Caseware UK (AP4) 2023.0.135 2023.0.135 2022-12-312022-12-31falsefalseRetail management solutions2022-01-01183false215 01486255 2022-01-01 2022-12-31 01486255 2021-01-01 2021-12-31 01486255 2022-12-31 01486255 2021-12-31 01486255 2021-01-01 01486255 4 2022-01-01 2022-12-31 01486255 4 2021-01-01 2021-12-31 01486255 d:CompanySecretary1 2022-01-01 2022-12-31 01486255 d:Director1 2022-01-01 2022-12-31 01486255 d:Director1 2022-12-31 01486255 d:Director2 2022-01-01 2022-12-31 01486255 d:Director2 2022-12-31 01486255 d:Director3 2022-01-01 2022-12-31 01486255 d:Director3 2022-12-31 01486255 d:Director4 2022-01-01 2022-12-31 01486255 d:Director4 2022-12-31 01486255 d:Director5 2022-01-01 2022-12-31 01486255 d:Director5 2022-12-31 01486255 d:Director6 2022-01-01 2022-12-31 01486255 d:Director6 2022-12-31 01486255 d:RegisteredOffice 2022-01-01 2022-12-31 01486255 e:Buildings e:LongLeaseholdAssets 2022-01-01 2022-12-31 01486255 e:Buildings e:LongLeaseholdAssets 2022-12-31 01486255 e:Buildings e:LongLeaseholdAssets 2021-12-31 01486255 e:Buildings e:ShortLeaseholdAssets 2022-01-01 2022-12-31 01486255 e:PlantMachinery 2022-01-01 2022-12-31 01486255 e:FurnitureFittings 2022-01-01 2022-12-31 01486255 e:ComputerEquipment 2022-01-01 2022-12-31 01486255 e:ComputerEquipment 2022-12-31 01486255 e:ComputerEquipment 2021-12-31 01486255 e:ComputerEquipment e:OwnedOrFreeholdAssets 2022-01-01 2022-12-31 01486255 e:OwnedOrFreeholdAssets 2022-01-01 2022-12-31 01486255 e:DevelopmentCostsCapitalisedDevelopmentExpenditure 2022-12-31 01486255 e:DevelopmentCostsCapitalisedDevelopmentExpenditure 2021-12-31 01486255 e:CurrentFinancialInstruments 2022-12-31 01486255 e:CurrentFinancialInstruments 2021-12-31 01486255 e:CurrentFinancialInstruments 4 2022-12-31 01486255 e:CurrentFinancialInstruments 4 2021-12-31 01486255 e:Non-currentFinancialInstruments 2022-12-31 01486255 e:Non-currentFinancialInstruments 2021-12-31 01486255 e:CurrentFinancialInstruments e:WithinOneYear 2022-12-31 01486255 e:CurrentFinancialInstruments e:WithinOneYear 2021-12-31 01486255 e:Non-currentFinancialInstruments e:AfterOneYear 2022-12-31 01486255 e:Non-currentFinancialInstruments e:AfterOneYear 2021-12-31 01486255 e:Non-currentFinancialInstruments e:BetweenOneTwoYears 2022-12-31 01486255 e:Non-currentFinancialInstruments e:BetweenOneTwoYears 2021-12-31 01486255 e:ReportableOperatingSegment1 2022-01-01 2022-12-31 01486255 e:ReportableOperatingSegment1 2021-01-01 2021-12-31 01486255 e:ReportableOperatingSegment2 2022-01-01 2022-12-31 01486255 e:ReportableOperatingSegment2 2021-01-01 2021-12-31 01486255 e:ReportableOperatingSegment3 2022-01-01 2022-12-31 01486255 e:ReportableOperatingSegment3 2021-01-01 2021-12-31 01486255 e:ReportableOperatingSegment5 2022-01-01 2022-12-31 01486255 e:ReportableOperatingSegment5 2021-01-01 2021-12-31 01486255 f:UnitedKingdom 2022-01-01 2022-12-31 01486255 f:UnitedKingdom 2021-01-01 2021-12-31 01486255 f:RestEuropeOutsideUK 2022-01-01 2022-12-31 01486255 f:RestEuropeOutsideUK 2021-01-01 2021-12-31 01486255 e:UKTax 2022-01-01 2022-12-31 01486255 e:UKTax 2021-01-01 2021-12-31 01486255 e:ShareCapital 2022-12-31 01486255 e:ShareCapital 2021-12-31 01486255 e:ShareCapital 2021-01-01 01486255 e:SharePremium 2022-12-31 01486255 e:SharePremium 2021-12-31 01486255 e:SharePremium 2021-01-01 01486255 e:CapitalRedemptionReserve 2022-12-31 01486255 e:CapitalRedemptionReserve 2021-12-31 01486255 e:CapitalRedemptionReserve 2021-01-01 01486255 e:RetainedEarningsAccumulatedLosses 2022-01-01 2022-12-31 01486255 e:RetainedEarningsAccumulatedLosses 2022-12-31 01486255 e:RetainedEarningsAccumulatedLosses 2021-01-01 2021-12-31 01486255 e:RetainedEarningsAccumulatedLosses 2021-12-31 01486255 e:RetainedEarningsAccumulatedLosses 2021-01-01 01486255 e:AcceleratedTaxDepreciationDeferredTax 2022-12-31 01486255 e:AcceleratedTaxDepreciationDeferredTax 2021-12-31 01486255 e:RetirementBenefitObligationsDeferredTax 2022-12-31 01486255 e:RetirementBenefitObligationsDeferredTax 2021-12-31 01486255 e:OtherDeferredTax 2022-12-31 01486255 e:OtherDeferredTax 2021-12-31 01486255 e:FurtherSpecificTypeProvisionContingentLiability1ComponentTotalProvisionsContingentLiabilities 2022-01-01 2022-12-31 01486255 e:FurtherSpecificTypeProvisionContingentLiability1ComponentTotalProvisionsContingentLiabilities 2022-12-31 01486255 e:FurtherSpecificTypeProvisionContingentLiability1ComponentTotalProvisionsContingentLiabilities 2021-12-31 01486255 d:OrdinaryShareClass1 2022-01-01 2022-12-31 01486255 d:OrdinaryShareClass1 2022-12-31 01486255 d:OrdinaryShareClass1 2021-12-31 01486255 d:FRS102 2022-01-01 2022-12-31 01486255 d:Audited 2022-01-01 2022-12-31 01486255 d:FullAccounts 2022-01-01 2022-12-31 01486255 d:PrivateLimitedCompanyLtd 2022-01-01 2022-12-31 01486255 e:WithinOneYear 2022-12-31 01486255 e:WithinOneYear 2021-12-31 01486255 e:BetweenOneFiveYears 2022-12-31 01486255 e:BetweenOneFiveYears 2021-12-31 01486255 6 2022-01-01 2022-12-31 01486255 e:DevelopmentCostsCapitalisedDevelopmentExpenditure e:OwnedIntangibleAssets 2022-01-01 2022-12-31 01486255 g:PoundSterling 2022-01-01 2022-12-31 iso4217:GBP xbrli:shares xbrli:pure


