Company registration number 01250877 (England and Wales)
CULTURA TECHNOLOGIES LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
CULTURA TECHNOLOGIES LTD
COMPANY INFORMATION
Directors
D Riley
B Beattie
R Reynertson
(Appointed 10 October 2023)
Secretary
D Riley
Company number
01250877
Registered office
Rivington House
Chorley North Business Park
Drumhead Road
Chorley
Lancashire
England
PR6 7BX
Auditor
PM+M Solutions for Business LLP
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
CULTURA TECHNOLOGIES LTD
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 7
Statement of comprehensive income
8
Balance sheet
9 - 10
Statement of changes in equity
11
Notes to the financial statements
12 - 25
CULTURA TECHNOLOGIES LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

Fair review of the business

The directors aim to present a balanced and comprehensive review of the development and performance of the business during the year, and its position at year end. Our review is consistent with the size and non‑complex nature of the business and is written in the context of the risks and uncertainties we face.

Principal risks and uncertainties

The directors are of the opinion that risks for the company are low and manageable. All the company's revenues derive from cash flows from an increasingly diversified pool of clients and products, such that no single customer, product, or investment will have a disproportionate impact on results. Instead, a significant proportion of the Company's revenues ultimately derive from long term, recurring business with our loyal and valued customer base.

 

Financial risk management objectives and policies

The company makes little use of financial instruments other than an operational bank account and so its exposure to credit risk, liquidity risk and cash flow risk is not material for the assessment of the assets, liabilities, financial position and profit or loss of the company.

 

Key performance indicators
The directors use the Key Performance Indicators defined by our parent group to manage the business. The key performance indicators are sales growth, operating profit and operating profit margins. The directors consider that the performance of the business in accordance with these metrics increased slightly in 2023 over 2022.
2023
2022
Turnover
6,119
5,841
Sales growth
4.75%
(8.27)%
Operating Profit (£000)
888
803
Operating Profit Margin
14.52%
13.75%
During the year, turnover increased by 4.54%, and operating profits saw a modest rise of 0.79%, resulting in an operating profit margin of 14.52%. The directors consider this performance satisfactory, The increase in turnover was largely driven by price increases associated with inflation-linked contracts. These contracts allowed the company to adjust prices in response to inflationary pressures, ensuring revenue growth despite challenging economic conditions. This strategic approach has been a key factor in maintaining a stable financial performance.

On behalf of the board

D Riley
Director
29 July 2024
CULTURA TECHNOLOGIES LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company continued to be that of the supply and installation of computer equipment and programming services.

Results and dividends

The results for the year are set out on page 8.

Ordinary dividends were paid amounting to £1,000,000. The directors do not recommend payment of a final dividend.

No preference dividends were paid. 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:

J A Baker
(Resigned 10 October 2023)
D Riley
B Beattie
R Reynertson
(Appointed 10 October 2023)
Supplier payment policy

The company's current policy concerning the payment of trade creditors is to follow the CBI's Prompt Payers Code (copies are available from the CBI, Centre Point, 103 New Oxford Street, London WC1A 1DU).

 

The company's current policy concerning the payment of trade creditors is to:

 

Trade creditors of the company at the year end were equivalent to 67 day's purchases, based on the average daily amount invoiced by suppliers during the year.

Future developments

As for many companies of our size, the business environment in which we operate continues to be challenging. With these risks and uncertainties in mind we are aware that any plans for the development of the business may be subject to unforeseen future events outside our control. However, we will continue to show flexibility and respond to the market conditions as they arise.

Auditor

The auditor, PM+M Solutions for Business LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

CULTURA TECHNOLOGIES LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
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:

 

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.

On behalf of the board
D Riley
Director
29 July 2024
CULTURA TECHNOLOGIES LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CULTURA TECHNOLOGIES LTD
- 4 -
Opinion

We have audited the financial statements of Cultura Technologies Ltd (the 'company') for the year ended 31 December 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 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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 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.

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 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:

CULTURA TECHNOLOGIES LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CULTURA TECHNOLOGIES LTD
- 5 -
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:

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.

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, 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.

 

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

CULTURA TECHNOLOGIES LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CULTURA TECHNOLOGIES LTD
- 6 -

Identifying and assessing potential risks related to irregularities

 

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we have considered the following:

 

 

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: timing of recognition of commercial income, posting of unusual journals and complex transactions; and manipulating the company's performance profit measures and other key performance indicators to meet remuneration targets and externally communicated targets. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

 

We also obtained an understanding of the legal and regulatory frameworks that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included UK Companies Act, employment law, health and safety, pensions legislation and tax legislation.

