Company registration number 03585492 (England and Wales)
PEX SOFTWARE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
PEX SOFTWARE LIMITED
COMPANY INFORMATION
Directors
Mark Falkenberg
Vinit Doshi
Secretary
Fieldfisher Secretaries Limited
Company number
03585492
Registered office
Riverbank House
2 Swan Lane
London
EC4R 3TT
United Kingdom
Auditor
Ernst & Young LLP
G1
5 George Square
Glasgow
G2 1DY
PEX SOFTWARE LIMITED
CONTENTS
Page
Directors' report
1 - 2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Statement of profit or loss
7
Statement of financial position
8
Statement of changes in equity
9
Notes to the financial statements
10 - 19
PEX SOFTWARE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors of PEX Software Limited (the “Company”) present their annual report and financial statements for the year ended 31 December 2023.
Results and dividends
The directors are satisfied with the Company’s results of operations for the year. The loss for the year, after taxation, amounted to £1,279,434 (loss for year ending 2022 was £3,191,318). The directors have not recommended the payment of a dividend.
Directors of the Company
The directors who have held office during the period of this report are as follows:
Mark Falkenberg
Vinit Doshi
Review of the business and principal activities
The Company is a private limited company and was incorporated in the United Kingdom (“UK”) on 22 June 1998. The Company is domiciled in the United Kingdom, and its registered office address is Riverbank House, 2 Swan Lane, London, EC4R 3TT, United Kingdom.
The Company is a wholly-owned subsidiary of RealPage UK Holdings Ltd., a private limited company incorporated in the United Kingdom. As at 1 January 2021, the company's ultimate parent was RealPage, Inc. ("RPI") , a public incorporated company in the United States of America. RPI's corporate headquarters are located at 2201 Lakeside Boulevard, Richardson, Texas 75082. Effective 22 April 2021, RPI was acquired and is now a privately owned company. Its ultimate parent company, RealPage Parent, LP, is an affiliate of funds advised by Thoma Bravo, L.P., a leading private equity investment firm focused on the software and technology-enabled services sector.
RPI, together with its subsidiaries, is a leading global provider of software and data analytics to the real estate industry. Its platform of data analytics and software solutions enables the rental real estate industry to manage property operations (such as marketing, pricing, screening, leasing, and accounting), identify opportunities through market intelligence, and obtain data-driven insight for better operational and financial decision-making. By leveraging data as well as integrating and streamlining a wide range of complex processes and interactions among the rental real estate ecosystem (owners, managers, prospects, renters, service providers and investors), the platform helps its clients improve financial and operational performance and prudently place and harvest capital.
The Company generated a loss of £1,279,434 on turnover of £1,380,824 for the year ended 31 December 2023. The Company serves as a base for RPI's expansion of services to the UK and European markets. The directors expect to grow revenue through both expansion of the Company's client base and through the cross-sale of additional RPI capabilities into the Company's client base.
Principal risks and uncertainties
The Company operates in a market that is highly competitive, fragmented and rapidly changing. The Company manages this risk by providing value added services and delivering high quality products to its clients. The Company operated at a loss for the year ended 31 December 2023 and currently is dependent on the ongoing financial support of RPI as further described below. Without this support the Company may not be able to obtain sufficient external financing required for its operations.
Going concern
In line with the Financial Reporting Council’s guidance on going concern issued in April 2016, the directors have undertaken an exercise to review the appropriateness of the continued use of the going concern basis of preparation for the financial statements. The Company recorded a loss for the financial year of £1,279,434 and as at 31 December 2023 had net liabilities of £11,126,395. The Company is dependent upon RPI for ongoing financial and operational support. RPI has confirmed it can and will provide ongoing financial and operational support. The directors consider that having made the appropriate enquiries and having reviewed cash flow forecasts and related sensitivity analyses for RPI, in consideration of the underlying risks and uncertainties at the time of approving these financial statements, the Company has access to adequate resources to continue in operational existence throughout the going concern period until 1 October 2025. Therefore the directors continue to adopt the going concern basis in preparing these financial statements.
PEX SOFTWARE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Future developments
The Company has continued to establish itself in the UK market and has successfully deployed certain solutions from RPI's software platform. The Company will continue to focus its efforts on expanding its customer base and anticipates introducing additional data analytics and software solutions from RPI’s platform to the market.
Disclosure of information to the auditors
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information, being information needed by the auditor in connection with preparing its report, of which the auditor is unaware. Having made enquiries of management and the Company’s auditor, the directors have taken all the steps that they are obliged to take as directors in order to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.
