Company registration number 01053218 (England and Wales)
TECHEX LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
TECHEX LIMITED
COMPANY INFORMATION
Directors
R Bergman Bailey
Mrs C Bergman Bailey
(Appointed 14 June 2022)
Company number
01053218
Registered office
Greenwood House
London Road
Bracknell
Berkshire
United Kingdom
RG12 2AA
Auditor
Azets Audit Services
Suites B & D
Burnham Yard
London End
Beaconsfield
Buckinghamshire
United Kingdom
HP9 2JH
TECHEX LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 20
TECHEX LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 1 -
The directors present the strategic report for the year ended 31 May 2023.
Review of business
The principal activity of Techex Limited is offering specialised cloud and video over IP software and services. Techex is redefining how IP and the cloud are used to move and manage live video through the development of proprietary technology and partnerships with other technology partners. The organisation provides support for live broadcasters who depend on technology to produce uninterrupted live event transmissions in accordance with accepted industry standards. Techex delivers products and services which are part of our customers' workflow.
Techex has a long-standing European and UK customer base and is looking to expand our existing customer base in the North American market by incorporating Techex Inc. in the USA. The principal activity of Techex Inc. is selling Techex Limited products in the North American market. Techex Inc. was incorporated on 24 May 2023 in the State of Delaware and started trading in August 2023.
As we lead the cutting edge technology, Techex is best placed to assist with the broadcast industry's efforts to modernise and adopt new technologies. The business has made additional investments in expanding its software capabilities and establishing connections with technology partners.
The company was acquired on 14 June 2022 and the buyout was supported by funds managed by WestBridge Fund Managers Limited. The acquisition served to support the business's ambitious organic development goals and US expansion.
The business continues to invest in its people with an increased focus on development, culture and wellbeing recognising the importance of societal and environmental impacts. With this in mind, the business has embarked on a wide-ranging ESG programme and is compiling it first annual ESG report for the next reporting period.
Principal risks and uncertainties
General economic uncertainty
The Group offers specialised cloud and video over IP services to the broadcasting sector, which is striving to adopt new technology resulting in macro tailwinds.
Geopolitical risks
Techex currently services customers in Europe and USA and is not exposed to the Russia / Ukraine conflict.
Competitor risks
Techex offers specialised cloud and video over IP services to the broadcasting sector, which is striving to adopt new technology. We think the business is in a strong financial position, and we are still optimistic about its ability to expand.
Financial Instruments
Techex has a normal level of exposure to price, credit, liquidity and cash flow risks arising from trading activities largely conducted in sterling. The group does not enter into any formal hedging arrangements.
Future developments, and research and development
Techex is actively developing new business in North America and sees this market as potential growth in the coming years. To support this strategy, the group launched a wholly-owned subsidiary in the USA on 24 May 2023 to support this activity in developing and servicing customers in North America. Techex Inc. was incorporated on 24 May 2023 in the State of Delaware and started trading in August 2023.
The company is still committed to enhancing its cloud capabilities in the upcoming months while also continuing to create broadcast-related software features based on user input.
TECHEX LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 2 -
Key performance indicators
The directors consider the following to be the key performance indicators of the group:
* The above Reported EBITDA and profit before tax each include £763k of restructuring activities in the current year which is expected to be a one-off.
R Bergman Bailey
Director
19 February 2024
TECHEX LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 May 2023.
Principal activities
The principal activity of the company continued to be that of information technology and telecommunications activities.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £5,916,251. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
R Bergman Bailey
Mrs C Bergman Bailey
(Appointed 14 June 2022)
D Ely
(Appointed 14 June 2022 and resigned 6 April 2023)
Auditor
In accordance with the company's articles, a resolution proposing that Azets Audit Services be deemed appointed as auditor of the company will be put at a General Meeting.
Statement of directors' responsibilities
The directors are responsible for preparing the annual 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
TECHEX LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 4 -
On behalf of the board
R Bergman Bailey
Director
19 February 2024
TECHEX LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF TECHEX LIMITED
- 5 -
Opinion
We have audited the financial statements of Techex Limited (the 'company') for the year ended 31 May 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 May 2023 and of its profit 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.
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 UK, including the FRC’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.
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 report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our 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.
