Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2023
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OPENCAST SOFTWARE EUROPE LIMITED
COMPANY INFORMATION
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OPENCAST SOFTWARE EUROPE LIMITED
CONTENTS
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OPENCAST SOFTWARE EUROPE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present the strategic report for the year ended 31 December 2023.
The principal activity of the Company continued to be that of the provision of digital transformation consultancy.
2023 was a year of consolidation for Opencast, as revenue grew to £49.9m, an increase of 38%, and pre-tax profits fell 22% to £3.2m against a backdrop of increased volatility in the operating and macroeconomic environments. The UK technology sector slowed overall, leading to increased competition for work in government, alongside downward pressure on departmental spending and several large contractual transitions/renewals. This was most acutely felt when a large team on a public sector client rolled off at short notice due to client budgetary pressures, and the decision to protect the jobs of those affected people resulted in lower utilisation across the remainder of the year. People numbers grew overall to 464 by the end of the year, an increase of 15%, as we continued to invest in talent across our consulting and core function capabilities. Our people-focused approach has continued to resonate, especially given the strong strategic position we took to prioritise our people through a more challenging economic period. Whilst we held off on further investments in physical hub locations, investments were made into Manchester and Birmingham as virtual hubs, Leeds was moved to the virtual hub model, alongside maintaining our physical locations in Newcastle, London, Edinburgh and Glasgow. During the year we worked in partnership with an external consultancy to define the strategy which will underpin the next phase of our growth journey. Our three dimensions of growth identified are: Further deepen our focus on government We will continue to both deepen and broaden our relationships with existing central government clients alongside growing relationships in new public sector areas. We will continue to strengthen existing capabilities and explore service and product innovation as technical accelerators for our clients. We will also look to expand our capability across the value chain to encompass the full range of consult through to run service offerings. Strategic investments into both data as a service offering and healthcare as a vertical Data services are being consumed at an ever-increasing rate across both the public and private sectors. Building out our existing data capability will ensure that our service offering remains relevant, leverages advances in the latest technologies and enable us to support our customers in their adoption of AI. The healthcare market is a natural fit for Opencast due to existing relationships and expertise within the business, together with our vision to make a positive impact on society through solutions that are simpler, more sustainable and fairer for all. Opportunistic exploration of adjacent sectors We will continue to remain open to opportunities which are impactful and have a strong strategic fit with our service and capability offerings and social impact goals. Utilities, renewable energy, and banking/financial services are all areas where we have expertise, capability and active engagements.
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OPENCAST SOFTWARE EUROPE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2023 revenues grew 38% to £49.9m (2022 - £36.3m) as we consolidated our position across several key central government departments as well as forging new commercial relationships across the private sector, most notably as the technology partner to a market disruptor in the renewable energy sector.
Gross margin increased to £17.1m (2022 - £13.3m), albeit at 34% (2022 – 37%). The drop in gross margin was attributable to economic headwinds in the form of both inflationary pressures and softer demand as day rates stagnated whilst salary costs continued to climb in line with labour market benchmarks. Utilisation tracked below plan largely because of the significant roll off on one of our public sector engagements due to budgetary constraints, and the softer demand environment for placing these people back into billable work. Profit before tax decreased to £3.2m (2022 - £4.1m) as the business continued to invest in people and systems to position the business for future growth in line with our strategy. People Review Opencast’s success is defined by our people. We closed the year with 464 people (2022 - 403) based across five locations. Employee retention remains high at 79% (2022 – 83%) with an eNPS of 60 (2022: 75). We also continued to demonstrate our strong people-focused values with a Glassdoor rating of 4.8 and ranking 36th in Newsweek’s UK Top 100 Most Loved Workplaces list 2023 (determined after surveying more than 1.4 million employees from businesses with workforces varying in size from 50 to more than 10,000). We continue to invest in our people across a range of areas, from competitive salaries and bonuses informed by industry benchmarks, though a comprehensive benefits package, an employee share option scheme available to all of our people, access to leading learning and development programs and career progression initiatives. Our commitment to creating an open, transparent and consultative culture informs how leadership engage with the wider team on a day-to-day basis. Quarterly employee surveys provide a valued source of actionable feedback to the executive leadership, and we continue to champion in-person meetings across our office network where appropriate, as well as disseminating company-wide information on a regular basis via message boards and in-person via our quarterly conference program.
