Company registration number 05323637 (England and Wales)
INVENIAS LIMITED
ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
INVENIAS LIMITED
COMPANY INFORMATION
Directors
Mr A Papas
Mr B Sylvester
Company number
05323637
Registered office
155 Bishopsgate
8th Floor
London
EC2M 3AJ
Auditor
Azets Audit Services
6th Floor Bank House
Cherry Street
Birmingham
B2 5AL
Business address
155 Bishopsgate
8th Floor
London
EC2M 3AJ
INVENIAS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 9
Group profit and loss account
10
Group statement of comprehensive income
11
Group balance sheet
12 - 13
Company balance sheet
14
Group statement of changes in equity
15
Company statement of changes in equity
16
Group statement of cash flows
17
Notes to the consolidated and Company financial statements
18 - 48
INVENIAS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -
The directors present the strategic report for the year ended 31 December 2022.
Fair review of the business
The principal activity of the Company and Group continues to be to provide the staffing and recruitment industry with software to improve their business efficiency. The Group develop, market, host, implement, and support enterprise software with industry specific requirements to meet the customer's needs. The Group's core offering, software for executive search and specialist recruitment companies, assists these firms to manage their executive labour pool by capturing actionable insights to increase executive placements.
The Group has experienced continued growth for its software and services, both organically and through acquisition. Revenue has increased significantly in 2022 with headcount also growing, demonstrating the Group's ongoing commitment to the UK executive recruitment market. The directors expect the general level of activity to continue for the foreseeable future. Customer retention and growth rates remain at a high level.
The operating loss is impacted by foreign currency exchange movements which in the year have resulted in a £5.7m exchange loss which have arisen on significant loans received from Bullhorn Inc in order to fund acquisitions of subsidiaries.
Sourcebreaker Limited was acquired during the period. Furthermore, a group reconstruction has occurred. The financial information contained within this report and consolidated financial statements are presented on the basis that the group had been in existence in it's current form for the whole of the year ended 31 December 2022 and prior periods and thus merger accounting has been applied.
Principal risks and uncertainties
The Group competes in the Customer Relationship Management (“CRM”) and Applicant Tracking System (“ATS”) software markets and faces a number of risks and uncertainties, the principal of which is commercial risk.
Commercial Risk
The markets the Group operates within are intensely competitive, rapidly changing, and highly fragmented, as current competitors expand their product offerings and new companies enter the market. Competitors vary in size and in the scope and breadth of the products and services offered.
This is mitigated as management keep abreast of these changes and respond as necessary. The Group offer a unique product that allows them to target a specific area of the market that is not oversaturated.
Further risks are detailed in the directors' report.
Key performance indicators
The board monitors progress on the overall strategy and the individual strategic elements by reference to KPIs.
The Group's key financial and non-financial performance indicators during the year were as follows:
2022 2021
Turnover £24,408,958 £15,789,729
Turnover growth % 54% n.a
Operating profit / (loss) £(6,509,361) £3,466,031
Profit / (loss) before taxation £(6,651,441) £3,466,141
Employee headcount 210 155
Turnover per employee £116,233 £101,869
Net liabilities £(12,477,785) £(3,959,433)
Human Resources
The Group is aware that its performance is only as good as the people it employs. The Group therefore attempts to have policies in place to attract, retain and motivate its employees to help achieve its business objectives.
INVENIAS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
Mr B Sylvester
Director
26 March 2025
INVENIAS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2022.
Principal activities
The principal activity of the Company and the Group continues to be to provide the staffing and recruitment industry with software to improve their business efficiency.
Results and dividends
The results for the year are set out on page 10.
No ordinary dividends were paid.
As part of the Group's restructure during the year, which is discussed further in the notes to these accounts, the Company transferred its investment in a subsidiary via a dividend in specie totalling £1.
The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr A Papas
Mr B Sylvester
Financial instruments
Liquidity and cash flow risk
The Group manages liquidity and cash flow risks by retaining sufficient cash to ensure it has adequate funds available for operations. The Group has access to additional funding from its parent if required.
Foreign currency risk
Foreign exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group manages foreign exchange risk by monitoring its operating cashflow requirements in order to ensure that it has sufficient foreign currency reserves available to meet its local currency cashflow requirements in the territories in which it currently operates. The Group maintains local currency bank accounts in the countries in which it operates in order to meet its short term cashflow requirements.
Credit risk
Credit risk arises when customers fail to discharge their obligations thus causing the Group a financial loss. The Group's credit control policies are aimed at minimizing such losses and deferred payment terms are only granted to customers who demonstrate appropriate payment history and satisfy credit worthiness checks.
Research and development
The Group continually undertakes research and development activities to develop its software provision.
Cancellation of own shares
During the year, the Company reduced its share capital by cancelling 503,332 Ordinary A 0.1667p shares with a par value of £839, this being the total issued share capital in this class of share. The cancellation represented 22.8% of the Company's issued share capital.
Additionally, the Company cancelled its share premium totalling £4,251,825.
The purpose of these transactions was to create distributable reserves in the Company.
INVENIAS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 4 -
Post reporting date events
The Company plans to complete a restructuring of its subsidiaries in 2025 for the purpose of reducing administrative costs. As part of this restructuring the Company plans to assume the customer contracts and obligations of its UK subsidiaries and close these entities during 2025. The restructuring will comprise the following subsidiaries; Sourcebreaker Limited, Cube 19 Limited, Sirenum Limited, Bond International Software (UK) Limited and Innovantage Systems Limited. In 2023 the Company closed Bond International Software Shanghai Limited entity as the commercial activity of this entity had essentially stopped. Finally, as part of the Company's tax structure and strategy, any debts payable and/or receivable as part of group undertakings will be interest bearing.
Future developments
Invenias Limited's Parent Company, Bullhorn Inc., is a global leader for Customer Relationship Management (“CRM”) and Applicant Tracking System (“ATS”) software through its hosted platform. The directors aim to maintain the management policies which have resulted in the Group’s growth in previous years. The directors expect to see a continued growth in the Group’s results.
Auditor
Azets Audit Services were re-appointed auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the Company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the Company is aware of that information.
Going Concern
The financial statements have been prepared on a going concern basis, which assumes the Group and Company will continue in operational existence for the foreseeable future.
The directors have reviewed detailed forecasts and plans, they have also made enquiries, indicating that the Group and Company has sufficient funding to continue its operations for a minimum of 12 months from the date of approval of these financial statements. The directors have also received confirmation that intercompany balances will not be required to be paid for a period until at least 12 months following the approval of these financial statements where it would call into question the going concern status of the business.
For the reasons set out above, the directors have prepared the financial statements on a going concern basis, and have concluded that there are no material uncertainties related to going concern.
Strategic report
The Company has chosen in accordance with Companies Act 2006, s. 414C(11) to include the Group's future developments in the Director's report.
On behalf of the board
Mr B Sylvester
Director
26 March 2025
INVENIAS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 5 -
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 financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the ;
prepare the on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
INVENIAS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF INVENIAS LIMITED
- 6 -
We have audited the financial statements of Invenias Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion, because of the significance of the matter described in the basis for adverse opinion section of our report, the group financial statements:
Do not give a true and fair view of the state of the group's affairs as at 31 December 2022 and of the group’s loss for the year then ended;
have not been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have not been prepared in accordance with the requirements of the Companies Act 2006.
In our opinion, except for the effects of the matter described in the basis for adverse opinion section of our report, the parent company financial statements:
give a true and fair view of the state of the parent company's affairs as at 31 December 2022;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for adverse opinion
As explained in note 1.3, the group has not consolidated subsidiary Napsbury Limited because it has not yet been able to determine the values of certain of the subsidiary’s material assets and liabilities at the acquisition date and since acquisition. Under FRS 102, the parent company should have consolidated this subsidiary and accounted for the acquisition based on provisional amounts. Had Napsbury Limited been consolidated, many elements in the accompanying consolidated financial statements would have been materially affected. The effects on the consolidated financial statements of the failure to consolidate have not been determined. Our opinion on the parent company’s financial statements is also qualified for this matter as the failure to consolidate all subsidiaries is a departure from the requirements of FRS 102 and the Companies Act 2006.
