Registered number: 05512285
TRUSTWAVE HOLDINGS LIMITED
ANNUAL REPORT AND
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
|
TRUSTWAVE HOLDINGS LIMITED
COMPANY INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C/O Corporation Service Company (Uk) Limited 5 Churchill Place
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Zedra Corporate Reporting Services (UK) Limited
|
|
|
|
|
|
TRUSTWAVE HOLDINGS LIMITED
CONTENTS
|
|
|
|
|
|
Independent Auditors' Report
|
|
Consolidated Statement of Profit or Loss and Other Comprehensive Income
|
|
Consolidated Statement of Financial Position
|
|
Company Statement of Financial Position
|
|
Consolidated Statement of Changes in Equity
|
|
Company Statement of Changes in Equity
|
|
Consolidated Statement of Cash Flows
|
|
Company Statement of Cash Flows
|
|
Notes to the Consolidated Financial Statements
|
|
|
TRUSTWAVE HOLDINGS LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
The directors present their Strategic Report for the year ended 31 March 2024 for Trustwave Holdings Limited ("the Company") and its subsidiaries, collectively ("the Group").
Details of the results for the year are set out in the Profit and Loss Account on page 9.
For the year ended 31 March 2024, the Group reported turnover of £17,605,232 (2023: £15,442,911), a 12% increase year over year. The Group reported an operating profit of £145,744 (2023: £843,471).
The Company reports a profit before tax of £147,700 (2023 - £9,563,063). The primary reason for the significant decrease in profit when compared to the prior year, is due to the £9,139,041 net gain realised upon the liquidation of M86 Security International Limited in 2023. Further details are provided in note 10 of these financial statements.
The Company has reported net assets of £22,652,803 as at 31 March 2024 (2023 - £22,672,624). This movement is a result of the loss reported for the year. Net current assets have increased by £769,094 when compared to the prior year’s balance sheet, primarily driven by an increase in net amounts receivable from wider group undertakings.
Financial key performance indicators
|
As described above, turnover increased from £15,442,911 in the year ended 31 March 2023 to £17,605,232 in the year ended 31 March 2024, this was partially due to obtaining a large multi-year customer contract during the year. Moderate revenue growth was achieved elsewhere and the directors are satisfied with the performance.
The directors are satisfied with the performance of the business in the year ended 31 March 2023 compared to the year ended 31 March 2024.
The Company does not have any non-financial key performance indicators, although it monitors staff retention and customer renewals as part of its risk assessment process.
|
TRUSTWAVE HOLDINGS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
Principal risks and uncertainties
|
The principal risks and uncertainties faced by the Group include the development of automated compliance solutions that obviate the need for consulting services. The directors feel that this risk is mitigated by the relationship with the intermediate parent, Trustwave Holdings, Inc., which is engaged in a programme of development and purchase of such automated compliance solutions, some of which have already been made available to the Group, thus reducing its reliance on consulting services as a revenue generator. It is expected that this trend will continue.
The Group also faces a risk that it will be unable to recruit or retain sufficient staff to perform the work which it has contracted to do. To mitigate this risk, management has set up procedures to ensure that the Group's recruitment and compensation policies meet or exceed industry standards.
There is a risk that the Group will be unable to win new business so as to meet growth targets. This risk is mitigated to some extent by its practice of entering into multi-year service contracts with clients, and is further mitigated by its policy of recruiting high-achieving sales executives and incentivising them to increase sales, and by its strategy to enter into partnership agreements with large payment service providers to provide compliance services to their customers.
Financial risk
The Group's financial risk management objective is to ensure that financial risks are controlled and have minimal impact on the Company's operations, and its policies are designed to achieve that objective. These policies do not include hedging, and hedge accounting is not used for any transaction. The Group's principal price risk is currency risk. Although no currency hedging is used, Trustwave minimises currency risk by maintaining its cash in the currencies in which most of its obligations are incurred. These currencies are Sterling, Euro and Polish Zloty.
The Group is exposed to the same trade credit risk as any other company operating within its market. Risk control policies include requiring upfront payment from smaller and less creditworthy customers, entering into multi-year contracts where periodic payments are collected before substantial work is completed, and a proactive
collections policy. The Group's loans have all been made to fellow group companies, and the directors are confident that there is minimal credit risk attached to these loans, as they are implicitly backed by the ultimate
parent, which has been confirmed in writing to the directors by the parent company. Liquidity risk is actively minimised by the Group's policy of keeping its financial assets in cash, which is denominated in the currencies in which most of its trade is settled (Sterling, Euro, and Polish Zloty). These currencies are all heavily traded and there is little risk of being unable to sell currency due to a lack of counterparty.
Cash flow risk is minimised by a proactive debtor collection stance coupled with cash flow forecasting. In the event of a projected shortfall the Group is able to call upon the resources of the wider group to maintain cash flow.
This report was approved by the board and signed on its behalf.
|
TRUSTWAVE HOLDINGS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
The directors present their report and the financial statements for the year ended 31 March 2024. In accordance with s414c (11) of the Companies Act 2006, certain information required to be presented in the Directors' Report has been provided in the Strategic Report.
The principal activity of the Group in the year under review continued to be that of providing compliance, web application, network and data security solutions delivered through the cloud, managed security services, software and appliances.
The parent company's activity is that of a holding company for its subsidiaries.
The directors who served during the year were:
The loss for the year, after taxation, amounted to £124,614 (2023 - profit £9,305,939).
