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Registered number: 13215701









SARAH TOPCO LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 
SARAH TOPCO LIMITED
 
 
COMPANY INFORMATION


Directors
D Cumming 
A Mainwaring 
A Majumdar (resigned 10 February 2023)
P Manning 
N Nicolson 
G O'Neil 




Registered number
13215701



Registered office
47 Queen Anne Street
Marylebone

London

United Kingdom

W1G 9JG




Independent auditors
Anderson Anderson & Brown Audit LLP

133 Finnieston Street

Glasgow

G3 8HB





 
SARAH TOPCO LIMITED
 

CONTENTS



Page
Group Strategic Report
1 - 2
Directors' Report
3 - 4
Independent Auditors' Report
5 - 8
Consolidated Statement of Comprehensive Income
9
Consolidated Balance Sheet
10
Company Balance Sheet
11
Consolidated Statement of Changes in Equity
12
Company Statement of Changes in Equity
13
Consolidated Statement of Cash Flows
14
Consolidated Analysis of Net Debt
15
Notes to the Financial Statements
16 - 40


 
SARAH TOPCO LIMITED
 
 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
The directors present their report for the year ended 31 December 2023 of Sarah Topco Limited, and its subsidiaries, trading as Systal Technologies (‘Systal’). 

Business review
 
Systal is a global, market leading, managed network and security services provider focused on providing excellent customer service and bespoke solutions. Systal’s network and security operating  centres around the World, manage and monitor network performance around the clock, 365 days a year, to a wide range of global businesses. The Group looks after over 200,000 assets in more than 70 countries for 240 enterprise level customers.
Systal’s investment in infrastructure and its geographical network of 28 locations has established the platform to deliver its value-add solutions and cyber security services. In support of its US customer base and rising demand for managed network, cyber security and cloud services, in early 2024, Systal opened a new operating centre in Tampa, Florida. 
Revenue in the year was £69.9m (2022: £74.8m) reflecting the expiry of revenue commitments in the early part of the year. Gross margins in the year were unchanged at 30% (2022: 29%) as the Group adjusted its cost base for long term growth. Underlying Ebitda (earnings before interest, tax, depreciation and amortisation), a key performance indicator of the cash generation of the company, increased by 2,143% to £3.8m (2022: loss £185k as restated) reflecting improved overhead control and more efficiency in tooling and infrastructure.

Financial review

Sarah Topco Limited’s balance sheet and financing benefits, during periods of high inflation and significantly increased interest rates, from having a limited exposure to third party borrowing. Day to day activities are financed through cash reserves and an invoice financing facility, which is secured on amounts due from customers. Cash interest of £0.4m in the year was covered by underlying ebitda 9.25 times over.  Cash balances increased due to strong cash flow in the by £0.7m from £1.3m to £2.0m at 31 December 2023.
The acquisition of the Systal Group of companies in 2021 by Sarah Topco Limited, resulted in  non-cash annual charges of £10.3m (2022: £10.1m) to the income statement. Goodwill of £48.4m arose on acquisition, which is amortised over a 10 year period resulting in an annual non-cash charge of £4.8m (2022: £4.8m). As part of the acquisition, Sarah Topco Limited allotted £53.0m of loan notes to its owners on which non-cash interest accrues and the charge to the income statement in 2023 was £5.5m (2022: £5.3m).  

Principal 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.

Page 1

 
SARAH TOPCO LIMITED
 

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

Directors' statement of compliance with duty to promote the success of the Group
 
Employee Engagement
Sarah Topco Limited is fully committed to keeping employees informed of matters which affect them, the Company and its subsidiaries in the short term and the long term. This information is disseminated in a variety of ways and frequencies depending on the nature and importance of the information. This includes but is not limited to:
• Weekly operational management meetings
• Quarterly town hall meetings hosted by the CEO
• Lunch and learn sessions
• Internal social media updates of business activities and contract awards
•Email announcements on strategic decisions
Other Stakeholders
Central to the Group’s success are relationships with its key stakeholders such as customers, suppliers, shareholders and local communities. Interactions include, but are not limited to:
• Frequent customer meetings to review service quality, performance, delivery and future business requirements
• Periodic supplier meetings to discuss issues, performance and ongoing requirements
• Regular interaction with local universities and colleges to facilitate future opportunities or apprenticeships
•Support for local charities and institutions , often led through local employee initiatives and supported by the Group.
The Group seeks to operate within high standards of business conduct and regularly reviews industry best practice to deliver a sustainable business with high standards in respect of environmental and regulatory issues. 