Re-appointment of auditors
Ernst & Young LLP were appointed as auditor to the Company and in accordance with section 487 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
In preparing this report, the Directors have taken advantage of the exemption provided by the Companies Act 2006 and have not prepared a Strategic report.
Signed on behalf of the Board of Directors:
Mark Falkenberg
Director
1 October 2024
PEX SOFTWARE LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Directors' responsibilities
The directors are responsible for preparing the directors' report and financial statements in accordance with applicable laws and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law, the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice. Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing those financial statements, the directors are required to:
present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
PEX SOFTWARE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PEX SOFTWARE LIMITED
- 4 -
Opinion
We have audited the financial statements of PEX Software Limited (the 'company') for the year ended 31 December 2023 which comprise the Profit and Loss Account, the Balance Sheet, the Statement of changes in equity and the related notes 1 to 18, 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 FRS 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 company’s affairs as at 31 December 203 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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 Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard and the provisions available for small entities, in the circumstances set out in note 1 to the financial statements, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of twelve months from when the financial statements are authorised for issue, through to 1 October 2025.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the company's ability to continue as a going concern.
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s 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 this 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 the other information, we are required to report that fact.
We have nothing to report in this regard.
PEX SOFTWARE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF PEX SOFTWARE LIMITED
- 5 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
the information given in the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the directors' report has been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit
the director were not entitled to prepare the financial statements in accordance with the small companies' regime and take advantage of the small companies' exemptions in preparing the directors' report and from the requirement to prepare a strategic report.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement set out on page 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's 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 auditor's 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.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.
PEX SOFTWARE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF PEX SOFTWARE LIMITED
- 6 -
Our approach was as follows:
We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant are those that relate to the reporting framework (FRS102 and Companies Act 2006) and relevant tax compliance regulations in the UK.
We understood how the company is complying with those frameworks by making enquiries of management to understand how the company maintains and communicates its policies and procedures in these areas and corroborated this by reviewing supporting documentation. We further corroborated our enquiries through our review of board minutes, and we have noted that there was no contradictory evidence.
We assessed the susceptibility of the company's financial statements to material misstatement, including how fraud might occur by meeting with management to understand where they considered there was susceptibility to fraud. We also considered performance targets and their propensity to influence on efforts made by management to manage earnings. Where the risk was considered to be higher, we performed audit procedures to address the identified fraud risk, management override of controls.
Based on this understanding we designed our audit procedures to identify noncompliance with such laws and regulations. Our procedures involved journal entry testing, with a focus on manual journals and journals involving large or unusual transactions based on our understanding of the business and enquiries of management and those charged with governance. In addition, we completed procedures to test disclosures in the financial statements with all applicable requirements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s 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.
Janie McMinn (Senior Statutory Auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
1 October 2024
Glasgow
PEX SOFTWARE LIMITED
STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
1,380,824
1,276,588
Cost of sales
(566,475)
(542,060)
Gross profit
814,349
734,528
Administrative expenses
(2,093,251)
(3,810,215)
Operating loss
4
(1,278,902)
(3,075,687)
Amounts written off receivables due from subsidiary
7
(532)
(115,631)
Loss before taxation
(1,279,434)
(3,191,318)
Tax on loss
8
Loss for the financial year
(1,279,434)
(3,191,318)
The profit and loss account has been prepared on the basis that all operations are continuing operations. There is no other comprehensive income.
PEX SOFTWARE LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
279
589
Investments
10
7
7
286
596
Current assets
Debtors
12
322,241
339,944
Cash at bank and in hand
305,704
172,678
627,945
512,622
Creditors: amounts falling due within one year
13
(11,754,626)
(10,388,160)
Net current liabilities
(11,126,681)
(9,875,538)
Total assets less current liabilities
(11,126,395)
(9,874,942)
Capital and reserves
Called up share capital
15
119
119
Share premium account
636,913
636,913
Capital reserves
999,585
999,585
Profit and loss reserves
(12,763,012)
(11,511,559)
Total equity
(11,126,395)
(9,874,942)
The financial statements were approved by the board of directors and authorised for issue on 1 October 2024 and are signed on its behalf by:
Mark Falkenberg
Director
Company Registration No. 03585492
PEX SOFTWARE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Share capital
Share premium account
Capital reserves
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2022
119
636,913
999,585
(8,431,921)
(6,795,304)
Year ended 31 December 2022:
Loss for the year
-
-
-
(3,191,318)
(3,191,318)
Incentive unit compensation expense
-
-
-
111,680
111,680
Balance at 31 December 2022
119
636,913
999,585
(11,511,559)
(9,874,942)
Year ended 31 December 2023:
Loss for the year
-
-
-
(1,279,434)
(1,279,434)
Incentive unit compensation expense
-
-
-
27,981
27,981
Balance at 31 December 2023
119
636,913
999,585
(12,763,012)
(11,126,395)
PEX SOFTWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
1
Accounting policies
Company information
Pex Software Limited is a private company limited by shares incorporated in England and Wales. The registered office is Riverbank House, 2 Swan Lane, London, United Kingdom, EC4R 3TT.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company has taken advantage of the exemption under section 399 of the Companies Act 2006 not to prepare consolidated accounts, on the basis that the group of which this is the parent qualifies as a small group. The financial statements present information about the company as an individual entity and not about its group.