The directors do not recommend payment of a dividend (2023 - £Nil).
Management intend to continue broadening the Group's offering both in terms of products and services and also geographically. The Group will continue to benefit from the Trustwave brand and the technical expertise and financial strength afforded to it by the wider Trustwave group.
Directors' responsibilities statement
|
The directors are responsible for preparing the Group Strategic Report, Directors' Report and the consolidated financial statements, in accordance with applicable law.
Company law requires the directors to prepare consolidated financial statements for each financial year. Under that law they have elected to prepare the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK.
Under company law the directors must not approve the consolidated financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing the consolidated financial statements, the directors are required to:
∙select suitable accounting policies and then apply them consistently;
∙make judgements and estimates that are reasonable and prudent;
∙state whether they have been prepared in accordance with IFRS as adopted by the UK, subject to any material departures disclosed and explained in the financial statements;
∙assess the Group and Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
∙use the going concern basis of accounting unless they either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.
|
TRUSTWAVE HOLDINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the Parent Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.
Disclosure of information to auditors
|
Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.
Trustwave Holdings, Inc. (“TWHI”) was acquired by MC2 Titanium LLC (“MC2”), an acquisition vehicle of the Chertoff Group LLC, on 04 January 2024 and subsequently, on 21 October 2024, MC2 and TWHI signed a share purchase agreement with Cybereason Inc. (“Cybereason”), selling all of MC2’s shares in TWHI to Cybereason.
This deal was terminated in February 2025, which left MC2 as the continuing owner of TWHI. As described in note 4.2 management are actively seeking new ownership and investment following the termination of the Cybereason deal.
There have been no other adjusting or other non-adjusting events affecting the Group since the year end.
This report was approved by the board and signed on its behalf.
|
TRUSTWAVE HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TRUSTWAVE HOLDINGS LIMITED
We have audited the financial statements of Trustwave Holdings Limited (the 'Parent Company') and its subsidiaries (the 'Group') for the year ended 31 March 2024 which comprise the Consolidated Statement of Profit or Loss and Other Comprehensive Income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Cash Flows, the Company Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies set out on pages 20 - 31. The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom.
In our opinion:
∙the financial statements give a true and fair view of the state of the Group's and the Parent Company's affairs as at 31 March 2024 and of the Group's loss for the year then ended;
∙the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the United Kingdom; and
∙the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
|
We draw attention to note 4.2 in the financial statements, which indicates that as a result of the merger agreement with Cyberreason, Inc, being cancelled, the group headed by Trustwave Holdings, Inc. needs to obtain an alternative investment in order to stabilise their cash position and continue to meet their obligations and delivering services to customers. As stated in note 4.2, these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the Group's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors' assessment of the Group's ability to continue to adopt the going concern basis of accounting included a review of cash flow and financial forecasts to 2027.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
|
TRUSTWAVE HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TRUSTWAVE HOLDINGS LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report, other than the financial statements and our auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinion on other matters prescribed by the Companies Act 2006
|
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
∙adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
∙the Parent Company financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of directors' remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement on page 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group's and the Parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.
|
TRUSTWAVE HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TRUSTWAVE HOLDINGS LIMITED (CONTINUED)
Auditors' responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
∙the responsible individual ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
∙we identified the laws and regulations applicable to the Company through discussions with directors and other management, and from our commercial knowledge and experience of the specific sector;
∙we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Company, including the Companies Act 2006 and taxation legislation;
∙we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
∙identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the Company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
∙making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
∙considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
∙performed analytical procedures to identify any unusual or unexpected relationships;
∙tested journal entries to identify unusual transactions;
∙assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
∙investigated the rationale behind significant or unusual transactions.
We identified that fraud risk in relation to revenue recognition is a significant risk in line with ISA 240 and designed and implemented appropriate audit procedures in this area. Audit procedures included but were not limited to:
∙testing the control environment relating to the approval of customer contracts, invoicing and revenue recognition;
|
TRUSTWAVE HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TRUSTWAVE HOLDINGS LIMITED (CONTINUED)
∙substantively testing a sample of customer contracts through to performance obligations and subsequent revenue recognition; and
∙confirming the appropriateness of Standalone Selling Price (SSP) allocations for each component of revenue.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
∙agreeing financial statement disclosures to underlying supporting documentation;
∙enquiring of management as to actual and potential litigation and claims; and
∙reviewing correspondence with HMRC.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors' report.
The parent company's financial statements were audited by another auditor in the prior period who expressed an unqualified opinion. This did not relate to the Group as the parent company took exemption under Section 401 of the Companies Act in the prior year.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Edward Wallis ACA (Senior Statutory Auditor)
for and on behalf of
ZEDRA Corporate Reporting Services (UK) Limited
Chartered Accountants and Statutory Auditors
5th Floor
19-25 Birchin Lane
London
United Kingdom
EC3V 9DU
28 March 2025
|
TRUSTWAVE HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
(Loss)/profit for the year
|
|
|
|
Other comprehensive income:
|
|
|
Exchange gains arising on translation on foreign operations
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income for the year, net of tax
|
|
|
|
|
|
|
|
Total comprehensive income
|
|
|
|
The notes on pages 20 to 46 form part of these financial statements.
All results were derived from continuing operations.