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 the launch of our network operating centre in Tampa, Florida, which is already seeing positive demand for its transformational skills, underpinned by extended commitments from long term customer relationships, supports Systal’s  ambition to substantially grow revenue, run rate ebitda and its return to shareholders. 


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





N Nicolson
Director

Date: 1 July 2024

Page 2

 
SARAH TOPCO LIMITED
 
 
 
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 Group Strategic Report, the Directors' Report and the consolidated 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 the Group and of the profit or loss of the Group for that period.

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


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

make judgments and accounting estimates that are reasonable and prudent;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The loss for the year, after taxation, amounted to £10,459,201 (2022 - loss £13,930,626).

Directors

The directors who served during the year were:

D Cumming 
A Mainwaring 
A Majumdar (resigned 10 February 2023)
P Manning 
N Nicolson 
G O'Neil 

Future developments

The company has chosen in accordance with Companies Act 2006, s.414C(11) to set out the company's
strategic report information required by Large and Medium sized Companies and Groups (Accounts and
Reports) Regulations 2008, Sch.7 to be contained in the Directors' report. It has been done so in respect of
future developments.

Page 3

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

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 and the Group'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 and the Group's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Group 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.
 





N Nicolson
Director

Date: 1 July 2024

Page 4

 
SARAH TOPCO LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SARAH TOPCO LIMITED
 

Opinion


We have audited the financial statements of Sarah Topco Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023, which comprise the Group Statement of Comprehensive Income, the Group and Company Balance Sheets, the Group Statement of Cash Flows, the Group and Company 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 Group's and of the parent Company's affairs as at 31 December 2023 and of the Group's 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 Group 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 Group's or the parent 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.


Page 5

 
SARAH TOPCO LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SARAH TOPCO LIMITED (CONTINUED)


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 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.


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 Group 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 Group 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 Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company 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 Group's and the parent 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 Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Page 6

 
SARAH TOPCO LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SARAH TOPCO LIMITED (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 Group 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

 
SARAH TOPCO LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SARAH TOPCO LIMITED (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

 
SARAH TOPCO LIMITED
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

As restated
2023
2022
Note
£
£

  

Turnover
 3 
69,928,449
74,796,815

Cost of sales
  
(48,760,989)
(53,072,136)

Gross profit
  
21,167,460
21,724,679

Administrative expenses
  
(17,844,073)
(21,950,975)

Other operating income
 4 
460,000
41,074

Operating profit before amortisation, depreciation and exceptional items
 5 
3,783,387
(185,222)

Amortisation and depreciation charges
  
(6,395,216)
(5,765,658)

Exceptional items
  
(2,058,651)
(4,456,889)

Operating (loss)/profit
 5 
(4,670,480)
(10,407,769)

Interest payable and expenses
 9 
(6,085,667)
(5,732,790)

Loss before taxation
  
(10,756,147)
(16,140,559)

Tax on loss
 10 
296,946
2,209,933

Loss for the financial year
  
(10,459,201)
(13,930,626)

  

  

The notes on pages 16 to 40 form part of these financial statements.

Page 9

 
SARAH TOPCO LIMITED
REGISTERED NUMBER: 13215701

CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2023

As restated
2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 12 
34,646,699
39,481,951

Tangible assets
  
5,473,014
4,528,758

  
40,119,713
44,010,709

Current assets
  

Debtors
 15 
27,272,130
28,791,096

Cash at bank and in hand
 16 
1,984,362
1,267,209

  
29,256,492
30,058,305

Creditors: amounts falling due within one year
 17 
(23,828,200)
(23,495,291)

Net current assets
  
 
 
5,428,292
 
 
6,563,014

Total assets less current liabilities
  
45,548,005
50,573,723

Creditors: amounts falling due after more than one year
 18 
(69,894,431)
(64,204,917)

Provisions for liabilities
  

Net liabilities
  
(24,346,426)
(13,631,194)


Capital and reserves
  

Called up share capital 
 23 
9,456
9,456

Share premium account
  
2,214,957
2,214,957

Profit and loss account
  
(26,570,839)
(15,855,607)

  
(24,346,426)
(13,631,194)


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




N Nicolson
Director

The notes on pages 16 to 40 form part of these financial statements.

