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Registered number: SC345442









SYSTAL TECHNOLOGY SOLUTIONS LTD









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

COMPANY INFORMATION


Directors
Douglas Cumming 
Neil Nicolson 
Gary O'Neil 




Registered number
SC345442



Registered office
Rowan House
1 Robroyston Oval

Glasgow

G33 1AP




Independent auditors
Anderson Anderson & Brown Audit LLP

133 Finnieston Street

Glasgow

G3 8HB




Bankers
Virgin Money
56 Murray Place

Stirling

FK8 2BX





HSBC Bank Plc

2 Buchanan Street

Glasgow





 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

CONTENTS



Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditors' report
5 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 27


 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
The directors present their report of Systal Technology Solutions Limited (‘Systal’) for the year ended 31 December 2023. 

Business review
 
Systal Technology Solutions Limited is one of the UK’s leading managed network and security service provider. Demand for its services and customer focused transformation skills increased revenue in the year by 27% to £69.9m (2022: £54.9m). An agile solutions provider, Systal managed over 30,000 assets in the UK for over 60 enterprise level customers. Systal continued to invest in its infrastructure and took steps early in the year to improve its gross margin, and as a result gross profit was 31% higher the last year at £13.5m (2022: £9.8m).
Operating profit before amortisation, depreciation and exceptional items, which is a key performance indicator, increased to £1.25m profit (2022: loss £1.3m). 

Financial review
 
Systal Technology Solutions Limited continued to demonstrate a strong balance sheet, with net assets at 31 December 2023 of £5.0m (2022: £7.9m as restated). The company finances its working capital through its cash resources and an invoice financing facility, secured on its trade debtors. During a period of high inflation and increased interest rates Systal has benefitted from its conservative financing by having a limited exposure to third party borrowing. 
Loss for the financial year was £191k (2022: £172k profit as restated) as the prior year reflected benefit within the tax charge for its research and development activities as part of its value add transformation service model.

Principle risks and uncertainties
 
The Board reviewed the principle risks and uncertainties of the Group and concluded that there were no significant changes. The Group’s principle risks are its competitors, customer concentration, staff retention and cyber security. Training and developing staff, strategic actions to win new business and application of the latest software combined with targeted on-line learning sought to manage these risks during the year.

S172 Statement
 
The directors have disclosed their group S172 statement within the Ultimate Parent company's accounts, Sarah Topco Limited, and copies of the consolidated financial statements are available to the public from its registered office at 47 Queen Anne Street, Marylebone, London, UK, W1G 9JG.

Future developments

Our employees are Systal’s most important asset and the Board  would like to thank them for their huge contribution to the growth and development of Systal over the last year. Systal continues its strategy to support controlled growth, improve margins and to deliver strong cash flow. 
Our focus on new business and partnerships together with extended commitments from long term customer relationships, supports Systal’s  ambition to substantially grow revenue, run rate ebitda and its return to shareholders. 

Page 1

 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


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





Neil Nicolson
Director

Date: 1 July 2024

Page 2

 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

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

Directors' responsibilities statement

The Directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.
 
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

 In preparing these financial statements, the Directors are required to:


select suitable accounting policies for the Company's financial statements and then apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable UK 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 to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Directors

The Directors who served during the year were:

Douglas Cumming 
Neil Nicolson 
Gary O'Neil 

Greenhouse gas emissions, energy consumption and energy efficiency action

No further disclosure is given in this Report in relation to the Streamlined Energy & Carbon Reporting as the company is exempt from disclosure as a low energy user.





Disclosure of information to auditors

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

the Director has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Page 3

 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Post balance sheet events

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

Auditors

The auditorsAnderson Anderson & Brown Audit LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

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





Neil Nicolson
Director

Date: 1 July 2024

Page 4

 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SYSTAL TECHNOLOGY SOLUTIONS LTD
 

Opinion


We have audited the financial statements of Systal Technology Solutions 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 the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 December 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 United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


Conclusions relating to going concern


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


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.


Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The Directors are responsible for the other information contained within the Annual ReportOur opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.


We have nothing to report in this regard.


Page 5

 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SYSTAL TECHNOLOGY SOLUTIONS LTD (CONTINUED)


Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.