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OPENCAST SOFTWARE EUROPE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The Board recognises the need to manage and mitigate risk effectively in pursuit of our strategic objectives.
Information and data security is a principal risk as cyber threats continue to evolve in both the complexity and frequency of attacks. Failing to respond to the threat of information security breaches has the potential to lead to significant reputational, legal and financial ramifications. To mitigate against this risk, we have recruited increased IT and Information Security capability to operate across both our internal systems and also to build capability around our customer facing service offerings. Macroeconomic uncertainty remains a key risk due to increasing instability of global financial markets and the geopolitical order. These combined forces have the potential to disrupt financial performance in the short term which could impact our ability to trade. In response to this we continue to build resilience into our business model by diversifying across both customer base and through our service and capability offerings and a longer-term view of our sales pipeline. Retaining and recruiting skilled people remains a key focus as the demand landscape constantly develops, evolving existing and bringing new capabilities to the fore. We mitigate this risk by nurturing our talent flywheel; our people and the culture we have collectively developed are our unique assets; we have a growth mindset and our people are owners of our success. Climate change poses a significant risk not only for Opencast but the world beyond. Understanding these risks and implementing effective and timely mitigation strategies is crucial for ensuring sustainability. Failure to act in a timely manner could pose material reputational risks and financial risks. In response, we are engaged in assessing climate risk to understand potential impacts and mitigations, such as carbon footprint reduction and our path to net zero. We are also committed to innovation and R&D in this area as we are actively pursuing the role of sustainability in technology consultancy and how it can support a greener future.
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OPENCAST SOFTWARE EUROPE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Section 172 of the UK Companies Act 2006 requires Directors to act in a way they consider, in good faith, would most likely promote the success of the Company for the benefit of its members as a whole. In order to promote the success of the Company, a fundamental requirement of all serving Directors is to act in the interest of shareholders whilst taking onto consideration the long-term impact of the decisions made on the wider stakeholder groups. Under section 172, we consider our stakeholder groups to be our people, our customers, our shareholders and our communities.
Our people Their interests: • Their reward and benefits • Their career progression • Training and development opportunities • Our culture and teamwork • Their health & wellbeing Reward and benefits • We benchmark salaries regularly using verified external payroll data to ensure our salaries remain competitive and in line with industry standards. • We undertake regular reviews to make sure pay is fair and equitable, including gender pay gap reporting. • We have recently undertaken a comprehensive benefits review to review our package in line with the expectations and motivations of each individual. The review consisted of five pillars which show our commitment to total reward for our people: • Priority – flexible working practices • Core & Foundational – compensation, holidays • Family – preparing for a family, family leave & pay, returning to work after family leave, whilst they’re growing • Health & lifestyle – health benefits, social rewards/savings, entertainment • Financial Wellbeing – retirement support, financial advice/support, salary sacrifice schemes • We embedded our approach to Diversity, Equity & Inclusion throughout the review to ensure benefits are equitable and accessible for all our people. Career progression We believe career progression is unique and personal to the individual and are committed to supporting our people achieve their development goals. Every role in Opencast is defined using a competency role description; these describe the way each role and level meets the competencies. All our competency descriptions are transparent and available to everyone, helping our colleagues understand the expectations their own roles and the people they work with. We recognise that not everyone will want to progress out of their current role, so a personal development plan at Opencast can be triggered at any time or not at all. We support various routes to career progression: • Moving upwards or taking side steps within the competency framework • Squiggly careers • Longer term career aspirations