Page 10

 
SARAH TOPCO LIMITED
REGISTERED NUMBER: 13215701

COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Investments
 14 
1
1

  
1
1

Current assets
  

Debtors
 15 
2,798,361
2,581,718

Cash at bank and in hand
 16 
137
634

  
2,798,498
2,582,352

Creditors: amounts falling due within one year
 17 
(56,312)
(5,680)

Net current assets
  
 
 
2,742,186
 
 
2,576,672

Total assets less current liabilities
  
2,742,187
2,576,673

Creditors: amounts falling due after more than one year
 18 
(63,101)
(24,249)

Net assets
  
2,679,086
2,552,424


Capital and reserves
  

Called up share capital 
 23 
9,456
9,456

Share premium account
  
2,214,957
2,214,957

Profit and loss account brought forward
  
328,011
181,141

Profit for the year
  
126,662
146,870

Profit and loss account carried forward
  
454,673
328,011

  
2,679,086
2,552,424


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


N Nicolson
Director

The notes on pages 16 to 40 form part of these financial statements.

Page 11

 
SARAH TOPCO LIMITED
 

CONSOLIDATED 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 22 January 2022
9,375
2,101,588
(1,924,981)
185,982



Loss for the year (as restated)
-
-
(13,930,626)
(13,930,626)

Shares issued during the year
81
113,369
-
113,450



At 1 January 2023 (as restated)
9,456
2,214,957
(15,855,607)
(13,631,194)



Loss for the year
-
-
(10,459,201)
(10,459,201)

Currency translation differences
-
-
(256,031)
(256,031)


At 31 December 2023
9,456
2,214,957
(26,570,839)
(24,346,426)


The notes on pages 16 to 40 form part of these financial statements.

Page 12

 
SARAH TOPCO LIMITED
 

COMPANY 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 22 January 2022
9,375
2,101,588
181,141
2,292,104



Profit for the year
-
-
146,870
146,870

Shares issued during the year
81
113,369
-
113,450



At 1 January 2023
9,456
2,214,957
328,011
2,552,424



Profit for the year
-
-
126,662
126,662


At 31 December 2023
9,456
2,214,957
454,673
2,679,086


The notes on pages 16 to 40 form part of these financial statements.

Page 13

 
SARAH TOPCO LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023

As restated
2023
2022
£
£

Cash flows from operating activities

Operating profit for the period
(4,670,480)
(10,407,769)

Adjustments for:

Amortisation of intangible assets
4,835,252
4,835,253

Depreciation of tangible assets
1,556,064
930,546

Foreign exchange movement
303,840
(316,075)

Loss on disposal of tangible assets
-
29,504

Government grants
-
(41,074)

(Increase) in debtors
699,581
40,739

(Decrease)/increase in creditors
(586,973)
11,748,647

Corporation tax paid
(570,804)
(145,698)

Net cash generated from operating activities

1,566,480
6,674,073

Cash flows from investing activities

Purchase of tangible fixed assets
(775,224)
(2,094,813)

Disposal of fixed assets
182
-

Government grants received
-
41,074

HP Interest paid
(94,396)
(71,664)

Interest payable
(467,650)
(661,126)

Net cash from investing activities

(1,337,088)
(2,786,529)

Cash flows from financing activities

Issue of ordinary shares
-
113,450

Movement in invoice financing facility
787,853
(264,676)

Repayment of/new finance leases
(300,092)
830,730

Repayment of loan notes
-
(5,000,000)

Net cash used in financing activities
487,761
(4,320,496)

Net increase/(decrease) in cash and cash equivalents
717,153
(432,952)

Cash and cash equivalents at beginning of year
1,267,209
1,700,161

Cash and cash equivalents at the end of year
1,984,362
1,267,209


Cash at bank and in hand
1,984,362
1,267,209


Page 14

 
SARAH TOPCO LIMITED
 

CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023





At 1 January 2023
Cash flows
New finance leases
At 31 December 2023
£

£

£

£

Cash at bank and in hand

1,267,209

717,153

-

1,984,362

Invoice financing

(4,377,297)

(787,853)

-

(5,165,150)

Debt due within 1 year

(1,675,000)

(1,467)

-

(1,676,467)

Finance leases

(2,205,364)

(1,002,613)

706,408

(2,501,569)


(6,990,452)
(1,074,780)
706,408
(7,358,824)

The notes on pages 16 to 40 form part of these financial statements.

