Company registration number 09193626 (England and Wales)
SECURE THINGZ LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
SECURE THINGZ LTD
COMPANY INFORMATION
Directors
Ms A M Zetterberg
Mr R Lind
(Appointed 21 April 2023)
Mr T Woodruff
(Appointed 21 April 2023)
Company number
09193626
Registered office
Hudson House
Maris Lane
Trumpington
Cambridge
CB2 9FF
Auditor
Ensors Accountants LLP
Incubator 2
The Boulevard, Enterprise Campus
Alconbury Weald
Huntingdon
PE28 4XA
SECURE THINGZ LTD
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Profit and loss account
7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 23
SECURE THINGZ LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

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

Review of the business

The directors remain pleased with the performance of the company.

Since being acquired in April 2018 by IAR Systems Group AB, a Swedish publicly traded company, the company has now been fully integrated into the group.

Main focus in 2023 has been to continue expand and streamline our development activities to integrate our security solutions into the product range sold through our sister company IAR Systems AB. The IAR Group including Secure Thingz envision creating an (e)DLCP, (embedded) Development Life Cycle Platform, that will provide our customers with the added value of a life cycle perspective on their code and solutions. In the same way, we envision creating an (e)SOAP, (embedded) Security Operations and Automation Platform, that will deliver added value with the vision that security must be simple. It will be what we call SMS: Security Made Simple.

 

Principal risks and uncertainties

Being a cost centre to the group, the main risks are considered to be the ability of the group to grow sales profitably, maintain its employee workforce and increase its efficiency.

Being part of a larger profitable international group increases the company’s ability to achieve its goals and at the same time reduces the risks the company faces.

 

Development and performance

The company is aiming to continue to build headcount, Research and Development facilities and ultimately more products for the group to sell. At the same time the company can benefit from the Group's support functions and further increase the efficiency. In 2024 we will continue to streamline our development activities to integrate our security solutions into the product range sold through our sister company IAR Systems AB.

 

Key performance indicators

The directors manage and monitor the business using key performance indicators. These include cash flow and working capital requirement.

On behalf of the board

Ms A M Zetterberg
Director
24 July 2024
SECURE THINGZ 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 developing and delivering advanced security solutions.

Results and dividends

The results for the year are set out on page 7.

No ordinary 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:

Mr H Povey
(Resigned 21 April 2023)
Ms A M Zetterberg
Mr R Lind
(Appointed 21 April 2023)
Mr T Woodruff
(Appointed 21 April 2023)
Auditor

In accordance with the company's articles, a resolution proposing that Ensors Accountants LLP be reappointed as auditor of the company will be put at a General Meeting.

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.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Ms A M Zetterberg
Director
24 July 2024
SECURE THINGZ LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

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.

SECURE THINGZ LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SECURE THINGZ LTD
- 4 -
Opinion

We have audited the financial statements of Secure Thingz Ltd (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows 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:

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:

SECURE THINGZ LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SECURE THINGZ LTD (CONTINUED)
- 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.

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.

 

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:

 

 

However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.

 

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.

SECURE THINGZ LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SECURE THINGZ LTD (CONTINUED)
- 6 -

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.

James Francis
Senior Statutory Auditor
For and on behalf of Ensors Accountants LLP
24 July 2024
Chartered Accountants
Statutory Auditor
Incubator 2
The Boulevard, Enterprise Campus
Alconbury Weald
Huntingdon
PE28 4XA
SECURE THINGZ LTD
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
668
12,831
Cost of sales
(4,865)
(1,409)
Gross (loss)/profit
(4,197)
11,422
Administrative expenses
(4,081,681)
(5,198,845)
Operating loss
4
(4,085,878)
(5,187,423)
Interest receivable and similar income
7
256
279
Interest payable and similar expenses
8
(1,238,302)
(458,972)
Loss before taxation
(5,323,924)
(5,646,116)
Tax on loss
9
467,685
999,365
Loss for the financial year
(4,856,239)
(4,646,751)
SECURE THINGZ LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
£
£
Loss for the year
(4,856,239)
(4,646,751)
Other comprehensive income
-
-
Total comprehensive income for the year
(4,856,239)
(4,646,751)
SECURE THINGZ LTD
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
144,692
201,585
Current assets
Stocks
11
157,429
158,370
Debtors
12
606,961
1,210,769
Cash at bank and in hand
265,020
44,008
1,029,410
1,413,147
Creditors: amounts falling due within one year
13
(26,399,044)
(22,050,205)
Net current liabilities
(25,369,634)
(20,637,058)
Net liabilities
(25,224,942)
(20,435,473)
Capital and reserves
Called up share capital
16
1
1
Equity reserve
237,626
170,856
Profit and loss reserves
(25,462,569)
(20,606,330)
Total equity
(25,224,942)
(20,435,473)

