The directors present the strategic report for the year ended 31 December 2024.
Colvir Software Solution Ltd ("the company") together with its subsidiaries and associates ("Colvir" or "the group") is a computer software developer and technical support service provider. Colvir's core products comprise: Colvir Banking Systems (“CBS”), Colvir Postal Systems (“CPS”), Colvir Treasury Systems (“CTS”) and Colvir ERP solutions.
Results and performance
The results of the group for the year and its financial position are set out on pages 12 and 14, and show a profit before taxation of $25.2 million (2023: $15.8 million) and net assets of $117.1 million (2023: $93.6 million).
This was another successful year for Colvir during which the group secured its first pilot project for Colvir v.4 implementation with one of the biggest banks in Kazakhstan. The group has also released significant enhancements to its existing platform Colvir v.3Plus comprising new security modules, new reports services and various other applications. In 2024 the group recorded its highest annual revenue of $25.0 million (2023: $20.1 million) driven by the sale of newly released modules as well ongoing implementation of the SWIFT ISO 20022 transition projects.
During the year the group renewed its corporate development strategy and implemented new leadership programme which led to significant improvements in projects' efficiency, profitability, and cost recovery.
Colvir continues to maintain a strong market share amongst financial institutions in Kazakhstan, Turkmenistan, Uzbekistan and Kyrgyzstan. During the year, the group commenced Turkmenistan's Reboot project comprising extensive marketing activities aimed at further penetration of the Turkmenistan's banking sector. This proved to be a successful campaign generating new projects in Turkmenistan. Colvir is now working on similar campaigns in other revenue generating territories.
The process of risk acceptance and risk management is addressed through a framework of policies, procedures, internal controls, mitigating actions and development plans. All policies are subject to board approval and ongoing review by management. Compliance with regulations, legal and ethical standards is a high priority for the group, its management team and the finance department, all of which take on an important oversight role in this regard.
The principal risks for the CBS, ERP and CTS software solutions arise from the instability of the financial services market, regulatory pressure on the banking sector which is diverting the banks' attention and resources from core technological innovations, and political / economic instability in developing countries where the group’s clients operate.
The principal risks for the CPS software solutions business arise from a low level of profitability and in some cases underfinancing (low level of subsidies provided by governments) to postal offices in developing countries thus limiting resourcing for modernisation and innovation.
The board monitors the progress of the group by reference to the following KPIs:
Group's revenue increased by 23.9% to $25.0 million (2023: $20.1 million) due to increased sale of newly released modules as well ongoing implementation of the SWIFT ISO 20022 transition projects.
Group's gross profit increased by 41.8% to $13.9 million (2023: $9.8 million) due to improved internal efficiencies and cost recoveries.
Group's share of post-tax profits of equity accounted associates increased by 53.9% to $18.3 million (2023: $11.9 million) due to significant growth in profit share from Rysgal Bank.
The group’s financial position continues to strengthen with net assets position increasing by 25.1% to $117.1 million (2023: $93.6 million).
The group maintains a healthy short-term liquidity of 477.0% (2023: 245.5%).
Colvir continuously developing its new CBS software Colvir v.4 applying state-of-the-art technologies. Colvir v.4 is based on microservice architecture using Java Code and PostgreSQL database. It is a low code platform designed to significantly simplify and accelerate development of financial applications. It allows easy horizontal scaling, requires cheaper operating infrastructure, and is supported on both desktop with web interface and mobile devices.
The key advantage of the microservice architecture is the ability to offer Colvir v.4's components as standalone products that can be sold to new banks and integrated with third-party banking systems. This flexibility expands Colvir’s market reach and creates opportunities to serve institutions interested in modular solutions instead of large-scale platform replacements.
The new software-based products will be sold along Colvir’s current Oracle-Delphi platform as additional modules.
In 2024, Colvir launched its first pilot project for Colvir v.4 implementation with one of the biggest banks in Kazakhstan. This sale demonstrated the growing market demand for the new class of software solutions especially amongst the big technologically advanced banks all of which wish to accelerate core banking upgrades to shorten time-to-market for their new banking products.