Registered number: 01486255












HTEC LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

 

HTEC LIMITED

CONTENTS



Page
Company information
 
1
Strategic report
 
2 - 6
Directors' report
 
7
Directors' responsibilities statement
 
8
Independent auditor's report
 
9 - 12
Profit and loss account
 
        13
Balance sheet
 
14
Statement of changes in equity
 
15
Notes to the financial statements
 
16 - 36


 

HTEC LIMITED
 
COMPANY INFORMATION


Directors
J A Frangis (appointed 2 September 2022)
L Geiss (appointed 2 September 2022)
S Smotherman (appointed 2 September 2022, resigned 23 October 2023)
C Hatcher (appointed 2 September 2022, resigned 31 January 2023)
N A Radley (resigned 18 June 2022)
A Wilding (resigned 3 September 2022)




Company secretary
Taylor Wessing Secretaries Limited



Registered number
01486255



Registered office
5 New Street Square

London

EC4A 3TW




Independent auditor
Blick Rothenberg Audit LLP
Chartered Accountants & Statutory Auditor

16 Great Queen Street

Covent Garden

London

WC2B 5AH




Page 1

 

HTEC LIMITED
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

Introduction
 
The Directors present their Strategic Report for the year ended 31 December 2022.


Principal activity

Product focus on real-time Retail Management Solutions (“RMS”)
The Company specialises in comprehensive, real-time, mission-critical solutions including RMS, card payment terminals and services, customer engagement, forecourt site controllers, outdoor payment terminals, automatic number plate recognition and handheld devices.

Key target markets are convenience and forecourt retailers
The Company targets businesses in retail, mainly convenience stores, wholesalers and fuel forecourts. The Company designs, develops and supports RMS, payment and loyalty systems for the UK petrol forecourt and convenience markets. These can be provided as a comprehensive, fully managed offering or as discrete products, according to customer needs.
The Company’s activities generate four distinct revenue streams from:

Data services: Our payments switch and associated services, which accept, process, store and transmit credit card information are accredited at the highest level of the PCI standards. 
Software licences and hardware: This income stream comes from the sale of products, such as RMS. Our existing customer base brings new revenues but also typically adds additional recurring revenues from support contracts. In addition to securing new customers, there are regular opportunities to refresh the products on existing customer estates.
Consultancy, transactional and software maintenance: Our software development teams provide product development, consultancy and transactional services and product support to customers, with the teams focused respectively on products and hosted solutions. Our data centres also maintain and support hosted solutions for our cloud-based products covering management information, loyalty and as an agent for payment processing. They deliver high uptime and excellent transaction processing speeds for our customer base.
Service and installations: The sale of our software and hardware products typically leads to an additional recurring revenue stream through the provision of support services and customer installations. We provide industry-leading customer service levels, with 24-hour help desk support, a nationwide field service and a specialised repair and refurbishment team, all of which help to promote close, long-term customer relationships.

Across each of these revenue streams, innovation and high levels of customer care are central to the Company’s success.

Organisational Overview
 
The Company’s business is directed by the Board and managed by Brad McGuinness, SVP & GM, POS Solutions.  A Senior Management Team, comprising SVP & GM Enterprise Productivity Sales Europe;  COO, Enterprise Productivity;  CTO, Enterprise Productivity are responsible for sales, operations and development.

Page 2

 

HTEC LIMITED

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

Startegy and business plan
 
We aim to be the leading solutions partner to retailers in our chosen verticals, supplying customers with our market-leading, innovative systems for RMS, payment and loyalty operations. These systems are real-time, mission-critical and data rich, and our customers rely on us to keep them trading. Accordingly, professional and timely support from our data centre teams, field engineering force and help desk professionals continue to remain a core part of what we do.

Opportunities to acquire new businesses are reviewed on a regular basis, where they extend penetration within addressable markets, add complementary technology or broaden geographic reach. During 2022, the Board did not consider it appropriate to make any strategic acquisitions.

The Company was acquired by PDI Technologies, Inc. in January 2022.  Since the acquisition of the Company, the goal of simplifying the product portfolio, optimizing the investment into profitable go forward products, improving processes and controls around field customer management and most importantly continuing to integrate resources into PDI’s other synergistic business.  This will continue in 2024 with PDI exiting the non-profitable business areas to improve the financial condition of the business.