In addition, the group has not recognised an equity settled share-based payment transaction in the current period in respect of share options issued to employees of Sourcebreaker Limited, or in the prior 2021 period in relation to employees of Cube19 Limited or Sirenum Limited which is contrary to the requirements of FRS102 Section 26. This includes an accelerated share based payment charge when Invenias Limited acquired Sourcebreaker Limited, Cube19 Limited and Sirenum Limited. The necessary information to make such accounting entries including assessing the fair value of the share options at grant date is not available to management following the change of control, and therefore we are also unable to obtain sufficient and appropriate evidence as to whether a material error is present within administrative expenses and within equity in the years ended 31 December 2022 and 31 December 2021. Our opinion on the current period’s financial statements is therefore also modified because of the possible effect of this matter on the comparability of the current period’s figures and the corresponding figures.
Any disclosures required by FRS102 are also omitted for the above possible misstatements. In addition, the directors’ report and strategic report do not consider the effects of the failure to consolidate this subsidiary or account for share based payments.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our adverse opinion on the group financial statements and qualified opinion on the parent company financial statements.
INVENIAS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF INVENIAS LIMITED
- 7 -
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
As described in the basis for adverse opinion section of our report, the group financial statements have not consolidated subsidiary Napsbury Limited, and have not accounted for certain share based payments. We have concluded that the other information is materially misstated for the same reason with respect to the amounts or other items in the annual report affected by the failure to consolidate this subsidiary and account for certain share based payments.
Opinions on other matters prescribed by the Companies Act 2006
Because of the significance of the matter described in the basis for adverse opinion section of our report, in our opinion, based on the work undertaken in the course of the audit:
Except for the effects of the matters described in the basis for adverse opinion section of our report, in our opinion, based on the work undertaken in the course of the audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the directors’ report has been prepared in accordance with applicable legal requirements.
INVENIAS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF INVENIAS LIMITED
- 8 -
Matters on which we are required to report by exception
As a result of the matters described in the basis for adverse opinion section of our report, in the light of the knowledge and understanding of the group and parent company and their environment obtained in the course of the audit, we have identified material misstatements in the strategic report and the directors’ report.
Arising as a result of the matters described in the basis for adverse opinion section of our report, 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:
returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
INVENIAS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF INVENIAS LIMITED
- 9 -
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the entity through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
In the previous year, the company took advantage of the exemption under section 399 of the Companies Act 2006 to prepare consolidated financial statements. The consolidated financial statements for the year ended 31 December 2022 are the first set of consolidated financial statements prepared by the Group. The comparative consolidated figures for the year ended 31 December 2021 have been presented for comparative purposes but were therefore not subject to audit.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Ben Sheldon ACA (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
26 March 2025
Statutory Auditor
6th Floor Bank House
Cherry Street
Birmingham
B2 5AL
INVENIAS LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 10 -
Unaudited
2022
2021
Notes
£
£
Turnover
4
21,115,634
15,789,729
Cost of sales
(4,694,301)
(2,499,151)
Gross profit
16,421,333
13,290,578
Administrative expenses
(33,450,420)
(9,674,026)
Other operating income
10,665,043
-
Exceptional items
5
(145,317)
(150,521)
Operating (loss)/profit
6
(6,509,361)
3,466,031
Interest receivable and similar income
427
110
Interest payable and similar expenses
(142,507)
-
(Loss)/profit before taxation
(6,651,441)
3,466,141
Tax on (loss)/profit
10
395,681
493,155
(Loss)/profit for the financial year
28
(6,255,760)
3,959,296
(Loss)/profit for the financial year is all attributable to the owners of the Parent Company.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
The notes on pages 18 to 48 form part of these financial statements.
INVENIAS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 11 -
Unaudited
2022
2021
£
£
(Loss)/profit for the year
(6,255,760)
3,959,296
Other comprehensive income
Currency translation gain/(loss) taken to retained earnings
465,993
(5,467)
Total comprehensive income for the year
(5,789,767)
3,953,829
Total comprehensive income for the year is all attributable to the owners of the Parent Company.
The notes on pages 18 to 48 form part of these financial statements.
INVENIAS LIMITED
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 12 -
Unaudited
2022
2021
Notes
£
£
£
£
Fixed assets
Goodwill
12
91,282,898
42,405,277
Other intangible assets
12
53,985,053
32,972,391
Total intangible assets
145,267,951
75,377,668
Tangible assets
13
129,923
60,602
145,397,874
75,438,270
Current assets
Debtors
17
23,842,690
12,053,878
Cash at bank and in hand
10,335,362
8,747,022
34,178,052
20,800,900
Creditors: amounts falling due within one year
18
(179,634,856)
(90,894,009)
Net current liabilities
(145,456,804)
(70,093,109)
Total assets less current liabilities
(58,930)
5,345,161
Creditors: amounts falling due after more than one year
19
-
(1,707,560)
Provisions for liabilities
Provisions
20
132,081
Deferred tax liability
21
12,418,855
7,464,953
(12,418,855)
(7,597,034)
Net liabilities
(12,477,785)
(3,959,433)
Capital and reserves
Called up share capital
24
2,842
3,680
Share premium account
25
4,251,825
Other reserves
(3,971,571)
(8,315,601)
Profit and loss reserves
28
(8,509,056)
100,663
Total equity
(12,477,785)
(3,959,433)
The notes on pages 18 to 48 form part of these financial statements.
Included in debtors are amounts due after more than one year totalling £116,997, (2021: £630,162).
INVENIAS LIMITED
GROUP BALANCE SHEET (CONTINUED)
AS AT
31 DECEMBER 2022
31 December 2022
- 13 -
The financial statements were approved by the board of directors and authorised for issue on 26 March 2025 and are signed on its behalf by:
26 March 2025
Mr B Sylvester
Director
Company registration number 05323637 (England and Wales)
INVENIAS LIMITED
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2022
31 December 2022
- 14 -
2022
2021
as restated
Notes
£
£
£
£
Fixed assets
Tangible assets
13
17,014
22,562
Investments
14
144,043,646
70,167,568
144,060,660
70,190,130
Current assets
Debtors
17
10,881,324
5,140,709
Cash at bank and in hand
2,760,724
2,078,128
13,642,048
7,218,837
Creditors: amounts falling due within one year
18
(157,634,868)
(71,715,909)
Net current liabilities
(143,992,820)
(64,497,072)
Total assets less current liabilities
67,840
5,693,058
Creditors: amounts falling due after more than one year
19
-
(1,707,560)
Provisions for liabilities
Deferred tax liability
21
1,817
(1,817)
-
Net assets
66,023
3,985,498
Capital and reserves
Called up share capital
24
2,842
3,680
Share premium account
25
4,251,825
Profit and loss reserves
28
63,181
(270,007)
Total equity
66,023
3,985,498
The notes on pages 18 to 48 form part of these financial statements.
Included in debtors are amounts due after more than one year totalling £46,441, (2021: £449,875).
As permitted by s408 Companies Act 2006, the Company has not presented its own profit and loss account and related notes. The Company’s loss for the year was £3,919,475 (2021 - £1,112,833 profit).
The financial statements were approved by the board of directors and authorised for issue on 26 March 2025 and are signed on its behalf by:
26 March 2025
Mr B Sylvester
Director
Company registration number 05323637 (England and Wales)
INVENIAS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 15 -
Share capital
Share premium account
Merger reserves
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2021 (Unaudited)
3,680
4,251,825
(8,315,601)
(3,853,166)
(7,913,262)
Year ended 31 December 2021:(Unaudited)
Profit for the year (Unaudited)
-
-
-
3,959,296
3,959,296
Other comprehensive income (Unaudited):
Currency translation differences (Unaudited)
-
-
-
(5,467)
(5,467)
Total comprehensive income (Unaudited)
-
-
-
3,953,829
3,953,829
Balance at 31 December 2021 (Unaudited)
3,680
4,251,825
(8,315,601)
100,663
(3,959,433)
Year ended 31 December 2022:
Loss for the year
-
-
-
(6,255,760)
(6,255,760)
Other comprehensive income:
Currency translation differences
-
-
-
465,993
465,993
Total comprehensive income
-
-
-
(5,789,767)
(5,789,767)
Transactions with owners:
Issue of share capital
24
1
-
-
1
Reduction of share capital and share premium
24
(839)
(4,251,825)
-
4,252,664
Disposal of subsidiary
25
-
-
4,344,030
(7,072,616)
(2,728,586)
Balance at 31 December 2022
2,842
(3,971,571)
(8,509,056)
(12,477,785)
The notes on pages 18 to 48 form part of these financial statements.