Negotiations for the implementation of Colvir v.4 at other banks in Kazakhstan are underway and the big transformation programme moving current monolith core banking solution to microservice architecture is anticipated to commence within 12 to 18 months.
By the end of 2025, Colvir will reach a crucial milestone by completing the implementation of the first Colvir v.4's pilot project and launching a credit accounting system decoupled from the monolithic core banking system. This will represent the first practical step in transitioning large banks onto modular, independently deployable solutions.
Consequently, Colvir will start offering forward sale contract options to its existing customer base for the implementation of the big transformation programme, ensuring smooth and speedy release of Colvir v.4 to the wider market.
Looking forward, Colvir will set up a fully operational industrial-grade development and delivery cycle on the new platform. The group will also develop dedicated infrastructure to support running multiple implementation projects in parallel. This will establish Colvir v.4 as a scalable, reliable and future-proof solution for banks across the region.
By the end of 2027, Colvir plans to deliver a minimum set of products forming a fully functional core banking system ready for deployment at a new bank.
On behalf of the board
The directors present their annual report and audited financial statements for the year ended 31 December 2024.
The group’s business activities, together with the factors likely to affect its future development, performance and position are set out in the strategic report and directors’ report. These reports also describe the financial position of the group, its cash flows and liquidity position, the group’s objectives, policies and processes for managing its financial risks objectives, details of its financial instruments, and its exposure to credit risk, currency and liquidity risk.
The results for the year are set out on page 12.
No ordinary dividends were paid (2023: $nil). The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group’s activities expose it to a variety of financial risks. The main financial risks managed by the group, under policies approved by the board, are credit risk, interest rate risk, liquidity risk and foreign currency risks.
The group has put in place a risk management programme that seeks to limit the adverse effects of the financial risks on the financial performance of the group as follows:
Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions as well as exposure to customers, including outstanding receivables and committed transactions. Cash is only lodged with reputable financial institutions with a high credit rating or significant government ownership where pre-approved by the board. New credit customers are only accepted if either externally or internally rated and approved by the board. Majority of the group's customers are reputable financial institutions or large corporations with high independent ratings. If there is no independent rating, then risk control assesses the credit quality of the customer by taking into account its financial position, past experience and other factors.
The group is not exposed to interest rate risk as its borrowings are issued at fixed rates and are not dependent on base rate fluctuations.
The group’s policy is to ensure that it has sufficient cash to allow it to meet its liabilities when they become due. To achieve this aim, it seeks to maintain cash balances (or agreed facilities) to meet expected requirements for a period of at least 90 days. The group further reduces its liquidity risk by fixing interest rates on its long-term borrowings. Cash flow forecasts identifying the group’s funding and liquidity requirements are reviewed regularly by management on 12-month rolling basis.
The contractual maturities of the group’s financial liabilities (which are all carried at amortised cost) are shown in the note 22.
The group's activities expose it to financial risks associated with changes in foreign currency exchange rates. The group's policy is, where possible, to maximise the matching of foreign currency receipts and payments and to hold sufficient reserves of foreign currency to settle its foreign currency obligations. The group does not hedge its exposure to foreign currency exchange rates.
The group’s primary exposure is to the exchange rate movements of Euro. 10% weakening of Euro against US dollar would decrease the operating results by $118,000. 10% strengthening of Euro against US dollar would increase the operating results by $118,000.
The group continues to invest in research and development, which has resulted in an improvement in its products and in its maintenance and support services. Where appropriate, the cost in respect of the new products or upgrades and improvements to the existing products has been capitalised in the statement of financial position.
Related parties
Transactions with related parties are disclosed in note 30.
Events after the reporting date affecting the group financial statements are disclosed in note 32.
Future developments in the business of the group are discussed in the strategic report.
