IRIS Accounts Production v24.2.0.383 03335009 Board of Directors 1.1.23 31.12.23 31.12.23 false true true false false true false Ordinary 1.00000 iso4217:GBPiso4217:USDiso4217:EURxbrli:sharesxbrli:pureutr:tonnesutr:kWh033350092022-12-31033350092023-12-31033350092023-01-012023-12-31033350092021-12-31033350092022-01-012022-12-31033350092022-12-3103335009ns15:EnglandWales2023-01-012023-12-3103335009ns14:PoundSterling2023-01-012023-12-3103335009ns10:Director12023-01-012023-12-3103335009ns10:PrivateLimitedCompanyLtd2023-01-012023-12-3103335009ns10:FRS1022023-01-012023-12-3103335009ns10:Audited2023-01-012023-12-3103335009ns10:LargeMedium-sizedCompaniesRegimeForDirectorsReport2023-01-012023-12-3103335009ns10:LargeMedium-sizedCompaniesRegimeForAccounts2023-01-012023-12-3103335009ns10:FullAccounts2023-01-012023-12-3103335009ns10:OrdinaryShareClass12023-01-012023-12-3103335009ns10:Director32023-01-012023-12-3103335009ns10:CompanySecretary12023-01-012023-12-3103335009ns10:RegisteredOffice2023-01-012023-12-3103335009ns10:Director22023-01-012023-12-3103335009ns5:CurrentFinancialInstruments2023-12-3103335009ns5:CurrentFinancialInstruments2022-12-3103335009ns5:Non-currentFinancialInstruments2023-12-3103335009ns5:Non-currentFinancialInstruments2022-12-3103335009ns5:ShareCapital2023-12-3103335009ns5:ShareCapital2022-12-3103335009ns5:FurtherSpecificReserve1ComponentTotalEquity2023-12-3103335009ns5:FurtherSpecificReserve1ComponentTotalEquity2022-12-3103335009ns5:RetainedEarningsAccumulatedLosses2023-12-3103335009ns5:RetainedEarningsAccumulatedLosses2022-12-3103335009ns5:ShareCapital2021-12-3103335009ns5:RetainedEarningsAccumulatedLosses2021-12-3103335009ns5:FurtherSpecificReserve1ComponentTotalEquity2021-12-3103335009ns5:FurtherSpecificReserve1ComponentTotalEquity2022-01-012022-12-3103335009ns5:FurtherSpecificReserve1ComponentTotalEquity2023-01-012023-12-3103335009ns5:LeaseholdImprovements2023-01-012023-12-3103335009ns5:PlantMachinery2023-01-012023-12-3103335009ns5:FurnitureFittings2023-01-012023-12-3103335009ns5:ComputerEquipment2023-01-012023-12-3103335009ns5:ReportableOperatingSegment22023-01-012023-12-3103335009ns5:ReportableOperatingSegment22022-01-012022-12-3103335009ns5:TotalReportableOperatingSegmentsIncludingAnyUnallocatedAmount2023-01-012023-12-3103335009ns5:TotalReportableOperatingSegmentsIncludingAnyUnallocatedAmount2022-01-012022-12-3103335009ns15:UnitedStates2023-01-012023-12-3103335009ns15:UnitedStates2022-01-012022-12-3103335009ns5:TotalGeographicSegmentsIncludingAnyUnallocatedAmount2023-01-012023-12-3103335009ns5:TotalGeographicSegmentsIncludingAnyUnallocatedAmount2022-01-012022-12-3103335009ns10:HighestPaidDirector2023-01-012023-12-3103335009ns10:HighestPaidDirector2022-01-012022-12-3103335009ns5:OwnedAssets2023-01-012023-12-3103335009ns5:OwnedAssets2022-01-012022-12-3103335009112023-01-012023-12-3103335009112022-01-012022-12-3103335009122023-01-012023-12-3103335009122022-01-012022-12-3103335009132023-01-012023-12-3103335009132022-01-012022-12-3103335009142023-01-012023-12-3103335009142022-01-012022-12-3103335009ns5:LeaseholdImprovements2022-12-3103335009ns5:PlantMachinery2022-12-3103335009ns5:FurnitureFittings2022-12-3103335009ns5:ComputerEquipment2022-12-3103335009ns5:LeaseholdImprovements2023-12-3103335009ns5:PlantMachinery2023-12-3103335009ns5:FurnitureFittings2023-12-3103335009ns5:ComputerEquipment2023-12-3103335009ns5:LeaseholdImprovements2022-12-3103335009ns5:PlantMachinery2022-12-3103335009ns5:FurnitureFittings2022-12-3103335009ns5:ComputerEquipment2022-12-3103335009ns5:CurrentFinancialInstrumentsns5:WithinOneYear2023-12-3103335009ns5:CurrentFinancialInstrumentsns5:WithinOneYear2022-12-3103335009ns5:WithinOneYear2023-12-3103335009ns5:WithinOneYear2022-12-3103335009ns5:BetweenOneFiveYears2023-12-3103335009ns5:BetweenOneFiveYears2022-12-3103335009ns5:MoreThanFiveYears2023-12-3103335009ns5:MoreThanFiveYears2022-12-3103335009ns5:AllPeriods2023-12-3103335009ns5:AllPeriods2022-12-3103335009ns10:OrdinaryShareClass12023-12-3103335009ns5:RetainedEarningsAccumulatedLosses2022-12-3103335009ns5:FurtherSpecificReserve1ComponentTotalEquity2022-12-3103335009ns5:RetainedEarningsAccumulatedLosses2023-01-012023-12-31
REGISTERED NUMBER: 03335009 (England and Wales)


























REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER 2023

FOR

HARMONIC (UK) LTD

HARMONIC (UK) LTD (REGISTERED NUMBER: 03335009)

CONTENTS OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31ST DECEMBER 2023










Page

Company Information 1

Report of the Directors 2

Report of the Independent Auditors 4

Statement of Comprehensive Income 7

Balance Sheet 8

Statement of Changes in Equity 9

Notes to the Financial Statements 10


HARMONIC (UK) LTD

COMPANY INFORMATION
FOR THE YEAR ENDED 31ST DECEMBER 2023







DIRECTORS: Mr T C Chu
Mr W F Jankovic



SECRETARY: Mr T C Chu



REGISTERED OFFICE: Clifton House
Bunnian Place
Basingstoke
Hampshire
RG21 7JE



BUSINESS ADDRESS: Ground Floor
250 Fowler Avenue
IQ Farnborough
Farnborough
Hampshire
GU14 7JP



REGISTERED NUMBER: 03335009 (England and Wales)



SENIOR STATUTORY AUDITOR: Ross Garfitt



AUDITORS: Langdowns DFK Limited
Statutory Auditor
Fleming Court
Leigh Road
Eastleigh
Southampton
Hampshire
SO50 9PD

HARMONIC (UK) LTD (REGISTERED NUMBER: 03335009)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31ST DECEMBER 2023


The directors present their report with the financial statements of the company for the year ended 31st December 2023.

PRINCIPAL ACTIVITY
The principal activity of the company in the year under review was that of the sale of digital and lightwave-based communications systems that deliver video, audio and data over hybrid fibre/coax, satellite and wireless networks. Harmonic's advanced solutions enable cable television and other network operators to provide a range of broadcast and interactive broadband services that include high-speed internet access and video-on-demand.

REVIEW OF BUSINESS
The performance of the company shows steady success, building on the internal restructuring of products and services provided. The company will continue to focus its work as a distribution agent for Harmonic Inc, its ultimate parent company. The company will also continue its work in providing services to other members of the Harmonic Group.