We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


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


Responsibilities of directors
 

As explained more fully in the Directors' responsibilities statement set out on page 3, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.


In preparing the financial statements, the Directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.


Page 6

 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SYSTAL TECHNOLOGY SOLUTIONS LTD (CONTINUED)


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 an Auditors' 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:
- completing a risk-assessment process during our planning for this audit that specifically considered the risk of
fraud;
- enquiry of management about the company's policies, procedures and related controls regarding compliance
with laws and regulations and if there are any known instances of non-compliance;
- examining supporting documents for all material balances, transactions and disclosures;
- enquiry of management, about litigations and claims and inspection of relevant correspondence
- evaluation of the selection and application of accounting policies related to subjective measurements and
complex transactions;
- analytical procedures to identify any unusual or unexpected relationships;
- specific audit testing on and review of areas that could be subject to management override of controls and
potential bias, most notably around the key judgments and estimates, including the amounts recoverable on
contracts, deprecation of fixed assets, carrying value of accruals and revenue recognition;
- considering management override of controls outside of the normal operating cycles including testing the
appropriateness of journal entries recorded in the general ledger and other adjustments made in the preparation
of the financial statements including evaluating the business rationale of significant transactions, outside the
normal course of business.
We design our procedures so as to obtain sufficient appropriate audit evidence that the financial statements are
not materially misstated due to non-compliance with laws and regulations or due to fraud or error.
We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all
laws and regulations - this responsibility lies with management with the oversight of the directors.
Based on our understanding of the company and industry, discussions with management and directors we
identified financial reporting standards and Companies Act 2006 as having a direct effect on the amounts and
disclosures in the financial statements.
As part of the engagement team discussion about how and where the company's financial statements may be
materially misstated due to fraud, we did not identify any areas with an increased risk of fraud.
Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements of
the financial statements may not be detected, even though the audit is properly planned and performed in
accordance with the ISAs (UK).
The potential effects of inherent limitations are particularly significant in the case of misstatement resulting from
fraud because fraud may involve sophisticated and carefully organized schemes designed to conceal it, including
deliberate failure to record transactions, collusion or intentional misrepresentations being made to us.


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 Auditors' report.


Page 7

 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SYSTAL TECHNOLOGY SOLUTIONS LTD (CONTINUED)


Use of our report
 

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' 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.





Angus McCuaig (Senior statutory auditor)
for and on behalf of
Anderson Anderson & Brown Audit LLP
Statutory Auditors
133 Finnieston Street
Glasgow
G3 8HB

2 July 2024
Page 8

 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

As restated
2023
2022
Note
£
£

  

Turnover
 3 
69,942,350
54,942,131

Cost of sales
  
(56,443,265)
(45,125,266)

Gross profit
  
13,499,085
9,816,865

Administrative expenses
  
(12,708,899)
(11,137,193)

Other operating income
  
460,000
5,000

Operating profit/(loss) before depreciation and exceptional items
 4 
1,250,186
(1,315,328)

Exceptional items
  
(612,352)
768,169

Depreciation charges
  
(1,219,543)
(836,262)

Total operating loss
  
(581,709)
(1,383,421)

Interest payable and similar expenses
 8 
(477,147)
(353,299)

Loss before tax
  
(1,058,856)
(1,736,720)

Tax on loss
 9 
867,750
1,908,741

(Loss)/profit for the financial year
  
(191,106)
172,021

The notes on pages 12 to 27 form part of these financial statements.

Page 9

 
SYSTAL TECHNOLOGY SOLUTIONS LTD
REGISTERED NUMBER: SC345442

BALANCE SHEET
AS AT 31 DECEMBER 2023

As restated
2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 12 
3,826,702
3,770,852

Investments
 13 
1,107
1,107

  
3,827,809
3,771,959

Current assets
  

Debtors: amounts falling due within one year
 14 
21,119,379
20,987,230

Cash at bank and in hand
  
112,377
73,444

  
21,231,756
21,060,674

Creditors: amounts falling due within one year
 15 
(15,790,374)
(14,936,680)

Net current assets
  
 
 
5,441,382
 
 
6,123,994

Total assets less current liabilities
  
9,269,191
9,895,953

Creditors: amounts falling due after more than one year
 16 
(1,660,050)
(1,495,706)

  

Net assets
  
7,609,141
8,400,247


Capital and reserves
  

Called up share capital 
 21 
154
154

Share premium account
  
64,950
64,950

Profit and loss account
  
7,544,037
8,335,143

  
7,609,141
8,400,247


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 1 July 2024.