Business and Product Development
 
Retail management solutions
The Company plans to continue to work in partnership with its PDI sister companies to broaden the Company’s customer base in the UK and upsell the Group’s enterprise management system to a wide variety of customers in the UK. In addition, the Company will continue the development of retail management systems as complementary products to the SME market.

Payments
The Company provides payment processing services via its Gemini Payment Services (“GPS”) platform, delivered as a highly resilient, scalable platform, backed by the Company’s 24/7 service capability. Our GPS offering has been enhanced for the forecourt market to create our own unique intellectual property.
The Company also offers integrated payment solutions for pay-at-pump, in store payment terminals and direct point of sale integration as well as forecourt specific capabilities for unattended sites and next-gen mobile payment. The Company offers these payment services while maintaining the highest level of payment accreditations, being PCI-DSS Level 1, and has been certified since 2008

Customer engagement
The Company provides and hosts the points engine and associated services that underpin one of the world’s largest oil company’s consumer loyalty schemes.

Page 3

 

HTEC LIMITED

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

Financial Review
 
The management team is responsible for  the operations of the business and uses a number of financial and non-financial KPIs in order to manage and develop the business to achieve the Company's strategic objectives. The directors monitor customer pipelines, revenue, expenses, cash balance outstanding and other relevant KPIs as key performance indicators of the company. 
Key Performance indicators 
The company's key KPI is adjusted EBITDA margin  
 
Definition
Adjusted EBITDA margin is defined as earnings before interest, taxes, depreciation, amortisation, administration expenses resulting from acquisition costs and share-based payments as a percentage of revenue. Each business area is monitored each month and business performance is reviewed at Executive team meetings and at Board meetings. 
2022 Performance 
Adjusted EBITDA margin was positive 5.4% for 2022 (2021: negative 4.0%). The improvement in adjusted EBITDA margin was achieved by payroll cost reductions from operating efficiencies and procurement initiatives, plus lower impairment and dilapidations costs.  

Profit and loss
Company revenues increased 1.8% to £21.41 million (2021: £21.03 million).
Data services revenue totalled £4.07 million (2021: £5.06 million).
Consultancy, transactional and licence maintenance revenues totalled £6.41 million (2021: £2.63 million) including significant growth in transactional.
Service and installation revenues totalled £5.63 million (2021: £7.02 million) where 2021 included fuel installations for a major supermarket.
Software licence and hardware revenues continued strongly at £5.29 million (2021: £6.32 million) reflecting a continuing catch-up of systems updates deferred by customers during the early phase of the pandemic.
Operating expenses decreased 7.4% to £22.47 million (2021 restated: £23.89 million) largely driven by payroll savings and a lower impact from the impairment of development costs, lease dilapidations and inventory provisions.
Loss before tax was £1.07 million (2021: £2.96 million loss). 

Balance sheet
Net cash totalled £0.83 million (2021: £0.70 million) at the year end.
Fixed assets decreased to £1.74 million (2021 restated: 3.47 million) mainly from ongoing depreciation and the write off of assets no longer in use but that were not fully depreciated.
Current assets in 2021 included the advance billing of a major hardware sale fulfilled in 2022 and decreased by £6.90 million.
Correspondingly, current liabilities decreased by £7.70 million to £5.95 million (2021 restated: £13.63 million) due to lower deferred revenue on the advance billing.

Page 4

 

HTEC LIMITED

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

Principal risks and uncertainties

 Concentration of customers
Three customers accounted for 64% of sales in 2022 (71% in 2021). Given this concentration, the loss of a major customer would result in a material reduction in turnover. 
We act to mitigate the risk by securing long-term contracts with customers wherever possible. We also seek to provide high service levels and innovate new products. In addition, we are focused on business 'initiates' designed to broaden the customer base. 
Competition
The market demands continual improvements in functionality, and competition from other suppliers exists. 
To offset these risks, the Company continues to invest significantly in improving the quality and functionality of its products. The objective is to increase the value of the Compan'ys offering to its customers and to ensure that we continue to provide market-leading products and services. 
Maintaining the bank and other approvals to allow the company to operate as a payment service provider
Attaining these approvals requires considerable committed resources and continuous product renewal. 
The Company achieves the highest standard of PCI compliance by its annual certification process and continued monitoring of platform performance and changes in regulations and standards. 
Dependence on technology
We are heavily dependent on technology for the smooth running of our business. A cybersecurity incident could lead to a loss of data integrity within our systems or loss of financial assets through fraud. A cyber-attack or serious failure in our systems could result in us being unable to deliver service to our customers. As a result, we could suffer reputational loss, financial loss and penalties. 
The Company operates robust and well-protected data centres with multiple data links to protect against the risk of failure. The Company also maintains near-live-back-up data centres which are designed to be able to provide the necessary services in the event of a failure at a primary site. The use of antivirus and malware software, firewalls, email scanning and internet monitoring are also an integral part of our security plan. 
Market changes
Significant ownership changes could occur within the Company's target markets of petrol forecourts and convenience stores. Major oil companies have withdrawn from retailing operations and both market sectors are seeing a degree of consolidation activity. This provides both an opportunity and a threat. 
The Company's response is to continue to develop market-leading products and to ensure they can be integrated as widely as possible within the other technologies used in petrol retailing and the convenience store sectors. 

FINANCIAL RISK MANAGEMENT
The Company’s operations expose it to a variety of risks including the effect of changes in foreign currency exchange rates, credit risk and liquidity risk.
The Company does not have material exposures in any of the areas identified above.
The Company’s principal financial instruments comprise obligations under finance leases together with trade debtors and trade creditors that arise from operations. 
 