The auditor, Nyman Libson Paul LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
The directors have reviewed the group’s cash flow forecast for the period to 31 December 2026 and they believe that, taking account of global economic recession and challenges brought by war in Ukraine as well as reasonably possible changes in projected profitability, contracted recurring revenue, available liquid resources and scheduled repayment of credit line facility, the group has adequate resources to continue in operational existence for the foreseeable future.
Opinion
We have audited the financial statements of Colvir Software Solutions Ltd (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2024 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom. The financial reporting framework that has been applied in the preparation of the parent Company financial statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (United Kingdom Generally Accepted Accounting Practice).
In our opinion, except for the effects of the matter described in the basis for qualified opinion section of our report:
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 December 2024 and of the Group's profit for the year then ended;
the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the United Kingdom;
the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for qualified opinion
Colvir Software Solutions Ltd’s investment in JSC Rysgal Bank, a foreign associate accounted for by the equity method, is carried at $22,407,000 (2023: at $22,407,000 ) on the Company’s Statement of Financial Position and $67,622,000 (2023: $57,374,000) on the Consolidated Statement of Financial Position as at 31 December 2024. Colvir Software Solutions Ltd’s share of JSC Rysgal Bank’s net profit after tax of $17,645,000 (2023: $17,289,000), adjustment in respect of prior years of $nil (2023: 6,001,000) and exchange loss arising from the investment in foreign associate of $nil (2023: $nil) is included in the Consolidated Statement of Comprehensive Income.
The audit evidence available to us in respect of these balances was limited because we were denied access to the financial information of JSC Rysgal Bank. We were therefore unable to obtain sufficient information about the carrying amount of the group and parent investment in JSC Rysgal Bank as at 31 December 2024 and the group’s share of JSC Rysgal Bank’s profit/loss after tax, adjustment in respect of prior years and the exchange loss arising from the investment in foreign associate for the year. Consequently, we were unable to determine whether any adjustments to these amounts were necessary.
The audit opinion for the prior year was qualified on a similar basis and consequently we were unable to determine whether any adjustments to these amounts as at 31 December 2023 were necessary.
In addition, were any adjustments required to these balances, the strategic report would also need to be amended.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group and the parent Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Our evaluation of the directors' assessment of the Group's and the parent Company's ability to continue to adopt the going concern basis of accounting included review and assessment of:
financing facilities including repayment terms and covenants;
review of financial forecasts and assumptions used in the forecasts;
the headroom in the forecasts both in terms of cash and covenants; and
the sophistication of the model used to prepare the forecasts, testing of the clerical accuracy of the forecasts and the accuracy of previous forecasts prepared by management.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the Annual Report, other than the financial statements and our auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements, or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves regarding the group’s and parent investment in JSC Rysgal Bank, the group’s share of JSC Rysgal Bank’s profit/loss after tax and the exchange loss arising from the investment in foreign associate for the year for both the current and prior year, and consequently, we are unable to determine whether adjustments might be necessary in respect of this. We have concluded that where the other information refers to these balances are related balances, it may be materially misstated for the same reason.
Opinions on other matters prescribed by the Companies Act 2006
Except for the possible effects of the matter described in the basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of the audit:
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.
As explained more fully in the directors' responsibilities statement in the Directors’ Report, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group's and the parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
the nature of the industry and sector, control environment and business performance;
results of our enquiries of management about their own identification and assessment of the risks of irregularities;
any matters we identified having obtained and reviewed the Group and parent Company’s documentation of their policies and procedures relating to:
- identifying, evaluating and complying with laws and regulations and whether they were aware of any
instances of non-compliance;
- detecting and responding to the risks of fraud and whether they have knowledge of any actual,
suspected or alleged fraud;
- the internal controls established to mitigate risks of fraud or non-compliance with laws and
regulations;
- the matters discussed among the audit engagement team regarding how and where fraud might
occur in the financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in relation to timing of revenue recognition and manipulation of accounting entries to improve the results for the year. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Group and parent Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included IFRS as adopted by the UK, the UK Companies Act and local tax legislation.