INVENIAS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 16 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
As restated for the period ended 31 December 2021:
Balance at 1 January 2021
3,680
4,251,825
(256,294)
3,999,211
Effect of change in accounting policy
-
-
(1,126,546)
(1,126,546)
As restated
3,680
4,251,825
(1,382,840)
2,872,665
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
-
1,112,833
1,112,833
Balance at 31 December 2021
3,680
4,251,825
(270,007)
3,985,498
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
(3,919,475)
(3,919,475)
Issue of share capital
24
1
-
1
Dividends
11
-
-
(1)
(1)
Reduction of share capital and share premium
24
(839)
(4,251,825)
4,252,664
Balance at 31 December 2022
2,842
63,181
66,023
The notes on pages 18 to 48 form part of these financial statements.
INVENIAS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 17 -
Unaudited
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
36
2,724,482
13,120,028
Interest paid
(142,507)
Effects of foreign exchange differences
-
9,251
Income taxes refunded
80,174
159,870
Net cash inflow from operating activities
2,662,149
13,289,149
Investing activities
Purchase of tangible fixed assets
(21,938)
-
Proceeds from disposal of tangible fixed assets
(12,943)
3,462
Purchase of subsidiaries, net of cash acquired
(60,116,648)
(61,522,620)
Cash surrendered on disposal
(1,599,225)
-
Interest received
427
110
Net cash used in investing activities
(61,750,327)
(61,519,048)
Financing activities
Interest paid
142,507
-
Loan receipts from parent company
61,440,020
53,142,148
Proceeds from borrowings
1,514
-
Repayment of borrowings
(907,523)
(1,679,117)
Net cash generated from financing activities
60,676,518
51,463,031
Net increase in cash and cash equivalents
1,588,340
3,233,132
Cash and cash equivalents at beginning of year
8,747,022
5,513,890
Cash and cash equivalents at end of year
10,335,362
8,747,022
The notes on pages 18 to 48 form part of these financial statements.
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 18 -
1
Accounting policies
Company information
Invenias Limited (“the Company”) is a private limited Company, limited by shares and domiciled and incorporated in England and Wales. The registered office is 155 Bishopsgate, 8th Floor, London, England, EC2M 3AJ.
The Group consists of Invenias Limited and all of its subsidiaries listed in note 15.
1.1
Accounting convention
These consolidated financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006. The Company's financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the Company. Monetary amounts in these financial statements are rounded to the nearest £.
The functional currency of the subsidiaries are the Sterling, US Dollar, Euro, Australian Dollar, Chinese Yuan, Hong Kong Dollar and Singapore Dollar. All balances have been translated into Sterling for the purposes of consolidation.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The Directors have taken advantage of the exemption available under Section 408 of the Companies Act 2006 and have not presented a statement of comprehensive loss for the Company alone.
The Parent Company is a qualifying entity for the purposes of FRS 102, being a member of a Group where the Parent of that Group prepares publicly available consolidated financial statements, including this Company, which are intended to give a true and fair view of the assets, liabilities and financial position, and profit and loss of the Group. The Company has therefore taken advantage of exemptions from the following disclosure requirements for Parent Company information presented within the consolidated financial statements:
In accordance with FRS102, the Parent Company has taken advantage of the exemption to prepare a company only statement of cashflows, as the Parent Company's cashflows are included within the Group Statement of Cash Flows.
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 19 -
1.2
Business combinations
In the Parent Company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill, and where identifiable other intangible assets. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries are accounted for at cost less impairment.
Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.
In the event of a group reconstruction resulting in the direct and indirect acquisition of a subsidiary, the Group applies merger accounting in accordance with the Companies Act 2006.
The carrying values of the assets and liabilities of the parties to the combination are included within the financial statements from the date of acquisition by the wider Group. Reserves pertaining to periods prior to the wider Group ownership are shown in the merger reserve.
On disposal of a subsidiary acquired as part of a group reconstruction, an amount equal to the amount that has become realised on disposal is transferred to retained profit or loss.
A group reconstruction happened within the year. As a result, in accordance with the above, the results and cash flows of all the combining entities have been brought into the financial statements of Invenias Limited from the beginning of 2022, adjusted so as to achieve uniformity of accounting policies. The comparative information includes the total comprehensive income for all the combining entities for the previous reporting period and their statement of financial position for the previous reporting date, adjusted as necessary to achieve uniformity of accounting policies.
1.3
Basis of consolidation
In the previous year, the company took advantage of the exemption under section 399 of the Companies Act 2006 to prepare consolidated financial statements. The consolidated financial statements for the year ended 31 December 2022 are the first set of consolidated financial statements prepared by the Group. The comparative consolidated figures for the year ended 31 December 2021 have been presented for comparative purposes but were therefore not subject to audit.
The consolidated Group financial statements consist of the financial statements of the Parent Company, Invenias Limited, together with all entities controlled by the Parent Company (its subsidiaries), except for Napbsury Limited which has not been consolidated. This is because following it's acquisition, group management have been unable to determine it's material assets and liabilities at the acquisition date and since acquisition.
All financial statements are made up to 31 December 2022. 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.
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 20 -
Subsidiaries which are direct acquisitions are consolidated in the Group’s financial statements from the date that control commences until the date that control ceases.
Subsidiaries which are acquired as part of a group reconstruction are consolidated in the Group’s financial statements based on the date which control commenced in the wider Group, until the date that control ceases.
1.4
Going concern
The financial statements have been prepared on a going concern basis, which assumes the Group and Company will continue in operational existence for the foreseeable future.
The directors have reviewed detailed forecasts and plans, they have also made enquiries, indicating that the Group and Company has sufficient funding to continue its operations for a minimum of 12 months from the date of approval of these financial statements. The directors have also received confirmation that intercompany balances will not be required to be paid for a period until at least 12 months following the approval of these financial statements where it would call into question the going concern status of the business.
For the reasons set out above, the directors have prepared the financial statements on a going concern basis, and have concluded that there are no material uncertainties related to going concern.
1.5
Turnover
Revenue is measured at the fair value of the consideration received or receivable and represents the amount received for services rendered, net of returns, discounts and rebates allowed by the Group and the Company and value added taxes.
The Group and the Company derives its revenues from two sources: (1) subscription revenues, which are composed of subscription fees from customers accessing its hosted software as a service and (2) related professional services and other nonrecurring revenue. The Group and the Company evaluates the arrangements to determine if separate units of accounting exist, and if so, allocates revenue to each element based upon the relative selling price of each of the elements.
The Group and the Company’s multiple element arrangements typically include subscriptions and professional services to configure the hosted software to the customer’s specifications. The Group and the Company considers subscription services to have standalone value as such services are sold separately. In determining whether professional services have standalone value the Group and the Company considers the availability of services from other vendors and the nature of the professional engagement.
Subscription revenues are recognised rateably over the contract term beginning on the date specified in each contract following go live.
Professional service offerings consist of initial setup fees purchased along with the subscription to configure the hosted software to customer specifications and separately purchased professional services to further enhance an already live system. In determining whether the professional services can be accounted for separately from subscription services, the Group and the Company considers the following factors for each professional service arrangement: availability of the consulting services from other vendors, the nature of the professional services, the timing of when the professional service arrangement was signed in comparison to the subscription service start date, and the contractual dependence of the subscription service on the customer’s satisfaction with the services provided. When purchased separately, revenues are recognised as the services are rendered for time and material contracts and when accepted by the customer for fixed price contracts. The majority of the Group and the Company’s consulting contracts are on a time and material basis. Training revenues are recognised as the services are performed.
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 21 -
1.6
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life of 10 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.7
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Non-competition agreements
4.5 years
Completed technology
8, 8.5 and 12.5 years
Customer relationships
12.5, 14 and 16.5 years
Trade marks
12, 12.5 and 13.5 years
1.8
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold improvements
33% reducing balance
Plant and equipment
33% and 25% reducing balance
Fixtures and fittings
33% reducing balance
Computers
33% reducing balance and 17-20% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
1.9
Fixed asset investments
Interests in subsidiaries 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.