Page 5

 

HTEC LIMITED

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

The main risks arising from the Company’s financial instruments can be analysed as follows:
Foreign exchange rate risk
The Company transacts business in Euros with approximately 7% (2021: 10%) of turnover denominated in that currency. The Company is not exposed significantly to foreign exchange risk due to a short working capital cycle in Euros.
Credit risk
The Company’s principal financial assets are bank balances, cash, and trade debtors, which represent the Company’s maximum exposure to credit risk in relation to financial assets.
The Company’s credit risk is primarily attributable to its trade debtors.  Credit risk is managed by monitoring the amount and duration of exposure to any one customer depending upon their credit rating.  The amounts presented in the balance sheet are net of allowances for doubtful debts estimated by the Company’s management based on prior experience.
The Company has a significant concentration of credit risk, with 59% (2021: 71%) of its turnover spread over three large blue chip customers. The Company carefully monitors the creditworthiness of these three customers and is satisfied no significant exposure to default exists.
Liquidity risk
The Company’s policy has been to ensure continuity of funding through acquiring an element of the Company’s fixed assets under finance leases and arranging funding for operations via intercompany advances.
Cash flow interest rate risk
The directors monitor the overall level of borrowings and interest costs to limit any adverse effects on the financial performance of the company.

ENVIRONMENT
The Company’s policy with regards to the environment is to understand and effectively manage the actual and potential environmental impact of its activities. Operations are conducted such to comply with all the legal requirements relating to the environment in all areas where business is carried out.  During the period covered by this report, the Company has not incurred any fines or penalties or been investigated for any breach of environmental regulations. It is Company policy to continually carry out research and development of new products and processes to minimise the impact of its operations on the environment.
 


This report was approved by the board and signed on its behalf.



J A Frangis
Director

Date: 2 February 2024

Page 6

 

HTEC LIMITED

DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

The directors present their report and the financial statements for the year ended 31 December 2022.

Results and dividends

The loss for the year, after taxation, amounted to £820,293 (2021 - loss £2,249,518).

The directors do not recommend a dividend.

Directors

The directors who served during the year were:

J A Frangis (appointed 2 September 2022)
L Geiss (appointed 2 September 2022)
S Smotherman (appointed 2 September 2022, resigned 23 October 2023)
C Hatcher (appointed 2 September 2022, resigned 31 January 2023)
N A Radley (resigned 18 June 2022)
A Wilding (resigned 3 September 2022)

Qualifying third party indemnity provisions

The company has made qualifying third party indemnity provisions for the benefit of its directors which were made during the year and remain in force at the date of this report.

Matters covered in the Strategic report

As permitted by S414c (11) of the Companies Act 2006, the directors have elected to disclose information,
required to be in the Directors' Report by Schedule 7 of the 'Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008', in the strategic report.

Disclosure of information to auditor

Each of the persons who are directors at the time when this directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the company's auditor is unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the company's auditor is aware of that information.

Post balance sheet events

There have been no significant events affecting the company since the year end.

This report was approved by the board and signed on its behalf.
 





J A Frangis
Director

Date: 2 February 2024

Page 7

 

HTEC LIMITED
 
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022

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 judgements and accounting estimates that are reasonable and prudent; and


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 2006They 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.

Page 8

 

HTEC LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF HTEC LIMITED
 FOR THE YEAR ENDED 31 DECEMBER 2022

Opinion


We have audited the financial statements of HTEC Limited (the 'company') for the year ended 31 December 2022, which comprise the profit and loss account, the balance sheet, the statement of changes in equity and the related notes, including a summary of significant accounting policiesThe 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:


give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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.


Conclusions relating to going concern


In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the 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 auditor's report thereon. The directors are responsible for the other information contained within the annual reportOur opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.


We have nothing to report in this regard.


Page 9

 

HTEC LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF HTEC LIMITED (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


the information given in the 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.


Matters on which we are required to report by exception
 

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:


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the directors' responsibilities statement set out on page 8, 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.


Page 10

 

HTEC LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF HTEC LIMITED (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

Auditor's responsibilities for the audit of the financial statements
 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.


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:

the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the sector;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including Payment Card Industry Data Security Standard ("PCI DSS"), the Companies Act 2006 and taxation legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

performed analytical procedures to identify any unusual or unexpected relationships;
tested a sample of journal entries to identify unusual transactions;
reviewed a sample of revenue transactions and reviewed the income recognition policy;
assessed whether judgements and assumptions made in determining the accounting estimates set out in note 3 were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

agreeing financial statement disclosures to underlying supporting documentation;
reading the minutes of meetings of those charged with governance; and
enquiring of management as to actual and potential litigation and claims.


 
Page 11

 

HTEC LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF HTEC LIMITED (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022


There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.


Use of our report
 

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 2006Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





Jacqueline Oakes (senior statutory auditor)
  
for and on behalf of
Blick Rothenberg Audit LLP
 
Chartered Accountants
Statutory Auditor
  
16 Great Queen Street
Covent Garden
London
WC2B 5AH

8 February 2024
Page 12

 

HTEC LIMITED
 
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2022

As restated
2022
2021
Note
£
£

  

Turnover
 4 
21,411,474
21,031,751

Cost of sales
  
(7,205,843)
(5,979,923)

Gross profit
  
14,205,631
15,051,828

Administrative expenses
  
(15,263,328)
(17,908,699)

Operating loss
 5 
(1,057,697)
(2,856,871)

Interest payable and similar expenses
 9 
(14,534)
(75,928)

Loss before tax
  
(1,072,231)
(2,932,799)

Tax on loss
 10 
251,938
683,281

Loss for the financial year
  
(820,293)
(2,249,518)

There are no items of other comprehensive income for either the year or the prior year other than the loss for the year. Accordingly, no statement of other comprehensive income has been presented.