In 2023, the Group experienced a gain on the acquisition of its subsidiary M86 Security International Ltd wich was non-recurring income of £8,659,067, included in other income.
|
|
TRUSTWAVE HOLDINGS LIMITED
REGISTERED NUMBER: 05512285
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2024
|
|
|
|
|
|
|
Property, plant and equipment
|
|
|
|
Trade and other receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other receivables
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TRUSTWAVE HOLDINGS LIMITED
REGISTERED NUMBER: 05512285
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 MARCH 2024
Issued capital and reserves attributable to owners of the parent
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The financial statements on pages 9 to 46 were approved and authorised for issue by the board of directors and were signed on its behalf by:
The notes on pages 20 to 46 form part of these financial statements.
|
TRUSTWAVE HOLDINGS LIMITED
REGISTERED NUMBER: 05512285
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other receivables
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TRUSTWAVE HOLDINGS LIMITED
REGISTERED NUMBER: 05512285
COMPANY STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 MARCH 2024
Issued capital and reserves attributable to owners of the parent
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company's loss for the year was £20,000 (2023 - £20,000).
The financial statements on pages 9 to 46 were approved and authorised for issue by the board of directors and were signed on its behalf by:
The notes on pages 20 to 46 form part of these financial statements.
|
TRUSTWAVE HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
|
Share capital & share premium
|
|
Share based payment reserve
|
|
Total attributable to equity holders of parent
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income for the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income
|
|
|
|
|
|
|
Total comprehensive income for the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share based payment expense
|
|
|
|
|
|
|
Total contributions by and distributions to owners
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income for the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income
|
|
|
|
|
|
|
Total comprehensive income for the year
|
|
|
|
|
|
|
Share based payment expense
|
|
|
|
|
|
|
Total contributions by and distributions to owners
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TRUSTWAVE HOLDINGS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
|
Share capital & share premium
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income for the year
|
|
|
|
|
|
|
|
Total comprehensive income for the year
|
|
|
|
|
|
|
|
Total contributions by and distributions to owners
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income for the year
|
|
|
|
|
|
|
|
Total comprehensive income for the year
|
|
|
|
|
|
|
|
|
TRUSTWAVE HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
Cash flows from operating activities
|
|
|
|
(Loss)/profit for the year
|
|
|
|
|
|
|
|
Depreciation of property, plant and equipment
|
|
|
|
Loss on disposal of property, plant and equipment
|
|
|
|
Non-cash gain on acquisition of subsidiary
|
|
|
|
Share-based payment expense
|
|
|
|
Net foreign exchange loss
|
|
|
|
|
|
|
|
|
|
|
|
Movements in working capital:
|
|
|
|
Increase in trade and other receivables
|
|
|
|
Increase in trade and other payables
|
|
|
|
Cash generated from operations
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
|
|
Cash flows from investing activities
|
|
|
|
Acquisition of subsidiary, net of cash acquired
|
|
|
|
Purchases of property, plant and equipment
|
|
|
|
Net cash (used in)/from investing activities
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
Net cash from financing activities
|
|
|
|
Net decrease in cash and cash equivalents
|
|
|
|
|
|
|
|
Cash and cash equivalents at the beginning of year
|
|
|
|
Cash and cash equivalents at the end of the year
|
|
|
|
|
TRUSTWAVE HOLDINGS LIMITED
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
Movements in working capital:
|
|
|
Increase in trade and other receivables
|
|
|
Increase/(decrease) in trade and other payables
|
|
|
Cash generated from operations
|
|
|
|
|
|
Net cash used in operating activities
|
|
|
Acquisition of subsidiary, net of cash acquired
|
|
|
Net cash from/(used in) investing activities
|
|
|
|
|
|
Net cash from financing activities
|
|
|
Net decrease in cash and cash equivalents
|
|
|
|
|
|
Cash and cash equivalents at the beginning of year
|
|
|
Cash and cash equivalents at the end of the year
|
|
|
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Trustwave Holdings Limited (the 'Company') is a limited company incorporated in the United Kingdom and registered in England and Wales. The Company's registered office is given on the Company Information page. These consolidated financial statements comprise the Company and its subsidiaries (collectively the 'Group' and individually 'Group companies'). The Group is primarily involved in providing compliance, web application, network and data security solutions delivered through the cloud, managed security services, software and appliances..
The Group's consolidated and the Company's individual financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations as adopted by the UK (collectively IFRSs). They were authorised for issue by the Company's board of directors on 28 March 202528 March 2025.
Details of the Group's accounting policies, including changes during the year, are included in note 4.
The Company has taken advantage of the exemption available under section 408 of the Companies Act 2006 and elected not to present its own Statement of Comprehensive Income in these financial statements.
In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the Group accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.
The areas where judgements and estimates have been made in preparing the consolidated financial statements and their effects are disclosed in note 5.
The financial statements have been prepared on the historical cost basis except for the following items, which are measured on an alternative basis on each reporting date.
|
|
|
There were no items measured on an alternative basis at each reporting date.
|
|
2.2 Changes in accounting policies
i) New standards, interpretations and amendments effective from 1 April 2023
|
Classification of Liabilities as Current or Non-current (Amendments to IAS 1)
The Group has adopted the amendments to IAS 1 for the first time in the current year. The amendments clarify that the classification of liabilities as current or non-current should be based on rights that exist at the end of the reporting period. Expectations about whether an entity will exercise a right to defer settlement of liability do not affect its classification. In addition, a liability is classified as non-current where the right to defer settlement of a liability for at least 12 months after the reporting date exists as at the end of the reporting period.