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.
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 22 -
1.10
Impairment of fixed assets
At each reporting period 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 Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.11
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.12
Financial instruments
The Group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the Group's balance sheet when the Group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 23 -
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the Group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 24 -
1.13
Equity instruments
Equity instruments issued by the Group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the Group.
1.14
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account 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 liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, 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 if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.15
Provisions
Provisions are recognised when the Group has a legal or constructive present obligation as a result of a past event, it is probable that the Group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.16
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed 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 Company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.17
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 25 -
1.18
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
1.19
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
The assets and liabilities of foreign subsidiaries are translated into Sterling using exchange rates at the reporting date. The components of shareholders' equity are stated at historical value. Average exchange rates for the period are used to translate income and expense items of foreign operations. However, if exchange rates fluctuate significantly, the exchange rates at the dates of the transactions are used.
2
Change in accounting policy
In prior periods the Company capitalised identifiable development expenditure to the extent that the technical, commercial and financial feasibility was demonstrated.
During the year the Company changed its accounting policy for development expenditure. Development costs are no longer capitalised in the Balance Sheet as intangible fixed assets but instead expensed to Profit & Loss as incurred.
See Note 38 for further details.
These are the first Group financial statements and therefore there is no adjustment to the Group's primary statements.
3
Judgements and key sources of estimation uncertainty
In the application of the Group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
3
Judgements and key sources of estimation uncertainty
(Continued)
- 26 -
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.
Impairment testing in respect of investment in subsidiaries
Investments in subsidiaries consists of the acquisition of equity shares totalling £144,043,646 (2021: £70,167,568).
Management has considered the carrying value of the Company's investment in subsidiaries and concluded that the Company has not suffered an impairment loss. On making this assessment management note that the Group continues to derive significant economic benefit from the software development in these subsidiaries as well as the customer relationships inherited.
Impairment testing in respect of intangible assets
Intangible assets totalling £145,267,951 (2021: £75,377,668) consists of goodwill, customer relationships, developed technology, trademarks and non-competition agreements which were acquired as part of the Company's acquisition of subsidiaries.
Management has considered the carrying value of the Group's intangible assets and concluded that the Company has not suffered an impairment loss. As noted above, on making this assessment management note that the Group continues to derive significant economic benefit from the software development in these subsidiaries as well as the customer relationships inherited.
4
Turnover and other revenue
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
12,066,181
9,781,473
Europe
4,564,552
2,428,860
Rest of the world
4,484,901
3,579,396
21,115,634
15,789,729
2022
2021
£
£
Other revenue
Interest income
427
110
Other operating income
10,665,043
-
Other operating income includes an income allocation received from a Company under common control. This represents a portion of revenue generated by that Company from the sale of the Group's products, which is passed back to the Group to reflect the underlying economic substance of the transactions.
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 27 -
5
Exceptional item
2022
2021
£
£
Expenditure
Restructuring costs
145,317
100,521
Other exceptional costs
-
50,000
145,317
150,521
Restructuring costs incurred by the Group are as a result of Group reorganisations.
6
Operating (loss)/profit
2022
2021
£
£
Operating (loss)/profit for the year is stated after charging:
Exchange losses
5,667,718
700,319
Depreciation of owned tangible fixed assets
43,909
45,377
Loss on disposal of tangible fixed assets
23,359
74,157
Amortisation of intangible assets
10,461,626
2,016,575
Operating lease charges
220,570
86,464
7
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the Group and Company
39,750
29,100
Audit of the financial statements of the Company's subsidiaries
136,750
88,893
176,500
117,993
For other services
Taxation compliance services
15,000
16,050
All other non-audit services
113,525
68,207
128,525
84,257
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 28 -
8
Employees
The average monthly number of persons (including directors) employed by the Group and Company during the year was:
Group
Company
2022
2021
2022
2021
Number
Number
Number
Number
Research and development
57
56
15
17
Sales
28
12
3
2
Finance
1
2
-
-
Professional services
24
26
1
1
Administration and HR
6
1
1
1
Support services
87
57
11
11
Marketing
7
1
-
-
210
155
31
32
Their aggregate remuneration comprised:
Group
Company
restated
2022
2021
2022
2021
£
£
£
£
Wages and salaries
11,507,457
4,414,741
1,808,109
1,710,003
Social security costs
1,673,507
597,543
206,592
192,830
Pension costs
273,795
161,720
54,500
54,661
13,454,759
5,174,004
2,069,201
1,957,494
There were no key management personnel other than the directors.
9
Directors' remuneration
The Company's directors are employees of the Parent Company and therefore no remuneration was paid to the Company's directors by the Invenias Group.
10
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
205,415
Adjustments in respect of prior periods
81,408
Total UK current tax
205,415
81,408
Foreign current tax on profits for the current period
53,486
5,332
Other foreign taxes and reliefs
(11,034)
Total current tax
258,901
75,706
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
10
Taxation
2022
2021
£
£
(Continued)
- 29 -
Deferred tax
Origination and reversal of timing differences
(654,582)
(568,861)
Total tax credit
(395,681)
(493,155)
The actual credit for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
(Loss)/profit before taxation
(6,651,441)
3,466,141
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
(1,263,774)
658,567
Tax effect of expenses that are not deductible in determining taxable profit
543,643
210,744
Tax effect of income not taxable in determining taxable profit
(15,641)
(2,397)
Tax effect of utilisation of tax losses not previously recognised
(117,087)
(1,208,356)
Unutilised tax losses carried forward
1,333,336
484,696
Adjustments in respect of prior years
81,408
Effect of change in corporation tax rate
(149,907)
(402,954)
Permanent capital allowances in excess of depreciation
23,263
(7,563)
Research and development tax credit
(168,618)
Other permanent differences
(74,187)
121,612
Foreign exchange differences
321
2,156
Tax in respect of business combinations
(696,576)
(203,004)
Taxation not recognised
20,928
(59,446)
Taxation credit
(395,681)
(493,155)
The Group has tax losses available to carry forward for relief against future taxable profits of £12,432,006 (2021: £12,670,040).
Deferred tax assets in relation to losses and other deductions at the end of the year of £2,248,433 (2021: £1,937,037) have not been provided for on the basis that the timing of the future reversal of the underlying timing differences is uncertain. This does not impact on the going concern of the Company.
Deferred tax is calculated on an expected future tax rate of 25% for the UK entity and for foreign entites the rates enacted at the reporting date in the overseas jurisdictiorns is 25% (2021: 25%). These are the rates expected to apply when the majority of the balances are settled.
In his budget on 3rd March 2021, the chancellor announced an increase to the main rate of UK corporation tax from 1st April 2023 from 19% to 25%. This was enacted on 24th May 2021 and will affect the Group and Company's future tax liabilities on trading profit.
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 30 -
11
Dividends
2022
2021
2022
2021
Recognised as distributions to equity holders:
Per share
Per share
Total
Total
£
£
£
£
Ordinary shares
Final paid - dividend in specie (note 30)
1.00
-
1
-
The amount of cumulative preference dividends not recognised is £0 (2021 - £0).