The company as a qualifying entity has taken advantage of the disclosure exemptions available for small companies:
- cash flow statement and related notes; and
- key management personnel compensation.
1.2
Going concern
In line with the Financial Reporting Council’s guidance on going concern issued in April 2016, the directortrues have undertaken an exercise to review the appropriateness of the continued use of the going concern basis of preparation for the financial statements. The Company recorded a loss for the financial year of £1,279,434 and as at 31 December 2023 had net liabilities of £11,126,395. The Company is dependent upon RPI for ongoing financial and operational support. RPI has confirmed it can and will provide ongoing financial and operational support. The directors consider that having made the appropriate enquiries and having reviewed cash flow forecasts and related sensitivity analyses for RPI, in consideration of the underlying risks and uncertainties at the time of approving these financial statements, the Company has access to adequate resources to continue in operational existence throughout the going concern period until 1 October 2025. Therefore the directors continue to adopt the going concern basis in preparing these financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from contracts for the provision of goods and services is recognised on a time-apportioned basis over the period to which the contract relates.
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
PEX SOFTWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 11 -
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Leasehold improvements
straight line over the terms of the lease
Fixtures and fittings
25% straight line
Office equipment
33% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Investments
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.8
Cash and cash equivalents
Cash at bank and in hand are basic financial assets and include cash in hand and deposits held at call with banks.
PEX SOFTWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.9
Financial instruments
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.
Basic financial assets
Basic financial assets, which include debtors, cash and bank balances and amounts owed by group undertakings, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors and amounts owed to group undertakings, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Taxation
The tax expense represents the tax currently payable.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
PEX SOFTWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax assets are not recognised on carried forward losses until there is sufficient certainty that future taxable profits will be available to use them against.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
Certain employees of the company have been granted incentive units in RealPage Parent LP (“Parent LP”), the ultimate parent of the company, under the terms of the RealPage Parent, LP Incentive Equity Plan (the “Plan”). The Plan provides for the grant of partnership incentive stock options, profit interests, equity appreciation rights and other forms of awards to employees and other service providers to Parent LP and its subsidiaries. Granted incentive units are subject to performance and/or service vesting conditions, and typically have a requisite service period of four years. Performance vesting conditions are based on the achievement of individual EBITDA targets established by Parent LP’s Board, typically over a performance period of four years. Stock-based compensation expense for granted incentive units is recognized as expense over the requisite service period. Forfeitures are accounted for as they occur. This expense is recognized as a contribution from the Partnership through RealPage, Inc., and is recorded within Profit and Loss Reserves on the Statement of Financial Position.
The company estimates the fair value of the incentive units using an option-pricing model. As of 31 December 2023 and 2022, 21,500 and 20,000 units, respectively, had been granted to employees of the company. As of 31 December 2023, 3,500 had been forfeited, 8,625 units were vested and 9,375 units were unvested. The weighted average grant date fair value of the units was $12.05 per unit. For the year ended 31 December 2023, the Company recognized COGS and Administrative Expense of £3,144 and £24,837, respectively, related to granted awards. As of 31 December 2023, the Company had unrecognized expense of £45,947 related to these awards that it expects to recognize over the next three years.
1.13
Retirement benefits
The company operates a defined contribution scheme for the benefit of its employees. Contributions payable are charged to the profit and loss account in the year they are payable.
1.14
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases are consumed.
1.15
Foreign currency translation
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
PEX SOFTWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
2
Critical accounting estimates and judgements
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods. Significant estimates include the useful life of assets and the realizability of deferred tax assets.