The amendments also clarify that (for the purposes of classification as current or non-current), settlement
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2.Basis of preparation (continued)
|
2.2 Changes in accounting policies (continued)
|
|
i) New standards, interpretations and amendments effective from 1 April 2023 (continued)
|
is the transfer of cash, the entity’s own equity instruments (except for certain options as described below), and other assets or services.
An option granted to a lender to convert a liability into equity shares will not affect the classification of the liability as current or non-current if the option is recognized as an equity instrument separate from the liability in accordance with IAS 32 Financial Instruments: Presentation.
These amendments had no impact on the classification of current and non-current liabilities.These amendments had no impact on the classification of current and non-current liabilities.
Non-current liabilities with Covenants (Amendments to IAS 1)
The amendments to IAS 1 Non-current Liabilities with Covenants specify that only those covenants with which an entity must comply on or before the end of the reporting period affect the classification of a liability as current or non-current. Such covenants affect this classification even if the assessment of compliance with the covenant as at the end of the reporting period is only performed after the reporting period.
These amendments had no impact on the classification of liabilities on the Group’s reporting.
Lease liability in a Sale and Leaseback (Amendments to IFRS 16)
Lease liability in a Sale and Leaseback (Amendments to IFRS 16)
The amendments address the accounting that should be applied by a seller-lessee in a sale and leaseback transaction when the leaseback contains variable lease payments, such as turnover rentals, which do not depend on an index or rate.
When the transfer of an asset by a seller-lessee meets IFRS 15 Revenue from Contracts with Customers requirements to be accounted for as a sale, IFRS 16 Leases requires the seller-lessee to recognise only the amount of any gain or loss that relates to the rights transferred to the buyer-lessor. Therefore, no gain or loss is recognised on the right of use retained by the seller-lessee.
There is no impact of these amendments as the Group does not have any sale and lease-back arrangements.
Supplier Finance Arrangements (Amendments IAS 7 and IFRS 7 )
IAS 7 and IFRS 7 were amended to meet investors’ demands for more detailed information about supplier finance arrangements (which are sometimes referred to as supply chain finance, payables finance, or reverse factoring arrangements). These amendments require an entity to disclose information about its supplier finance arrangements to enable users of financial statements to assess the effects of those arrangements on the entity’s liabilities and cash flows and on the entity’s exposure to liquidity risk.
There is no impact of these amendments as the Group does not have any finance arrangement that meets the definition of a supplier finance arrangement under IAS 7.
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
2.Basis of preparation (continued)
|
|
New standards, interpretations and amendments not yet effective
|
The following standards and interpretations to published standards are not yet effective:
|
New standard or interpretation
|
|
Mandatory effective date (period beginning)
|
|
Lack of Exchangeability (Amendments to IAS 21)
|
|
|
|
Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7)
|
|
|
|
Annual improvements to IFRS Accounting Standards — Volume 11
|
|
|
|
IFRS 18 Presentation and Disclosure in Financial Statements
|
|
|
|
|
|
|
The directors do not expect any material impact as a result of adopting the standards and amendments listed above in the financial year they become effective.
|
Functional and presentation currency
|
These consolidated financial statements are presented in Pound Sterling, which is the Company's functional currency. All amounts have been rounded to the nearest Pound, unless otherwise indicated. The Group includes a subsidiary company who's functional and presentational currency is South African Rand, for the purposes of consolidation the results are translated into pound sterling with exchange differences being recorded in the foreign exchange reserve.
4.Accounting policies
The consolidated financial statements incorporate the financial statements of the Company and entities (including structured entities) controlled by the Company and its subsidiaries. Control is achieved when the Company:
∙has power over the investee;
∙is exposed, or has rights, to variable returns from its involvement with the investee; and
∙has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.
When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company's voting rights in an investee are sufficient to give it power, including:
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
4.Accounting policies (continued)
|
|
Basis of consolidation (continued)
|
∙the size of the Company's holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
∙potential voting rights held by the Company, other vote holders or other parties;
∙rights arising from other contractual arrangements; and
∙any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at this time that decisions need to be made, including voting patterns at previous shareholders' meetings.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group's accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.
For the year ended 31 March 2024, the Group reported a loss after tax of £287,072 (2023 restated profit after tax: £9,305,939). The Group was in an overall net asset position, primarily supported by receivables from related parties. The Group’s position is reliant on the ongoing support of its parent company, Trustwave Holdings, Inc. for the ongoing provision of support services in delivering services to customers together with cash flow management.
In October 2024, Trustwave Holdings, Inc. announced a merger agreement with Cyberreason Inc. Subsequent to the year end in February 2025, the deal was cancelled. As a result of this, Trustwave Holdings, Inc. intends to secure an alternative deal in order to provide the required financial support to the Group. The group headed by Trustwave Holdings, Inc. needs to obtain investment in order to stabilise their cash position and continue to meet their obligations and delivering services to customers.
Management have considered a period of at least 12 months from the date of the approval of these financial statements, during this time they expect to continue to grow the Group’s revenue base and move towards a breakeven position in FY27. These expectations are reliant on the continued support of prospective investors.
At the time of approval of the financial statements, despite there being material uncertainty about the Group’s position, the Directors have a reasonable expectation of securing sufficient alternative funding, and thus have prepared these financial statements on a going concern basis. No further agreements have been entered into as at the date of approval of the financial statements.