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 31 -
12
Intangible fixed assets
Group
Goodwill
Software
Non-competition agreements
Completed technology
Customer relationships
Trade marks
Total
£
£
£
£
£
£
£
Cost
At 1 January 2022
43,798,636
68,858
4,557,523
28,146,626
953,462
77,525,105
Additions - business combinations
56,094,325
1,436,364
6,590,376
15,800,004
675,936
80,597,005
Other changes
(245,096)
-
(245,096)
At 31 December 2022
99,647,865
68,858
1,436,364
11,147,899
43,946,630
1,629,398
157,877,014
Amortisation and impairment
At 1 January 2022
1,393,359
68,858
136,004
528,311
20,905
2,147,437
Amortisation charged for the year
6,971,608
149,713
798,384
2,441,718
100,203
10,461,626
At 31 December 2022
8,364,967
68,858
149,713
934,388
2,970,029
121,108
12,609,063
Carrying amount
At 31 December 2022
91,282,898
1,286,651
10,213,511
40,976,601
1,508,290
145,267,951
At 31 December 2021
42,405,277
4,421,519
27,618,315
932,557
75,377,668
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 32 -
Company
Development costs
Software
Total
£
£
£
Cost
At 1 January 2022 (as previously reported)
5,055,988
68,858
68,858
Prior year adjustment (note 38)
(5,055,988)
At 31 December 2022
68,858
68,858
Amortisation and impairment
At 1 January 2022 (as previously reported)
3,755,578
68,858
68,858
Prior year adjustment (note 38)
(3,755,578)
At 31 December 2022
68,858
68,858
Carrying amount
At 31 December 2022
At 31 December 2021 (as previously reported)
1,300,410
At 31 December 2021 (as restated)
-
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 33 -
13
Tangible fixed assets
Group
Leasehold improvements
Plant and equipment
Fixtures and fittings
Computers
Total
£
£
£
£
£
Cost
At 1 January 2022
166,882
484,879
651,761
Additions
24,367
24,367
Acquired via business combinations
20,000
10,668
5,054
94,886
130,608
Disposals
(12,057)
(5,054)
(7,973)
(25,084)
Exchange adjustments
(2,429)
(2,429)
At 31 December 2022
20,000
163,064
596,159
779,223
Depreciation and impairment
At 1 January 2022
144,199
446,960
591,159
Depreciation charged in the year
3,371
5,289
35,249
43,909
Acquired via business combinations
278
5,782
1,375
21,465
28,900
Eliminated in respect of disposals
(6,912)
(1,375)
(4,074)
(12,361)
Exchange adjustments
(2,307)
(2,307)
At 31 December 2022
3,649
146,051
499,600
649,300
Carrying amount
At 31 December 2022
16,351
17,013
96,559
129,923
At 31 December 2021
22,683
37,919
60,602
Company
Plant and equipment
£
Cost
At 1 January 2022
164,453
Disposals
(1,388)
At 31 December 2022
163,065
Depreciation and impairment
At 1 January 2022
141,891
Depreciation charged in the year
5,290
Eliminated in respect of disposals
(1,130)
At 31 December 2022
146,051
Carrying amount
At 31 December 2022
17,014
At 31 December 2021
22,562
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 34 -
14
Fixed asset investments
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Investments in subsidiaries
15
-
144,043,646
70,167,568
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
14
Fixed asset investments
(Continued)
- 35 -
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2022
70,167,568
Additions
74,121,176
Valuation changes
(245,097)
Disposals
(1)
At 31 December 2022
144,043,646
Carrying amount
At 31 December 2022
144,043,646
At 31 December 2021
70,167,568
During the year Company acquired the following subsidiaries through direct acquisition:
15 July 2022: 100% of the issued share capital in Sourcebreaker Limited for £74,121,176.
During the year, the Company acquired the following subsidiaries following a group reconstruction:
3 May 2022: 100% of the issued share capital in Radlett Limited and its subsidiaries in consideration for the allotment of 1 ordinary share in Invenias Limited.
3 May 2022: 100% of the issued share capital in Hockliffe Limited by way of dividend in specie from Radlett Limited.
3 May 2022: 100% of the issued share capital in Napsbury Limited by way of dividend in specie from Radlett Limited.
6 July 2022: 100% of the issued share capital in Bond International Software (UK) Limited, Bond International Software Singapore Ltd, Bond International Software China Ltd, Bond International Software Shanghai Ltd, Bond International Software Pty Ltd and Innovantage Systems Ltd for consideration of £1.
Radlett Limited and Hockliffe Limited subsequently dissolved on 26 July 2022 and 20 September 2022 respectively.
Also, during the year, on 3 May 2022, as part of the group reconstruction, the Company disposed of its interest in Invenias Inc at book value of £1.
In the prior year, the Company purchased 100% of the issued share capital of Sirenum Limited for consideration of £34,801,247 and 100% of the issued share capital of Cube19 Limited for consideration of £35,366,320.
During the year the Company's investment in Cube19 Limited was reduced by £245,097 due to a reduction in the valuation resulting in a reduction in the deferred contingent consideration payable.
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 36 -
15
Subsidiaries
Details of the Company's subsidiaries at 31 December 2022 are as follows:
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Indirect
Sourcebreaker Limited
155 Bishopsgate, 8th Floor, London, EC2M 3AJ
Software development
Ordinary
100.00
-
Cube19 Limited
155 Bishopsgate, 8th Floor, London, EC2M 3AJ
Software development
Ordinary
100.00
-
Cube 19 Inc
3500 South Dupont Highway Dover De 19901 Kent
Software development
Ordinary
-
100.00
Cube19 Australia Pty Limited
Level 17 44 Market Street Sydney NSW 2000
Software development
Ordinary
-
100.00
Sirenum Limited
155 Bishopsgate, 8th Floor, London, EC2M 3AJ
Software development
Ordinary
100.00
-
Napsbury Limited
155 Bishopsgate, 8th Floor, London, EC2M 3AJ
Software development
Ordinary
100.00
-
Bond International Software (UK) Limited
155 Bishopsgate, 8th Floor, London, EC2M 3AJ
Software development
Ordinary
100.00
-
Bond International Software Singapore Pte Limited
30 Raffles Place, Level 17 Chevron House, Singapore 048622
Software development
Ordinary
100.00
-
Bond International Software China Limited
Rooms 901/902, 3 Hau Fook Street, TsimshaShui, Kowloon, Hong Kong
Software development
Ordinary
100.00
-
Bond International Software Shanghai Limited
Room 108, Building 4, No. 840 Middle Luochuan Road, Jingan District, Shanghai, China
Software development
Ordinary
-
100.00
Bond International Software Pty Limited
Level 1, 172-174 Keira Street, Wollongong, NSW 2500, Australia
Software development
Ordinary
100.00
-
Innovantage Systems Limited
155 Bishopsgate, 8th Floor, London, EC2M 3AJ
Software development
Ordinary
100.00
-
The aggregate capital and reserves and the result for the year of the subsidiaries noted above was as follows:
Name of undertaking
Capital and Reserves
Profit/(Loss)
£
£
Sourcebreaker Limited
(485,899)
(1,054,317)
Cube19 Limited
2,772,176
2,320,901
Cube 19 Inc
3,264,415
3,010,332
Cube19 Australia Pty Limited
293,613
47,236
Sirenum Limited
1,452,567
1,927,850
Napsbury Limited
44,781,920
(750,915)
Bond International Software (UK) Limited
(6,857,873)
365,184
Bond International Software Singapore Pte Limited
(311,846)
-
Bond International Software China Limited
(1,067,367)
(38,986)
Bond International Software Shanghai Limited
413
116,469
Bond International Software Pty Limited
746,333
8,197
Innovantage Systems Limited
(468,946)
(76,647)
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 37 -
16
Financial instruments
Group
Company
2022
2021
2022
2021
£
£
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
32,216,223
19,747,395
13,273,588
6,760,415
Carrying amount of financial liabilities
Measured at amortised cost
174,757,607
89,360,302
156,594,568
73,011,362
The Group’s activities expose it to a number of financial risks: foreign currency risk, credit risk and liquidity risk. The Group’s overall risk management approach focuses on minimising the potential adverse effects of these risks on its financial performance. Information on how the Group manages these risks is included within the Directors Report.
There were no financial instruments held at fair value by the Group in either the current or previous accounting period.
17
Debtors
Group
Company
2022
2021
2022
2021
as restated
Amounts falling due within one year:
£
£
£
£
Trade debtors
2,259,401
2,087,642
1,141,514
210,084
Corporation tax recoverable
22,259
Amounts owed by group undertakings
19,064,224
8,616,430
9,098,120
4,362,764
Other debtors
1,265,006
106,525
435,465
13,216
Prepayments and accrued income
1,137,042
582,783
159,784
104,770
23,725,673
11,415,639
10,834,883
4,690,834
Deferred tax asset (note 21)
20
8,077
23,725,693
11,423,716
10,834,883
4,690,834
Amounts falling due after more than one year:
Other debtors
46,441
32,091
46,441
30,412
Prepayments and accrued income
58,010
37,439
104,451
69,530
46,441
30,412
Deferred tax asset (note 21)
12,546
560,632
419,463
116,997
630,162
46,441
449,875
Total debtors
23,842,690
12,053,878
10,881,324
5,140,709
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
17
Debtors
(Continued)
- 38 -
Trade debtors are stated net of a provision totaling £162,743 (2021: £168,040).
