Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2023
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SYSTAL TECHNOLOGY SOLUTIONS LTD
COMPANY INFORMATION
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SYSTAL TECHNOLOGY SOLUTIONS LTD
CONTENTS
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SYSTAL TECHNOLOGY SOLUTIONS LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report of Systal Technology Solutions Limited (‘Systal’) for the year ended 31 December 2023.
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).
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.
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.
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.
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.
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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.
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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.
The Directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.
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 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.
The Directors who served during the year were:
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.
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SYSTAL TECHNOLOGY SOLUTIONS LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
There have been no significant events affecting the Company since the year end.
The auditors, Anderson Anderson & Brown Audit LLP, will 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.
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SYSTAL TECHNOLOGY SOLUTIONS LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SYSTAL TECHNOLOGY SOLUTIONS LTD
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 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).
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.
In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The Directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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SYSTAL TECHNOLOGY SOLUTIONS LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SYSTAL TECHNOLOGY SOLUTIONS LTD (CONTINUED)
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.
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.
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SYSTAL TECHNOLOGY SOLUTIONS LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SYSTAL TECHNOLOGY SOLUTIONS LTD (CONTINUED)
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.
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SYSTAL TECHNOLOGY SOLUTIONS LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SYSTAL TECHNOLOGY SOLUTIONS LTD (CONTINUED)
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an 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.
for and on behalf of
Statutory Auditors
133 Finnieston Street
G3 8HB
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SYSTAL TECHNOLOGY SOLUTIONS LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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SYSTAL TECHNOLOGY SOLUTIONS LTD
REGISTERED NUMBER: SC345442
BALANCE SHEET
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 12 to 27 form part of these financial statements.
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SYSTAL TECHNOLOGY SOLUTIONS LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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SYSTAL TECHNOLOGY SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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
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:
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.
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.
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SYSTAL TECHNOLOGY SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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.
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.
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.
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.
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SYSTAL TECHNOLOGY SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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SYSTAL TECHNOLOGY SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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.
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SYSTAL TECHNOLOGY SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (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:
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.
Rentals payable under hire purchase contracts are charged against the resultant creditor with any
interest element being charged against income as the charges arise.
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.
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.
Deferred income results when payments have been received prior to the risks and rewards of ownership passing.
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SYSTAL TECHNOLOGY SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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.
Loans are measured initially at fair value, net of transactions costs, and are measured subsequently
at amortised cost using the effective interest method.
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.
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SYSTAL TECHNOLOGY SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Analysis of turnover by country of destination:
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SYSTAL TECHNOLOGY SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The Directors consider themselves as the key management personnel of the company so no further
disclosure required.
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SYSTAL TECHNOLOGY SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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SYSTAL TECHNOLOGY SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
9.Taxation (continued)
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SYSTAL TECHNOLOGY SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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SYSTAL TECHNOLOGY SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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SYSTAL TECHNOLOGY SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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.
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SYSTAL TECHNOLOGY SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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SYSTAL TECHNOLOGY SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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.
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).
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SYSTAL TECHNOLOGY SOLUTIONS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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.
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.
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