In addition, we considered other laws and regulations that could have an effect on the Group and parent Company and result in the imposition of financial or other penalties and litigation. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. These limited procedures did not identify actual or suspected non-compliance.
All matters in relation to non-compliance with laws and regulations and potential fraud risks were communicated to all members of the engagement team and we remained alert to any indications of non-compliance throughout the audit.
Our procedures to respond to risks identified included the following:
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
enquiring of management concerning actual and potential litigation and claims;
assessing the appropriateness and where appropriate with third parties concerning actual and potential
litigation and claims;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
reading minutes of meetings of those charged with governance and correspondence with HMRC;
in addressing the risk of fraud through management override of controls, reviewing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias;
performing substantive audit procedures on the revenue recognised during the year by agreeing to supporting documentation;
and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors' report.
Use of our report
This report is made solely to the parent Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the parent Company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the parent Company and the parent Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
The consolidated statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
The accompanying notes on pages 17 to 40 form part of these financial statements.
The accompanying notes on pages 17 to 40 form part of these financial statements.
The accompanying notes on pages 17 to 40 form part of these financial statements.
The accompanying notes on pages 17 to 40 form part of these financial statements.
Colvir Software Solutions Limited is a private company limited by shares, domiciled and incorporated in England and Wales. The registered office is Building 3, Chiswick Park, 566 Chiswick High Road, Chiswick, London, United Kingdom, W4 5YA. The company's principal activities and nature of its operations are disclosed in the strategic report.
The group consists of Colvir Software Solutions Limited and all of its subsidiaries and associates.
The group’s business activities, together with the factors likely to affect its future development, performance and position are set out in the strategic report and directors’ report. These reports also describe the financial position of the group, its cash flows and liquidity position, the group’s objectives, policies and processes for managing its financial risks objectives, details of its financial instruments, and its exposure to credit risk, currency and liquidity risks.
The financial statements are presented in US dollars ($), which is the functional and presentation currency of the company. Monetary amounts in these financial statements are rounded to the nearest $'000.
The exchange rate of $/£ at the reporting date was 1.2529 (2023: 1.2747) and the average rate of $/£ for the year was 1.2783 (2023: 1.2434).
The consolidated financial statements consist of the financial statements of the parent company Colvir Software Solutions Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
Investments in joint ventures and associates are carried in the group statement of financial position at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value.
If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.
The group recognises revenue from the following major sources:
Professional Services
Licensed Software Fees
Maintenance fees
The nature, timing of satisfaction of performance obligations and significant payment terms of the group's major sources of revenue are as follows:
Professional Services revenue is generated from the provision of training, consulting, implementation and change requests services. These services are reflected either within a licence contract or in a separate contract and can be either on a time-and-material or fixed-price basis. Revenue recognition for professional services is dependent on the contract-specific facts and circumstances and is based upon the satisfaction of specific performance obligations/milestones.
Revenue from Licenced Software Fees (“LSF”) arises from granting customers the right to use Colvir’s and certain third party software products, including significant upgrades pertaining to customers purchasing new modules or user rights.
LSF are treated as a single deliverable and their revenue is recognised on a delivery of the software to the customer at which point control of the product has been transferred to the customer.
Maintenance of software is often covered by the separate Maintenance and Support Agreement. The pricing is usually based on a percentage of the LSF, which is common industry practice. The Maintenance fee provides customers with the rights to unspecified product upgrades, enhancements and help desk access during a defined support period. This revenue is recognised over time based on the terms of the maintenance contract.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the parent company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the group holds a long-term interest and has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
The group recognises financial debt when the group becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.
The group does not hold any financial liabilities measured at fair value through profit or loss.
Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Financial liabilities are derecognised when, and only when, the group’s obligations are discharged, cancelled, or they expire.
Equity instruments issued by the parent company are recorded at the proceeds received, net of direct issue costs.
Dividends payable on equity instruments are recognised as liabilities once they are no longer payable at the discretion of the company.