Page 15

 
SARAH TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Sarah Topco Limited ("the company") is a private limited company domiciled and incorporated in England and Wales. The registered office is 47 Queen Anne Street, Marylebone, London, United Kingdom, W1G 9JG.
The group consists of Sarah Topco Limited and all of its subsidiaries.
The principal activity of the company is that of a holding 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 Group management to exercise judgment in applying the Group's accounting policies.

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.

The following principal accounting policies have been applied:

  
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Page 16

 
SARAH TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.3

Going concern

The directors note the net liabilities position of the group as at 31 December 2023. This is as a result of the interest accruing on long term finance and on the non- cash impact of amortisation of goodwill on consolidation. The interest and corresponding loan notes are not due for repayment until 3 March 2027.
The group depends on its existing bank facilities to meet its day to day working capital requirements.  The group expects to be able to operate within these facilities for the whole of the foreseeable future.  Additionally, whilst these facilities are reviewed annually, the Directors are not aware of any circumstances that may adversely affect them being renewed.
The Directors have considered their budgets and cashflow forecasts for the next 12 months from the date of signing the financial statements.  Having reviewed the projections, the Directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future.
Accordingly, the Directors believe it is appropriate to prepare the financial statements on a going concern basis.  .

 
2.4

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 Consolidated 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'.

On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

Page 17

 
SARAH TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

  
2.5

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.

 
2.6

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Group has transferred the significant risks and rewards of ownership to the buyer;
the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract 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 18

 
SARAH TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.8

Operating leases: the Group 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.

 
2.9

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

 
2.10

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group 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 Group in independently administered funds.

Page 19

 
SARAH TOPCO LIMITED
 
 
 
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 and the Group operate and generate 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;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

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 Group but are presented separately due to their size or incidence.

Page 20

 
SARAH TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.13

Intangible assets

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated Statement of Comprehensive Income over its useful economic life.

Other intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 The estimated useful lives range as follows:

Goodwill
-
10
years

 
2.14

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.

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:

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

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.

Page 21

 
SARAH TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.15

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.16

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.

 
2.17

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

 
2.18

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.

  
2.19

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.

  
2.20

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.

Page 22

 
SARAH TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

  
2.21

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.

  
2.22

Deferred income

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

  
2.23

Loans

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

 
2.24

Provisions for liabilities

Provisions are made where an event has taken place that gives the Group 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 Group 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.
When payments are eventually made, they are charged to the provision carried in the Balance Sheet.

 
2.25

Financial instruments

The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated Statement of Comprehensive Income.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate
Page 23

 
SARAH TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.25
Financial instruments (continued)

for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Group would receive for the asset if it were to be sold at the balance sheet date.

Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

  
2.26

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 group’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.  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 24

 
SARAH TOPCO LIMITED
 
 
 
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:


2023
2022
£
£

Sales of goods and services
69,928,449
74,796,815

69,928,449
74,796,815


Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
64,493,363
70,961,335

Europe
2,660,691
655,474

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

69,928,449
74,796,815



4.


Other operating income

2023
2022
£
£

Government grants receivable
-
41,074

Sundry income
460,000
-

460,000
41,074



5.


Operating loss

The operating loss is stated after charging:

2023
2022
£
£

Amortisation of goodwill
4,835,252
4,835,253

Exchange differences
404,559
(318,111)

Other operating lease rentals
1,260,959
821,537

Depreciation
1,556,064
930,546

Loss on disposal of fixed assets
-
9,845

Auditors' remuneration
67,000
58,500

Page 25

 
SARAH TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

6.


Auditors' remuneration

During the year, the Group obtained the following services from the Company's auditors:


2023
2022
£
£

Fees payable for audit services for the Parent and group
67,000
58,500

Fees for non-audit services for Parent and group
32,000
43,400

Fees payable for audit services for the Parent company only
3,000
2,000

Fees payable for non-audit services for the Parent company only
5,000
4,000


7.


