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Registered number: 10196436
SHEPPER LIMITED
FINANCIAL STATEMENTS
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE PERIOD ENDED 31 DECEMBER 2022
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SHEPPER LIMITED
REGISTERED NUMBER: 10196436
BALANCE SHEET
AS AT 31 DECEMBER 2022
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the profit and loss account in accordance with provisions applicable to companies subject to the small companies' regime.
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SHEPPER LIMITED
REGISTERED NUMBER: 10196436
BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2022
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 19 July 2023.
The notes on pages 3 to 16 form part of these financial statements.
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SHEPPER LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
Shepper Limited is a private company, limited by shares, registered in England and Wales. the company's registered number is 10196436 and the registered office is The Butler's Wharf Building, 36 Shad Thames, London, SE1 2YE.
2.Accounting policies
The company reporting date is for a period greater than 12 months. The company extended its year end to 31 December 2022 which created a 14 month period. The comparative figures are for the 12 month period to 31 October 2021. Future reporting periods will be for the 12 month period to 31 December each year.
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of 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:
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Exemption from preparing consolidated financial statements
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The Company, and the Group headed by it, qualify as small as set out in section 383 of the Companies Act 2006 and the parent and Group are considered eligible for the exemption to prepare consolidated accounts.
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SHEPPER LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
The company made a pre-tax loss of £3.3m in the period and had net current assets of £2.7m at the balance sheet date including cash in hand of £1.3m. On 23rd December 2023, a total fundraise of £10.1m was concluded, which was made up of £3m in cash equity and £7.1m in convertible loan notes converting. The cash element was received during December 2022 and January 2023.
As part of assessing going concern the directors have considered the company's current financial position, performed a review of its budgets and forecasts, the principal risks including the current economic client and financing facilities available.
Revenue
A healthy growth of 55% was delivered in 2022, on the backdrop of some lighter covid restrictions, a war in the Ukraine and economic turmoil. Thus successfully building upon the growth experienced in prior years.
All client orders have been reviewed on a granular basis as part of the internal forecasting process and updated to reflect the trading conditions as the economy and consumer spending continues to recover. All renewals are included in the forecast at expected value, which has been continually adjusted to reflect the latest information from client discussions and challenge by management.
Following these up-to-date assessments the directors are confident that the company will continue to represent a going concern over the next 12 months.
Operations
The company has considered the strength of its existing and target customer base and the impact of restrictions on their ability to continue to operate for at least 12 months following the signing date. All debtor balances and open orders have been assessed for present and future collectability. As a result of review the company does not anticipate an increase in collectability issues for its customer base.
The company has considered the potential impact on its key suppliers and the availability of services. The company relies on its data collecting Shepherds to perform tasks, whom are primarily based in the UK. The business continues to grow and diversify the number of shepherds completing tasks, whilst maintaining a high completion rate.
The directors also consider appropriate measures are in place to ensure compliance with relevant employment laws and regulations and continue to monitor any proposed changes in this area.
Cashflow
Cashflow is regularly scrutinised by the directors and various models have been drawn up to anticipate any changes in the trading environment. As at the date of this report the company has enough cash reserves to continue trading over the course of the year even if revenue were to fall significantly.
As such, after careful consideration, the directors consider that it remains appropriate to continue to adopt the going concern basis in preparing the annual report and accounts and the financial statements do not include adjustments that would result if the company was unable to continue as a going concern.
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SHEPPER LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
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Foreign currency translation
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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 profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
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:
∙the amount of revenue can be measured reliably;
∙it is probable that the Company will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
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SHEPPER LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
All borrowing costs are recognised in profit or loss in the period in which they are incurred.
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 profit or loss 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.
Where share options are awarded to employees, the fair value of the options at the date of grant is charged to profit or loss over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Company keeping the scheme open or the employee maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.
Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services received.
Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.
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SHEPPER LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
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 profit or loss.
Investments in subsidiaries are measured at cost less accumulated impairment.
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SHEPPER LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
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.
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Cash and cash equivalents
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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.
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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Provisions for liabilities
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Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance sheet.
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SHEPPER LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
The Company only enters into basic financial instrument 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 and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Investments in non-derivative instruments that are equity to the issuer are measured:
∙at fair value with changes recognised in the Profit and loss account if the shares are publicly traded or their fair value can otherwise be measured reliably;
∙at cost less impairment for all other investments.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Profit and loss account.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.
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Judgments in applying accounting policies and key sources of estimation uncertainty
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At 31 December 2022 42,220 share options had been granted. These are valued using the Black-Scholes model, which considers the value of the company at issue date, volatility and the risk-free interest rate.
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The average monthly number of employees, including directors, during the period was 29 (2021 - 29).
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SHEPPER LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
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At 1 November 2021 (as previously stated)
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At 1 November 2021 (as restated)
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At 1 November 2021 (as previously stated)
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At 1 November 2021 (as restated)
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Charge for the period on owned assets
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At 31 October 2021 (as restated)
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SHEPPER LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
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Charge for the period on owned assets
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SHEPPER LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
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Investments in subsidiary companies
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Amounts owed by group undertakings
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Prepayments and accrued income
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SHEPPER LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Other taxation and social security
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Accruals and deferred income
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Creditors: Amounts falling due after more than one year
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SHEPPER LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
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Analysis of the maturity of loans is given below:
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Amounts falling due within one year
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Amounts falling due 1-2 years
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On 23 December 2022, the company converted £6,623,611 of debt into A Preference shares. The debt had an interest rate of 8% and a discount on conversion of 20%.
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Charged to profit or loss
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SHEPPER LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
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Allotted, called up and fully paid
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132,579 (2021 - 132,579) Ordinary shares of £1.000 each
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58,477 (2021 - 58,477) Preference shares of £1.000 each
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272,510 (2021 - ) A Preference shares of £0.001 each
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During the year, 272,510 A Preference shares of £0.001 each were issued for consideration of £9,374,256.
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The following prior year balances were adjusted for in the year:
A change in accounting policy came into effect in the current year which has required the prior year figures to be restated. Identifiable development expenditure is now capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated. Previously these costs were shown in the statement of comprehensive income. As a result, opening reserves were increased by £782,977. In the prior period administration expenses have decreased by £236,982 creating a decrease in the overall loss for the period.
The effect on the balance sheet in the prior year was to increase fixed assets by £782,977.
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Post balance sheet events
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On 5 January 2023 the company issued 18,320 A preference shares with a nominal value of £0.001 per share for consideration of £799,986. This was part of the Series B funding which concluded on 23 December 2022.
In March 2023 the company entered into an operating lease agreement on a new office space, the lease has future non-cancellable commitments of £90,000.
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SHEPPER LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
The auditors' report on the financial statements for the period ended 31 December 2022 was unqualified.
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In their report, the auditors emphasised the following matter without qualifying their report:
Attention was drawn to the prior year adjustment note in respect in respect of the change in accounting policy to recognise qualifying development costs as intangible assets.
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The audit report was signed on 19 July 2023 by Pete Cattermole (Senior statutory auditor) on behalf of CB Reid Limited.
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