Audit response to risks identified

Our procedures to respond to risks identified included the following:

 

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

CULTURA TECHNOLOGIES LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CULTURA TECHNOLOGIES LTD
- 7 -

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.

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 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an 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.

Miss Helen Louise Clayton BSc FCA (Senior Statutory Auditor)
For and on behalf of PM+M Solutions for Business LLP
29 July 2024
Chartered Accountants
Statutory Auditor
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
CULTURA TECHNOLOGIES LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
6,118,516
5,840,922
Cost of sales
(4,589,108)
(4,472,631)
Gross profit
1,529,408
1,368,291
Administrative expenses
(640,929)
(565,042)
Operating profit
4
888,479
803,249
Interest payable and similar expenses
7
(701)
(1,677)
Profit before taxation
887,778
801,572
Tax on profit
8
(132,885)
3,248
Profit and total comprehensive income for the financial year
754,893
804,820

The profit and loss account has been prepared on the basis that all operations are continuing operations.

CULTURA TECHNOLOGIES LTD
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
10
7,905
11,056
Tangible fixed assets
11
152,940
213,822
Investments
12
214,235
214,235
375,080
439,113
Current assets
Debtors
14
5,127,493
4,341,030
Cash at bank and in hand
36,170
66,966
5,163,663
4,407,996
Creditors: amounts falling due within one year
Creditors
15
4,008,987
3,134,675
Current tax liabilities
207,765
139,944
Other taxation and social security
43,643
-
Lease liabilities
16
12,467
49,249
4,272,862
3,323,868
Net current assets
890,801
1,084,128
Total assets less current liabilities
1,265,881
1,523,241
Creditors: amounts falling due after more than one year
Lease liabilities
16
-
12,467
-
(12,467)
Provisions for liabilities
Deferred tax liabilities
17
(10,608)
(10,394)
Net assets
1,255,273
1,500,380
Capital and reserves
Called up share capital
19
50,370
50,370
Share premium account
20
2,618
2,618
Capital redemption reserve
21
195,771
195,771
22
750
750
Profit and loss reserves
1,005,764
1,250,871
Total equity
1,255,273
1,500,380
CULTURA TECHNOLOGIES LTD
BALANCE SHEET (CONTINUED)
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
The financial statements were approved by the board of directors and authorised for issue on 29 July 2024 and are signed on its behalf by:
D Riley
Director
Company registration number 01250877 (England and Wales)
CULTURA TECHNOLOGIES LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Share premium account
Capital redemption reserve
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
£
£
Balance at 1 January 2022
50,370
2,618
195,771
750
1,446,051
1,695,560
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
-
-
804,820
804,820
Transactions with owners in their capacity as owners:
Dividends
9
-
-
-
-
(1,000,000)
(1,000,000)
Balance at 31 December 2022
50,370
2,618
195,771
750
1,250,871
1,500,380
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
-
-
754,893
754,893
Transactions with owners in their capacity as owners:
Dividends
9
-
-
-
-
(1,000,000)
(1,000,000)
Balance at 31 December 2023
50,370
2,618
195,771
750
1,005,764
1,255,273
CULTURA TECHNOLOGIES LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information

Cultura Technologies Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Rivington House, Chorley North Business Park, Drumhead Road, Chorley, Lancashire, England, PR6 7BX. The company's principal activities and nature of its operations are disclosed in the directors' report.

1.1
Accounting convention

The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.

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.

As permitted by FRS 101, the company has taken advantage of the following disclosure exemptions from the requirements of IFRS:

Where required, equivalent disclosures are given in the group accounts of Constellation Software Inc. The group accounts of Constellation Software Inc. are available to the public and can be obtained as set out in note 24.

The company has taken advantage of the exemption under section 401 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

 

Cultura Technologies Ltd is a wholly owned subsidiary of Volaris Group UK Holdco Limited and the results of Cultura Technologies Ltd are included in the consolidated financial statements of Constellation Software Inc which are available from Gary Jonas Computing Ltd, 8133 Warden Ave, Suite 400, Markham, Ontario, Canada, L6G 1B3.

1.2
Going concern

The directors have at the time of approving the financial statements, a reasonable expectation that the truecompany has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

CULTURA TECHNOLOGIES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.3
Turnover

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and 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.

 

In respect of maintenance contracts, income is recognised over the life of the contract.

 

In respect of contracts for ongoing services, revenue represents the value of the work done in the year, including estimates of amounts not invoiced. Revenue in respect of contracts for ongoing services is recognised by reference to the stage of completion.

 

In respect of licenses, revenue represents the full value of the sale.

 

Contract work in progress is stated at cost incurred, less those transferred to the profit and loss account, after deducting foreseeable losses and payments on account not matched with revenue.