Employees






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


        2023
        2022
            No.
            No.







Admin
309
313



Engineers
502
517

811
830

The Company has no employees other than the directors.


 

Staff costs, including directors' remuneration, were as follows:
2023
2022 (as restated)
£
£
Wages and salaries
39,711,069
43,085,948
Social security costs
4,902,764
5,761,420
Pension costs
3,892,690
2,846,390
48,506,523
51,693,759

Page 26

 
SARAH TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

8.

Directors' remuneration

2023
2022
£
£
Directors' emoluments
983,938
599,361
Social security costs
131,749
81,549
Pension
36,000
135,558
1,151,687
816,468


.



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.


9.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
5,109
17,526

Other loan interest payable
460,806
352,698

Loan notes interest (note 19)
5,525,169
5,290,902

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

Other interest payable
187
-

6,085,667
5,732,790

Page 27

 
SARAH TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

10.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
570,804
(937,190)

Adjustments in respect of previous periods
(577,153)
(887,669)


Total current tax
(6,349)
(1,824,859)

Deferred tax


Origination and reversal of timing differences
(290,597)
(385,074)

Total deferred tax
(290,597)
(385,074)


Taxation on loss on ordinary activities
(296,946)
(2,209,933)

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:

2023
2022
£
£


Loss on ordinary activities before tax
(10,756,147)
(16,140,559)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.52% (2022 - 19%)
(2,529,846)
(3,066,706)

Effects of:


Non-tax deductible amortisation of goodwill and impairment
918,696
918,698

Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
1,358,007
669,779

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

Adjustments to tax charge in respect of prior periods
352,107
(887,669)

Other timing differences leading to an increase (decrease) in taxation
(398,792)
150,440

Total tax charge for the year
(296,946)
(2,209,933)


Factors that may affect future tax charges

There were no factors that may affect future tax charges.

Page 28

 
SARAH TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
10.Taxation (continued)




11.


Administrative expenses - exceptional items

2023
2022
£
£


Professional and consultancy costs
-
1,986,676

Specific bad debt
-
1,929,734

Restructuring and set-up costs
2,058,651
540,479

2,058,651
4,456,889


12.


Intangible assets

Group only




Goodwill

£



Cost


At 1 January 2023
48,352,532



At 31 December 2023

48,352,532



Amortisation


At 1 January 2023
8,870,581


Charge for the year
4,835,252



At 31 December 2023

13,705,833



Net book value



At 31 December 2023
34,646,699



There are no intangible fixed assets held in the Parent Company.

Page 29

 
SARAH TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.
Tangible fixed assets


Group

Rental assets
Motor vehicles
Fixtures and fittings
Improvements to property
Total

£
£
£
£
£

Cost or valuation

At 01 January 2023
3,648,169
331,123
1,577,897
539,418
6,096,607

Additions
2,367,255
-
133,065
-
2,500,320


At 31 December 2023
6,015,424
331,123
1,710,962
539,418
8,596,927

Depreciation

At 01 January 2023
745,526
156,930
418,773
246,619
1,567,848

Charge for the period
1,125,584
63,893
313,126
53,461
1,556,064


At 31 December 2023
1,871,110
220,823
731,899
300,080
3,123,912

Net book value

At 31 December 2023
4,144,314
110,300
979,063
239,338
5,473,015

At 31 December 2022
2,902,644
174,193
1,159,123
292,799
4,528,759

The net book value of assets held under hire purchase contracts as at 31 December 2023 was £101,021 (2022: £156,254).
There are no tangible fixed assets held within the Parent company. 


14.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost or valuation


At 1 January 2023
1



At 31 December 2023
1




The investment within the company represents the investment held in Sarah Midco 1 Ltd.