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 24 July 2024 and are signed on its behalf by:
Ms A M Zetterberg
Director
Company registration number 09193626 (England and Wales)
SECURE THINGZ LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Equity reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2022
1
152,794
(15,959,579)
(15,806,784)
Year ended 31 December 2022:
Loss and total comprehensive income
-
-
(4,646,751)
(4,646,751)
Other movements
-
18,062
-
18,062
Balance at 31 December 2022
1
170,856
(20,606,330)
(20,435,473)
Year ended 31 December 2023:
Loss and total comprehensive income
-
-
(4,856,239)
(4,856,239)
Other movements
-
66,770
-
66,770
Balance at 31 December 2023
1
237,626
(25,462,569)
(25,224,942)
SECURE THINGZ LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
20
506,272
(393,494)
Interest paid
(1,238,302)
(458,972)
Income taxes refunded
976,755
902,936
Net cash inflow from operating activities
244,725
50,470
Investing activities
Purchase of tangible fixed assets
(32,793)
(72,423)
Proceeds from disposal of tangible fixed assets
8,824
-
0
Interest received
256
279
Net cash used in investing activities
(23,713)
(72,144)
Net increase/(decrease) in cash and cash equivalents
221,012
(21,674)
Cash and cash equivalents at beginning of year
44,008
65,682
Cash and cash equivalents at end of year
265,020
44,008
SECURE THINGZ LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information

Secure Thingz Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Hudson House, Maris Lane, Trumpington, Cambridge, CB2 9FF.

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.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company 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.

 

Despite the balance sheet showing that the company has net current liabilities of £25,369,634 as at 31 December 2023, the accounts have been prepared on a going concern basis as the company has the continuing financial support from IAR Systems Group AB, the ultimate parent.

 

The most significant liability of the company is the balance owing to IAR Systems Group AB of £26,249,545. IAR Systems Group AB have provided a letter of support stating that they will not demand repayment of this liability except for any repayment that will not adversely affect the ability of Secure Thingz Limited to carry on as a going concern.

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 business, and is shown net of VAT and other sales related taxes.

1.4
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

1.5
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Leasehold improvements
20% straight line
Fixtures and fittings
25% reducing balance

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.

SECURE THINGZ LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.6
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible 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.

1.7
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.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.8
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.

1.9
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.

SECURE THINGZ LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.10
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.

1.11
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

SECURE THINGZ LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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.

 

1.12
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.

1.13
Retirement benefits

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

1.14
Share-based payments

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black Scholes Model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

 

Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

 

The share based payment reserve within equity represents the value of share options granted by the ultimate parent company in relation to the employees service to the company.

 

 

SECURE THINGZ LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.15
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.

 

Share based payments

The company engages a third party professional to value their share based payments using the Black Scholes model. The provision at the end of the accounting period was £237,626 (2022 - £170,856).