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OPENCAST SOFTWARE EUROPE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
We hold twice yearly progression cycles where our people can apply to move levels; a cross section of people from across the business then review the submission and hold a panel with the applicant. Representatives on the panel assess:
• Technical ability • Culture, values and behaviours • Self-development and growth mindset Training and development opportunities We have a multi-layered approach to maintain and grow technical capabilities, expertise, service standards and best practices at various levels: • Delivery and Talent Excellence teams provide strategic direction to ensure technical capabilities meet client needs, championing the ‘client voice’ at board-level • Our Heads of Service (HoS) and Practice Leads (PLs) (dedicated non-billable internal roles with extensive delivery careers) oversee capability development in their specialist area of capability • Our recruitment, competency framework and learning pathways align to DDaT capabilities and SFIA- levels. With a culture of continuous learning, we empower consultants through bespoke learning pathways, our learning management system (Pluralsight), and training budgets with development and training guidance from Learning & Development Leads and People Experience Partners • When not on client, our consultants up/cross-skill to maintain capabilities in readiness to deploy. They are encouraged and supported to seek out world class training and education to build their professional development We’re trusted to build client capabilities; at HMRC, we’re an approved training provider. We helped create their ‘Apprentice Academy’ and establish the Edinburgh digital delivery centre. We run training (Agile), mentoring and mentored coach on GDS, facilitate CoPs, lead peer-learning. We’ve upskilled c.400+ HMRC/supplier staff across c.50 digital services. Culture and teamwork At Opencast, we aim to positively impact how our people feel. Our core aims are to create a culture that enables people to be open, progress, feel cared for and to flourish. Opencast’s people display qualities and behaviours that underpin our values as an organisation. In practice, that means they are hard-working, smart self-starters who think independently and use their initiative to deliver for our clients with confidence. Our people also have a strong sense of team and always treat each other with respect. We provide them with the support they need to do the best job possible. Health & wellbeing At Opencast we support physical and mental health and wellbeing through a range of initiatives, including contract-specific commitments that we deliver for our clients. We provide an Employee Assistance Programme (EAP), providing 24/7 mental and physical health and wellbeing support; provide access to Peaceful Minds, a free confidential counselling service, and Health Shield, providing a corporate rate health scheme at varied levels for all our employees. All our consultants are provided with dedicated People Experience Partners (PEEPs), providing hands-on support and pastoral care. We run a range of virtual and in person events (i.e ‘lunch and learns’, new starter meet-ups sessions, company conferences) keeping people connected within our hybrid working model. In addition, we have a range of fitness and social groups from cycling (including a Cycle-to-Work scheme) to hiking, yoga to CrossFit, baking to self-defence classes. We also provide mental health training, with several trained Mental Health Champions and First Aiders across our business. These individuals run regular in-person and virtual drop-in sessions to support our people.