Page 30

 
SARAH TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Registered office

Class of shares

Holding

Sarah Midco 1 Ltd
47 Queen Anne Street, Marlebone, London, UK, W1G 9JG
Ordinary
100%
Sarah Midco 2 Ltd
47 Queen Anne Street, Marlebone, London, UK, W1G 9JG
Ordinary
100%
Sarah Bidco Ltd
47 Queen Anne Street, Marlebone, London, UK, W1G 9JG
Ordinary
100%
Systal Holdings Ltd
Rowan House 1, Robroyston Oval, Glasgow, G33 1AP
Ordinary
100%
Systal Technology Solutions Ltd
Rowan House 1, Robroyston Oval, Glasgow, G33 1AP
Ordinary
100%
Systal Technology Solutions (Ireland) Ltd
Marine House, Clan William Place, Dublin
Ordinary
100%
Systal Technology Solutions Inc
Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware, 19801
Ordinary
100%
Systal Technology Solutions Singapore PTE Ltd
7 Straights View, #12-00 Marina One East Tower, Singapore, 018936
Ordinary
100%
Systal Technology Solutions Australia PTY Ltd
Barangaroo, 2000 New South Wales, Australia
Ordinary
100%
Systal Technology Solutions SAS
Favart:4, RUE Marivaux - 75002 Paris
Ordinary
100%
Systal Technology Solutions GmbH
Eschersheimer Ordinary Landstrasse 14, 60322 Frankfurt am Main, Germany
Ordinary
100%
Systal Technology Solutions SL
 C/Pricipe, Ordinary de Vergara 211 102, 28002 Madrid, Spain
Ordinary
100%
Systal Technology Solutions SRL
TLS Assicuazione, Ordinary Orifessuinale di Avvocati e Commercialisti Piazza Tre Torri, 220145, Milano, Italy
Ordinary
100%
Systal Technology Solutions S.r.o.
CITY, Ordinary Tower, Hvzdova, 1716/2b, 140 78 Praha 4, Czech Republic
Ordinary
100%
Page 31

 
SARAH TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Subsidiary undertakings (continued)


Name

Registered office

Class of shares

Holding

Systal Technology Solutions S.r.o.
 Business Centre, Twin City, Karadziova, 2/A, 815 32 Bratislava, Slovakia
Ordinary
100%
Systal Technology Solutions BV
Apollolaan 151, 1077 AR Amsterdam, The Netherlands
Ordinary
  100%
Systal Technology Solutions NV
Avenue Marnix Ordinary 23, 5th Floor, 1000 Brussels
Ordinary
100%
Systal Technology Solutions OY
P.O. Box 1015 (Itamerentori 2), Fl-00101, Helsinki, Finland
Ordinary
100%
Systal Technology Solutions ApS
BKH Law Amaliegade 15, 1256 Copenhagen BKH Law P/S, CVR 37 34 96 74
Ordinary
100%
Systal Technology Solutions AB
P.O. Box 16285, 103 25, Stockholm, Sweden
Ordinary
100%
Systal Technology Solutions AG
Zahlerweg 6, 6300 Zug, Switzerland
Ordinary
100%
Systal Solucoes em Tecnologia Ltda
Europartner, Avenida Paulista 807 - sala 522 Bela Vista, Sao Paulo - SPCEP 01311-915
Ordinary
100%
Systal Technology Solutions Malaysia Sdn.Bhd
Level 11, 1 Sentral, Jalan Rakyat, Kuala Lumpur Sentral, 50470 Kuala Lumpur, Malaysia
Ordinary
100%
Systal Technology Solutions Inc
18 York Street, Suite c2500, Toronto, Ontario, M5J 0B2
Ordinary
100%
Systal Technology Solutions PL
Chandiok & Guliana Chartered Accountants, C-44, Nizamuddin East, New Delhi - 110013, India
Ordinary
100%
Systal Technology AS
Munkedamsveien 59B, 0270 OSLO
Ordinary
100%
Systal Technology Solutions Ltd
Level 26, HSBC Tower, 188 Quay Street, Auckland, 1010, NZ
Ordinary
100%
Systal Technology Solutions (Pty) Ltd
P.O. Box 429, Pretoria, 0001, Republic of South Africa, Docex 256, Pretoria
Ordinary
100%
Raeste lota S.a.r.l.
17 Boulevard F.W. Raiffeisen, 2411, Luxembourg
Ordinary
100%
Page 32

 
SARAH TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Subsidiary undertakings (continued)


Name

Registered office

Class of shares

Holding

Systal Technology Solutions Ltd
3806 Central Plaza, 18 Harbour Road, Wanchai, Hong Kong
Ordinary
100%

Page 33

 
SARAH TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Subsidiary undertakings (continued)