Amounts owed by group undertakings are unsecured, interest free and repayable on demand.
18
Creditors: amounts falling due within one year
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Bank loans and overdrafts
1,514
Trade creditors
159,049
30,569
41,082
Amounts owed to group undertakings
155,296,616
83,963,003
140,545,790
68,839,443
Corporation tax payable
205,652
22,919
Other taxation and social security
1,537,808
886,418
-
178,864
Deferred income
22
3,133,789
2,331,930
1,040,300
233,243
Other creditors
15,674,111
2,270,135
15,576,246
1,910,643
Accruals
3,626,317
1,389,035
431,450
553,716
179,634,856
90,894,009
157,634,868
71,715,909
Included in other creditors for the Group and Company is deferred consideration on the acquisition of a subsidiary totalling £15,576,246 (2021: £1,850,000).
Amounts due to group undertakings are unsecured, interest free and repayable on demand.
19
Creditors: amounts falling due after more than one year
Group
Company
2022
2021
2022
2021
£
£
£
£
Accruals and deferred income
1,707,560
1,707,560
The prior year non-current other creditors for the Group and Company relates to deferred consideration on the acquisition of a subsidiary. This was discounted to present value using a rate equivalent to the cost of the debt taken out by the Bullhorn Inc to finance the acquisitions.
20
Provisions for liabilities
Group
Company
2022
2021
2022
2021
£
£
£
£
-
132,081
-
-
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
20
Provisions for liabilities
(Continued)
- 39 -
Movements on provisions:
Total
Group
£
At 1 January 2022
132,081
Utilisation of provision
(132,081)
At 31 December 2022
-
Amounts included in provisions relate to an onerous lease which existed at the prior reporting date.
21
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the Group and Company, and movements thereon:
Liabilities
Liabilities
Assets
Assets
2022
2021
2022
2021
Group
£
£
£
£
Accelerated capital allowances
30,244
6,489
5,112
45,583
Tax losses
(854,885)
-
4,684
523,126
Retirement benefit obligations
(4,129)
-
2,770
-
Goodwill on business combinations
13,496,264
7,458,464
-
-
Intangibles
(248,639)
-
-
-
12,418,855
7,464,953
12,566
568,709
Liabilities
Liabilities
Assets
Assets
2022
2021
2022
2021
Company
£
£
£
£
Accelerated capital allowances
3,077
-
-
(3,090)
Tax losses
-
-
-
422,553
Retirement benefit obligations
(1,260)
-
-
-
1,817
-
-
419,463
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
21
Deferred taxation
(Continued)
- 40 -
Group
Company
2022
2022
Movements in the year:
£
£
Liability/(Asset) at 1 January 2022
6,896,244
(419,463)
(Credit)/charge to profit or loss
(654,582)
421,280
Transfer on disposal
38,957
-
Effect of business combinations
6,125,670
-
Liability at 31 December 2022
12,406,289
1,817
The deferred tax asset set out above relates mainly to the utilisation of tax losses against future expected profits of the same period.
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
22
Deferred income
Group
Company
2022
2021
2022
2021
£
£
£
£
Other deferred income
3,133,789
2,331,930
1,040,300
233,243
23
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
273,795
161,720
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the Group in an independently administered fund.
At the balance sheet date the Group owed £52,653 to the pension providers (2021: £49,209).
24
Share capital
Group and company
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 0.1667p each
1,704,376
1,704,375
2,842
2,841
Ordinary A shares of 0.1667p each
-
503,332
-
839
1,704,376
2,207,707
2,842
3,680
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
24
Share capital
(Continued)
- 41 -
On 20 April 2022, Invenias Limited, reduced its share capital by cancelling all of its Ordinary A Shares totalling £839.
On 3 May 2022, as part of a group reconstruction, the Company issued 1 0.1667p Ordinary share in consideration for the acquisition of a subsidiary from a fellow group company.
Also on 3 May 2022, Bullhorn Global Inc acquired 100% of the issued share capital in Invenias Limited from Bullhorn Inc.
Reconciliation of movements during the year:
Number
Number
Ordinary
Ordinary A
At 1 January 2022
1,704,375
503,332
Issue of fully paid shares
1
-
Cancellation of fully paid shares
-
(503,332)
At 31 December 2022
1,704,376
-
25
Share premium account
Group
Company
2022
2021
2022
2021
£
£
£
£
At the beginning of the year
4,251,825
4,251,825
4,251,825
4,251,825
Share capital reduction
(4,251,825)
-
(4,251,825)
-
At the end of the year
4,251,825
4,251,825
On 20 April 2022 Invenias Limited cancelled all of its share premium account totalling £4,251,825.
26
Other reserves
2022
2021
Group
£
£
At the beginning of the year
(8,315,601)
(8,315,601)
Disposal of subsidiaries
4,344,030
-
At the end of the year
(3,971,571)
(8,315,601)
2022
2021
Company
£
£
At the beginning and end of the year
-
-
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
26
Other reserves
(Continued)
- 42 -
Other reserves result from merger accounting following a group reconstruction.
Amounts included in other reserves include the total of the subsidiaries reserves prior to acquisition by the wider group.
27
Currency translation reserve
2022
2021
Group
£
£
At the beginning of the year
-
-
Translation (loss)/gain arising in the year
(465,993)
5,467
Transfer to retained earnings
465,993
(5,467)
At the end of the year
-
-
2022
2021
Company
£
£
At the beginning and end of the year
-
-
The currency translation reserve represents the cumulative translation differences of the Group which results from the conversion of the Company's subsidiaries from their functional currency to the Group presentational currency.
The Group elects to transfer currency translations to profit and loss reserves each year.
28
Profit and loss reserves
Group
Company
2022
2021
2022
2021
as restated
£
£
£
£
At the beginning of the year
100,663
(3,853,166)
705,300
(256,294)
Prior year adjustment
-
-
(975,307)
(1,126,546)
As restated
100,663
(3,853,166)
(270,007)
(1,382,840)
Profit/(loss) for the year
(6,255,760)
3,959,296
(3,919,475)
1,112,833
Dividends
-
-
(1)
-
Currency translation differences
465,993
(5,467)
Share redemption or reduction
4,252,664
-
4,252,664
-
Disposal of a subsidiary
(7,072,616)
-
-
-
At the end of the year
(8,509,056)
100,663
63,181
(270,007)
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 43 -
29
Acquisition of a business
On 15 July 2022 the group acquired 100% percent of the issued capital of Sourcebreaker Limited.
Book Value
Adjustments
Fair Value
Net assets acquired
£
£
£
Intangible assets
-
24,502,680
24,502,680
Property, plant & equipment
110,640
-
110,640
Trade and other receivables
1,060,047
-
1,060,047
Cash and cash equivalents
2,198,946
-
2,198,946
Borrowings
(907,523)
-
(907,523)
Trade and other payables
(2,812,271)
-
(2,812,271)
Deferred tax
-
(6,125,670)
(6,125,670)
Total identifiable net assets
(350,161)
18,377,010
18,026,849
Goodwill
56,094,325
Total consideration
74,121,174
The consideration was satisfied by:
£
Cash
60,543,445
Deferred consideration
13,577,729
74,121,174
Contribution by the acquired business for the reporting period included in the group statement of comprehensive income since acquisition:
£
Turnover
4,541,958
Profit after tax
127,583
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
29
Acquisition of a business
(Continued)
- 44 -
In the prior year, Invenias Limited purchased 100% of the issued share capital of Sirenum Limited for consideration of £35,399,980 and 100% of the issued share capital of Cube19 Limited for consideration of £34,801,247.
In the current year the following additional acquisitions were made following a group reconstruction and were accounted under merger accounting.
3 May 2022: 100% of the issued share capital in Radlett Limited and its subsidiaries in consideration for the allotment of 1 ordinary share in Invenias Limited.