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
4.Accounting policies (continued)
The Group generates turnover by providing managed security and consulting services and the resale of products. Turnover comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Group's activities. Turnover is shown net of value added tax and after deducting trade discounts.
Performance obligations and timing of revenue recognition
The majority of the Group's revenue is derived from services to customers with revenue recognised over time as this pattern of recognition best represents the transfer of serivces to customers. The Group identified the performance obligation on all contracts with reference to the service provided.
Each of the Group's revenue streams are detailed below:
∙Managed security testing revenue recognition is based on the principle established by the Group that the performance obligation is the delivery of each test. Revenue is recognised at the point at which the test is delivered to the customer. Where the customer has purchased several tests under one contract, the transaction price is allocated to each test based on management's best estimate of the costs required to complete each test.
∙Product sales revenue is recognised once goods have been dispatched to, and accepted by, the customer. Advance payments or deposits received from customers for future product shipment are deferred until products have been shipped. In some instances, contract terms have resulted in turnover not being recognised on shipment, but on the satisfactory installation and activation of the hardware and software, as dictated by the terms of the contract. In some cases management is required to make a judgement about whether the Group is acting as a principal or an agent in a transcation, these judgements are based on whether the control of the specified goods are retained by the Group in the transaction as part of an ongoing service obligation.
∙Professional services revenue is generated primarily through the testing and consulting services which are billed either on a time basis or a fixed price set out in a contract. Revenue related to time contracts is recognised as the service is performed, based on labour hours provided at contractual labour rates and as material costs are incurred. Revenue on fixed price contracts is recognised as labour hours are incurred on the contracts with any remaining hours not incurred being recognised at the end of the contract. In some instances, revenue is accrued for the service provided to within a given period but not invoiced to the customer, as it has been agreed to invoice the customer on completion or at certain key stages of the contract based on pre-agreed contract terms. On partially complete contracts, the Group recognised revenue based on stage of completion of the project which is estimated by comparing the number of hours actually spent on the project with the total number of hours expected to complete the project. This is considered a faithful depiction of the transfer of services as the contracts are initially priced on the basis of the anticipated hours to complete the projects and therefore also represents the amount to which the Group would be entitled based on its performance to date.
∙Subscription revenue is recognised equally over the term of the contract as the Group provides these services to the customer and the customer is free to consume these services on a constant basis over the course of the contract.
Most of the Group's revenue is derived from fixed price contracts and therefore the amount of revenue to
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
4.Accounting policies (continued)
be earned from each contract is determined by reference to those fixed prices. Where a customer orders more than one product line, the Group is able to determine the split of the total contract price between each product line by reference to each products standalone selling prices.
Incremental commissions paid to sales staff for obtaining contracts are recorded in prepayments as costs to obtain the contracts and amortised over a standard period of 15 months, which is deemed to be management's best estimate of the average contract length. The contract assets represented are included as components of prepayments and accrued income in the financial statements.
Except in exceptional circumstances, which are separated based on management's judgement, the cost of fulfilling contracts do not result in the recognition of separate assets because the Group does not expect to incur costs on a contract by contract basis, as such the Group cannot specifically identify costs as being relevant to a contract. The Group recognises a contract liability where billing is completed prior to revenue being recorded.
In preparing the financial statements of each individual group entity, transactions in currencies other than the entity's functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
For the purposes of presenting these consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated into pounds using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity (and attributed to non-controlling interests as appropriate).
On the disposal of a foreign operation (i.e. a disposal of the Group's entire interest in a foreign operation, a disposal involving loss of control over a subsidiary that includes a foreign operation, or a partial disposal of an interest in a joint arrangement or an associate that includes a foreign operation of which the retained interest becomes a financial asset), all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Company are reclassified to profit or loss.
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
4.Accounting policies (continued)
|
Short-term and other long-term employee benefits
|
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.
Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.
Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Group in respect of services provided by employees up to the reporting date.
|
Share-based payment transactions of the Company
|
Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in note 18.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve.
Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service.
Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from ‘profit before tax’ as reported in the consolidated Consolidated Statement of Profit or Loss and Other Comprehensive Income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group's current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
4.Accounting policies (continued)
|
(ii) Deferred tax (continued)
|
Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period 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 liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
International tax reform - Pillar Two model rules
The Group has applied the mandatory exception to the recognition and disclosure of information about deferred tax assets and liabilities related to Pillar Two income taxes (i.e. income taxes arising from the jurisdictional implementation of OECD’s Pillar Two Model Rules).
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
4.Accounting policies (continued)
|
|
Property, plant and equipment
|
Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.
Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives. It is provided at the following range:
|
|
|
|
|
|
Customer premise equipment
|
|
|
|
Impairment of tangible assets
|
At the end of each reporting period, 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). When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs of disposal 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 (see note 4.8).
When an impairment loss subsequently reverses, the carrying amount of the asset (or a 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 (see note 4.8).
|
|
Cash and cash equivalents
|
Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments maturing within 90 days from the date of acquisition that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
4.Accounting policies (continued)
|
|
Financial instruments (continued)
|
Financial assets and financial liabilities are recognised when a Group entity becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
4.Accounting policies (continued)
|
|
Financial assets (continued)
|
|
(i) Amortised cost and effective interest method
|
The effective interest method is a method for calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period.