The tax expense represents the sum of the tax currently payable and deferred tax.
Withholding tax and royalties
Certain countries in which the group operates, levy royalty and other withholding taxes on gross revenue receivable from licences and services provided to clients in those territories. The UK has concluded double taxation treaties with most countries in which the group operates. These treaties either eliminate or reduce such royalty and other withholding taxes to a rate between 5% and 20%. The effect of the royalty and other withholding taxes in these territories are accounted for as part of the current tax in the consolidated income statement.
At inception, the group assesses whether a contract is, or contains, a lease within the scope of IFRS 16 Leases. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the group recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment.
The group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less, or for leases of low-value assets. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.
Exchange differences recognised in profit or loss in group entities' separate financial statements on the translation of long-term monetary items forming part of the group's net investment in the overseas operation concerned are reclassified to other comprehensive income and accumulated in the currency translation reserve.
On disposal of foreign operation, the cumulative exchanges differences recognised in the currency translation reserve relating to that operation up to the date of disposal are transferred to the consolidated income statement as part of the profit or loss on disposal.
Dividend income
Dividend income is recognised when the right to receive payment is established.
Standards, amendments and interpretations effective in 2024
A number of new and amended standards and interpretations issued by IASB have become effective for the first time for financial periods beginning on (or after) 1 January 2024 and have been applied by the group in these financial statements. None of these new and amended standards and interpretations had a significant effect on the group because they are either not relevant to the group’s activities or require accounting which is consistent with the group’s current accounting policies.
Standards, amendments and interpretations that are not yet effective and have not been early adopted
There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future accounting periods and which have not been adopted early. None of these are expected to have a significant effect on the group.
In the application of the group's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Tangible and intangible non-current assets are depreciated/amortised over their useful economic lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values. Carrying values of tangible and intangible assets are disclosed in notes 11, 12, 35 and 36.
The group makes an estimate of the recoverable value of its investments. Where an indication of impairment is identified the estimation of the recoverable value is made by reference to the estimated future cash flows from the investment and also selection of appropriate discount rates in order to calculate the net present value of those cash flows. Carrying values of investments are disclosed in notes 13 and 37.
The group accounts for its revenue from professional services depending on the contract-specific facts and circumstances, and based upon the satisfaction of specific performance obligations/milestones. Estimates may be required when determining the service performed as proportion of the total services to be provided. When carrying out the assessment various factors are considered including time and material spent, milestones achieved and schedules of completed works.
The average monthly number of persons (including directors) employed by the group during the year was:
Their aggregate remuneration comprised:
The group engages external workforce which comprises third party overseas consultants and agency personnel. The total cost of the external workforce for the year amounted to $8,502,000 (2023: $10,622,000).
With effect from 1 April 2023, the UK corporation tax rate increased from 19.00% to 25.00%. The blended rate for the comparative year was 23.52%.
The charge for the year can be reconciled to the loss per the income statement as follows:
Amortisation charge for the year of £3,368,000 (2023: £2,844,000) is included in the statement of comprehensive income within administrative expenses.
During the prior year a number of old vehicles were fully written off and eliminated from the books as they were no longer in use.
The directors consider that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.
Details of the company's subsidiaries at 31 December 2024 are as follows:
Details of the group's associates at 31 December 2024 are as follows:
Set out below is the financial information of the group's material equity accounted associates.
Joint-Stock Commercial Bank "Rysgal" ("Rysgal Bank") is incorporated and operates in Turkmenistan. It holds a licence issued by the Central Bank of Turkmenistan for banking operations in national currency. Rysgal Bank is a strategic partner for the group providing access to new customers and markets in Turkmenistan and the middle East region.
All amounts from Turkmen Manat to US dollars were converted using an exchange rate equal to 3.50 as at 31 December 2024 (2023: 3.50) and average rate for the year equal to 3.50 (2023: 3.50).