At the balance sheet date tax liabilities and assets are based on management’s best estimate of the future amounts that will be settled. While the company aims to ensure that the estimates recorded are accurate, the actual amounts could be different from those expected. The company recognises deferred corporation tax assets for deductible temporary differences and tax loss carry forwards to the extent that it deems probable such assets will be recovered in the future. Further detail is provided in note 8.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Licence fees
862,559
928,391
Rendering of services
518,265
348,197
1,380,824
1,276,588
4
Operating loss
2023
2022
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange differences
(572,619)
869,916
Depreciation of owned tangible fixed assets
310
2,555
Incentive unit compensation expense
27,981
111,680
Operating lease charges
72,709
109,943
During the period, no director received any emoluments for qualifying services to the company. Each director was remunerated by RPI for their services to all RPI companies, and it has not been possible to separately identify the remuneration receivable in respect of qualifying services to PEX Software Limited.
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
22,000
22,000
PEX SOFTWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Sales
3
3
Administration
21
23
Total
24
26
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,198,218
2,259,990
Social security costs
269,952
284,240
Pension costs
56,167
54,569
2,524,337
2,598,799
7
Amounts written off receivables due from subsidiary
2023
2022
£
£
Amounts written off receivables due from subsidiary
(532)
(115,631)
PEX SOFTWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
8
Taxation
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Loss before taxation
(1,279,434)
(3,191,318)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
(319,859)
(606,350)
Tax effect of expenses that are not deductible in determining taxable profit
2,652
23,335
Unutilised tax losses carried forward
310,134
561,469
Depreciation on assets not qualifying for tax allowances
78
485
Incentive unit compensation expense
6,995
21,219
Capital allowances
(158)
Taxation charge for the year
-
-
Tax trading losses carried forward at the period end are £11,755,169 (2022: £10,514,633). In accordance with accounting policies, no deferred tax has been recognised.
9
Tangible fixed assets
Leasehold improvements
Fixtures and fittings
Office equipment
Total
£
£
£
£
Cost
At 1 January 2023 and 31 December 2023
43,624
21,452
86,129
151,205
Depreciation and impairment
At 1 January 2023
43,624
21,421
85,571
150,616
Depreciation charged in the year
31
279
310
At 31 December 2023
43,624
21,452
85,850
150,926
Carrying amount
At 31 December 2023
279
279
At 31 December 2022
31
558
589
10
Investments
2023
2022
Notes
£
£
Investments in subsidiaries
11
7
7
PEX SOFTWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Investments
(Continued)
- 17 -
Movements in investments
Shares in group undertakings
£
Cost or valuation
At 1 January 2023 & 31 December 2023
7
Carrying amount
At 31 December 2023
7
At 31 December 2022
7
11
Subsidiaries
Details of the company's subsidiary at 31 December 2023 is as follows:
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
PEX Software Australia Pty Limited
Australia
Provision of software and services
Ordinary
100.00
The aggregate capital and reserves and the result for the year of the subsidiary noted above was as follows:
Name of undertaking
Capital and Reserves
Profit/(Loss)
£
£
PEX Software Australia Pty Limited
(18,585)
(4,641)
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
259,218
105,373
Corporation tax recoverable
79,104
Amounts owed by group undertakings
104,585
Other debtors
18,300
37,151
Prepayments and accrued income
44,723
13,731
322,241
339,944
PEX SOFTWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
13
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
16,784
6,814
Amounts owed to group undertakings
11,239,695
9,973,346
Taxation and social security
90,238
72,616
Other creditors
11,465
3,220
Accruals and deferred income
396,444
332,164
11,754,626
10,388,160
14
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
56,167
54,569
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
15
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 0.01p each
1,193,891
1,193,891
119
119
16
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
18,000
18,300
17
Related party transactions
The company has taken advantage of the exemption available in FRS 102 "Related party disclosures", and has not disclosed transactions with the parent company and its subsidiaries.
PEX SOFTWARE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
18
Ultimate controlling party
The Company's parent undertaking (100%) is RealPage UK Holdings Ltd, a company incorporated in England and Wales, of Riverbank House, 2 Swan Lane, London, EC4R 3TT.
As at 1 January 2021, the company's ultimate parent was RealPage, Inc. ("RPI") , a public incorporated company in the United States of America. RPI's corporate headquarters are located at 2201 Lakeside Boulevard, Richardson, Texas 75082. Effective 22 April 2021, RPI was acquired and is now a privately owned company. Its ultimate parent company, RealPage Parent, LP, is an affiliate of funds advised by Thoma Bravo, L.P., a leading private equity investment firm focused on the software and technology-enabled services sector.
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