Page 13

 

HTEC LIMITED

BALANCE SHEET
AS AT 31 DECEMBER 2022

As restated
2022
2021
Note
£
£

Fixed assets
  

Intangible assets
 11 
1,374,718
2,053,501

Tangible fixed assets
 12 
306,038
1,368,091

Investments
 13 
48,467
48,467

  
1,729,223
3,470,059

Current assets
  

Stocks
 14 
981,150
3,329,341

Debtors: amounts falling due within one year
 15 
15,897,400
20,673,428

Cash at bank and in hand
  
828,057
700,315

  
17,706,607
24,703,084

Creditors: amounts falling due within one year
 16 
(5,953,438)
(13,655,038)

Net current assets
  
 
 
11,753,169
 
 
11,048,046

Total assets less current liabilities
  
13,482,392
14,518,105

Creditors: amounts falling due after more than one year
 17 
-
(65,000)

Provisions for liabilities
  

Deferred tax
 19 
-
(349,942)

Other provisions
 20 
(598,567)
(399,045)

  
 
 
(598,567)
 
 
(748,987)

Net assets
  
12,883,825
13,704,118


Capital and reserves
  

Called up share capital 
 21 
1,840
1,840

Share premium account
 22 
758,194
758,194

Capital redemption reserve
 22 
786,037
786,037

Profit and loss account
 22 
11,337,754
12,158,047

Total equity
  
12,883,825
13,704,118


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 

J A Frangis
Director

Date: 2 February 2024

Page 14

 

HTEC LIMITED

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022


Called up share capital
Share premium account
Capital redemption reserve
Profit and loss account
Total equity

£
£
£
£
£

At 1 January 2022
1,840
758,194
786,037
12,158,047
13,704,118



Loss for the financial year
-
-
-
(820,293)
(820,293)


At 31 December 2022
1,840
758,194
786,037
11,337,754
12,883,825



STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021


Called up share capital
Share premium account
Capital redemption reserve
Profit and loss account
Total equity

£
£
£
£
£

At 1 January 2021
1,840
758,194
786,037
14,407,565
15,953,636



Loss for the year
-
-
-
(2,249,518)
(2,249,518)


At 31 December 2021
1,840
758,194
786,037
12,158,047
13,704,118


Page 15

 

HTEC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1.


General information

HTEC Limited specialises in comprehensive, real-time, mission-critical solutions including RMS, card payment terminals and services, customer engagement, forecourt site controllers, outdoor payment terminals, automatic number plate recognition and handheld devices. 
The company is a private company limited by shares and incorporated in England and Wales. The
address of its registered office 5 New Street Square, London, United Kingdom, EC4A 3TW. 
The financial statements are presented in Sterling (£), which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £. 

2.Accounting policies

 
2.1

Basis of preparation of financial statements

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 company has taken advantage of the following disclosure exemptions in preparing these
financial statements, as permitted by FRS 102:
Section 3 Financial Statement Presentation paragraph 3.17(d) (inclusion of statement of cash
flows);
Section 7 Statement of Cash Flows (inclusion of statement of cash flows);
Section 11 Financial Instruments paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv),11.48(b) and 11.48(c) (disclosures relating to financial instruments);
Section 26 Share based payments (disclosure of share based payments); and
Section 33 Related Party Disclosures paragraph 33.7 (disclosures of key management personnel compensation).

These financial statements, for the year ended 31 December 2022, are the first the company has
prepared in accordance with UK GAAP. For periods up to and including the year ended 31 December 2021, the company prepared its financial statements in accordance with IFRS.

Accordingly, the Company has prepared financial statements that comply with UK GAAP applicable
as at 31 December 2022 together with the comparative period data for the year ended 31 December
2021. In preparing the financial statements, the company's opening statement of financial position
was prepared as at 1 January 2021, the Company's date of transition to UK GAAP.

The adjustments required to restate the financial statements, including the statement of financial
position as at 1 January 2021 and the financial statements as of, and for, the year ended 31
December 2021 are set out in note 26.

The preparation of financial statements in compliance with FRS 102 requires the use of certain
critical accounting estimates. It also requires management to exercise judgement in applying the
company's accounting policies (see note 3).

The following principal accounting policies have been applied:

  
2.2

Prior year adjustment

The company has restated its comparative figures for the year ended 31 December 2021. An explanation of the adjustment, together with the financial impact is set out in note 26.

Page 16

 

HTEC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.3

Exemption from preparing consolidated financial statements

The company was, at the end of the year, a wholly-owned subsidiary of Inform Information Systems Limited, whose registered address is 5 New Street Square, London, EC4A 3TW. 

Inform Information Systems Limited prepares consolidated financial statements, in which the company is included. In accordance with the exemption given in Section 400 of the Companies Act 2006, the company is not required to produce, and has not published, consolidated accounts.

 
2.4

Going concern

After making enquiries, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence and meet its liabilities as they fall due for the foreseeable future, being a period of at least twelve months from the date these financial statements were approved. This assessment is based on the financial support of the ultimate parent company, which has been confirmed in writing. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
 
 
2.5

Revenue

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:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the company has transferred the significant risks and rewards of ownership to the buyer;
the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the company will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

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.

A summary of the company's revenue streams and associated recognition criteria is set out below:

Software licences - Software licence fees are recognised at a point in time upon completion of the related hardware installation on the basis that the licences are on-premise perpetual licences and so represent a right to use the software as it exists at the point of installation. 