The directors consider the level and trading of the company to be satisfactory. The directors believe that the sector is one that has significant expansion capacity. The directors will look to take the opportunities as and when they arise.

DIVIDENDS
No dividends will be distributed for the year ended 31st December 2023.

DIRECTORS
Mr T C Chu has held office during the whole of the period from 1st January 2023 to the date of this report.

Other changes in directors holding office are as follows:

Mr W F Jankovic was appointed as a director after 31st December 2023 but prior to the date of this report.

Mr I B Graham ceased to be a director after 31st December 2023 but prior to the date of this report.

SECTION 414B EXEMPTION
The strategic report has not been prepared by the company in accordance with the exemption available to the company under section 414B of the Companies Act 2006.

PRINCIPAL RISKS AND UNCERTAINTIES
The company's operations expose it to a variety of financial risks. The principal risks applicable to the company are credit risk, liquidity risk and interest rate cash flow risk. The company has in place a risk management programme that seeks to limit adverse effects on the financial performance of the company. The policies set by the board of directors are implemented by the company's finance department. The company does not use derivative financial instruments and as such no hedge accounting is applied.

CREDIT RISK
The company has implemented policies that require appropriate credit checks on potential customers before sales are made, however such risk is limited in the main to the ability of the group to settle debts under the agreement.

LIQUIDITY RISK AND INTEREST RATE CASH FLOW RISK
The company's finance facilities are obtained via inter-company funding mechanisms, which are provided on an interest-free basis, although the company has been operating without the need for such finance in recent years. Use of and access to these facilities is designed to ensure that the company has sufficient funds available for operations.

RESULTS FOR THE YEAR
The company's pre tax loss for the year was £318,596 (2022: pre tax loss of £290,754) and sales of £6,729,570 (2022: £6,586,910) were recorded during the year. Net assets of the company as at 31st December 2023 amounted to £6,754,136 (2022: £6,336,857).

GOING CONCERN
The company's ultimate parent company, Harmonic Inc, a company incorporated in the USA, and the company's immediate parent company, Harmonic International GmbH, a company incorporated in Switzerland, have agreed to provide such financial support so as to allow Harmonic (UK) Ltd to meet its liabilities as they fall due and to carry on its business without significant curtailment of operations for the foreseeable future and for at least the next twelve months after the date of approval of these financial statements.


HARMONIC (UK) LTD (REGISTERED NUMBER: 03335009)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31ST DECEMBER 2023

STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the the Report of the Directors 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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

- select suitable accounting policies and then apply them consistently;
- make judgements and accounting estimates that are reasonable and prudent;
- state whether applicable accounting standards have been followed, subject to any material departures disclosed and
explained in the financial statements;
- 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 AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS
The auditors, Langdowns DFK Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:





Mr T C Chu - Director


23rd August 2024

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
HARMONIC (UK) LTD


Opinion
We have audited the financial statements of Harmonic (UK) Ltd (the 'company') for the year ended 31st December 2023 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of 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 31st December 2023 and of its loss for the year then ended;
-have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' 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 directors are responsible for the other information. The other information comprises the information in the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 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 the audit:
- the information given in the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Report of the Directors has been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of directors' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
HARMONIC (UK) LTD


Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page three, 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 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.

Auditors' 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 a Report of the Auditors 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

As part of our audit planning procedures we identify the significant laws and regulations applicable to the company based upon our knowledge of the company, the industry in which it operates and from making enquiries with management. We consider those laws and regulations where non-compliance may have a material effect on the financial statements and those which have a direct impact on the financial statements. We identified that the most significant laws and regulations applicable during the year were compliance with the requirements of the Companies Act 2006 and compliance with health and safety regulations.

Audit procedures performed by the engagement team in relation to laws and regulations include making enquiries of management as to any known or suspected instances of non-compliance, maintaining awareness throughout the course of the audit as to any indications of instances of non-compliance, reviewing legal and professional invoices and undertaking a review of the disclosures in the financial statements to supporting information and to disclosure checklists.