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OPENCAST SOFTWARE EUROPE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
We listen to our people, advocating a user-centred approach to our health and wellbeing initiatives. We conduct ongoing research with our employees (surveys, focus groups, interviews) to gather insights to enable us to iterate initiatives and test and learn – continuously improving our environment/culture. Our customers Their interests: • Our deep client expertise • Our ability to reliably deliver outcomes • Our impact on the wider society We frequently consult with our clients and conduct a voice of client survey twice a year to help us determine what they value in Opencast and where we may be able to offer an even better client experience. We commit to deep client expertise to understand the needs and requirements of our clients, particularly in public sector and healthcare. Our key account teams work directly to serve a broad range of clients as well as operating within partner eco-systems to give our work greater reach and broader impact. As a human-centred business, embedded in the work of large central government departments, we care deeply about the work we deliver and appreciate the reach and scale of impact our work has on the lives of UK citizens and civil servants, often going above and beyond in engagements. We are known by our clients and partners for having an outcome-driven, client-centric, collaborative, and engaging approach to delivery. We excel working in mixed-team environments with our clients' people and their wider supplier ecosystem. This drives capability and innovation within our clients for more holistic value and deep partnerships. We strive to establish relationships at every level of our clients’ organisation, allowing leadership, delivery, people and commercial stakeholders to gain insight and support from Opencast outside the direct scope of a contract. We believe in the incredible potential of people and technology to make a positive impact on society. Our investment in people supports low levels of attrition which gives client and partners invaluable reassurance to quality and consistency. Through our commitment to delivering simpler, more sustainable, and fairer solutions, we strive to improve lives, empower communities, and create a better future for all. Outcomes Our success is demonstrated in consistently high NPS score (latest was +79 for clients and +83 for partners) along with a very good customer effort score of 9.3, determined through our Voice of Client survey. Our clients and partners regularly advocate for Opencast through industry events, referrals and internal and public-facing case studies. Our communities Their interests: • Our engagement with community-based programmes • Our carbon footprint and commitment to reducing our environmental impact • Our employment options for their communities • Our ethical stance as a company
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OPENCAST SOFTWARE EUROPE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Opencast is committed to being a purpose-led business that makes a positive impact on society. We are focused on doing the right thing for everyone, and this includes our people, our clients and our wider communities.
From our HQ in Byker, Newcastle (top 1% of deprived UK areas) Opencast is committed to tackling economic inequality through a range of initiatives, including contract-specific commitments that we deliver for our clients. Through our socially impactful recruitment strategy we create employment and training opportunities for those who face barriers to employment, who are located in deprived areas, and people in industries with known skills-shortages. We create new businesses, jobs and skills in the North-East, through the Dynamo Tech Talent Engine (DTTE) supporting growth and innovation. We also actively address skills-shortages for individuals in the community when seeking employment and are working to remove potential barriers to employment for underrepresented groups. We run recruitment, training, and upskilling initiatives for ‘early-career’ candidates across a range of digital and technology disciplines, working with partners to target diverse candidates. We provide work-experience (school-level) placements for students every year, with opportunities for career progression and offer ‘Squiggly-careers’ training to support people to diversify into new digital and technology roles. To tackle inequality, we also partner with organisations to create an inclusive organisation, providing opportunities for those with disabilities and work-experience for neurodiverse people. We’re aiming for Disability Confident Level 2 in 2024. Opencast’s social impact initiatives are the ways in which we deliver and contribute solutions to collective problems society is facing. They align with our social impact pillars and fall into two categories: Communities and Beyond sustainability. Communities These are the ways we work with our communities. It’s a flexible offer we can adapt to collaborate on a wide range of social and environmental projects across multiple organisational and operational contexts. This initiative covers sharing expertise and providing services directly to purpose-led organisations: People and skills: Volunteering Skills-based volunteering focuses on delivering short-term interventions with non-profit partners ranging from a few hours to a day at a time where our people can give their time and skills to make an impact. We are pleased to be able to offer this as one-off engagements or as a long-term shared value partnership. Volunteering opportunities must be aligned with at least one of our social impact pillars and be led by non-profit organisations registered with the Charity Commission (including Charities and Trusts & Foundations) or led by schools, colleges, universities or other educational institutions. We have a wide-ranging set of volunteering projects, ranging from expert workshops, inspiring talks, mentoring, event facilitation and leadership support. Examples of volunteering engagements include: • Career talks • Career fairs • Job hunting preparation support • Mentoring • STEM & UCD workshops
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OPENCAST SOFTWARE EUROPE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
In kind support: Open spaces This initiative offers Opencast’s non-profits and community organisations the opportunity to use dedicated office space at our Headquarters in Hoults Yard, Newcastle, at no cost. Many organisations have already used our Opencast spaces with great success over the last few years including non-profits, schools and start-ups. Open spaces is about harnessing the power our brilliant building offers us to bring people together to create positive change. • Non-profit organisations who are registered with The Charity Commission (including Charities & Trusts and Foundations) whose purpose is aligned with at least one of our social impact pillars • Schools • Purpose-driven SMEs that have a formal external accreditation showing they are social impact driven (such as Social Enterprise, B Corp) and/or can evidence that they are, by way of business model, theory of change and external communications Laptop donations Opencast supports science, technology, engineering, and mathematics (STEM) subject learning through in kind laptop donations to education settings. Working with a partner, Opencast were able to support schools with rehomed MacBook laptops. In 2023, Opencast donated laptops to Wardley Primary School to support students competing in an international robotics competition. Our shareholders Their interests: • Our strategic direction and successful implementation of the strategy • Our operational and financial performance • Our shareholder returns How we engage: Our CEO and CFO meet our shareholders regularly on both a formal and informal basis to provide detailed information on financial performance and strategy execution. Benefit and Impact: Feedback is communicated and actioned through our Supervisory and Executive Board structures.
