation
At 1 January 2022
806
189
995
Charge for the year
1,033
34
1,067
At 31 December 2022
1,839
223
2,062
Charge for the year
1,183
43
1,226
Eliminated on disposal
-
0
(136)
(136)
At 31 December 2023
3,022
130
3,152
Carrying amount
At 31 December 2023
2,417
60
2,477
At 31 December 2022
1,740
103
1,843

During the year a number of old vehicles were fully written off and eliminated from the books as they are no longer in use.

COLVIR SOFTWARE SOLUTIONS LIMITED
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 46 -
37
Investments - company
Current
Non-current
2023
2022
2023
2022
$'000
$'000
$'000
$'000
Investments in subsidiaries (note 14)
-
0
-
0
2
2
Investments in associates (note 15)
-
0
-
0
22,423
22,567
-
0
-
0
22,425
22,569
Investment in subsidiary and associated undertakings

Details of the company's principal operating subsidiaries and associates are included in notes 14 and 15 respectively.

Movements in non-current investments
Investments in subsidiaries and associates
$'000
Cost or valuation
At 1 January 2023
22,569
Disposal of Colvir Balkans AD
(144)
At 31 December 2023
22,425
Carrying amount
At 31 December 2023
22,425
At 31 December 2022
22,569

Following a strategic review a decision was made to exit from the Joint Venture Agreements with Colvir Balkans and CTDIS.

 

In December 2023 all the shares held by the parent company in Colvir Balkans AD were transferred to the remaining shareholder at nil consideration and the carrying amount of the company's investment in Colvir Balkans AD was fully written off.

 

At 31 December 2023 the withdrawal from CTDIS Joint Venture was still ongoing and is expected to formally conclude in 2025. The carrying amount of the company's investment in CTDIS was $nil at 31 December 2023 and 31 December 2022.

COLVIR SOFTWARE SOLUTIONS LIMITED
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 47 -
38
Contracts with customers - company
2023
2022
2022
Period end
Period end
Period start
$'000
$'000
$'000
Contracts in progress
Contract assets (note 39)
253
732
524
Contract liabilities (note 40)
(646)
(1,536)
(164)

Contract assets arise when the company has right to consideration in exchange for product or services that it has transferred to a customer but not yet invoiced. They arise primarily from professional services contracts that can take several months or over a year to complete.

 

Contract liabilities arise when a customer pays consideration in advance before the product or service is transferred to the customer.

Significant changes in contract assets and liabilities

Contract assets have decrease due to a reduction in ongoing projects at 31 December 2023.

 

In 2022 contract liabilities included $1,000,000 prepayment for third party products, The order was subsequently cancelled and the amount was returned back to the customer in 2023. The remaining contract liabilities relate entirely to maintenance services which are typically invoiced in advance. The increase in this balance is attributed partly to new contracts and partly to changes in billing arrangements with certain customers.

 

Revenue recognised in relation to contract assets and liabilities

The following table shows how much of the revenue recognised in the reporting year relates to the brought forward contract assets and liabilities:

2023
2022
Contract assets
Contract liabilities
Contract assets
Contract liabilities
$'000
$'000
$'000
$'000
Maintenance fees
-
536
-
164
Professional services and licence fees
732
-
96
-

The company did not have any revenue in the current or prior year which related to performance obligations that were satisfied in prior years.

Unsatisfied long-term professional services contracts

The transaction price for unsatisfied professional contracts which are for periods of one year or less, or those that are billed based on time incurred are not disclosed, as permitted under IFRS 15.

 

The company did not have any unsatisfied professional contract which were for periods longer than one year.

COLVIR SOFTWARE SOLUTIONS LIMITED
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 48 -
39
Trade and other receivables - company
Current
Non-current
2023
2022
2023
2022
$'000
$'000
$'000
$'000
Trade receivables
855
1,277
-
-
Contract assets (note 38)
253
732
-
-
VAT recoverable
14
4
-
-
Amounts owed by associate undertakings
-
0
3,103
8,170
-
0
Prepayments
97
66
-
-
1,219
5,182
8,170
-

Amounts owed by associate undertakings comprise $8,170,000 (2022: $3,080,000) of dividends receivable from Rysgal Bank (note 15) and $nil (2022: $23,000) other loans receivable which are unsecure, interest free and repayable on demand.

 

In 2023 $1,162,000 of the outstanding dividends receivable were received with the remaining balance expected to be paid within 4 years. The remaining balance is therefore presented as non-current receivable.

 

Included within the non-current dividends receivable amount is an adjustment for the expected phasing of the dividends receipts. A $1,145,000 credit adjustment against the dividends receivable balance was recognised in the year, representing the effect of time value of money on the receipts expected in the future. The credit adjustment was calculated by discounting the expected receipts over the next 4 years at the discount rate based on the US Treasury Bond risk free rate.

 

Fair value of trade and other receivables

The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.

40
Trade and other payables - company
2023
2022
$'000
$'000
Trade payables
655
750
Contract liabilities (note 38)
646
1,536
Amounts owed to fellow group undertakings
16
16
Accruals
200
178
Other payables
7
304
1,524
2,784
COLVIR SOFTWARE SOLUTIONS LIMITED
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 49 -
41
Borrowings - company
Current
Non-current
2023
2022
2023
2022
$'000
$'000
$'000
$'000
Borrowings held at amortised cost:
Bank loans
-
-
4,205
3,923
Other loans
-
300
-
-

Bank loans

On 5 May 2022, the company entered into a revolving credit line facility for $4,000,000 with Halyk Bank of Kazakhstan. The facility provides additional working capital for operating purposes. It is for a 3-year term until 5 May 2025, bears annual interest of 7% and is secured over certain existing customer contracts. On 21 April 2023 the facility was increased to $5,000,000, with all other terms remaining unchanged.

 

On 13 May 2024, the facility has been extended to 5 May 2026 with all other terms remaining unchanged (note 32).

 

Other loans

On 9 August 2022, the company entered into a loan agreement with Mr Aben Bektasov for $300,000. The loan was unsecured, repayable any time by 1 August 2023 and bore an annual interest of 7%. The loan was repaid in full on 31 July 2023.

 

On 10 May 2024, the company entered into another loan agreement with Mr Aben Bektasov for $300,000. The loan is unsecured, repayable on 31 May 2025 and bears an annual interest of 7% (note 32).

42
Fair value of financial liabilities - company

The directors consider that the carrying amounts of financial liabilities carried at amortised cost in the financial statements approximate to their fair values.

43
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.

ACAs
Tax losses
Other*
Total
$'000
$'000
$'000
$'000
Liability at 1 January 2022
399
(1,342)
2,276
1,333
Deferred tax movements in prior year
Charge/(credit) to profit or loss
(92)
(2,403)
1,162
(1,333)
Liability at 1 January 2023
307
(3,745)
3,438
-
0
Deferred tax movements in current year
Charge/(credit) to profit or loss
177
2,104
(587)
1,694
Liability at 31 December 2023
484
(1,641)
2,851
1,694
COLVIR SOFTWARE SOLUTIONS LIMITED
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
43
Deferred taxation
(Continued)
- 50 -

* Other category relates to temporary differences on intangible assets.

 

Deferred tax assets are recognised for taxable losses carried forward to the extent that the realisation of the related tax benefit through future taxable profits is probable.

 

At 31 December 2023, the group did not have any unrecognised tax losses carried forward (2022: $376,000 with a tax value, at the standard rate of corporation tax in the UK of 25%, of $94,000).

44
Share capital and reserves - company
Refer to notes 24 and 25 of the group financial statements.
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