We also consider areas that are at a higher risk of causing material misstatement in the financial statements due to irregularities, including those resulting from fraud and how such fraud may occur. We discuss with senior management the key controls in place to mitigate the risk of fraud and enquire as to whether they are aware of, or suspect, any fraudulent activities having taken place.

Throughout the audit, we maintain an appropriate level of professional scepticism when provided with information and explanations. We consider the appropriateness of significant accounting journals that were processed during the year, assess the reasonableness of any significant accounting estimates and consider whether there were any indications of bias by management during the year that represents a risk of material misstatement due to fraud. We also carry out analytical procedures to identify any unusual or unexpected variances to expectations as these may be an indication of management over-ride or management 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 is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
HARMONIC (UK) LTD


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 a Report of the Auditors 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.




Ross Garfitt (Senior Statutory Auditor)
for and on behalf of Langdowns DFK Limited
Statutory Auditor
Fleming Court
Leigh Road
Eastleigh
Southampton
Hampshire
SO50 9PD

30th August 2024

HARMONIC (UK) LTD (REGISTERED NUMBER: 03335009)

STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31ST DECEMBER 2023

2023 2022
Notes £    £   

TURNOVER 4 6,729,570 6,586,910

Administrative expenses 7,161,637 6,937,685
OPERATING LOSS 6 (432,067 ) (350,775 )

Interest receivable and similar income 115,822 60,806
(316,245 ) (289,969 )

Interest payable and similar expenses 7 2,351 785
LOSS BEFORE TAXATION (318,596 ) (290,754 )

Tax on loss 8 129,202 92,598
LOSS FOR THE FINANCIAL YEAR (447,798 ) (383,352 )

OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR

(447,798

)

(383,352

)

HARMONIC (UK) LTD (REGISTERED NUMBER: 03335009)

BALANCE SHEET
31ST DECEMBER 2023

2023 2022
Notes £    £    £    £   
FIXED ASSETS
Tangible assets 9 78,151 90,564

CURRENT ASSETS
Debtors 10 6,765,941 4,975,695
Cash at bank 691,125 2,507,940
7,457,066 7,483,635
CREDITORS
Amounts falling due within one year 11 629,356 1,074,227
NET CURRENT ASSETS 6,827,710 6,409,408
TOTAL ASSETS LESS CURRENT
LIABILITIES

6,905,861

6,499,972

CREDITORS
Amounts falling due after more than one year 12 151,725 163,115
NET ASSETS 6,754,136 6,336,857

CAPITAL AND RESERVES
Called up share capital 14 2,279,697 2,279,697
Contribution from parent 15 5,746,930 4,881,853
Retained earnings 15 (1,272,491 ) (824,693 )
SHAREHOLDERS' FUNDS 6,754,136 6,336,857

The financial statements were approved by the Board of Directors and authorised for issue on 23rd August 2024 and were signed on its behalf by:





Mr T C Chu - Director


HARMONIC (UK) LTD (REGISTERED NUMBER: 03335009)

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31ST DECEMBER 2023

Called up Contribution
share Retained from Total
capital earnings parent equity
£    £    £    £   
Balance at 1st January 2022 2,279,697 (441,341 ) 4,108,621 5,946,977

Changes in equity
Total comprehensive income - (383,352 ) 773,232 389,880
Balance at 31st December 2022 2,279,697 (824,693 ) 4,881,853 6,336,857

Changes in equity
Total comprehensive income - (447,798 ) 865,077 417,279
Balance at 31st December 2023 2,279,697 (1,272,491 ) 5,746,930 6,754,136

HARMONIC (UK) LTD (REGISTERED NUMBER: 03335009)

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31ST DECEMBER 2023


1. STATUTORY INFORMATION

Harmonic (UK) Ltd is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).


2. STATEMENT OF COMPLIANCE

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006.