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sale of goods
668
12,831
2023
2022
£
£
Turnover analysed by geographical market
Outside of the UK
668
12,831
2023
2022
£
£
Other revenue
Interest income
256
279
SECURE THINGZ LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
4
Operating loss
2023
2022
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(153,637)
346,044
Research and development costs
349,806
399,372
Fees payable to the company's auditor for the audit of the company's financial statements
13,125
10,200
Depreciation of owned tangible fixed assets
65,063
79,402
Loss on disposal of tangible fixed assets
15,799
264
Share-based payments
66,770
18,062
5
Employees

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

2023
2022
Number
Number
37
42

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
2,471,591
2,934,566
Social security costs
293,179
345,169
Pension costs
93,527
108,612
2,858,297
3,388,347
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
162,599
200,000
Company pension contributions to defined contribution schemes
6,912
9,173
169,511
209,173

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).

SECURE THINGZ LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Directors' remuneration
(Continued)
- 18 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
n/a
200,000
Company pension contributions to defined contribution schemes
n/a
9,173

As total directors' remuneration was less than £200,000 in the current year, no disclosure is provided for that year.

7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
256
16
Other interest income
-
0
263
Total income
256
279
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
256
16
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest payable to group undertakings
1,238,302
458,972
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
(490,295)
(999,365)
Adjustments in respect of prior periods
22,610
-
0
Total current tax
(467,685)
(999,365)
SECURE THINGZ LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
(Continued)
- 19 -

The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Loss before taxation
(5,323,924)
(5,646,116)
Expected tax credit based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
(1,252,216)
(1,072,762)
Under/(over) provided in prior years
22,610
-
0
Fixed asset differences
1,305
(1,874)
Expenses not deductable for tax purposes
16,169
3,506
R&D expenditure / losses
7,133
(430,011)
Deferred tax not recognised
737,314
501,776
Taxation credit for the year
(467,685)
(999,365)
10
Tangible fixed assets
Leasehold improvements
Fixtures and fittings
Total
£
£
£
Cost
At 1 January 2023
147,596
374,493
522,089
Additions
-
0
32,793
32,793
Disposals
(27,638)
(60,078)
(87,716)
At 31 December 2023
119,958
347,208
467,166
Depreciation and impairment
At 1 January 2023
120,633
199,871
320,504
Depreciation charged in the year
16,878
48,185
65,063
Eliminated in respect of disposals
(21,812)
(41,281)
(63,093)
At 31 December 2023
115,699
206,775
322,474
Carrying amount
At 31 December 2023
4,259
140,433
144,692
At 31 December 2022
26,963
174,622
201,585
11
Stocks
2023
2022
£
£
Raw materials and consumables
157,429
158,370
SECURE THINGZ LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
627
-
0
Corporation tax recoverable
490,295
999,365
Other debtors
22,726
54,572
Prepayments and accrued income
93,313
156,832
606,961
1,210,769
13
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
31,215
187,897
Amounts owed to group undertakings
26,249,545
21,667,149
Taxation and social security
56,834
83,956
Other creditors
-
0
17,055
Accruals and deferred income
61,450
94,148
26,399,044
22,050,205
14
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
93,527
108,612

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.

SECURE THINGZ LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
15
Share-based payment transactions

At the year end Secure Thingz Limited had two share option schemes for selected employees in place. Both schemes give the participants the option to purchase shares in the ultimate holding company, IAR Systems Group AB.

 

Rolled share scheme

 

As part of the acquisition of Secure Thingz Limited, IAR Systems Group AB allowed holders of Secure Thingz Inc previous share incentive scheme to exchange their options for new options in IAR Systems Group AB. A total of 575,000 share options in Secure Thingz Inc were exchanged for 73,413 of share options in IAR Systems Group AB. Of the 73,413 share options issued, 27,450 have an exercise price of SEK 6.50 and 45,963 have an exercise price of SEK 26.00.

 

The options continue to vest gradually until 2022.

 

LTIP 2019

 

A further share option scheme was made available to employees in 2019. The performance conditions for exercise are based on average annual growth of IAR Systems Group's turnover over the 2019, 2020 and 2021 financial years. In order to achieve the maximum number of options, turnover must grow by 10% each year. Growth of under 5% each year would mean that no options are exercisable.