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OPENCAST SOFTWARE EUROPE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The global temperature has already risen 1.1ºC above the pre-industrial level, and the impacts of climate change are being felt everywhere but especially by the poorest and most marginalised communities.
Climate change is not the only negative environmental phenomenon making the world a more inhospitable place and threatening our survival: biodiversity loss and ecosystem destruction are pushing forward a mass extinction, increasing the intensity and frequency of extreme weather events, displacing millions of people, increasing poverty and economic inequality, worsening people’s health and even causing armed conflicts. We are committed to more sustainable working and contributing to a greener, cleaner, fairer future. These are the ways we’re working to integrate sustainability in all we do: • Sustainable by default - As a technology consultancy, we are responsible for considering the whole life of IT equipment and devices. We refurbish and rehome laptops through in kind support to schools, working alongside our specialist IT partner CMYK. We also ensure old equipment that cannot be rehomed is responsibly separated into components, then recycled or disposed of. • Our move to Net Zero - Opencast are committed to becoming a Net Zero company by 2040. We will transform all aspects of our business operations to ensure we can accelerate meaningful sustainable change and align ourselves with the UN 2030 Decade of Action agenda. Our Carbon Reduction Plan and Carbon Reduction Targets have been developed to support this.
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OPENCAST SOFTWARE EUROPE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Narrative of change
This year, Opencast fell under the scope of SECR reporting requirements. Over the same period, Opencast has undergone a period of large improvement in data capture and emission calculation methodology. This involves using more primary data and improving the accuracy of assumptions. The following have been identified as explanations of variance between 2022 and 2023: • Heating systems in one office were replaced with HVAC units, eliminating natural gas usage. • Renewable Energy Certificates were obtained for the Newcastle office, meaning market-based emissions could be reported for the first time to demonstrate the procurement of renewable electricity. Energy Efficiency Actions In the reporting period of 2023, Opencast has phased out natural gas at their Newcastle office by switching to electric heating. Headquarter offices in Hoults Yard, Newcastle have been equipped with energy efficient LED light bulbs, occupancy sensors, programmable thermostat and sleep mode has been installed on shared electrical equipment such as printers. Lighting, heating and office equipment are switched off at the end of the day. Maintenance plans are also in place for HVAC units at our Headquarters to prevent leaks and this is included into our workplace procedures. Change of refrigerant gases to lower global warming potential alternatives in case of leakage is also planned for these HVAC units. Scope 2 market-based emissions have been reduced by switching to a 100% renewable energy tariff (REGO backed) for the Newcastle office during 2023. Further information on actions undertaken can be found in the carbon reduction plan (PPN/0621) on our website. Methodologies Opencast is committed to achieving Net Zero by 2040. At the start of 2023, we made a firm commitment to transforming all aspects of business operations to ensure that we could accelerate meaningful sustainable change and align ourselves with the UN 2030 Decade of Action agenda. We’ve published our emissions measurements for 2020-2022. 