 
Page 17

 

HTEC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)


2.5
Revenue (continued)

Hardware - Hardware sales are recognised when goods are delivered, title has passed and there is customer acceptance. 

Service contracts for products located at customer sites - Service contract revenues are recognised evenly over the contractual period as the customer simultaneously receives and consumes the benefit from the Group's service delivery and that the Group has an enforceable right to payment. 

Installation fees - Installation fees relating to software purchases and hardware are recognised over time and to the extent of the completion of installation. 

Data services - Service contract revenues  are recognised over the contractual period and as the transactions are processed. 

Software consulting fees - Software consulting revenues are recognised over time on the percentage of completion method based on hours worked as the customer simultaneously receives and consumes the benefit from the Group's service delivery and that the Group has an enforecable right to payment. 

Licence maintenance fees - Licence maintenance fees are charged on an annual basis and recognised evenly over the year of cover in accordance with the satisfaction of the performance obligation to provide support. 

 
2.6

Tangible fixed assets

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.

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.

The company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.

Page 18

 

HTEC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)


2.6
Tangible fixed assets (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:

Short-term leasehold property
-
Length of lease
Plant and machinery
-
2 to 5 years
Fixtures and fittings
-
2 to 7 years
Computer equipment
-
3 to 7 years

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.

 
2.7

Intangible assets

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.

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.

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. 

Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic life of five years.

If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

Research and development costs 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 research and development costs measured at cost less impairment, the impairment loss is measured as the difference between the asset's carrying amount and the best estimate of the amount the company would receive for the asset if it were to be sold at the reporting date.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Page 19

 

HTEC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.8

Cash and cash equivalents

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.

 
2.9

Finance costs

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.

 
2.10

Operating leases: the company as lessee

Rentals paid under operating leases are charged to profit or loss 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.

 
2.11

Pensions

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.

 
2.12

Foreign currency translation

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 within administrative expenses.

Page 20

 

HTEC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.13

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

 
2.14

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. 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.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.


2.15

Financial instruments

The company has elected to apply Sections 11 and 12 of FRS 102 in respect of financial instruments.

Financial assets and financial liabilities are recognised when the company becomes party to the contractual provisions of the instrument. 

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. 
 
The company’s policies for its major classes of financial assets and financial liabilities are set out below. 

Page 21

 

HTEC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)





Financial instruments (continued)

Financial assets
Basic financial assets, including trade and other debtors, cash and bank balances, intercompany working capital balances, and intercompany financing are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.

Such assets are subsequently carried at amortised cost using the effective interest method, less any impairment.

Financial liabilities

Basic financial liabilities, including trade and other creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Impairment of financial assets
Financial assets 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 cost less impairment, the impairment loss is measured as the difference between the asset's carrying amount and the best estimate of the amount the company would receive for the asset if it were to be sold at the reporting date. 

For financial assets measured at amortised cost, the impairment loss is measured as the difference between the asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If the 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.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Page 22

 

HTEC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)





Financial instruments (continued)

Derecognition of financial assets and financial liabilities
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions. 
 
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.

Offsetting of financial assets and financial liabilities
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

  
2.16

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.

 
2.17

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.18

Impairment of fixed assets and goodwill

Assets that are subject to depreciation or amortisation are assessed at each balance sheet date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each balance sheet date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.

 
2.19

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

Page 23

 

HTEC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

3.


Judgements in applying accounting policies and key sources of estimation uncertainty

In the process of applying the Company's accounting policies, which are described above, management have made the following judgements and estimations about the future that have the most significant effect on the amounts recognised in the financial statements. 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 reivision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. 

Impairment of goodwill
The carrying value of goodwill at the year-end is £nil after impairment provision of £390,000 (2021 restated: £nil after impairment provision of £390,000). An annual impairment review is performed involving judgement of the future cash flows for cash-generating units and the discount rates applied to future cash flows in order to calculate present value.

Recoverability of development costs
All capitalised and ongoing projects are reviewed regularly to ensure they meet the criteria for capitalisation. The key judgements required by management are around the potential impairment of the intangible assets once capitalised. These judgements surround the estimation of future cash flows to support the carring values of assets. The carrying value of capitalised development costs at the year end was £1,374,718 (2021: £2,053,501).



4.


Turnover

An analysis of turnover by class of business is as follows:


2022
2021
£
£

Software licenses and hardware
5,294,329
6,322,461

Services and installations
5,630,795
7,022,197

Data services
4,069,698
5,062,493

Consultancy and software licence maintenance
6,416,652
2,624,600

21,411,474
21,031,751


Analysis of turnover by country of destination:

2022
2021
£
£

United Kingdom
19,756,590
18,865,751

Rest of Europe
1,654,884
2,166,000

21,411,474
21,031,751


Page 24

 

HTEC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

5.


Operating loss

The operating loss is stated after charging:

2022
As restated
 2021
£
£

Exchange differences
98,554
24,238

Other operating lease rentals
24,726
27,417

Depreciation
332,907
630,167

Amortisation
678,783
1,617,699

Impairment
-
940,000


6.


Auditor's remuneration

During the year, the company obtained the following services from the company's auditor:


2022
2021
£
£

Fees payable to the company's auditor for the audit of the company's financial statements
32,000
108,000

Fees payable to the company's auditor for taxation services
3,000
13,000

Fees payable to the company's auditor for assistance in preparation of financial statements
10,750
-


Auditor's remuneration in 2021 relates to the previous auditor.




Page 25

 

HTEC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

7.