3. ACCOUNTING POLICIES

Basis of preparing the financial statements
The financial statements have been prepared under the historical cost convention.

The financial statements have been prepared on the going concern basis, as the directors believe that the company and the Group is in a stable position following the economic uncertainties of the coronavirus pandemic.

The Group holds strong levels of cash and maintains strong leadership. There are also relatively low fixed costs in the UK and the company have the ability to react to market conditions by varying pricing and if necessary, reducing the fixed costs of the business to match the market.

Financial Reporting Standard 102 - reduced disclosure exemptions
The company has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

the requirements of Section 7 Statement of Cash Flows.

Significant judgements and estimates
In the application of the Company's accounting policies, management is required to make judgements, estimates and assumptions about the carrying value of assets and liabilities that are not readily apparent from other sources. The estimates and the underlying 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 company have made these policies based on the detailed knowledge and understanding that they have of the industry and the business.

The most significant accounting estimate is that of the share based payments that is explained in detail below under share based payments.

Turnover
Turnover, which excludes value added tax and trade discounts, represents the invoiced value of goods delivered or services provided.

Revenue includes product, solution and services sales. Revenue is only recognised when persuasive evidence of an arrangement exists, delivery has occurred or services have been provided, the sale price is fixed or determinable and the risk of loss and title has transferred to the customer.

Product and solution sales are recognised upon shipment, or once all applicable criteria have been met. Product and solution sales invoiced, but not meeting the revenue recognition criteria are recorded as deferred revenue, with related costs incurred held within work in progress.

Revenue from services is recognised as the services are performed or based on contractual terms. Maintenance services are recognised over the maintenance term, which is typically one year. The costs associated with services are recognised as incurred. The unrecognised revenue portion of maintenance agreements invoiced is recorded as deferred income.

HARMONIC (UK) LTD (REGISTERED NUMBER: 03335009)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31ST DECEMBER 2023


3. ACCOUNTING POLICIES - continued

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.
Leasehold Improvements - over 10 years
Equipment - over 3 to 4 years
Fixtures and fittings - over 5 to 10 years
Computers - over 3 years

All fixed assets are initially recorded at cost.

Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Hire purchase and leasing commitments
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits
The company contributes to an independently administered separately funded defined contribution pension scheme. Costs of the defined contribution scheme are charged to the profit and loss account at the time the related pensionable pay is charged.

Financial instruments
Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Debtors and creditors receivable / payable within one year
Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the statement of comprehensive income.

HARMONIC (UK) LTD (REGISTERED NUMBER: 03335009)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31ST DECEMBER 2023


3. ACCOUNTING POLICIES - continued

Share based payments
The company make share based payments in respect of equities of the ultimate parent company, Harmonic Inc. ("HLIT"). Such share based payments are accounted for in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. A detailed policy is documented below from the ultimate parent company's accounts:-

The company measures and recognises compensation expenses for all share based payments awards made to employees and directors, including stock options, restricted stock units ("RSUs") and stock purchase rights under HLIT's Employee Stock Purchase Plan ("ESPP"), based upon the grant-date fair value of those awards. The company recognises the impact of forfeitures as they occur.

The fair value of the stock options and stock purchase rights under ESPP is estimated at the grant date, using the Black-Scholes option pricing model. The fair value of the RSUs and performance-related RSUs ("PRSUs") is calculated on the market value of HLIT's stock at grant date.

The company recognises the share based payments expense for options, RSUs and stock purchase rights under ESPP on a straight-line basis over the requisite service period, which is generally the vesting period. The company regognises the share based payments expense for PRSUs based on the probability of achieving performance criteria, as defined in the PRSU agreements. They estimate the number of PRSUs ultimately expected to vest and recognises expense using the graded vesting attribution method over the requisite service period. Changes in the estimates related to the probability of achieving certain performance criteria and the number of PRSUs expected to vest could significantly affect the share-based payments expense from one period to the next.