Neil Nicolson
Director

The notes on pages 12 to 27 form part of these financial statements.

Page 10

 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

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


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

£
£
£
£


At 1 January 2022
154
64,950
13,597,122
13,662,226


Comprehensive income for the year

Loss for the year (as restated)
-
-
172,021
172,021


Contributions by and distributions to owners

Dividends: Equity capital (Note 11)
-
-
(5,434,000)
(5,434,000)



At 1 January 2023 (as restated)
154
64,950
8,335,143
8,400,247


Comprehensive income for the year

Loss for the year
-
-
(191,106)
(191,106)


Contributions by and distributions to owners

Dividends: Equity capital (Note 10)
-
-
(600,000)
(600,000)


At 31 December 2023
154
64,950
7,544,037
7,609,141


The notes on pages 12 to 27 form part of these financial statements.

Page 11

 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

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

1.


General information

Systal Technology Solutions Limited is a private company, limited by shares, registered in Scotland. The
company's registered number is SC345442 and its registered office is Rowan House, 1 Robroyston Oval, Glasgow, G33 1AP.
The principal activity of the company is the provision of managed network and security services.
The financial statements are presented in Sterling, which is also the functional currency of the company. 

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

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

The following principal accounting policies have been applied:

  
2.2

Going concern

The company is in a strong financial position. Having considered budgets and cash flows, monthly
management accounts and available working capital, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The directors continue to believe the going concern basis of accounting appropriate in preparing the financial statements.

  
2.3

Critical accounting judgements and estimates

The preparation of the financial statements requires management to make judgements, estimates
and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet
date and the amounts reported for revenues and expenses during the year. However, the nature of
estimation means that actual outcomes could differ from those 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 key source of estimation uncertainty that has a significant effect on the amounts recognised in
the financial statements is the value of the amounts recoverable on contracts.  Amounts recoverable on contracts results when the risks and rewards of ownership have passed for the provision of goods and services. For projects spanning the year end, amounts recoverable on contract arises based on the percentage of completion on the project.  Further key judgements include the assessment and presentation of the exceptional costs reflected in exceptional administrative expenses.

Page 12

 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

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

2.Accounting policies (continued)

  
2.4

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.
As the company is included in the consolidated financial statements of Sarah Topco Limited, it is
entitled to take advantage of various disclosure exemptions within FRS 102. As a result, the company
has elected not to prepare a cash flow statement.

  
2.5

Related party exemption

The company has taken advantage of exemption, under Section 33 of Financial Reporting Standard
102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose
related party transactions with other group companies and to report any transactions with company directors within the consolidated group accounts.

  
2.6

Revenue

Turnover represents the amounts derived from the provision of goods and services which fall within the company’s ordinary activities, stated net of value added tax.
Turnover for the sale of goods is recognised when the company has transferred to the buyer the risks and rewards of ownership.
Turnover for the provision of services is recognised when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and the stage of completion can be measured reliably.

  
2.7

Grant income

Grant income is measured at the fair value of the asset received or receivable. Grant income received in the year has been recognised by the company using the accruals method. The grant income is recognised in income on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate.

Page 13

 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

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

2.Accounting policies (continued)

 
2.8

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

 
2.9

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.10

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.

Page 14

 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

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

2.Accounting policies (continued)

 
2.11

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

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

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

 
2.12

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.

 
2.13

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

Page 15

 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

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

2.Accounting policies (continued)


2.13
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Licences
-
20%
Rental assets
-
20%
Motor vehicles
-
20%
Fixtures and fittings
-
20%
Property improvements
-
10%

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

  
2.14

Hire purchase

Rentals payable under hire purchase contracts are charged against the resultant creditor with any
interest element being charged against income as the charges arise.