3 May 2022: 100% of the issued share capital in Hockliffe Limited by way of dividend in specie from Radlett Limited.
3 May 2022: 100% of the issued share capital in Napsbury Limited by way of dividend in specie from Radlett Limited.
6 July 2022: 100% of the issued share capital in Bond International Software (UK) Limited, Bond International Software Singapore Ltd, Bond International Software China Ltd, Bond International Software Shanghai Ltd, Bond International Software Pty Ltd and Innovantage Systems Ltd for consideration of £1.
30
Disposals
On 3 May 2022 the Company disposed of its 100% holding in Invenias Inc by way of dividend in specie to its Parent Company at book value totalling £1.
Included in these financial statements are profits of £980,006 arising from the Group's interest in Invenias Inc up to the date of its disposal.
Net assets disposed of
£
Cash and cash equivalents
1,957,968
Intangible assets
33,737
Trade and other receivables
3,094,199
Trade and other payables
(950,412)
Deferred tax
47,314
4,182,806
Distribution to Parent Company
(4,182,805)
Total consideration
1
The consideration was satisfied by:
£
Dividend in specie
1
The disposal of Invenias Inc was part of a group reconstruction and therefore this has been accounted for as a demerger, therefore there is no gain / loss on disposal in profit or loss. In the Group accounts the net assets of Invenias Inc at the date of disposal are recognised in equity as a reduction in retained profit and loss.
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
30
Disposals
(Continued)
- 45 -
On 6 July 2022 the Group disposed of its indirect 100% holding in TempBuddy Limited and its 100% owned subsidiary TempBuddy Research & Development SL. Included in these financial statements are losses of £163,382 arising from the Group's interest in TempBuddy Limited and its 100% owned subsidiary TempBuddy Research & Development SL up to the date of its disposal.
Net liabilities disposed of
£
Trade and other receivables
985,678
Trade and other payables
(2,081,156)
Overdrafts
(358,740)
(1,454,218)
Distribution on group reconstruction
1,454,219
Total consideration
1
The consideration was satisfied by:
£
Cash
1
The disposal of TempBuddy Limited and TempBuddy Research & Development SL by a subsidiary of the Group was also part of a group reconstruction. Therefore, this has also been accounted for as a demerger, therefore there is no gain / loss on disposal to profit of loss.
In the Group accounts the net assets of the TempBuddy subgroup at the date of disposal are recognised in equity as a reduction in retained profit and loss.
Amounts previously recognised in the merger reserve on acquisition of disposed subsidiaries is also released to retained profit and loss.
31
Financial commitments, guarantees and contingent liabilities
Golub Capital Markets Llc has a fixed and floating charge over the undertaking and property and assets present and future for all monies due or to become due from the Group to Golub Capital Markets Llc, on any account whatsoever under the terms of the aforementioned instrument creating or evidencing the charge.
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 46 -
32
Operating lease commitments
Lessee
At the reporting end date the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Group
Company
2022
2021
2022
2021
£
£
£
£
Within one year
328,205
221,201
-
-
Between two and five years
-
8,205
-
-
328,205
229,406
-
-
33
Events after the reporting date
The Company plans to complete a restructuring of its subsidiaries in 2025 for the purpose of reducing administrative costs. As part of this restructuring the Company plans to assume the customer contracts and obligations of its UK subsidiaries and close these entities during 2025. The restructuring will comprise the following subsidiaries; Sourcebreaker Limited, Cube 19 Limited, Sirenum Limited, Bond International Software (UK) Limited and Innovantage Systems Limited. In 2023 the Company closed Bond International Software Shanghai Limited entity as the commercial activity of this entity had essentially stopped. Finally, as part of the Company's tax structure and strategy, any debts payable and/or receivable as part of group undertakings will be interest bearing.
34
Related party transactions
Transactions with related parties
The company has taken advantage of the exemption available per paragraph 33.1A of FRS 102 whereby it has not disclosed transactions with the ultimate parent company or any wholly owned subsidiary undertaking of the group.
35
Controlling party
The Parent Company of Invenias Limited until the 3 May 2022 was Bullhorn Inc, a company incorporated in the US, whose registered office is 100 Summer Street, 17th Floor, Boston, MA 02110.
On 3 May 2022, Bullhorn Global Inc acquired 100% of the issued share capital in Invenias Limited from Bullhorn Inc. Bullhorm Global Inc is also a company incorporated in the US, whose registered office is 100 Summer Street, 17th Floor, Boston, MA 02110.
The ultimate Parent Company is BH Acquisition Holding Company LP, a company incorporated in the US, whose registered address is 20 Horseneck Lane, Greenwich, Connecticut, 06830.
The ultimate controlling party is Stone Point Capital LLC, a Private Equity firm registered in the US.
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 47 -
36
Cash generated from group operations
2022
2021
£
£
(Loss)/profit for the year after tax
(6,255,760)
3,959,296
Adjustments for:
Taxation credited
(395,681)
(493,155)
Investment income
(427)
(110)
Loss on disposal of tangible fixed assets
23,359
74,157
Amortisation and impairment of intangible assets
10,461,626
2,016,575
Depreciation and impairment of tangible fixed assets
43,909
45,377
Effect of foreign exchange
6,133,711
650,323
Other gains and losses
-
(830)
Decrease in provisions
(132,081)
(120,932)
Movements in working capital:
Increase in debtors
(16,505,006)
(3,683,776)
Increase in creditors
8,548,973
11,624,639
Increase/(decrease) in deferred income
801,859
(951,536)
Cash generated from operations
2,724,482
13,120,028
37
Analysis of changes in net funds - group
1 January 2022
Cash flows
31 December 2022
£
£
£
Cash at bank and in hand
8,747,022
1,588,340
10,335,362
Bank overdrafts
(1,514)
(1,514)
8,747,022
1,586,826
10,333,848
INVENIAS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 48 -
38
Prior period adjustment
Reconciliation of changes in equity - Company
1 January
31 December
2021
2021
£
£
Adjustments to prior year
Change in development cost accounting policy - Intangible fixed assets
(1,390,797)
(1,300,410)
Deferred tax associated with change in accounting policy
264,251
325,103
Total adjustments
(1,126,546)
(975,307)
Equity as previously reported
3,999,211
4,960,805
Equity as adjusted
2,872,665
3,985,498
Analysis of the effect upon equity
Profit and loss reserves
(1,126,546)
(975,307)
Reconciliation of changes in profit for the previous financial period
2021
£
Adjustments to prior year
Change in development cost accounting policy
90,387
Deferred tax associated with change in accounting policy
60,852
Total adjustments
151,239
Profit as previously reported
961,594
Profit as adjusted
1,112,833
Notes to reconciliation
During the year the Company changed its accounting policy for development expenditure. Development costs are no longer capitalised in the Balance Sheet as intangible fixed assets but instead expensed to Profit & Loss as incurred.
This change has been made retrospectively.
There is no corporation tax effect of this prior year adjustment, however, this change in policy impacts deferred tax, and therefore the Company accounts have also been restated for this impact.
As this is the first year the Company has prepared consolidated accounts there is no restatement to the Group Balance Sheet.