 

The exercise price for this scheme is fixed at SEK 347.70. The options expired in May 2022

 

LTIP 2022

A new share scheme has been made available to employees during the year.  The performance conditions for exercise are based on annual revenue growth of at least 10% for IAR Systems Group and an annual EBIT margin of 20% in each of the years ended 31 December 2022, 2023 and 2024. In order to achieve the maximum number of options these thresholds have to met in each of the three financial years. If they aren’t achieved in any of the years it would mean that no options are exercisable. The exercise price for this scheme is fixed at SEK 0.00.

 

LTIP 2023

 

The strike price for these options is Nil (zero) and employees will receive these shares for ‘free’ if certain conditions are met being (a minimum of 5% annual revenue growth and an annual 20% EBIT margin).

Number of share options
Weighted average exercise price
2023
2022
2023
2022
Number
Number
£
£
Outstanding at 1 January 2023
29,362
20,648
0.47
3.43
Granted
17,750
23,300
6.13
9.46
Forfeited
(15,529)
(2,896)
0.28
12.65
Exercised
-
0
(11,690)
-
0
1.42
Outstanding at 31 December 2023
31,583
29,362
0.30
0.46
Exercisable at 31 December 2023
4,514
6,562
2.11
2.06

The weighted average share price at the date of exercise for share options exercised during the year was £nil (2022 - £9.44).

SECURE THINGZ LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
15
Share-based payment transactions
(Continued)
- 22 -

The weighted average exercise price and weighted average expected and contractual lives for 2023 were:

 

 

2023

 

2022

 

£

 

£

Weighted average exercise price

0.00

 

1.42

Number of shares

0.00

 

11,690

Weighted average contractual life

2.86

 

3.45

Weighted average expected life

2.51

 

2.89

 

 

The fair value of the non qualifying options granted during the year and the assumptions used in the calculation are as follows:

Summary of schemes

 

 

 

 

 

 

 

Rolled 1 (6.5)

Rolled 2

LTIP 2022

LTIP 2023

 

 

 

 

 

 

Exercise price

 

-

2.11

-

-

No. of employees

 

-

4

25

22

Shares under option

 

-

4,514

13,319

13,750

Vesting period (years)

 

-

0.5

2

3

Volatility

 

-

43.2%

43.2%

43.2%

Option life (years)

 

-

5

3

3

Expected life (years)

 

-

1.00

3

3

Risk free rate

 

-

4.02%

4.02%

4.02%

Dividend yield

 

-

0%

0%

0%

Liabilities and expenses

During the year, the company recognised total share-based payment expenses of £66,770 (2022 - £18,062) which related to equity settled share based payment transactions.

16
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Preference Shares of 0.05p each
2
2
1
1
17
Operating lease commitments

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
162,965
163,381
Between two and five years
162,440
1,275
325,405
164,656
SECURE THINGZ LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
18
Events after the reporting date

In the period since the balance sheet date the company issued 100 ordinary £1 shares at a consideration of £20,475,000.

 

19
Ultimate controlling party

The parent company was Secure Thingz Inc, a company registered in the United States of America, up until 28 December 2023 when the company was dissolved. The share holding in SecureThingz Limited passed to IAR Systems Group AB.

The ultimate controlling parent company is IAR Systems Group AB. IAR Systems Group AB is listed on NASDAQ OMX Stockholm, Mid Cap List.

20
Cash generated from/(absorbed by) operations
2023
2022
£
£
Loss for the year after tax
(4,856,239)
(4,646,751)
Adjustments for:
Taxation credited
(467,685)
(999,365)
Finance costs
1,238,302
458,972
Investment income
(256)
(279)
Loss on disposal of tangible fixed assets
15,799
264
Depreciation and impairment of tangible fixed assets
65,063
79,402
Equity settled share based payment expense
66,770
18,062
Movements in working capital:
Decrease/(increase) in stocks
941
(515)
Decrease in debtors
94,738
53,849
Increase in creditors
4,348,839
4,642,867
Cash generated from/(absorbed by) operations
506,272
(393,494)
21
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
44,008
221,012
265,020
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