TECHEX LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF TECHEX LIMITED
- 6 -
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 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, 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.
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.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
TECHEX LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF TECHEX LIMITED
- 7 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the entity through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
This report is made solely to the company's member in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
David Green MA (Cantab) FCA
Senior Statutory Auditor
For and on behalf of Azets Audit Services
19 February 2024
Chartered Accountants
Statutory Auditor
Suites B & D
Burnham Yard
London End
Beaconsfield
Buckinghamshire
United Kingdom
HP9 2JH
TECHEX LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
19,357,297
16,544,738
Cost of sales
(9,299,600)
(7,626,873)
Gross profit
10,057,697
8,917,865
Distribution costs
(251,287)
(185,994)
Administrative expenses
(3,762,838)
(2,255,434)
Operating profit
4
6,043,572
6,476,437
Interest receivable and similar income
7
43,439
25,141
Interest payable and similar expenses
8
(1,291)
(3,195)
Profit before taxation
6,085,720
6,498,383
Tax on profit
9
(800,687)
(1,224,405)
Profit for the financial year
5,285,033
5,273,978
TECHEX LIMITED
BALANCE SHEET
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
11
33,122
Tangible assets
12
88,734
101,196
121,856
101,196
Current assets
Stocks
13
30,708
72,681
Debtors
14
5,447,470
1,913,816
Cash at bank and in hand
7,015,113
10,084,630
12,493,291
12,071,127
Creditors: amounts falling due within one year
15
(4,474,737)
(3,400,695)
Net current assets
8,018,554
8,670,432
Net assets
8,140,410
8,771,628
Capital and reserves
Called up share capital
17
457,000
457,000
Profit and loss reserves
7,683,410
8,314,628
Total equity
8,140,410
8,771,628
The financial statements were approved by the board of directors and authorised for issue on 19 February 2024 and are signed on its behalf by:
R Bergman Bailey
Director
Company Registration No. 01053218
TECHEX LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 June 2021
457,000
3,040,650
3,497,650
Year ended 31 May 2022:
Profit and total comprehensive income for the year
-
5,273,978
5,273,978
Balance at 31 May 2022
457,000
8,314,628
8,771,628
Year ended 31 May 2023:
Profit and total comprehensive income for the year
-
5,285,033
5,285,033
Dividends
10
-
(5,916,251)
(5,916,251)
Balance at 31 May 2023
457,000
7,683,410
8,140,410
TECHEX LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
- 11 -
1
Accounting policies
Company information
Techex Limited is a private company limited by shares incorporated in England and Wales. The registered office is Greenwood House, London Road, Bracknell, Berkshire, United Kingdom, RG12 2AA.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
1.2
Going concern
In preparing the financial statements, Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern. The Directors do not believe there to be any matters of disclosure. true
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of the company's business of developing, designing, delivering and supporting live video transport solutions, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Other intangible assets
33% on cost
TECHEX LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 12 -
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold improvements
over the life of the lease
Fixtures and fittings
20% on cost
Office equipment
25% on cost
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally 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.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
TECHEX LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 13 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
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.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
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.
Basic financial liabilities
Basic financial liabilities, including 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. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
TECHEX LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 14 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
TECHEX LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 15 -
1.14
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Solutions
11,523,128
10,155,134
Techex Software
2,714,168
2,907,318
Support & Maintenance
5,028,001
3,426,795
Other
92,000
55,491
19,357,297
16,544,738
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
15,894,196
11,534,444
Europe
1,748,888
2,121,357
Rest of the World
1,714,213
2,888,937
19,357,297
16,544,738
2023
2022
£
£
Other revenue
Interest income
43,439
25,141
TECHEX LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 16 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
14,490
(51,117)
Fees payable to the company's auditor for the audit of the company's financial statements
15,045
7,005
Depreciation of owned tangible fixed assets
29,147
33,810
Amortisation of intangible assets
1,917
-
Operating lease charges
251,287
185,994
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
26
26
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,981,196
1,406,747
Social security costs
234,439
152,708
Pension costs
60,948
92,443
2,276,583
1,651,898
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
8,100
Company pension contributions to defined contribution schemes
-
3,595
11,695
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 0 (2022 - 1).