2023 emissions will be published at the end of June 2024. Our Carbon Reduction Plan can be found on our website. This includes science-based emissions reductions targets for Scopes 1, 2, and 3. In Q4 of 2023, we also applied for B Corp certification, which sets out detailed expectations around reducing our carbon footprint. In Q3 of 2023, we also undertook a review of emission hotspots and updated our time-bound action plan. Insights from that review and iterated interim targets are published on our website. In Q1 of 2024, Opencast undertook a carbon foot printing exercise for 2023 (1st January to 31st December). This produced a comprehensive assessment of direct and indirect greenhouse gas (GHG) emissions across scopes 1, 2 and 3, in line with the Greenhouse Gas Reporting Protocol, in line with SECR recommendations. This builds on summaries of emissions from previous reporting periods and will allow Opencast to make informed decisions and implement policies to enable our target of Net Zero by 2040. Considering this assessment, the interim targets published in Q3 of 2023 will be revised and our updated plan will be published on our website by the end of Q3 2024. Energy Efficiency and Emissions reduction projects In the period covered by the report we have taken steps forward with a focus on reducing greenhouse gas emissions first. Our actions cover offices, travel, supply chain and employee education and engagement. Key projects included:
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OPENCAST SOFTWARE EUROPE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Facilities In the period covered by this report, 54,608 kWh of Opencast’s electricity consumption has been backed by Renewable Energy Attributes via the site landlord. In the 2023 reporting period, we ended our lease for our Leeds office and moved to a virtual hub model whereby employees living in the local area can use co-working spaces only as and when needed. This represents an estimated energy saving of 44 gigajoules per year. Going forward, if leases are near the end of their term, we will continue to consider the need for office space and whether a shared facility is sufficient. Our headquarter offices in Hoults Yard, Newcastle have been equipped with energy efficient LED light bulbs, occupancy sensors, programmable thermostat and sleep mode has been installed on shared electrical equipment such as printers. Lighting, heating and office equipment are switched off at the end of the day. Maintenance plans are also in place for HVAC units at our Headquarters to prevent leaks and this is included into our workplace procedures. Change of refrigerant gases to lower global warming potential alternatives is also planned for these HVAC units. Further efficiency and emissions reduction projects planned for 2024 include identifying opportunities for downsize or removal of offices and a shift to more flexible working or hotdesking policies; further engagement and liaison with the landlord about energy efficiency improvements for offices and their input to regular energy audits and final phase out or conversion of any remaining gas appliances within offices to electric at fully renewable powered sites. Travel In the reporting period, we rolled out a salary sacrifice car scheme for EV/hybrid vehicles to encourage employees to drive reductions in scope 3 emissions. We installed EV charging sockets for our HQ building and introduced shower units to promote other low-emission community methods. Our internal travel policy restricts the use of flights or taxis to only when absolutely necessary, favouring low carbon modes of transport for business travel and principally promoting rail travel. In 2023, we have introduced a new travel booking system (Navan) which will enable us to gain better insights into business travel patterns and inform further action to reduce emissions from travel. In 2024, several policies are planned to further reduce the impact of travel. These include but are not limited to creation of an internal communication channel to allow company employees to request car or taxi ride shares; continue to assess and identify cycle to work and car sharing opportunities and incentives within Opencast and re-engage employees through 2024 on these issues. Purchased goods and services In the reporting period, we also introduced a Supplier Code of Conduct stating our requirements in terms of alignment with our Net Zero and Sustainability goals. In 2024, we are going further by introducing a purchasing policy that promotes procuring goods/services from suppliers that are local to our offices, who align to our Net Zero targets and who are owned/led by minorities (Equality Act 2010). The 2023 carbon foot printing showed that most of our scope 3 emissions arise from purchased goods and services (and the costs associated with these as a spend based approach was used). Suppliers of goods and services will be engaged during 2024 considering this to obtain further information on their sustainability performance and emissions to inform future actions and foot printing by Opencast.