  
2.15

Finance leased assets

Leases of assets that transfer substantially all the risks and rewards incidental to ownership are
classified as finance leases.
Finance leases are capitalised at commencement of the lease as assets at the fair value of the
leased asset or, if lower, the present value of the minimum lease payments calculated using the
interest rate implicit in the lease. Where the implicit rate cannot be determined the company’s
incremental borrowing rate is used. Incremental direct costs, incurred in negotiating and arranging
the lease, are included in the cost of the asset.
Assets are depreciated over the shorter of the lease term and the estimated useful life of the asset.
Assets are assessed for impairment at each reporting date.
The capital element of lease obligations is recorded as a liability on inception of the arrangement.
Lease payments are apportioned between capital repayment and finance charge, using the effective
interest rate method, to produce a constant rate of charge on the balance of the capital repayments
outstanding.

  
2.16

Amounts recoverable on contracts

Amounts recoverable on contracts results when the risks and rewards of ownership have passed for
the provision of IT goods and services. For projects spanning the year end, amounts recoverable on
contract arises based on the percentage of completion on the project.

  
2.17

Deferred income

Deferred income results when payments have been received prior to the risks and rewards of ownership passing.

Page 16

 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

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

2.Accounting policies (continued)

 
2.18

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.19

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

  
2.20

Provisions for liabilities

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
Payments made are charged to the provision in the balance sheet, which is periodically re-assessed for adequacy.

  
2.21

Loans

Loans are measured initially at fair value, net of transactions costs, and are measured subsequently
at amortised cost using the effective interest method.

 
2.22

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

  
2.23

Prior year adjustment

The financial statements have been restated to incorporate the additional costs of operations incurred in Argentina and the movement on deferred tax.  
In last year’s accounts, the Argentina costs were not charged to the profit & loss as they were thought to be recoverable against an associate entity Systal Technology Argentina.  These costs however, should have been reflected as the company’s own costs as they are not rechargeable.
The accounting impact of this means the brought forward reserves are decreased by the amount of the costs equating to £1,877,042 and the intercompany account with Systal Holdings Ltd has decreased by the same value.
The deferred tax impact from including the above costs has resulted in last year's closing position changing from (£448,333) to £20,927 which is a movement of £469,260.  This has been reflected in the current year to re-state the opening deferred tax position and align the brought forward reserves with the movement.

Page 17

 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

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

3.


Turnover

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


As restated
2023
2022
£
£

Sales of goods and services
69,942,350
54,942,131

69,942,350
54,942,131


Analysis of turnover by country of destination:

As restated
2023
2022
£
£

United Kingdom
64,507,264
51,106,651

Rest of Europe
2,660,691
655,474

Rest of the world
2,774,395
3,180,006

69,942,350
54,942,131



4.


Operating loss

The operating loss is stated after charging:

As restated
2023
2022
£
£

Foreign currency (gains)/losses
140,302
(231,866)

Other operating lease rentals
463,950
460,236

Depreciation
1,219,541
834,314

Loss on disposal of fixed assets
-
19,659

Auditors' remuneration (Note 6)
34,000
32,000


5.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors and their associates:


2023
2022
£
£

Fees payable to the Company's auditors and their associates for the audit of the Company's financial statements
34,000
32,000

The Company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent Company.

Page 18

 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

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

6.


Employees

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


As restated
2023
2022
£
£

Wages and salaries
19,127,392
18,790,410

Social security costs
2,271,964
2,499,285

Pension costs
874,222
1,266,826

22,273,578
22,556,521


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


        2023
        2022
            No.
            No.







Admin
67
67



Engineers
249
252

316
319


7.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
658,512
489,361

Directors national insurance
86,840
66,881

Company contributions to defined contribution pension schemes
36,000
135,558

781,352
691,800


During the year retirement benefits were accruing to 3 Directors (2022 - 3) in respect of defined contribution pension schemes.

The Directors consider themselves as the key management personnel of the company so no further
disclosure required.

Page 19

 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

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

8.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
3,315
17,526

Finance leases and hire purchase contracts
94,396
71,664

Other interest payable
379,436
264,109

477,147
353,299


9.