Employees

Staff costs, including directors' remuneration, were as follows:


2022
2021
£
£

Wages and salaries
7,248,710
9,042,018

Social security costs
761,011
867,021

Cost of defined contribution scheme
318,428
291,409

Other benefits
95,057
69,312

8,423,206
10,269,760


The average monthly number of employees, including the directors, during the year was as follows:


        2022
        2021
            No.
            No.







Corporate/Administration
20
17



Sales and marketing
13
12



Research and development
44
63



Operations
106
123

183
215


8.


Directors' remuneration

2022
2021
£
£

Directors' emoluments
685,734
604,909

Company contributions to defined contribution pension schemes
22,583
27,714

708,317
632,623


During the year retirement benefits were accruing to 2 directors (2021 - 3) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £434,390 (2021 - £356,366). During the year, the director exercised their share options in respect of shares received under long term incentive plans. 

The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £11,917 (2021 - £10,215).

During the year NIL directors received shares under the long-term incentive schemes (2021 -2).
During the year, 2 directors exercised their share options under the long-term incentive schemes (2021 - NIL). 

Page 26

 

HTEC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

9.


Interest payable and similar expenses

As restated
2022
2021
£
£


Bank interest payable
6,133
71,210

Other loan interest payable
8,401
4,718


10.


Taxation


2022
As restated
2021
£
£

Corporation tax


Current tax on profits for the year
-
(345,307)

Adjustments in respect of previous periods
115,069
(160,974)


115,069
(506,281)


Total current tax
115,069
(506,281)

Deferred tax


Origination and reversal of timing differences
(367,007)
(177,000)

Total deferred tax
(367,007)
(177,000)


Tax on loss
(251,938)
(683,281)
Page 27

 

HTEC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
 
10.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is lower than (2021 - lower than) the standard rate of corporation tax in the UK of 19% (2021 - 19%). The differences are explained below:

2022
2021
£
£


Loss on ordinary activities before tax
(1,072,231)
(2,932,799)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
(203,724)
(557,232)

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
26,117
70,925

Fixed assets differences
5,598
-

Timing differences not recognised in the computation
-
(112,000)

Adjustments to tax charge in respect of prior periods
115,069
(160,974)

Research and development tax credits
-
(149,000)

Remeasurement of deferred tax for changes in tax rates
(53,490)
19,000

Movement in deferred tax not recognised
(144,133)
270,000

Adjustment in respect of prior periods - deferred tax
-
(64,000)

Group relief
2,625
-

Total tax charge for the year
(251,938)
(683,281)

Page 28

 

HTEC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
 
10.Taxation (continued)


Factors that may affect future tax charges

In the Spring Budget 2021, the UK Government announced that from 1 April 2023 the corporation tax rate would increase to 25% for companies with profits of over £250,000. A small profits rate will also be introduced for companies with profits of £50,000 or less so that they will continue to pay corporation tax at
19%. From this date companies with profits between £50,000 and £250,000 will pay tax at the main rate
reduced by a marginal relief providing a gradual increase in the effective corporation tax rate. This new
law was substantively enacted on 24 May 2021. Deferred taxes at the balance sheet date have been
measured using these enacted tax rates and reflected in these financial statements.


11.


Intangible assets




Development expenditure

£



Cost


At 1 January 2022
6,075,000



At 31 December 2022

6,075,000



Amortisation


As restated at 1 January 2022
4,021,499


Charge for the year
678,783



At 31 December 2022

4,700,282



Net book value



At 31 December 2022
1,374,718



At 31 December 2021
2,053,501



Page 29

 

HTEC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

12.


Tangible fixed assets





Leasehold improvements
Computer equipment
Total

£
£
£



Cost or valuation


At 1 January 2022
1,933,228
7,399,695
9,332,923


Additions
806
28,655
29,461


Disposals
-
(1,339,015)
(1,339,015)



At 31 December 2022

1,934,034
6,089,335
8,023,369



Depreciation


At 1 January 2022
1,852,549
6,112,283
7,964,832


Charge for the year
49,735
283,172
332,907


Disposals
-
(580,408)
(580,408)



At 31 December 2022

1,902,284
5,815,047
7,717,331



Net book value



At 31 December 2022
31,750
274,288
306,038



At 31 December 2021
80,679
1,287,412
1,368,091

Page 30

 

HTEC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

13.


Fixed asset investments





Investments in subsidiary companies

£



Cost or valuation


At 1 January 2022
48,467



At 31 December 2022
48,467






14.


Stocks

2022
2021
£
£

Work in progress
92,659
10,726

Component parts
888,491
3,318,615

981,150
3,329,341



15.


Debtors

2022
2021
£
£


Trade debtors
2,900,194
8,167,297

Amounts owed by group undertakings
11,285,403
10,799,774

Other debtors
228,593
504,091

Prepayments and accrued income
1,466,145
1,202,266

Deferred taxation
17,065
-

15,897,400
20,673,428


Amounts owed by group undertakings are interest free, have no fixed repayment date and are repayable on demand.

Trade debtors are presented net of £50,174 (2021: £183,000) provision for impairment.

Page 31

 

HTEC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

16.


Creditors: amounts falling due within one year

2022
2021
£
£

Bank loans
96,845
384,767

Trade creditors
977,518
3,465,609

Amounts owed to group undertakings
1,595,556
358,091

Other taxation and social security
684,743
1,925,794

Other creditors
337,699
632,491

Accruals
863,010
1,067,489

Deferred income
1,398,067
5,820,797

5,953,438
13,655,038


Amounts owed to group undertakings are interest free, have no fixed repayment date and are repayable on demand.


17.


Creditors: Amounts falling due after more than one year

2022
2021
£
£

Bank loans
-
65,000



18.