Since 2017 Turkmenistan’s Government tightened foreign exchange regulations to conserve hard currency for priority projects. This has slowed down Rysgal Bank’s ability to transfer funds to the group in a form of cash dividend. At the reporting date $14,862,000 of previously declared dividends by Rysgal Bank remained outstanding (2023: $8,170,000) (note 17).
There are no contingent liabilities relating to the group's interest in the associate.
In March 2020 Colvir together with Autonomous Cluster Fund “Park of Innovative Technologies” (“ACF”) established “Center for Technological Development of Intellectual Systems LLP” (“CTDIS”) which is a limited liability partnership registered under the laws of Republic of Kazakhstan. The main purpose of the partnership was provision of services for the design, development and implementation of IT software as well as modelling and digitalisation of technological processes.
Colvir had 50.1% participating interest in CTDIS with the remaining 49.9% held by ACF. The group had determined that despite Colvir having the majority of the participating interest, it was ACF who had the ability to exercise control over the policies and activities of CTDIS on the basis that it had a greater voting power and the practical ability to unilaterally direct the relevant activities of CTDIS. CTDIS was therefore accounted for as an associated undertaking of Colvir using equity accounting method.
Following significant legislative changes in the Republic of Kazakhstan the original objectives and activities of CTDIS no longer aligned with those of Colvir Software Solutions Ltd. In 2023 a decision was made to exit the existing partnership arrangement and seek alterative opportunities in other territories. At 31 December 2024 the withdrawal from CTDIS Joint Venture was still ongoing and is expected to formally conclude in 2025. The carrying amount of the group's investment in CTDIS was $nil at 31 December 2024 (2023: $nil).
Following its decision to exit the Joint Venture, the group has lost its ability to influence the economic decisions of the CTDIS.
Colvir Central Asia LLC is a joint venture in Uzbekistan established to provide support services to Colvir's Uzbekistani clients.
Colvir does not have a controlling stake in this joint venture and it does not have powers to direct the financial economic activity of the joint venture. The joint venture is therefore accounted for as an associated undertaking of Colvir using equity accounting method.
Contract assets arise when the group has right to consideration in exchange for product or services that it has transferred to a customer but not yet invoiced. They arise primarily from professional services contracts that can take several months or over a year to complete.
Contract liabilities arise when a customer pays consideration in advance before the product or service is transferred to the customer.
Contract assets have decreased due to the completion of two ongoing implementation projects in Turkmenistan.
Contract liabilities relate entirely to maintenance services which are typically invoiced in advance. The increase in this balance is attributed to new contracts.
Revenue recognised in relation to contract assets and liabilities
The following table shows how much of the revenue recognised in the reporting year relates to the brought forward contract assets and liabilities:
The group did not have any revenue in the current or prior year which related to performance obligations that were satisfied in prior years.
Unsatisfied long-term professional services contracts
The transaction price for unsatisfied professional contracts which are for periods of one year or less, or those that are billed based on time incurred are not disclosed, as permitted under IFRS 15.
Amounts owed by associate undertakings comprise $14,862,000 (2023: $8,170,000) of dividends receivable from Rysgal Bank (note 15).
Included within the dividends receivable amount is an adjustment for the expected phasing of the dividends receipts. A $705,000 (2023: $1,145,000) credit adjustment against the dividends receivable balance was recognised in the year, representing the effect of time value of money on the receipts expected in the future. The credit adjustment was calculated by discounting the expected receipts over the next 4 years at the discount rate based on the US Treasury Bond risk free rate.
The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.
No significant receivable balances were impaired at the reporting end date (2023: none).
Group's credit risk policies are disclosed in the directors' report.
Bank loans
In May 2022, the company entered into a revolving credit line facility for $4,000,000 with Halyk Bank of Kazakhstan. The facility provides additional working capital for operating purposes and is secured over certain existing customer contracts. It was initially for a 3-year term until 5 May 2025 which, on 13 May 2024, was extended to 5 May 2026. The facility bears an annual interest rate of 7%.