2022-12-312022-01-01falsefalseCCH SoftwareCCH Accounts Production 2024.310Mr A PapasMr B SylvesterFirst Inital D GrundyFirst Inital R A HarrisonFirst Inital J P IrvineFirst Inital J E CokerFirst Inital M FarmerFirst Inital D Hydefalse05323637bus:Consolidated2022-01-012022-12-31053236372022-01-012022-12-3105323637bus:Director12022-01-012022-12-3105323637bus:Director22022-01-012022-12-3105323637bus:Director32022-01-012022-12-3105323637bus:Director42022-01-012022-12-3105323637bus:Director52022-01-012022-12-3105323637bus:Director62022-01-012022-12-3105323637bus:Director72022-01-012022-12-3105323637bus:Director82022-01-012022-12-3105323637bus:RegisteredOffice2022-01-012022-12-3105323637bus:Consolidated2022-12-31053236372022-12-3105323637bus:Consolidated2021-01-012021-12-3105323637bus:Consolidated12022-01-012022-12-31053236372021-01-012021-12-3105323637core:RetainedEarningsAccumulatedLossesbus:Consolidated2022-01-012022-12-3105323637core:RetainedEarningsAccumulatedLossesbus:Consolidated2021-01-012021-12-3105323637core:RetainedEarningsAccumulatedLosses2022-01-012022-12-3105323637core:RetainedEarningsAccumulatedLosses2021-01-012021-12-3105323637core:Goodwillbus:Consolidated2022-12-3105323637core:Goodwillbus:Consolidated2021-12-3105323637core:ComputerSoftwarebus:Consolidated2022-12-3105323637core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwillbus:Consolidated2022-12-3105323637core:Non-standardIntangibleAssetClass2ComponentIntangibleAssetsOtherThanGoodwillbus:Consolidated2022-12-3105323637core:ComputerSoftwarebus:Consolidated2021-12-3105323637core:PatentsTrademarksLicencesConcessionsSimilarbus:Consolidated2021-12-3105323637core:NegativeGoodwill2022-12-3105323637core:Non-standardIntangibleAssetClass2ComponentIntangibleAssetsOtherThanGoodwill2022-12-3105323637core:Non-standardIntangibleAssetClass2ComponentIntangibleAssetsOtherThanGoodwill2021-12-31053236372021-12-3105323637bus:Consolidated2021-12-3105323637core:LeaseholdImprovementsbus:Consolidated2022-12-3105323637core:PlantMachinerybus:Consolidated2022-12-3105323637core:FurnitureFittingsbus:Consolidated2022-12-3105323637core:ComputerEquipmentbus:Consolidated2022-12-3105323637core:LeaseholdImprovementsbus:Consolidated2021-12-3105323637core:PlantMachinerybus:Consolidated2021-12-3105323637core:FurnitureFittingsbus:Consolidated2021-12-3105323637core:ComputerEquipmentbus:Consolidated2021-12-3105323637core:PlantMachinery2022-12-3105323637core:PlantMachinery2021-12-3105323637core:ShareCapitalbus:Consolidated2022-12-3105323637core:ShareCapitalbus:Consolidated2021-12-3105323637core:SharePremiumbus:Consolidated2022-12-3105323637core:SharePremiumbus:Consolidated2021-12-3105323637core:OtherMiscellaneousReservebus:Consolidated2022-12-3105323637core:OtherMiscellaneousReservebus:Consolidated2021-12-3105323637core:ShareCapital2022-12-3105323637core:ShareCapital2021-12-3105323637core:SharePremium2022-12-3105323637core:SharePremium2021-12-3105323637core:RetainedEarningsAccumulatedLosses2022-12-3105323637core:ShareCapitalbus:Consolidated2020-12-3105323637core:SharePremiumbus:Consolidated2020-12-3105323637core:RetainedEarningsAccumulatedLossesbus:Consolidated2020-12-3105323637core:RetainedEarningsAccumulatedLossesbus:Consolidated2021-12-3105323637core:RetainedEarningsAccumulatedLossesbus:Consolidated2022-12-3105323637core:ShareCapital2020-12-3105323637core:SharePremium2020-12-3105323637core:RetainedEarningsAccumulatedLosses2020-12-3105323637core:RetainedEarningsAccumulatedLosses2021-12-3105323637core:SharePremiumbus:Consolidated2021-12-3105323637core:SharePremium2021-12-3105323637core:ShareCapitalbus:Consolidated2022-01-012022-12-3105323637core:SharePremiumbus:Consolidated2022-01-012022-12-3105323637core:ShareCapital2022-01-012022-12-3105323637core:SharePremium2022-01-012022-12-3105323637core:Goodwill2022-01-012022-12-3105323637core:IntangibleAssetsOtherThanGoodwill2022-01-012022-12-3105323637core:DevelopmentCostsCapitalisedDevelopmentExpenditure2022-01-012022-12-3105323637core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwill2022-01-012022-12-3105323637core:Non-standardIntangibleAssetClass2ComponentIntangibleAssetsOtherThanGoodwill2022-01-012022-12-3105323637core:Non-standardIntangibleAssetClass3ComponentIntangibleAssetsOtherThanGoodwill2022-01-012022-12-3105323637core:LeaseholdImprovements2022-01-012022-12-3105323637core:PlantMachinery2022-01-012022-12-3105323637core:FurnitureFittings2022-01-012022-12-3105323637core:ComputerEquipment2022-01-012022-12-3105323637core:UKTaxbus:Consolidated2022-01-012022-12-3105323637core:UKTaxbus:Consolidated2021-01-012021-12-3105323637core:ForeignTaxbus:Consolidated2022-01-012022-12-3105323637core:ForeignTaxbus:Consolidated2021-01-012021-12-3105323637bus:Consolidated12021-01-012021-12-3105323637bus:Consolidated22022-01-012022-12-3105323637bus:Consolidated22021-01-012021-12-3105323637bus:Consolidated32022-01-012022-12-3105323637bus:Consolidated32021-01-012021-12-3105323637core:Goodwillbus:Consolidated2021-12-3105323637core:PatentsTrademarksLicencesConcessionsSimilarbus:Consolidated2021-12-3105323637core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwillbus:Consolidated2021-12-3105323637core:Non-standardIntangibleAssetClass2ComponentIntangibleAssetsOtherThanGoodwill2021-12-31053236372021-12-3105323637core:Goodwillbus:Consolidated2022-01-012022-12-3105323637core:ComputerSoftwarebus:Consolidated2022-01-012022-12-3105323637core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwillbus:Consolidated2022-01-012022-12-3105323637core:Non-standardIntangibleAssetClass2ComponentIntangibleAssetsOtherThanGoodwillbus:Consolidated2022-01-012022-12-3105323637core:PatentsTrademarksLicencesConcessionsSimilarbus:Consolidated2022-01-012022-12-3105323637core:LeaseholdImprovementsbus:Consolidated2021-12-3105323637core:PlantMachinerybus:Consolidated2021-12-3105323637core:FurnitureFittingsbus:Consolidated2021-12-3105323637core:ComputerEquipmentbus:Consolidated2021-12-3105323637bus:Consolidated2021-12-3105323637core:PlantMachinery2021-12-3105323637core:LeaseholdImprovementsbus:Consolidated2022-01-012022-12-3105323637core:PlantMachinerybus:Consolidated2022-01-012022-12-3105323637core:FurnitureFittingsbus:Consolidated2022-01-012022-12-3105323637core:ComputerEquipmentbus:Consolidated2022-01-012022-12-3105323637core:CurrentFinancialInstrumentsbus:Consolidated2022-12-3105323637core:CurrentFinancialInstrumentsbus:Consolidated2021-12-3105323637core:CurrentFinancialInstruments2022-12-3105323637core:CurrentFinancialInstruments2021-12-3105323637core:Non-currentFinancialInstrumentsbus:Consolidated2022-12-3105323637core:Non-currentFinancialInstrumentsbus:Consolidated2021-12-3105323637core:Non-currentFinancialInstruments2022-12-3105323637core:Non-currentFinancialInstruments2021-12-3105323637core:WithinOneYearbus:Consolidated2022-12-3105323637core:WithinOneYearbus:Consolidated2021-12-3105323637core:CurrentFinancialInstrumentscore:WithinOneYear2022-12-3105323637core:CurrentFinancialInstrumentscore:WithinOneYear2021-12-3105323637core:CurrentFinancialInstrumentscore:WithinOneYearbus:Consolidated2022-12-3105323637core:CurrentFinancialInstrumentscore:WithinOneYearbus:Consolidated2021-12-3105323637core:Non-currentFinancialInstrumentscore:AfterOneYearbus:Consolidated2022-12-3105323637core:Non-currentFinancialInstrumentscore:AfterOneYearbus:Consolidated2021-12-3105323637core:Non-currentFinancialInstrumentscore:AfterOneYear2022-12-3105323637core:Non-currentFinancialInstrumentscore:AfterOneYear2021-12-3105323637bus:PrivateLimitedCompanyLtd2022-01-012022-12-3105323637bus:FRS1022022-01-012022-12-3105323637bus:Audited2022-01-012022-12-3105323637bus:ConsolidatedGroupCompanyAccounts2022-01-012022-12-3105323637bus:FullAccounts2022-01-012022-12-31xbrli:purexbrli:sharesiso4217:GBP