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OPENCAST SOFTWARE EUROPE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Opencast is managed day-to-day with reference to ‘adjusted EBITDA’ as the directors believe that is the most appropriate performance measure when benchmarking against both prior year and external organisations.
Adjusted EBITDA £4,469,128
Non-recurring costs £(492,855) EBITDA £3,976,273 Interest £(70,140) Depreciation & Amortisation £(667,821) Tax £(774,335) Profit after Tax £2,463,977
The directors of the Company have considered the matters in Companies Act 2006 s172(1) when performing their duty to promote the success of the company for the benefit of the stakeholders as a whole. In doing so, the directors have reviewed the following:
The interest of the Company’s employees Details of how the Company engages with its employees are set out within the Section 172(1) report - see pages 4-6 for further details. The interest of the Company’s customers Details of how the Company engages with its customers are set out within the Section 172(1) report - see page 6 for further details. The impact of the Company’s operations on the community Details of how the Company engages with the community are set out within the Section 172(1) report - see pages 6-8 for further details. The interest of the Company’s shareholders and desire to maintain the Company’s reputation. Details of how the Company engages with its shareholders are set out within the Section 172(1) report - see page 8 for further details.
This report was approved by the board on 28 June 2024 and signed on its behalf.
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OPENCAST SOFTWARE EUROPE 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.
The profit for the year, after taxation, amounted to £2,463,977 (2022 - £4,428,120).
During the year, interim dividends totalling £697,970 (2022 - £1,591,846) were declared and paid. The directors do not recommend payment of further dividends.
The directors who served during the year were:
Demand for digital services remains strong and the directors recognise the opportunity to grow organically at a sustainable pace in order to capitalise on this. Opencast remains committed to growing out its core service and practice offerings whilst attracting a growing client base that allows our people to work on engaging projects which are aligned to our values.
Due to the nature of the company's business, it conducts significant research and development activities on a day to day basis.
Covered in the Section 172(1) report on pages 4-6.
Covered in the Section 172(1) report on pages 6-8.
Details of the Company's greenhouse gas emissions and energy consumption for the year are covered in the Streamlined Energy and Carbon report on pages 9-11.
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OPENCAST SOFTWARE EUROPE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Certain matters required to be covered by the directors' report have been addressed in the strategic report.
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.
On 12th February 2024, 100% ownership of the shares and voting rights of Opencast Software Europe Limited was acquired by Opencast Software Europe Holdings Limited (company number 15132278).
The auditors, Ryecroft Glenton, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
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OPENCAST SOFTWARE EUROPE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
This report was approved by the board on
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OPENCAST SOFTWARE EUROPE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OPENCAST SOFTWARE EUROPE LIMITED
We have audited the financial statements of Opencast Software Europe Limited (the 'Company') for the year ended 31 December 2023, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Cash Flows, 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.
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OPENCAST SOFTWARE EUROPE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OPENCAST SOFTWARE EUROPE LIMITED (CONTINUED)
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.
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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OPENCAST SOFTWARE EUROPE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OPENCAST SOFTWARE EUROPE LIMITED (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:
• the responsible individual ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; • we identified the laws and regulations applicable to the Company through discussions with directors and other management, and from our commercial knowledge and experience of the digital transformation sector; • we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Company, including the Companies Act 2006; • we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and reviewing legal expenditure; and • we ensured that the identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. We assessed the susceptibility of the Company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: • making enquiries of management as to where they considered there was susceptibility to fraud and their knowledge of actual, suspected and alleged fraud; and • considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. To address the risk of fraud through management bias and override of controls, we: • performed analytical procedures to identify any unusual or unexpected relationships; • tested journal entries to identify unusual transactions; and • assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias. In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: • agreeing financial statement disclosures to underlying supporting documentation; • reading the minutes of meetings of those charged with governance; • enquiring of management as to actual and potential litigation and claims; and • reviewing correspondence with HMRC and relevant regulators, as well as details of the Company’s legal expenditure during the year.