The aggregate of the share capital and reserves as at 31 December 2023 and the profit or loss for the year ended on that date for the subsidiary undertakings were as follows:

Name
Aggregate of share capital and reserves
Profit/(Loss)
£
£

Sarah Midco 1 Ltd
(15,764,345)
(5,685,794)

Sarah Midco 2 Ltd
1
-

Sarah Bidco Ltd
27,248
10,624

Systal Holdings Ltd
49,993
49,895

Systal Technology Solutions Ltd
7,609,141
(191,106)

Systal Technology Solutions (Ireland) Ltd
122,995
70,229

Systal Technology Solutions Inc
375,261
102,927

Systal Technology Solutions Singapore PTE Ltd
(8,599)
12,712

Systal Technology Solutions Australia PTY Ltd
(6,278)
(622)

Systal Technology Solutions SAS
110,568
48,495

Systal Technology Solutions GmbH
198,162
74,285

Systal Technology Solutions SL
41,385
2,445

Systal Technology Solutions SRL
191,428
77,293

Systal Technology Solutions S.r.o.
301,862
199,117

Systal Technology Solutions S.r.o.
(114,413)
205,279

Systal Technology Solutions BV
22,827
5,401

Systal Technology Solutions NV
64,758
1,332

Systal Technology Solutions OY
1
1,605

Systal Technology Solutions ApS
42,418
418

Systal Technology Solutions AB
3,580
2,158

Systal Technology Solutions AG
92,803
(374)

Systal Solucoes em Tecnologia Ltda
19,647
4,708

Systal Technology Solutions Malaysia Sdn.Bhd
20,487
(15,631)

Systal Technology Solutions Inc
7,214
3,210

Systal Technology Solutions PL
(35,030)
3,431

Systal Technology AS
2,317
(171)

Systal Technology Solutions Ltd
50
(111)

Systal Technology Solutions (Pty) Ltd
-
(150)

Raeste lota S.a.r.l.
10,596
(20,982)

Systal Technology Solutions Ltd
1,006
(128)

Page 34

 
SARAH TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

15.


Debtors

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Due after more than one year

Amounts owed by group undertakings
-
-
2,598,868
2,448,613

Other debtors
199,493
133,105
199,493
133,105

199,493
133,105
2,798,361
2,581,718

Due within one year

Trade debtors
16,708,951
18,052,297
-
-

Other debtors
1,204,221
1,710,401
-
-

Prepayments and accrued income
1,601,230
990,572
-
-

Amounts recoverable on long-term contracts
7,246,711
7,883,794
-
-

Deferred taxation
311,524
20,927
-
-

27,272,130
28,791,096
2,798,361
2,581,718



Company - amounts owed by group breakdown


2023
2022

£
£

Rollover loan notes
2,075,180
2,075,180

Intercompany loan
35,783
35,783

Accrued interest receivable
487,905
337,650

Employee benefit trust loan account
199,493
133,105

2,798,361
2,581,718


The loan notes recognised comprise of two loan note instruments, where each of them are secured and
carry a coupon of 10% (A Loan notes only) and 6% (Bridging Loan notes only) of interest which will compound daily. The loan notes were initially recognised at cost (£2,075,180 and £35,783 giving a total of £2,110,962) and the accumulated interest to date of £487,905 has been charged through the profit and loss. The total value amounts to £2,798,361.
The rollover loan notes are part of call options issued by management to Sarah Topco Ltd and Sarah Topco Ltd grants put options to management as a £2,075,180 rollover loan note.  These rollover loan notes will incur 10% compound interest per annum coupon rate.
The intercompany loan for £35,783 represents a share subscription and is advanced down from Sarah Topco Ltd (Parent company) to Sarah Midco 1 Ltd (direct subsidiary company) and will incur a 10% compound interest per annum coupon rate.

Page 35

 
SARAH TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

16.


Cash and cash equivalents

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Bank and cash balances
1,984,362
1,267,209
137
634

1,984,362
1,267,209
137
634



17.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

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

Trade creditors
2,686,285
4,686,432
41,841
5,680

Corporation tax
168
-
71
-

Other taxation and social security
6,324,681
4,936,278
(5,600)
-

Obligations under finance lease and hire purchase contracts
841,519
709,658
-
-

Other creditors
2,931,430
3,597,145
-
-

Accruals and deferred income
5,878,967
5,188,481
20,000
-

23,828,200
23,495,291
56,312
5,680



18.