On 21 April 2023 the facility was increased to $5,000,000 and on 23 December 2024 the facility was increased further to $6,500,000 with all other terms remaining unchanged.
Other loans
On 10 May 2024, the company entered into a 1-year loan agreement with Mr Aben Bektasov for $300,000. The loan is unsecured, and bears an annual interest of 7%. The loan was fully repaid in May 2025.
The directors consider that the carrying amounts of financial liabilities carried at amortised cost in the financial statements approximate to their fair values.
The following table details the remaining contractual maturity for the group's financial liabilities with agreed repayment periods. The contractual maturity is based on the earliest date on which the group may be required to pay.
Group's liquidity risk policies are disclosed in the directors' report.
The following are the major deferred tax liabilities and assets recognised by the group and movements thereon during the current and prior years:
* Other category relates to temporary differences on intangible assets.
Deferred tax assets are recognised for taxable losses carried forward to the extent that the realisation of the related tax benefit through future taxable profits is probable.
At 31 December 2024, the group did not have any unrecognised tax losses carried forward (2023: none).
The group's and company's reserves comprise the following:
Share capital
Amounts subscribed for share capital at proceeds received.
Currency translation reserve
The foreign currency translation reserve includes movements that relate to the retranslation of the subsidiaries whose functional currencies are not US dollar.
Retained earnings
Cumulative net gains and losses recognised in the income statement and the statement of other comprehensive income less any amounts reflected directly in other reserves.
Amounts recognised in profit or loss as an expense during the period in respect of lease arrangements are as follows:
The remuneration of key management personnel, including directors, is set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures.
During the year the group entered into the following transactions with related parties:
During the year $7,397,000 dividends were declared by Rysgal Bank (2023: $7,397,000) and $605,000 by Colvir Central Asia LLC (2023: $599,000) to the company (note 15).
The following amounts were outstanding at the reporting end date:
The following amounts were outstanding at the reporting end date:
All transactions carried out with related parties were made on terms equivalent to those that prevail in arm's length transactions.
The accompanying notes on pages 44 to 51 form part of these parent company financial statements.
The accompanying notes on pages 44 to 51 form part of these parent company financial statements.
Colvir Software Solutions Limited is a private company limited by shares, domiciled and incorporated in England and Wales. The registered office is Building 3, Chiswick Park, 566 Chiswick High Road, Chiswick, London, United Kingdom, W4 5YA. The company's principal activities and nature of its operations are disclosed in the strategic report.
The financial statements have been prepared on a going concern basis under the historical cost convention and in accordance with Financial Reporting Standard 101 'Reduced Disclosure Framework' (FRS 101) and the Companies Act 2006.
The financial statements are presented in US dollars ($), which is the functional and presentation currency of the company. Monetary amounts in these financial statements are rounded to the nearest $'000.
The exchange rate of $/£ at the reporting date was 1.2529 (2023: 1.2747) and the average rate of $/£ for the year was 1.2783 (2023: 1.2434).
The company applies accounting policies consistent with those applied by the group. To the extent that an accounting policy is relevant to both group and parent company financial statements, please refer to the group financial statements for disclosure of the relevant accounting policy.
The following exemptions from the requirements of IFRS have been applied in the preparation of these financial statements in accordance with FRS 101:
IFRS 7 Financial Instruments: Disclosures.
Paragraphs 91 to 99 of IFRS 13 Fair value measurement '(disclosure of valuation techniques and inputs used for the fair value measurement of assets and liabilities).
Paragraph 38 of IAS 1 Presentation of financial statements – comparative information requirements in respect of:
- paragraph 79(a)(iv) of IAS 1 Presentation of financial statements;
- paragraph 73(e) of IAS 16 Property, plant and equipment; and
- paragraph 118(e) of IAS 38 Intangible assets (reconciliations between the carrying amount at the beginning and end of the period.