For financial instruments other than purchased or originated credit-impaired financial assets, the effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) excluding expected credit losses, through the expected life of the debt instrument, or, where appropriate, a shorter period, to the gross carrying amount of the debt instrument on initial recognition. For purchased and originated credit-impaired financial assets, a credit-adjusted effective interest rate is calculated by discounting the estimated future cash flows, including expected credit losses, to the amortised cost of the debt instrument on initial recognition.
The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. On the other hand, the gross carrying amount of a financial asset is the amortised costs of a financial asset before adjusting for any loss allowance.
Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost and at FVOCI. For financial instruments other than purchased or originated credit-impaired financial assets, interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for financial assets that have subsequently become credit-impaired (see (ii) Impairment of financial assets). For financial assets that have subsequently become credit-impaired, interest income is recognised by applying the effective interest rate to the amortised cost of the financial asset. If, in subsequent reporting periods, the credit risk on the credit-impaired financial instrument improves so that the financial asset is no longer credit-impaired, interest income is recognised by the applying the effective interest rate to the gross carrying amount of the financial asset.
Interest income is recognised in profit or loss and is included in the 'finance income' line item.
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
4.Accounting policies (continued)
|
|
Financial assets (continued)
|
|
(ii) Impairment of financial assets
|
The Group recognises a loss allowance for expected credit losses on investments in debt instruments that are measured at amortised costs and amounts due from customers under contracts. No impairment loss is recognised for investments in equity instruments. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument.
The Group always recognises lifetime ECL for trade receivables, amounts due from customers under contracts and lease receivables. The expected credit losses on these financial assets are estimated using a provision matrix based on the Group's historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate.
For all other financial instruments, the Group recognises lifetime ECL when there has been a significant increase in credit risk since initial recognition.
Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument.
|
(iii) Measurement and recognition of expected credit losses
|
The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the magnitude of the loss if there is a default) and the exposure at default. The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information as described above. As for the exposure at default, for financial assets, this is represented by the assets' gross carrying amount at the reporting date; for loan commitments and financial guarantee contracts, the exposure includes the amount drawn down as at the reporting date, together with any additional amounts expected to be drawn down in the future by default date determined based on historical trend, the Group's understanding of the specific future financing needs of the debtors, and other relevant forward-looking information.
For financial assets, the expected credit loss is estimated as the difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the Group expects to receive, discounted at the original effective interest rate.
Where lifetime ECL is measured on a collective basis to cater for cases where evidence of significant increases in credit risk at the individual instrument level may not yet be available, the financial instruments are grouped on the following basis:
∙Nature of financial instruments;
∙Past-due status;
∙Nature, size and industry of debtors;
∙Nature of collaterals for finance lease receivables; and
∙External credit ratings where available.
The grouping is regularly reviewed by management to ensure the constituents of each group continue to share similar credit risk characteristics.
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
4.Accounting policies (continued)
|
|
Financial assets (continued)
|
|
(iii) Measurement and recognition of expected credit losses (continued)
|
The Group recognises an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.
|
(iv) Derecognition of financial assets
|
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
On derecognition of a financial asset measured at amortised cost, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognised in profit or loss.
|
|
Financial liabilities and equity instruments
|
|
(i) Classification as debt or equity
|
Debt and equity instruments issued by a group entity are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by a group entity are recognised at the proceeds received, net of direct issue costs.
Repurchase of the Company's own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company's own equity instruments.
|
(iii) Financial liabilities
|
All financial liabilities are subsequently measured at amortised cost using the effective interest method or at FVTPL.
However, financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies, financial guarantee contracts issued by the Group, and commitments issued by the Group to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set out below.
Financial liabilities subsequently measured at amortised cost
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
4.Accounting policies (continued)
|
|
Financial liabilities and equity instruments (continued)
|
|
(iii) Financial liabilities (continued)
|
integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability.
Foreign exchange gains and losses
For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments. These foreign exchange gains and losses are recognised in the 'finance income' or 'finance expense' line item, for gains and losses respectively, in profit or loss for financial liabilities that are not part of a designated hedging relationship.
The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
|
Accounting estimates and judgements
|
5.1 Judgement
Standalone Selling Price
On certain contracts the Group provides difference goods and services representing more than one performance obligation. Management have judged that they are unable to establish standalone selling price (SSP) using direct observable standalone sales and therefore they have developed a methodology which takes account of historic sales prices. This judgement results in some estimation uncertainty which could have a material impact on the financial statements.
Principal versus agent
As described in the revenue accounting policy in some circumstances revenue on third party product sales may be recognised either gross or net depending on management's judgement of whether there is an ongoing service provision to customers and the ownership of the product has been transferred to a third party. This could result in significant differences in the value of revenue recognised in the financial statements.
Costs to fulfil a contract
In certain circumstances, where the Group is able to identify costs to fulfil a contract, these are capitalised and deferred over the life of the contract by management. This involves some judgement as to which costs can be separately identified and are deemed to be directly in relation to the specific contract. This is a significant judgement which is applied depending on the size and nature of the costs and may therefore
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
5.Accounting estimates and judgements (continued)
|
5.1 Judgement (continued)
|
have a material impact on these financial statements.
Carrying value of intercompany receivables
The Group has intercompany receivables due from other group companies as a result of a restructuring exercise of the M86 business. These intercompany receivables are material and management has determined that they should not be impaired. This judgement is based on management's expectations that intercompany balances can be rationalised across the wider group without any reduction to the carrying amounts.
|
5.2 Estimates and assumptions
|
Carrying value of investments in subsidiaries
The Company considers indicators of impairments annually. If indicators are present, Management makes an estimate of the recoverable value of investments in subsidiaries. When assessing impairment of investments in subsidiaries, Management considers factors including current market and industry conditions and historical experience.