1.4
Intangible 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 intangible fixed assets less their residual values over their useful lives on the following bases:

 

Intellectual property - Between 2 - 8 years

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 land and buildings
2 to 3 years straight line
Fixtures and fittings
5 years straight line
Computers
1 to 4 years straight line
Motor vehicles
2 to 3 years straight line

The gain or loss arising on the disposal of a tangible fixed asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

1.6
Fixed asset investments

Investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

CULTURA TECHNOLOGIES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.7
Impairment of tangible and intangible assets

At each reporting end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

 

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.8
Cash at bank and in hand

Cash and cash equivalents 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.

1.9
Financial assets

Financial assets are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.

 

At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.

Financial assets held at amortised cost

Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.

Impairment of financial assets

Financial assets carried at amortised cost and fair value through other comprehensive income are assessed for indicators of impairment at each reporting end date.

 

The expected credit losses associated with these assets are estimated on a forward-looking basis. A broad range of information is considered when assessing credit risk and measuring expected credit losses, including past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.

CULTURA TECHNOLOGIES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

1.10
Financial liabilities

The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.

Other financial liabilities

Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

Derecognition of financial liabilities

Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.

1.11
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.12
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 is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary 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.

CULTURA TECHNOLOGIES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.13
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 inventories 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.

1.14
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.15
Leases

At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within tangible fixed assets, apart from those that meet the definition of investment property.

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.

 

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other tangible fixed assets. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the company's estimate of the amount expected to be payable under a residual value guarantee; or the company's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.

CULTURA TECHNOLOGIES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.16
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
Critical accounting estimates and judgements

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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

 

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.

Critical judgements
Provisions

In recognising provisions, the company evaluates the extent to which it is probably that it has incurred a legal or constructive obligation in respect of past events and the probability that there will be an outflow of benefits as a result. The judgements used to recognise provisions are based on currently known factors which may vary over time, resulting in changes in the measurement of recorded amounts as compared to initial estimates.

Key sources of estimation uncertainty
Impairment of non-financial assets

In assessing impairment, management estimates the recoverable amount of each asset or cash‑generating units based on expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates assumptions about future operating results and the determination of a suitable discount rate.

3
Turnover
2023
2022
£
£
Turnover analysed by class of business
Maintenance revenue
5,071,015
4,700,053
Services revenue
764,888
761,504
License revenue
282,613
379,365
6,118,516
5,840,922
CULTURA TECHNOLOGIES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
3
Turnover
(Continued)
- 18 -
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
5,189,815
5,545,986
Rest of World
928,701
294,936
6,118,516
5,840,922
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
19,288
2,669
Depreciation of property, plant and equipment
129,574
125,450
Amortisation of intangible assets (included within cost of sales)
5,541
6,191
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
14,750
14,000
6
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Research and Development
12
9
Maintenance and Services Staff
14
21
Administrative Staff
12
9
Sales and Marketing Staff
4
5
Total
42
44
CULTURA TECHNOLOGIES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Employees
(Continued)
- 19 -

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
1,850,511
2,040,180
Social security costs
220,695
242,278
Pension costs
80,626
73,391
2,151,832
2,355,849
7
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on lease liabilities
701
1,677
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
207,765
184,475
Adjustments in respect of prior periods
(75,094)
(174,535)
Total UK current tax
132,671
9,940
Deferred tax
Origination and reversal of temporary differences
214
(13,188)
Total tax charge/(credit)
132,885
(3,248)
CULTURA TECHNOLOGIES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
8
Taxation
(Continued)
- 20 -

The charge for the year can be reconciled to the profit per the profit and loss account as follows:

2023
2022
£
£
Profit before taxation
887,778
801,572
Expected tax charge based on a corporation tax rate of 23.52% (2022: 19.00%)
208,805
152,299
Adjustment in respect of prior years
(75,094)
(174,535)
Deferred tax adjustments in respect of prior years
-
(639)
Remeasurement of deferred tax for changes in tax rates
11
(3,012)
Fixed asset differences
(837)
(4,125)
Change in revenue recognition accounting policy
-
26,764
Taxation charge/(credit) for the year
132,885
(3,248)
9
Dividends
2023
2022
2023
2022
Amounts recognised as distributions:
per share
per share
Total
Total
£
£
£
£
Ordinary shares
Final dividend paid
19.85
19.85
1,000,000
1,000,000
CULTURA TECHNOLOGIES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
10
Intangible fixed assets
Intellectual property
£
Cost
At 31 December 2022
110,204
Additions - purchased
2,390
Disposals
(78,154)
At 31 December 2023
34,440
Amortisation and impairment
At 31 December 2022
99,148
Charge for the year
5,541
Eliminated on disposals
(78,154)
At 31 December 2023
26,535
Carrying amount
At 31 December 2023
7,905
At 31 December 2022
11,056
11
Tangible fixed assets
Leasehold land and buildings
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2023
415,116
111,566
761,983
9,654
1,298,319
Additions
-
0
-
0
68,692
-
0
68,692
Disposals
(25,013)
-
0
-
0
-
0
(25,013)
At 31 December 2023
390,103
111,566
830,675
9,654
1,341,998
Accumulated depreciation and impairment
At 1 January 2023
327,608
107,565
639,670
9,654
1,084,497
Charge for the year
69,621
1,599
58,354
-
0
129,574
Eliminated on disposal
(25,013)
-
0
-
0
-
0
(25,013)
At 31 December 2023
372,216
109,164
698,024
9,654
1,189,058
Carrying amount
At 31 December 2023
17,887
2,402
132,651
-
0
152,940
At 31 December 2022
87,508
4,001
122,313
-
0
213,822
CULTURA TECHNOLOGIES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
11
Tangible fixed assets
(Continued)
- 22 -

Tangible fixed assets includes right-of-use assets, as follows:

Right-of-use assets
2023
2022
£
£
Net values at the year end
Property
11,865
63,318
Depreciation charge for the year
Property
47,459
41,437
Motor vehicles
-
805
47,459
42,242
12
Investments
Current
Non-current
2023
2022
2023
2022
£
£
£
£
Investments in subsidiaries
-
-
214,235
214,235
Fair value of financial assets carried at amortised cost

The directors consider that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.

13
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
Cultura Technologies Deutschland GmbH
Hamburg, Germany
Ordinary
100.00
-
Software Company AMIC GmbH
Hamburg, Germany
Ordinary
-
100.00
14
Debtors
2023
2022
£
£
Trade debtors
164,578
245,781
VAT recoverable
-
106,331
Amounts owed by fellow group undertakings
4,759,359
3,708,577
Other debtors
1,159
1,359
Prepayments and accrued income
202,397
278,982
5,127,493
4,341,030
CULTURA TECHNOLOGIES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
15
Creditors
2023
2022
£
£
Trade creditors
70,644
108,343
Amounts owed to fellow group undertakings
2,253,979
1,165,348
Accruals and deferred income
1,575,756
1,749,884
Other creditors
108,608
111,100
4,008,987
3,134,675
16
Lease liabilities
2023
2022
Maturity analysis
£
£
Within one year
12,487
49,950
In two to five years
-
12,488
Total undiscounted liabilities
12,487
62,438
Future finance charges and other adjustments
(20)
(722)
Lease liabilities in the financial statements
12,467
61,716

Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:

2023
2022
£
£
Current liabilities
12,467
49,249
Non-current liabilities
-
12,467
12,467
61,716
2023
2022
Amounts recognised in profit or loss include the following:
£
£
Interest on lease liabilities
701
1,677
CULTURA TECHNOLOGIES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
17
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.

Accelerated capital allowances
£
Liability at 1 January 2022
23,582
Deferred tax movements in prior year
Effect of change in tax rate - profit or loss
(13,188)
Liability at 1 January 2023
10,394
Deferred tax movements in current year
Charge/(credit) to profit or loss
214
Liability at 31 December 2023
10,608
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
80,626
73,391

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.

An amount of £25,589 (2022- £17,881) was outstanding at the year end and is included in creditors.

19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
50,360
50,360
50,360
50,360
CULTURA TECHNOLOGIES LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
19
Share capital
(Continued)
- 25 -
2023
2022
2023
2022
Preference share capital
Number
Number
£
£
Issued and fully paid
Preference shares of £1 each
10
10
10
10
Preference shares classified as equity
10
10
Total equity share capital
50,370
50,370
20
Share premium account
2023
2022
£
£
At the beginning and end of the year
2,618
2,618
21
Capital redemption reserve
2023
2022
£
£
At the beginning and end of the year
195,771
195,771
22
Other reserves
2023
2022
£
£
At the beginning and end of the year
750
750
23
Related party transactions

As permitted by FRS101, related party transactions with wholly owned members of the Constellation Software Inc have not been disclosed.

24
Controlling party

The ultimate parent company is Constellation Software Inc., a company incorporated in Canada.

The only group in which the results of the company are consolidated is that headed by Constellation Software Inc.

 

Copies of the consolidated financial statements of Constellation Software Inc. are publicly available from Rivington House, Drumhead Road, Chorley, Lancashire, PR6 7BX

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