Creditors: Amounts falling due after more than one year

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Net obligations under finance leases and hire purchase contracts
1,660,050
1,495,706
-
-

Amounts owed to group undertakings
-
-
63,101
24,249

Loan notes (note 19)
68,234,381
62,709,211
-
-

69,894,431
64,204,917
63,101
24,249




Page 36

 
SARAH TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

19.

Loan notes analysis


Group 2023
Group 2022

£
£

Amounts falling due after more than 1 year

A Loan Notes
32,964,216
32,964,216

Bridging Loan Notes
20,000,000
20,000,000

Accrued interest
15,270,168
9,744,995

Total loan notes
68,234,384
62,709,211

The loan notes recognised comprise of three loan note instruments, where each of them are secured and carry a coupon of 10% (A Loan notes only) and 6% (Bridging Loan notes only)  of interest which will compound daily. The loan notes were initially recognised at cost (£5,000,000, £32,964,216 and £20,000,000 which amounts to £57,964,216) and the accumulated interest to date (£15,270,168) has been charged through the profit and loss.The total value amounts to £68,234,384.  The loans are secured over certain assets of the Group.  Inflexion Private Equity Ltd held fixed charges over all land and intellectual property and floating charges covering property.
One loan note of £5,000,000 was repaid in March 2022. The remaining balance represents two further loan notes, A loan notes and Bridging loan notes, and are considered non-qualifying corporate bonds in the hands of the relevant note holders and accrue compounded interest at 10% per month.  The company will have the option to settle rolled up interest via the issue of payment in kind ("PIK") notes with investor consent.  The redemption date on both of these loan notes is 03 March 2027.


20.
Secured debts


Group 2023
Group 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 37

 
SARAH TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

21.


Financial instruments

Group
Group
2023
2022
£
£

Financial assets

Financial assets measured at amortised cost
27,455,769
29,046,806


Financial liabilities

Financial liabilities measured at amortised cost
93,722,631
87,700,208


Financial assets measured at amortised cost consists of cash at bank and debtors falling due within one year excluding prepayments.


Financial liabilities measured at amortised cost consists of creditors at notes 17 and 18.


22.


Deferred taxation


Group



2023


£






At beginning of year
20,927


Charged to profit or loss
290,597



At end of year
311,524

Group
Group
2023
2022
£
£

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

Losses and other deductions
750,508
469,260

Short term timing differences
29,672
24,780

311,524
20,927

Page 38

 
SARAH TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

23.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



306,854 (2022 - 306,848) Ordinary shares - type A shares of £0.01 each
3,068
3,068
512,159 (2022 - 512,159) Ordinary shares - type B shares of £0.01 each
5,122
5,122
67,500 (2022 - 67,500) Ordinary shares - type C1 shares of £0.01 each
675
675
59,101 (2022 - 59,101) Ordinary shares - type C2 shares of £0.01 each
591
591

9,456

9,456



24.


Prior year adjustment

As referenced under accounting policy 2.26 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.


25.


Pension commitments

The group contributes to a defined contribution scheme on behalf of certain directors and employees.
The contributions amounted to £3,722,251 (2022: £2,265,607). At the year end there was £323,191 (2022: £1,362,646) to be collected by the pension scheme providers.


26.


Commitments under operating leases

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


Group
Group
2023
2022
£
£

Not later than 1 year
825,759
991,015

Later than 1 year and not later than 5 years
1,235,007
814,993

Later than 5 years
277,005
328,000

2,337,771
2,134,008
Page 39

 
SARAH TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

27.


Transactions with Directors

The balance owed to the Directors within the group as at year-ended 31 December 2023 is £1,676,466 (2022: £1,675,000).  The amounts due to Director 1 is £176,642 (2022: £175,000), Director 2 is £750,000 (2022: £750,000) and Director 3 is £749,825 (2022: £750,000).


28.


Related party transactions

The company has taken advantage of disclosure exemptions available under Section 33 of FRS 102
whereby it has not disclosed transactions entered into with any member of the same wholly-owned group.
Transactions between group entities which have been eliminated on consolidation are not disclosed within
the financial statements.

Page 40