Taxation


As restated
2023
2022
£
£

Corporation tax


Current tax on profits for the year
(117,153)
(937,235)

Adjustments in respect of previous periods
(460,000)
(887,669)


(577,153)
(1,824,904)


Total current tax
(577,153)
(1,824,904)

Deferred tax


Movement through profit and loss
(290,597)
(83,837)

Total deferred tax
(290,597)
(83,837)


Tax on loss
(867,750)
(1,908,741)
Page 20

 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
9.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - lower than) the standard rate of corporation tax in the UK of 23.52% (2022 - 19%). The differences are explained below:

As restated
2023
2022
£
£


Loss on ordinary activities before tax
(1,058,856)
(1,736,720)


(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.52% (2022 - 19%)
(249,043)
26,661

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
36,669
17,224

Capital allowances for year in excess of depreciation
2,882
5,525

Adjustments to tax charge in respect of prior periods
(117,153)
(887,669)

Other timing differences leading to an increase (decrease) in taxation
(142,316)
(226,645)

Non-taxable income
-
(760,000)

Deferred tax movements
(398,789)
(83,837)

Total tax charge for the year
(867,750)
(1,908,741)


10.


Dividends

2023
2022
£
£


"A" Ordinary shares
600,000
5,434,000

600,000
5,434,000


11.


Exceptional items

2023
2022
£
£

Exceptional administrative items


Professional and consultancy costs
-
1,302,097

Restructuring costs
612,352
-

Specific bad debt
-
1,929,734

Intercompany loan write-off
-
(4,000,000)

612,352
(768,169)

Page 21

 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

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

12.


Tangible fixed assets





Rental assets
Motor vehicles
Fixtures and fittings
Improvements to property
Total

£
£
£
£
£



Cost or valuation


At 1 January 2023
3,446,874
311,094
941,326
534,609
5,233,903


Additions
1,150,315
-
125,258
-
1,275,573


Disposals
-
-
(182)
-
(182)



At 31 December 2023

4,597,189
311,094
1,066,402
534,609
6,509,294



Depreciation


At 1 January 2023
738,212
151,094
327,126
246,619
1,463,051


Charge for the year
900,104
58,979
206,978
53,480
1,219,541



At 31 December 2023

1,638,316
210,073
534,104
300,099
2,682,592



Net book value



At 31 December 2023
2,958,873
101,021
532,298
234,510
3,826,702



At 31 December 2022
2,708,662
160,000
614,200
287,990
3,770,852

The net book value of assets held under hire purchase contracts as at 31 December 2023 was £101,021 (2022: £156,254).


13.


Fixed asset investments





Investments in subsidiary companies

£



Cost or valuation


At 1 January 2023
1,107



At 31 December 2023
1,107





Page 22

 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

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

14.


Debtors

As restated
2023
2022
£
£


Trade debtors
9,285,965
7,838,850

Amounts owed by group undertakings
4,983,527
6,446,301

Other debtors
504,976
1,185,105

Prepayments
1,379,610
705,375

Amounts recoverable on long-term contracts
4,653,777
4,790,672

Deferred taxation
311,524
20,927

21,119,379
20,987,230



15.


Creditors: Amounts falling due within one year

2023
2022
£
£

Invoice financing
5,165,150
4,377,297

Trade creditors
1,964,485
3,940,574

Other taxation and social security
2,610,451
1,781,306

Obligations under finance lease and hire purchase contracts (Note 17)
841,519
709,658

Other creditors
2,134,475
1,851,657

Accruals and deferred income
3,074,294
2,276,188

15,790,374
14,936,680



16.


Creditors: Amounts falling due after more than one year

2023
2022
£
£

Net obligations under finance leases and hire purchase contracts (Note 17)
1,660,050
1,495,706

1,660,050
1,495,706


Page 23

 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

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

17.


Hire purchase and finance leases


Minimum lease payments under hire purchase fall due as follows:

2023
2022
£
£


Within one year
841,519
709,658

Between 1-5 years
1,660,050
1,495,706

2,501,569
2,205,364


18.
Secured debts


2023
2022

£
£

The following secured debts are included within creditors

HP liabilities < 1 year
3,183
51,144

HP liabilities > 1 year
-
8,508

Finance leases < 1 year
838,336
658,514

Finance leases >1 year
1,660,050
1,487,198

Credit card facility
41,380
36,563

Invoice financing facility
5,165,150
4,377,297

7,708,099
6,619,224

Hire purchase contracts are secured against the assets which the liability relates.
Finance leases are secured against the assets which the liability relates.
The invoice discounting and credit card facility is secured by a floating charge over the assets, debtors books and undertakings of Systal Technology Solutions Limited by Virgin Money PLC.