Loans


Analysis of the maturity of loans is given below:


2022
2021
£
£

Amounts falling due within one year

Bank loans
96,845
384,767


96,845
384,767

Amounts falling due 1-2 years

Bank loans
-
65,000


-
65,000



96,845
449,767


Page 32

 

HTEC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

19.


Deferred taxation




2022


£






At beginning of year
(349,942)


Charged to profit or loss
367,007



At end of year
17,065

2022
2021
£
£


Fixed asset timing differences
(142,968)
(213,492)

Short term timing differences
23,729
(136,450)

Losses and other deductions
136,304
-

17,065
(349,942)

Comprising:

Asset
17,065
-

Liability
-
(349,942)



20.


Provisions




Dilapidations provision

£





At 1 January 2022 (as restated)
399,045


Charged to profit or loss
199,522



At 31 December 2022
598,567


21.


Share capital

2022
2021
£
£
Allotted, called up and fully paid



183,954 (2021 - 183,954) Authorised ordinary shares shares of £0.01 each
1,840
1,840


The Company has one class of ordinary shares which carry no right to fixed income.

Page 33

 

HTEC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

22.


Reserves

Profit and loss account

The profit and loss account includes all current and prior period retained profits and losses.


23.


Commitments under operating leases

At 31 December 2022 the company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2022
2021
£
£


Not later than 1 year
620,273
702,000

Later than 1 year and not later than 5 years
661,088
1,262,000

1,281,361
1,964,000


24.


Related party transactions

The company has taken advantage of the exemption contained in FRS 102 section 33 "Related Party Disclosures" from disclosing transactions with entities which are a wholly owned part of the group.


25.


Ultimate parent undertaking and controlling party

The immediate parent undertaking is HTEC Group Limited. 
The parent undertaking of the smallest group of undertakings for which group financial statements are drawn up and of which the company is a member is Inform Information Systems Limited, whose registered office is 5 New Street Square, London, EC4A 3TW. Copies of these group financial statements are available to the public from Companies House.

The ultimate parent company is PDS Parent Inc, a company incorporated in the United States. 

In the opinion of the director the ultimate controlling party is PDS Parent Inc.


Page 34

 

HTEC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

26.


Prior year adjustment

Prior year errors
During the year, a review of goodwill balances was performed which identified an impairment in the goodwill balance which should have been recognised in a prior year.
The companies that the goodwill related to were dormant in the prior years, and remain dormant in the current year. Therefore,  an adjustment has been made to recognise the impairment of these balances.
Transition adjustments from IFRS to FRS 102
These financial statements, for the period ended 31 December 2022, are the first the Company has prepared in accordance with UK GAAP. For periods up to and including the year ended 31 December 2021, the Company prepared its financial statements in accordance with IFRS.
Accordingly, the Company has prepared financial statements that comply with UK GAAP applicable as at 31 December 2022 together with the comparative period data for the year ended 30 December 2021. In preparing the financial statements, the Company's opening statement of financial position was prepared as at 1 January 2021, the Company's date of transition to UK GAAP.
The impact of the transition to FRS 102 on the company is summarised below. The extent of the transition was due to the derecgonition of right of use assets and corresponding lease liabilities and amortisation of goodwill. Please refer to the note below for  the adjustments required to restate the financial statements, including the statement of financial position as at 1 January 2021 and the financial statements as of, and for, the year ended 31 December 2021.
Additionally, a prior period adjustment was posted to reverse the IFRS 16 Leases balances which were included within the prior year accounts and recognise goodwill amortisation. The adjustment posted brings the comparatives in line with UK GAAP treatment.
The impact of these prior year adjustments are separately summarised below:





Change in profit and loss account

As previously stated
31 December 2021
Transition adjustments
Restated 31 December 2021
      £000's
      £000's
      £000's

Turnover

21,032

-
 
21,032
 
Operating costs

(23,859)

(30)
 
(23,889)
 
Operating profit

(2,827)

(30)
 
(2,857)
 
Interest payable and similar expenses

(136)

60
 
(76)
 
Loss before taxation

(2,963)

30
 
(2,933)
 
Tax

683

-
 
683
 
Loss after taxation

(2,280)

30
 
(2,250)
 

Page 35

 

HTEC LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022




Change in balance sheet

As previously stated
31 December 2021
Effect of prior period adjustments
Transition adjustments
Restated 31 December 2021
      £000's
      £000's
      £000's
      £000's

-

-

-
 
-
 
Intangible fixed assets

2,444

135

(256)
 
2,053
 
Tangible fixed assets

703

-

665
 
1,368
 
Right-of-use assets

2,625

-

(2,625)
 
-
 
Investments

49

-

-
 
49
 
Stock

3,329

-

-
 
3,329
 
Debtors: amounts due falling within one year

20,645

-

29
 
20,674
 
Cash at bank and in hand

700

-

-
 
700
 
Creditors: amounts falling due within one year

(14,754)

399

700
 
(13,655)
 
Creditors: amounts falling due after more than one year

(1,327)

-

1,262
 
(65)
 
Provisions

(350)

(399)

-
 
(749)
 
Share capital

(2)

-

-
 
(2)
 
Share premium

(758)

-

-
 
(758)
 
Capital redemption reserve

(786)

-

-
 
(786)
 
Profit and loss account

(12,518)

135

225
 
(12,158)
 


Change in opening net assets


As previously stated 1 January 2021
Effect of prior period adjustments
Transition adjustments
Restated 1 January 2021

£'000's
£'000's
£'000's
£'000's

Net assets 
 16,344
 (135)
 (256)
 15,953

 
Page 36