4. TURNOVER

The turnover and loss before taxation are attributable to the one principal activity of the company.

An analysis of turnover by class of business is given below:

2023 2022
£    £   
Intercompany sales 6,729,570 6,586,910
6,729,570 6,586,910

An analysis of turnover by geographical market is given below:

2023 2022
£    £   
United States of America 6,729,570 6,586,910
6,729,570 6,586,910

Group commissions received by the company were generated from sales from the USA.

5. EMPLOYEES AND DIRECTORS
2023 2022
£    £   
Wages and salaries 5,338,185 5,102,985
Social security costs 564,426 651,032
Other pension costs 242,670 200,346
6,145,281 5,954,363

HARMONIC (UK) LTD (REGISTERED NUMBER: 03335009)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31ST DECEMBER 2023


5. EMPLOYEES AND DIRECTORS - continued

The average number of employees during the year was as follows:
2023 2022

Technical services and support 12 14
Sales and marketing 20 16
Admin/IT 4 5
36 35

Included in Wages & Salaries are costs relating to employee remuneration paid by way of share based payments.

2023 2022
£    £   
Directors' remuneration 1,189,659 681,728
Directors' pension contributions to money purchase schemes 8,500 4,000

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes 1 1

Information regarding the highest paid director is as follows:
2023 2022
£    £   
Emoluments etc 1,189,659 681,728
Pension contributions to money purchase schemes 8,500 4,000

The directors are considered to be the key management personnel of the company.

6. OPERATING LOSS

The operating loss is stated after charging:

2023 2022
£    £   
Other operating leases 171,664 170,984
Depreciation - owned assets 26,142 24,933
Foreign exchange differences 5,575 2,678
Auditors' remuneration - audit of the financial statements 14,988 16,320
Auditors' remuneration - other services 2,238 2,158
Operating lease rentals - motor vehicles 7,047 6,995
Share based payments 865,077 773,232

The other services undertaken by the company's auditors are analysed as follows:

20232022
££

Taxation compliance advice1,5001,420
Company secretarial services738738
2,2382,158

HARMONIC (UK) LTD (REGISTERED NUMBER: 03335009)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31ST DECEMBER 2023


7. INTEREST PAYABLE AND SIMILAR EXPENSES
2023 2022
£    £   
Bank interest 2,351 785

8. TAXATION

Analysis of the tax charge
The tax charge on the loss for the year was as follows:
2023 2022
£    £   
Current tax:
UK corporation tax 129,202 92,598
Tax on loss 129,202 92,598

UK corporation tax has been charged at 23.52% (2022 - 19%).

Reconciliation of total tax charge included in profit and loss
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2023 2022
£    £   
Loss before tax (318,596 ) (290,754 )
Loss multiplied by the standard rate of corporation tax in the UK of
23.520% (2022 - 19%)

(74,934

)

(55,243

)

Effects of:
Expenses not deductible for tax purposes 205,099 148,701
Capital allowances in excess of depreciation (963 ) (860 )
Total tax charge 129,202 92,598

9. TANGIBLE FIXED ASSETS
Fixtures
Leasehold and
Improvements Equipment fittings Computers Totals
£    £    £    £    £   
COST
At 1st January 2023 555,528 312,582 45,572 10,427 924,109
Additions 7,005 - - 6,724 13,729
At 31st December 2023 562,533 312,582 45,572 17,151 937,838
DEPRECIATION
At 1st January 2023 474,271 307,606 45,572 6,096 833,545
Charge for year 20,956 1,357 - 3,829 26,142
At 31st December 2023 495,227 308,963 45,572 9,925 859,687
NET BOOK VALUE
At 31st December 2023 67,306 3,619 - 7,226 78,151
At 31st December 2022 81,257 4,976 - 4,331 90,564

