ACCOUNTS - Final Accounts preparation
ACCOUNTS - Final Accounts preparation
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Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2018
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WORKFRONT LTD
COMPANY INFORMATION
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WORKFRONT LTD
CONTENTS
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WORKFRONT LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2018
The principal activity of the company in the period under review was that of providing on a subscription basis a modern work management platform.
The results for the year and financial position are as shown in the annexed financial statements. The executive management team reviews monthly, quarterly and annual information covering a range of financial and non-financial key performance indicators, which they consider are effective in measuring delivery of their strategy, and which assist in the management of the business. The company had turnover on the continuing operations of £17,334,183 for the year ended December 31, 2019. This represents growth of 34.8% over the previous year’s turnover of £12,857,190. This increase is primarily due to an increase in customer annual recurring subscription revenue growing faster than the decrease from customers that terminate their subscription. Operating loss was £246,707 which equates to (1.4%) of turnover. This compares to last year’s operating loss of £884,539 which was (6.9%) of turnover. The company ended the year with £2,168,887 net current liabilities compared to £1,840,123 in 2017.
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WORKFRONT LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
There are a variety of competitive and economic factors that impact the way the company manages its business and influence how the company maintains and continually improves its work management platform.
The following principal risks and uncertainties for the company have been identified: Competition The overall market for enterprise work and project management software is rapidly evolving and subject to changing technology, shifting customer needs and frequent introductions of new applications. Many of the company’s competitors are larger and have greater brand name recognition, longer operating histories and significantly greater resources than the company does. Some of the company’s smaller competitors may offer applications on a stand-alone basis at a lower price than us due to lower overheads or other factors, while some of the company’s larger competitors may offer applications at a lower price in an attempt to cross-sell additional products in the future or retain a customer using a different application. People It is key to the company’s success to attract, retain, develop and motivate the best people with the appropriate capabilities at all levels of the organization. Performance could be negatively impacted by the loss of key individuals or the inability to obtain suitable replacements in a timely manner. The company endeavors to retain key employees by ensuring that appropriate levels of incentives are in place and by having a unique work culture and environment. Currency risk The company is exposed to foreign exchange risk in connection with its transactions with both its customers and suppliers as the company makes sales and purchases in euros and US dollars. Credit risk Credit risk may arise because of the non-payment by customers. This risk is partially mitigated by the majority of customers paying in advance of most services. Liquidity risk The company seeks to manage and forecast cash flow to ensure that sufficient liquidity is available to meet foreseeable needs.
2018 2017 Change
Turnover £17,334,183 £12,857,190 34.8% Gross profit £15,815,845 £9,216,351 71.6% Operating loss £(246,707) £(884,539) (72.1%) Net current liabilities £2,168,887 £1,840,123 (17.9%)
The company plans to continue its existing activities.
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WORKFRONT LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
This report was approved by the board and signed on its behalf.
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WORKFRONT LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2018
The directors present their report and the financial statements for the year ended 31 December 2018.
The loss for the year, after taxation, amounted to £289,437 (2017 - loss £884,355).
The directors do not recommend the payment of a dividend (2017: £nil).
The directors who served during the year were:
The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
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WORKFRONT LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2018
There have been no significant events affecting the Company since the year end.
The auditors, James Cowper Kreston, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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WORKFRONT LTD
INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OF WORKFRONT LTD
We have audited the financial statements of Workfront Ltd (the 'Company') for the year ended 31 December 2018, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of cash flows, the 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 their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
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 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.
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
∙the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
∙the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
The directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Auditors' report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
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WORKFRONT LTD
INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OF WORKFRONT LTD (CONTINUED)
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
As explained more fully in the Directors' responsibilities statement on page 4, 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 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 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.
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.
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WORKFRONT LTD
INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OF WORKFRONT LTD (CONTINUED)
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.
for and on behalf of
Chartered Accountants and Statutory Auditor
Reading Bridge House
George Street
Berkshire
RG1 8LS
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WORKFRONT LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2018
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WORKFRONT LTD
REGISTERED NUMBER: 06466672
BALANCE SHEET
AS AT 31 DECEMBER 2018
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 13 to 23 form part of these financial statements.
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WORKFRONT LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2018
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2017
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WORKFRONT LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2018
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WORKFRONT LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Workfront Ltd is a private company limited by shares, domiciled in England and Wales, registration number 06466672. The registered office address is Part Level 7, Belvedere House, Basing View, Basingstoke, Hampshire, RG21 4HG.
The principal activity of the company is the provision of software services.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The financial statements show a profit after tax of £289,437 (2017 loss: £884,355) and net liabilities of £1,879,180 (2017: £1,589,743). The financial statements have been prepared on a going concern basis as the parent company, Workfront Inc., has confirmed their continued financial support for at least 12 months from the date of signing the balance sheet and into the forseeable future.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
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WORKFRONT LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of comprehensive income.
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the Statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.
The Company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties.
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
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WORKFRONT LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
2.Accounting policies (continued)
Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of comprehensive income except when deferred in other comprehensive income as qualifying cash flow hedges.
Rentals paid under operating leases are charged to the Statement of comprehensive income on a straight line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in the Statement of comprehensive income when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.
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WORKFRONT LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The following judgements have had the most significant effect on amounts recognised in the financial statements.
Impairment of trade debtors The company reviews trade debtors regularly and estimates the impairment of trade debtors. In determining the impairment of trade debtors, assumptions and estimates are made in relation to the likelihood of trade debtors not being recovered based on the company's knowledge of the customer, credit terms and payment history. Commission payments The company spreads commission payments pertaining to new contracts over a period of three years as this is the deemed useful economic life of the installed software platform and is considered to be period over which financial benefit from a new contract is derived. Commission payments for renewal of contracts is spread over one year.
Analysis of turnover by country of destination:
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WORKFRONT LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
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WORKFRONT LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
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WORKFRONT LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
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WORKFRONT LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
10.Taxation (continued)
Legistlation has been passed to reduce the rate of UK corporation tax to 17% from 1 April 2020. These rates were substantively enacted at the balance sheet date and are reflected in the measurement of deferred tax in these financial statements.
The company has carried forward trading losses of £1,573,475 (2017: £1,378,304), no deferred tax asset has been recognised in respect of these losses due to uncertainty over future trading profits against which to offset these losses.
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WORKFRONT LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
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WORKFRONT LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
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WORKFRONT LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Profit and loss account
The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £438,726 (2017: £303,210). Contributions totalling £54,741 (2017: £65,064) were payable to the fund at the balance sheet date and are included in creditors.
The company's immediate and ultimate parent undertaking and controlling party is Workfront Inc. a company incorporated in the United States of America and registered at 3301 N Thanksgiving Way Ste. 100, Lehi, UT 84043. The smallest and largest group in which the financial statements of the company are consolidated is that headed by Workfront Inc. Consolidated accounts are available from the registered office of Workfront Inc.
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