The following paragraphs of IAS 1 Presentation of financial statements:
- 10(d) (statement of cash flows);
- 16 (statement of compliance with all IFRS);
- 38A (requirement for minimum of two primary statements, including cash flow statements);
- 38B-D (additional comparative information);
- 111 (statement of cash flows information); and
- 134-136 (capital management disclosures).
IAS 7 Statement of cash flows.
Paragraphs 30 and 31 of IAS 8 Accounting policies, changes in accounting estimates and errors (requirement for the disclosure of information when an entity has not applied a new IFRS that has been issued but is not yet effective).
Paragraph 17 of IAS 24 Related party disclosures (key management compensation).
The requirements in IAS 24 Related party disclosures to disclose related party transactions entered into between two or more members of a group.
The directors have reviewed the company's cash flow forecast for the period to 31 December 2026 and they believe that, taking account of global economic recession and challenges brought by war in Ukraine as well as reasonably possible changes in projected profitability, contracted recurring revenue, available liquid resources and scheduled repayment of credit line facility, the company has adequate resources to continue in operational existence for the foreseeable future.
The average monthly number of persons (including directors) employed by the company during the year was:
Their aggregate remuneration comprised:
The company engages external workforce which comprises third party overseas consultants and agency personnel. The total cost of the external workforce for the year amounted to $8,502,000 (2023: $10,622,000).
The directors consider that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.
Details of the company's principal operating subsidiaries and associates are included in notes 14 and 15 respectively.
Contract assets arise when the company has right to consideration in exchange for product or services that it has transferred to a customer but not yet invoiced. They arise primarily from professional services contracts that can take several months or over a year to complete.
Contract liabilities arise when a customer pays consideration in advance before the product or service is transferred to the customer.
Contract assets have decreased due to the completion of two ongoing implementation projects in Turkmenistan.
Contract liabilities relate entirely to maintenance services which are typically invoiced in advance. The increase in this balance is attributed to new contracts.
Revenue recognised in relation to contract assets and liabilities
The following table shows how much of the revenue recognised in the reporting year relates to the brought forward contract assets and liabilities:
The company did not have any revenue in the current or prior year which related to performance obligations that were satisfied in prior years.
Unsatisfied long-term professional services contracts
The transaction price for unsatisfied professional contracts which are for periods of one year or less, or those that are billed based on time incurred are not disclosed, as permitted under IFRS 15.
Amounts owed by associate undertakings comprise $14,862,000 (2023: $8,170,000) of dividends receivable from Rysgal Bank (note 15).
Included within the dividends receivable amount is an adjustment for the expected phasing of the dividends receipts. A $705,000 (2023: $1,145,000) credit adjustment against the dividends receivable balance was recognised in the year, representing the effect of time value of money on the receipts expected in the future. The credit adjustment was calculated by discounting the expected receipts over the next 4 years at the discount rate based on the US Treasury Bond risk free rate.
Fair value of trade and other receivables
The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.
Bank loans
In May 2022, the company entered into a revolving credit line facility for $4,000,000 with Halyk Bank of Kazakhstan. The facility provides additional working capital for operating purposes and is secured over certain existing customer contracts. It was initially for a 3-year term until 5 May 2025 which, on 13 May 2024, was extended to 5 May 2026. The facility bears an annual interest rate of 7%.
On 21 April 2023 the facility was increased to $5,000,000 and on 23 December 2024 the facility was increased further to $6,500,000 with all other terms remaining unchanged.
Other loans
On 10 May 2024, the company entered into a 1-year loan agreement with Mr Aben Bektasov for $300,000. The loan is unsecured, and bears an annual interest of 7%. The loan was fully repaid in May 2025.
The directors consider that the carrying amounts of financial liabilities carried at amortised cost in the financial statements approximate to their fair values.
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior years:
* Other category relates to temporary differences on intangible assets.
Deferred tax assets are recognised for taxable losses carried forward to the extent that the realisation of the related tax benefit through future taxable profits is probable.
At 31 December 2024, the company did not have any unrecognised tax losses carried forward (2023: none).