HARMONIC (UK) LTD (REGISTERED NUMBER: 03335009)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31ST DECEMBER 2023


10. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£    £   
Other debtors 228,951 145,152
Amounts owed from ultimate
parent company 6,426,415 4,667,873
VAT 40,439 46,515
Prepayments and accrued income 70,136 116,155
6,765,941 4,975,695

11. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£    £   
Trade creditors 22,766 95,390
Tax 42,116 40,223
Social security and other taxes 203,307 250,110
Other creditors 17,970 17,970
Accruals and deferred income 343,197 670,534
629,356 1,074,227

12. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
2023 2022
£    £   
Other creditors 151,725 163,115

13. LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:
2023 2022
£    £   
Within one year 162,788 167,794
Between one and five years 566,320 646,920
In more than five years - 80,865
729,108 895,579

14. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2023 2022
value: £    £   
2,279,697 Ordinary £1 2,279,697 2,279,697

HARMONIC (UK) LTD (REGISTERED NUMBER: 03335009)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31ST DECEMBER 2023


15. RESERVES
Contribution
Retained from
earnings parent Totals
£    £    £   

At 1st January 2023 (824,693 ) 4,881,853 4,057,160
Deficit for the year (447,798 ) (447,798 )
Share based payments - 865,077 865,077
At 31st December 2023 (1,272,491 ) 5,746,930 4,474,439

The Contribution from parent represents the share based payments made by way of share purchase plans operated through the ultimate parent company.

16. PENSION COMMITMENTS

The company pay pension contributions on behalf of it's employees and directors. The total charge in the year was £242,670 (2022 - £200,346). £nil (2022 - £nil) was outstanding in respect of these contributions at the year-end.

17. ULTIMATE PARENT COMPANY

Harmonic Inc. (incorporated in The United States of America ) is regarded by the directors as being the company's ultimate parent company.

Copies of the group consolidated financial statements for the period of Harmonic Inc. can be obtained from the Company Secretary at the registered office at 2590 Orchard Parkway, San Jose, CA 95131, U.S.A.

Harmonic International GmbH, a company incorporated in Switzerland, is the company's immediate parent company. Copies of the accounts of Harmonic International GmbH are not available as they are consolidated into the group consolidated financial statements of Harmonic Inc., the ultimate parent company, as detailed above.

18. RELATED PARTY DISCLOSURES

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with group companies where any subsidiary that is a party to the transaction is wholly owned within the group or where transactions have been undertaken under normal market conditions.

HARMONIC (UK) LTD (REGISTERED NUMBER: 03335009)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31ST DECEMBER 2023


19. SHARE BASED PAYMENTS TRANSACTIONS

The company makes share based payments in respect of equities in its ultimate parent company, Harmonic Inc. ("HLIT"). Details of the rewards made by way of share based payments to employees are as follows per HLIT:-

1995 Stock Plan - The 1995 Stock Plan provides for the grant of incentive stock options, non-statutory stock options and restricted stock units (“RSUs”). Incentive stock options may be granted only to employees. All other awards may be granted to employees and non-employees. Under the terms of the 1995 Stock Plan, no incentive stock option or non-statutory stock option may be granted in the ordinary course of business with a per share exercise price that is less than 100% of the fair value of the Company’s common stock on the date of grant. RSUs have no exercise price. Both options and RSUs vest over a period of time as determined by the Company’s Board of Directors (the “Board”), generally two to four years, and options expire seven years from the date of grant. Some of the RSUs granted by the Company have performance-based vesting terms, where vesting is dependent on achievement of certain financial and non-financial operating goals of the Company (performance-based RSUs, or “PRSUs”), or where vesting is dependent on performance of the Company’s total shareholder return (“TSR”) relative to the TSR of the NASDAQ Telecommunication Index (market-based RSUs, or “MRSUs”). The fair value of PRSUs is estimated on the date of grant based on the market value of our common stock. If the performance goals are not met as of the end of the performance period, no compensation expense is recognized and any previously recognized compensation expense is reversed. The expected cost is based on the portion of the awards that is probable to vest and is reflected over the service period. The fair value of MRSUs subject to targeted levels of relative TSR is estimated on the date of grant using a Monte Carlo simulation model. Compensation expense is recognized based upon the assumption of 100% achievement of the TSR goal and will not be reversed even if the threshold level of TSR is never achieved and is reflected over the service period. During the fiscal year 2023, the Company granted 268,704 and 236,749 shares of PRSUs and MRSUs, respectively. As of December 31, 2023, an aggregate of 8,537,211 shares of common stock were reserved for issuance under the 1995 Stock Plan, of which 5,481,584 shares remained available for future grants.