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OPENCAST SOFTWARE EUROPE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OPENCAST SOFTWARE EUROPE LIMITED (CONTINUED)
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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.
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
Chartered Accountants
Statutory Auditors
32 Portland Terrace
Newcastle upon Tyne
NE2 1QP
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OPENCAST SOFTWARE EUROPE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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OPENCAST SOFTWARE EUROPE LIMITED
REGISTERED NUMBER: 08047734
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 25 to 45 form part of these financial statements.
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OPENCAST SOFTWARE EUROPE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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OPENCAST SOFTWARE EUROPE LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
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OPENCAST SOFTWARE EUROPE LIMITED
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023
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OPENCAST SOFTWARE EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Opencast Software Europe Limited is a private company limited by shares incorporated in England and Wales, company number: 08047734. The registered office is Studio 2 The Kiln, Hoults Yard, Walker Road, Newcastle upon Tyne, England, NE6 1AB.
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 (see note 3).
The following principal accounting policies have been applied:
The Company meets its working capital requirements through its own cash reserves and external finance.
A review of the Company's business activities is provided within the strategic report. In addition, the strategic report also discloses the Company's principal risks and uncertainties, including exposures to competitive, legislative and financial risk. Having regard to the above, the directors believe it appropriate to adopt the going concern basis of accounting in preparing the financial statements.
Functional and presentation currency
Transactions and balances
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OPENCAST SOFTWARE EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.
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OPENCAST SOFTWARE EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Company keeping the scheme open or the employee maintaining any contributions required by the scheme). Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period. Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services received.
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OPENCAST SOFTWARE EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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.
Amortisation is provided on the following bases:
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.
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OPENCAST SOFTWARE EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the Company's Balance Sheet when the Company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
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OPENCAST SOFTWARE EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
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OPENCAST SOFTWARE EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Bonuses are paid based on various inputs including operating profit for the previous year. These figures are accrued into the financial statements using management's best estimate of the amounts to be paid in the following financial year and are adjusted if additional information comes to light before the financial statements are approved, for example an employee leaving before the bonus is paid.
The whole of the turnover is attributable to the principal activity of the company, which is wholly undertaken in the United Kingdom.
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OPENCAST SOFTWARE EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 32
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OPENCAST SOFTWARE EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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OPENCAST SOFTWARE EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 34
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OPENCAST SOFTWARE EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
12.Taxation (continued)
The Company is in the process of compiling a claim for Research and Development Tax Credits, which, once completed, is expected to significantly reduce the amount of corporation tax payable.
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OPENCAST SOFTWARE EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 36
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OPENCAST SOFTWARE EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Proceeds of factored debts are secured by way of an all assets debenture including a floating charge.
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OPENCAST SOFTWARE EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The bank loans attract interest at 3.8% above the bank's base rate and are secured by a fixed and floating charge and negative pledge dated 9 December 2020.
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OPENCAST SOFTWARE EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The bank loans attract interest at 3.8% above the bank's base rate and are secured by a fixed and floating charge and negative pledge dated 9 December 2020.
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OPENCAST SOFTWARE EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 40
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OPENCAST SOFTWARE EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 41
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OPENCAST SOFTWARE EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Other reserves
Profit and loss account
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OPENCAST SOFTWARE EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 43
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OPENCAST SOFTWARE EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £1,712,758 (2022 - £891,911). Contributions totalling £350,938 (2022 - £235,659) were payable to the fund at the balance sheet date and are included in creditors.
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OPENCAST SOFTWARE EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
In the opinion of the directors, as at the year end date, no individual had outright control of the company. At the date of approval of these financial statements, the controlling party is C W Hoult.
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