Amortisation period for incremental contract costs
Management have reviewed the average contract length for customers and determined that this is 15 months, this is based on historic data available and is used as the amortisation period for deferred commissions capitalised as contract assets. This is an estimation and may have a material impact on the timing of cost recognition versus revenue in the financial statements.
Estimation of fair value of share options
For the Group share option plan management uses external valuation agencies to assist with calculating the fair value of share options. This involves estimation uncertainty when determining the fair market value of options using the Black Scholes model.
This included the use of a risk free rate of 3.98% which was based on US government bonds, a dividend yield of 0% as the Group is loss making so no dividends are reasonable and lastly a volatility rate of 47.88%. These estimations could have a material impact on the calculation of the share based payment reserve and the corresponding expense in the profit and loss account.
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
|
|
|
The following is an analysis of the Group's revenue for the year from continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Managed security testing revenue
|
|
|
|
|
|
|
|
Professional services revenue
|
|
|
|
|
|
|
|
|
|
|
|
Analysis of revenue by country of destination:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timing of revenue recognition:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goods and services transferred at a point in time
|
|
|
|
Goods and services transferred over time
|
|
|
|
|
|
|
|
Estimates and assumptions
|
On certain contracts management has determined that performance obligations cannot be adequately separated or distinguished from one another. As a result, they have determined that the best and most appropriate recognition is over time and revenue is recognised over the term of the contract.
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
|
|
|
During the year, the Group obtained the following services from the Company's auditors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
|
|
|
|
The fees for the prior period relate to only the audit of the parent company financial statements as the Group did not prepare consolidated financial statements in the year to 31 March 2023.
|
|
|
|
Employee benefit expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee benefit expenses (including directors) comprise:
|
|
|
|
|
|
|
|
|
|
|
|
Defined contribution pension cost
|
|
|
|
|
|
|
|
Key management personnel compensation
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, including the directors of the Company.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Defined contribution scheme costs
|
|
|
|
|
|
|
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
8.Employee benefit expenses (continued)
|
The monthly average number of persons, including the directors, employed by the Group during the year was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
|
|
|
9.1 Income tax recognised in profit or loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current tax on profits for the year
|
|
|
|
Adjustments in respect of prior years
|
|
|
|
|
|
|
|
|
|
|
|
Origination and reversal of timing differences
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to profits for the year are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/profit for the year
|
|
|
|
|
|
|
|
Profit before income taxes
|
|
|
|
|
|
|
|
Tax using the Company's domestic tax rate of 25% (2023:19%)
|
|
|
|
Expenses not deductible for tax purposes
|
|
|
|
|
|
|
|
Adjustments to tax charge in respect of prior periods
|
|
|
|
Movements in deferred tax
|
|
|
|
Other differences leading to an increase/(decrease) in the tax charge
|
|
|
|
|
|
|
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
9.Tax expense (continued)
|
|
9.2 Current tax assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporation tax repayable
|
|
|
|
|
9.3 Deferred tax balances
|
|
The following is the analysis of deferred tax assets/(liabilities) presented in the consolidated statement of financial position:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recognised in profit or loss
|
|
|
|
|
|
|
|
|
|
|
|
|
Short term timing differences
|
|
|
|
|
|
|
|
|
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
|
Property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
Customer premise equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer premise equipment
|
|
|
|
|
|
|
|
Accumulated depreciation and impairment
|
|
|
|
|
|
|
|
|
|
Charge owned for the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charge owned for the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
|
|
|
Details of the Group's material subsidiaries at the end of the reporting period are as follows:
|
|
|
|
|
Place of incorporation and operation
|
Proportion of ownership interest and voting power held by the Group (%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Providing compliance, webapplication, network and data security solutions delivered through the cloud, managed security services,software and appliances.
|
|
|
|
|
2) Trustwave Security Solutions Proprietary Limited
|
Providing compliance, webapplication, network and data security solutions delivered through the cloud, managed security services,software and appliances.
|
|
|
|
|
3) M86 Security International Ltd (Indirect)
|
|
|
|
|
|
Investments in subsidiary companies
|
|
|
|
|
|
|
|
Trustwave Holdings Limited guarantees in accordance with S479A of the Companies Act 2006, that Trustwave Limited (05107724) is entitled to exemption from an audit of its individual financial statements for the year ended 31 March 2024.
|
|
Trade and other receivables
|
|
|
|
|
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
|
|
|
|
|
|
|
|
|
Total non-current trade and other receivables
|
|
|
|
|
|
|
|
|
|
|
|
Less: provision for impairment of trade receivables
|
|
|
|
|
|
|
|
Receivables from related parties
|
|
|
|
Prepayments and accrued income
|
|
|
|
|
|
|
|
Total current trade and other receivables
|
|
|
|
The Group recognises expected credit losses on receivables as follows:
∙10% on 30 days past due;
∙20% on 60 days past due;
∙30% on 90 days past due;
∙40% on 120 days past due; and
∙100% over 150 days past due.