Page 24

 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

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

19.


Financial instruments

2023
2022
£
£

Financial assets


Financial assets measured at amortised cost
21,602,049
22,211,414


Financial liabilities


Financial liabilities measured at amortised cost
17,657,489
16,432,386


Financial assets measured at amortised cost relate to cash at bank and in hand and debtors falling due
within one year, excluding prepayments.


Financial liabilities measured at amortised cost relate to liabilities stated in notes 15 and 16.


Total interest expenditure for financial liabilities held at amortised cost relates to costs stated in note 8.



2023
2022

£
£

Interest income and expense

Interest payable
477,147
353,299


20.


Deferred taxation




2023


£






At beginning of year - restated
20,927


Charged to profit or loss
290,597



At end of year
311,524

The deferred tax asset is made up as follows:

2023
2022
£
£


Accelerated capital allowances
(468,656)
(473,113)

Timing differences
29,672
24,780

Losses and other deductions
750,508
469,260

311,524
20,927

Page 25

 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

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

21.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



150 (2022 - 150) A Ordinary shares of £1.00 each shares of £1.00 each
150
150
4 (2022 - 4) B Ordinary shares of £1.00 each shares of £1.00 each
4
4

154

154



22.


Prior year adjustment

As referenced under accounting policy 2.23 there was a prior year adjustment in respect of the financial year ending 31 December 2022 for additional costs in Argentina and the impact of including these costs on the deferred tax position.
The impact of this means the brought forward opening reserves have changed by £1,407,782 from the original financial statements which is made up of £1,877,042 costs and £469,260 deferred tax movement.
The profit and loss for the prior year has been reduced from £493,621 operating profit to a restated operating loss of £1,383,421 and movements on the tax line of £469,260.  The brought forward reserves and the net assets have also reduced by the amount of £1,407,782.


23.


Pension commitments

The company contributes to a defined contribution scheme on behalf of certain directors and employees.
The contributions amounted to £838,222 (2022: £1,266,826). At the year end there was £120,208 to be
collected by the pension scheme providers (2022: £124,039).


24.


Commitments under operating leases

At 31 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£


Not later than 1 year
409,759
342,015

Later than 1 year and not later than 5 years
952,340
814,993

Later than 5 years
277,005
328,000

1,639,104
1,485,008


25.


Related party transactions

As detailed within accounting policy 2.5, the company has taken exemption to disclose certain related
parties transactions as per Section 33 Related Party Disclosures paragraph 33.7. The company has not
entered into any other related party transactions during the year that require disclosure.

Page 26

 
SYSTAL TECHNOLOGY SOLUTIONS LTD
 

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

26.


Capital management

Capital comprises of share capital and reserves stated on the Balance Sheet. The company's objective
when managing capital is to provide sufficient resources to allow the continued investment in new
products that is required in the rapidly changing market in which the company operates and to safeguard
the company's ability to continue as a going concern, so that it can continue to provide returns for
shareholders.
The company manages capital by regularly monitoring its current and expected liquidity requirements
rather than using debt/equity ratio analyses. No changes were made in the objectives, policies and
processes during the year.
The company is not subject to either internally or externally imposed capital requirements.


27.


Ultimate Parent company

Systal Holdings Limited, a company incorporated in Great Britain and registered in Scotland, is the
immediate parent company of Systal Technology Solutions Limited and Systal Holdings Limited owns 100% of the share capital of Systal Technology Solutions Limited.
The ultimate parent company of Systal Technology Solutions Limited is Sarah Topco Limited, a company incorporated in Great Britain and registered in England and Wales.  Copies of the consolidated financial statements of Sarah Topco Limited are available to the public from its registered office at 47 Queen Anne Street, Marylebone, London, UK, W1G 9JG.

Page 27