TECHEX LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 17 -
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
42,733
25,141
Other interest income
706
Total income
43,439
25,141
8
Interest payable and similar expenses
2023
2022
£
£
Other interest
1,291
3,195
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
800,687
1,312,291
Adjustments in respect of prior periods
(87,886)
Total current tax
800,687
1,224,405
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
6,085,720
6,498,383
Expected tax charge based on the standard rate of corporation tax in the UK of 20.00% (2022: 19.00%)
1,217,327
1,234,693
Tax effect of expenses that are not deductible in determining taxable profit
(4,319)
74,351
Adjustments in respect of prior years
(87,886)
Group relief
(414,059)
Permanent capital allowances in excess of depreciation
1,738
3,247
Taxation charge for the year
800,687
1,224,405
As part of Budget 2021 on 3 March 2021, it was announced that the UK corporation tax rate will increase to 25% from 1 April 2023. This change was substantively enacted on 24 May 2021. Prior to this change, the corporation tax rate was 19%. The effect on the company of this changes has been reflected in the group's financial statements in the financial year as appropriate.
TECHEX LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 18 -
10
Dividends
2023
2022
£
£
Interim paid
5,916,251
11
Intangible fixed assets
Other intangible assets
£
Cost
At 1 June 2022
Additions
35,039
At 31 May 2023
35,039
Amortisation and impairment
At 1 June 2022
Amortisation charged for the year
1,917
At 31 May 2023
1,917
Carrying amount
At 31 May 2023
33,122
At 31 May 2022
12
Tangible fixed assets
Leasehold improvements
Fixtures and fittings
Office equipment
Total
£
£
£
£
Cost
At 1 June 2022
144,258
53,267
135,333
332,858
Additions
599
16,086
16,685
At 31 May 2023
144,258
53,866
151,419
349,543
Depreciation and impairment
At 1 June 2022
67,321
46,406
117,935
231,662
Depreciation charged in the year
14,426
4,254
10,467
29,147
At 31 May 2023
81,747
50,660
128,402
260,809
Carrying amount
At 31 May 2023
62,511
3,206
23,017
88,734
At 31 May 2022
76,937
6,861
17,398
101,196
TECHEX LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 19 -
13
Stocks
2023
2022
£
£
Finished goods and goods for resale
30,708
72,681
An impairment arising of £86,504 (2022: £12,982) due to slow-moving and obsolete stock was recognised in cost of sales during the year.
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,559,610
1,292,352
Amounts owed by group undertakings
1,873,774
117,620
Prepayments and accrued income
1,014,086
503,844
5,447,470
1,913,816
15
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
1,118,979
614,900
Amounts owed to group undertakings
63,285
Corporation tax
370,043
714,428
Other taxation and social security
418,369
197,824
Other creditors
500
Accruals and deferred income
2,503,561
1,873,543
4,474,737
3,400,695
16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
60,948
92,443
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
At the balance sheet date, the company was committed to make payments into the staff pension schemes of £14,204 (2022: £14,699).
TECHEX LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 20 -
17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
457,000
457,000
457,000
457,000
18
Financial commitments, guarantees and contingent liabilities
There are fixed and floating charges over both the present and future assets of the company, including property or undertaking of the company and future cash deposits.
Loans in other group companies are secured with a cross-party guarantee between the company, Tampa 456 Limited and Tampa 789 Limited in favour of the lender.
19
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
384,315
40,349
20
Related party transactions
As a member of the group headed by Tampa 123 Limited, the company is exempt from the requirements of FRS 102 Section 33 to disclose transactions with other members of the group headed by Tampa 123 Limited on the grounds that accounts are publicly available from the Registered Office.
Techex Limited owe a shareholder of the group £500 (2022: £Nil). This is interest free and repayable on demand.
21
Ultimate controlling party
The directors consider there is no ultimate controlling party in either the current or preceding years.
22
Ultimate parent company
The company is a wholly owned subsidiary undertaking of Tampa 123 Ltd which is the ultimate parent company incorporated in Great Britain.
The largest group in which the results of the company are consolidated is that headed by Tampa 123 Ltd. No other group financial statements include the results of the company. The consolidated financial statements of the group can be obtained from Capital Building, Tyndall Street, Cardiff, United Kingdom, CF10 4AZ.
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