This is based on historic experience of credit losses and management believe it to be a best estimate of the likely returns expected on trade receivables.
|
|
|
|
|
|
Receivables from related parties
|
|
|
|
Total current trade and other receivables
|
|
|
|
Receivables from relates parties are unsecured, interest free and repayable on demand.
|
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
|
Contract assets are recognised as the incremental costs of obtaining a contract. These are amortised over a 15 month period which is the estimated average life of a revenue contract for the Group.
|
|
|
|
|
|
|
|
|
|
Total non-current trade and other payables
|
|
|
|
|
|
|
|
|
|
|
|
Payables to related parties
|
|
|
|
|
|
|
|
|
|
|
|
Other payables - tax and social security payments
|
|
|
|
|
|
|
|
Total current trade and other payables
|
|
|
|
Payables to related parties are unsecured, interest free and repayable on demand
|
|
|
|
|
|
Payables to related parties
|
|
|
|
|
|
|
|
Total current trade and other payables
|
|
|
|
Payables to related parties are unsecured, interest free and repayable on demand.
|
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
|
|
|
|
|
|
|
Ordinary shares of £1.00 each
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares of £1.00 each
|
|
|
|
|
|
|
|
|
|
|
Share premium
Share premium represents the excess paid for shares above their par value. On 12 November 2022, the Company issued one Ordinary share as consideration for the capital of a fellow group company M86 Security International Limited. The non-cash consideration for this share was £2,206,277.47, resulting in share premium as recorded in the balance sheet.
Foreign exchange reserve
The foreign exchange reserve represents differences arising on translation of the Group's foreign operations
Other reserves
Other reserves include historic share based payment transactions.
Retained earnings
Retained earnings represents accumulated profits and losses net of dividends.
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
|
Analysis of amounts recognised in other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
Exchange differences arising on translation of foreign operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences arising on translation of foreign operations
|
|
|
|
|
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
|
|
|
18.1. Employee share option plan of the Company
|
|
Details of the employee share option of the Company
|
The grant date fair value for all unit-based awards granted to employees was determined using an option-oricing model. Estimating grant date fair value requires assumptions to be made, including the value of equity, expected time to liquidity, and expected volatility.
Share based payments for granted units are recognised as an expense over the requisite service period, which is generally the vesting period for awards, on a straight line basis for awards with only a service condition. Forfeitures are accounted for as they occur.
Within 2024 the Company had two share based payment arrangements:
- The 2020 Long Term Incentive Plan, which granted stock options to certain employees
- The 2022 TWH Option Pool, which also granted stock options to certain employees
All stock options are deemed to vest over a period of 4 years and are restricted only based on time.
|
The following share-based payment arrangements were in existence during the current and prior years:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1) 2020 long-term incentive plan
|
|
|
|
|
|
2) 2022 share option plan
|
|
|
|
|
|
3) 2022 share option plan
|
|
|
|
|
|
4) 2022 share option plan
|
|
|
|
|
|
Fair value of share options granted in the year
|
|
The following share-based payment arrangements were in existence during the current and prior years:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1) 2020 long-term incentive plan
|
|
|
|
|
|
2) 2022 share option plan
|
|
|
|
|
|
3) 2022 share option plan
|
|
|
|
|
|
4) 2022 share option plan
|
|
|
|
|
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
|
|
Movements in share options during the year
|
|
The following reconciles the share options outstanding at the beginning and end of the year:
|
|
|
|
|
|
|
|
Weighted average exercise price
|
|
Weighted average exercise price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the beginning of the year
|
|
|
|
|
|
|
|
|
|
|
|
Forfeited during the year
|
|
|
|
|
|
Outstanding at the end of the year
|
|
|
|
|
|
Related party transactions
|
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note.
During the year, the Group, increased its receivables and payables with related parties. The Group also recharged transfer pricing costs of £1,893,039 (2023: £148,022) to the parent company, Trustwave Holdings Inc., in order to achieve an operating margin which is in line with the OECD transfer pricing guidelines. These transactions are deemed to be arms length transactions based on the services provided.
All other transactions are considered to have been conducted on an arms length basis with limited judgement and therefore have not been described in this note.
Trustwave Holdings Inc., a company incorporated in the United States of America is the parent company.
As at the year end date, Trustwave Holdings, Inc. ("Trustwave"), the immediate parent company of Trustwave Holdings Limited, was acquired by MC2 Titanium LLC ("MC2"), an acquisition vehicle of the Chertoff Group LLC, on 04 January 2024.
|
|
|
The Group is not subject to internally or externally imposed capital requirements. The Group’s objective when managing capital is to provide sufficient resources to allow the continued investment in new products that may be required in the rapidly changing market in which the Group operates and to safeguard the Group's ability to continue as a going concern, so that it can continue to provide returns for shareholders.
|
|
The Group's capital comprises share capital share premium, foreign exchange reserve and retained earnings, the value of this is set out in the Statement of Changes in Equity.
|
|
|
|
TRUSTWAVE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
|
Events after the reporting date
|
|
|
Trustwave Holdings, Inc. (“TWHI”) was acquired by MC2 Titanium LLC (“MC2”), an acquisition vehicle of the Chertoff Group LLC, on 04 January 2024 and subsequently, on 21 October 2024, MC2 and TWHI signed a share purchase agreement with Cybereason Inc. (“Cybereason”), selling all of MC2’s shares in TWHI to Cybereason.
This deal was terminated in February 2025, which left MC2 as the continuing owner of TWHI. As described in note 4.2 management are actively seeking new ownership and investment following the termination of the Cybereason deal.
There have been no adjusting or other non-adjusting events affecting the Group since the year end.
|