Employee Stock Purchase Plan - The 2002 Employee Stock Purchase Plan (“ESPP”) provides for the issuance of share purchase rights to employees of the Company. The ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. The ESPP enables employees to purchase shares at 85% of the fair market value of the Common Stock at the beginning or end of the offering period, whichever is lower. Offering periods generally begin on the first trading day on or after January 1 and July 1 of each year. Employees may participate through payroll deductions of 1% to 10% of their earnings. In the event that there are insufficient shares in the plan to fully fund the issuance, the available shares will be allocated across all participants based on their contributions relative to the total contributions received for the offering period. The Company’s stockholders approved an amendment to the ESPP Plan at the 2023 Annual Meeting to increase the number of shares of common stock reserved for issuance thereunder by 650,000 shares. As of December 31, 2023, 633,932 shares were reserved for future purchases by eligible employees. Under the ESPP, 733,030, 817,243 and 1,024,244 shares were issued during fiscal 2023, 2022 and 2021, respectively, representing $6.6 million, $5.9 million and $5.1 million in contributions.

Stock Options - All stock options were fully vested and exercised as of December 31, 2022. No stock options were granted in 2023.

Restricted Stock Units - The fair value of RSUs vested during the years ended December 31, 2023, 2022 and 2021 was $22.5 million, $22.4 million and $18.3 million, respectively.

Valuation Assumptions - The Company estimates the fair value of stock purchase rights under the ESPP using a Black-Scholes option valuation model. The value of the stock purchase rights under the ESPP consists of: (1) the 15% discount on the purchase of the stock; (2) 85% of the fair value of the call option; and (3) 15% of the fair value of the put option. The call option and put option were valued using the Black-Scholes option pricing model. At the date of grant, the Company estimated the fair value of each stock purchase right granted under the ESPP using the following weighted average assumptions:

Year ended December 31,
202320222021
Expected term (in years)0.500.500.50
Volatility46%47%45%
Risk-free interest rate5.2%1.4%0.1%
Expected dividends0.0%0.0%0.0%





HARMONIC (UK) LTD (REGISTERED NUMBER: 03335009)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31ST DECEMBER 2023


Expected term - The expected term of the stock purchase right under ESPP represents the period of time from the beginning of the offering period to the purchase date. The Company uses its historical volatility for a period equivalent to the expected term to estimate the expected volatility. The risk-free interest rate that the Company uses in the Black-Scholes option valuation model is based on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term. The Company has not paid and does not plan to pay any cash dividends in the foreseeable future.

The estimated weighted-average fair value per share of stock purchase rights under the ESPP, granted for the years ended December 31, 2023, 2022 and 2021 was $4.23, $2.91 and $2.24, respectively.

The following table summarises the stock options and restricted stock units activity under the plans in respect of Harmonic (UK) Ltd employees:-

Stock OptionsRestricted Stock Units*






Number
Weighted
Average
Exercise Price
Per Share



Number
Weighted
Average Grant
Value Price
Per Share
Balance at December 31, 2022--152,722$8.93
Granted--75,330$13.65
Exercised or released--(118,124)$8.96
Forfeited or cancelled--(513)$9.40
Balance at December 31, 2023--109,415$12.42

* The preceding table includes PRSUs activities during the year ended December 31, 2023.