Company registration number 08666682 (England and Wales)
ZENGINE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
ZENGINE LIMITED
COMPANY INFORMATION
Directors
Mr H Doetsch
(Appointed 25 April 2024)
Mr B J Schaknowski
(Appointed 25 April 2024)
Company number
08666682
Registered office
C/O Mccarthy Tetrault
1 Angel Court
18th Floor
London
EC2R 7HJ
Auditor
Azets Audit Services Limited
12 King Street
Leeds
LS1 2HL
ZENGINE LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 19
ZENGINE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 1 -
The directors present the strategic report for the year ended 30 June 2023.
Fair Review of the Business
Zengine Limited (“Zengine”), a UK-based company that owns the intellectual property related to the SEC3URE platform. The platform manages access levels and check-ins for everyone who makes a hospital or care facility work, from vendors and medical sales representatives to volunteers, across every point of entry. Facilities install the SEC3URE platform at no cost and individuals requiring access can purchase one-year subscriptions. Zengine licenses the platform to related parties operating in United States and United Kingdom for a percentage of all revenue derived from the platform. Research and development work on the SEC3URE platform is performed by the employees and contractors of related parties, and purchased by Zengine.
Results
Results for the year ended June 2023 are in line with the Directors expectations with Revenue of £14.4m (2022: £12.0m) resulting in an operating profit for the year of £2.8m (2022: £2.0m) and net assets of £20.3m (2022: £17.6m).
Outlook
Healthcare’s post-pandemic requirements have created a market demand that is best delivered through adopting new and modern technologies.Management believes our unique value proposition of connecting the supply and demand sides of care on a single, extensible, trusted, end-to-end technology platform is one of the most efficient cost effective solutions available in the market today. Our solutions work across virtually all geographical locations and perform as well on premises as they do online. As a result, we expect our growth will come from these key areas:
(a) Growth of the community and technology of the platform.
(b) Regional leadership for geographic expansion
Principal risks and uncertainties
The Board is ultimately responsible for ensuring that the risk management practices of the Group are sufficient to mitigate the risks present in its businesses and operations as efficiently and effectively as possible. The Chief Executive Officer of the company reports to the Board and assists the Board in overseeing the risk management and mitigation.
Although the business faces many risks and uncertainties, we consider the following to be the most significant:
Volatile and significantly weakened global economic conditions
Any interruptions or delays in services from third parties, including data centre hosting facilities, or from our inability to adequately plan for and manage service interruptions or infrastructure capacity requirements
Exposure to risks inherent in international operations from sales to customers outside the United Kingdom
An inability to compete effectively in the intensely competitive markets in which we participate
Any failure to expand our services and to develop and integrate our existing services in order to keep pace with technological developments
Changes in government regulations
Fluctuations in currency exchange rates, particularly the British Pound versus the US Dollar
The occurrence of natural disasters, pandemics and other events beyond our control
ZENGINE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 2 -
Principal risks and uncertainties (continued)
Management attempts to minimise these risks by thoughtfully managing the business including:
Preparing and stress-testing financial budgets and forecasts
Maintaining key relationships between The Group and its employees, customers and vendors
Remaining aware of industry developments and our competition
Maintaining adequate financial records
Remaining compliant with all laws and regulations in the markets in which we operate
Contingency planning for business disruptions
Environmental policies and procedures
Zengine does not have any employees. However, other business owned by Inception Point Systems LTD (collectively referred to as “The Group”), recognises the importance of progressive environmental, social and governance policies and has adopted the following policies and practices:
All employees must acknowledge and agree to comply with the policies of the Code of Ethics and Business Conduct on an annual basis
The establishment of our Core Values:
Teamwork is Our True North
Relentlessly Champion the Customer
Lead Through Equality & Integrity
Forge the Path
Rooted in Action & Outcomes
The creation of “Employee Resource Groups”, which are employee-led, self-directed, voluntary groups that offer opportunities to network internally, attract a diverse employee base, as well as promote and lead inclusion ideas and solutions.
All employees work from home with exceptions for those managing a regional office, working on hardware or traveling for the purposes of sales or in-person customer support, thereby minimizing both the facility footprint and the amount of employment-related travel of our employees
Compliance with laws and regulations
During the 12 months ended 30 June 2023, Zengine was in all material aspects in compliance with all relevant laws and regulations applicable to the jurisdictions it operates in.
Mr H Doetsch
Director
22 October 2024
ZENGINE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 3 -
The directors present their annual report and financial statements for the year ended 30 June 2023.
Principal activities
The principal activity of the company continued to be that of software development and sale of related licenses.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr T L Lin
(Resigned 25 April 2024)
Mr M J Sheehan
(Resigned 25 April 2024)
Mr H Doetsch
(Appointed 25 April 2024)
Mr B J Schaknowski
(Appointed 25 April 2024)
Auditor
The auditor, Azets Audit Services Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr H Doetsch
Director
22 October 2024
ZENGINE LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 JUNE 2023
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the 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.
ZENGINE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ZENGINE LIMITED
- 5 -
Opinion
We have audited the financial statements of Zengine Limited (the 'company') for the year ended 30 June 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including 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).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 30 June 2023 and of its profit 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 we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our 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.
ZENGINE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ZENGINE LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, 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.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
ZENGINE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ZENGINE LIMITED
- 7 -
Extent to which 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 and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Performing audit work over the timing and recognition of revenue and in particular whether it has been recorded in the correct accounting period
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
Jessica Lawrence
Senior Statutory Auditor
For and on behalf of Azets Audit Services Limited
22 October 2024
Chartered Accountants
Statutory Auditor
12 King Street
Leeds
LS1 2HL
ZENGINE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
14,433,164
12,044,399
Administrative expenses
(11,644,486)
(10,078,240)
Operating profit
4
2,788,678
1,966,159
Interest receivable and similar income
6
430,163
391,682
Profit before taxation
3,218,841
2,357,841
Tax on profit
7
(502,568)
167,614
Profit for the financial year
2,716,273
2,525,455
The profit and loss account has been prepared on the basis that all operations are continuing operations.
ZENGINE LIMITED
BALANCE SHEET
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
8
7,621,575
7,653,675
Current assets
Debtors
9
15,453,509
13,361,947
Cash at bank and in hand
1,282,199
1,316,303
16,735,708
14,678,250
Creditors: amounts falling due within one year
10
(2,145,377)
(2,829,354)
Net current assets
14,590,331
11,848,896
Total assets less current liabilities
22,211,906
19,502,571
Provisions for liabilities
Deferred tax liability
11
1,905,394
1,912,332
(1,905,394)
(1,912,332)
Net assets
20,306,512
17,590,239
Capital and reserves
Called up share capital
12
2,011,501
2,011,501
Profit and loss reserves
18,295,011
15,578,738
Total equity
20,306,512
17,590,239
The financial statements were approved by the board of directors and authorised for issue on 22 October 2024 and are signed on its behalf by:
Mr H Doetsch
Director
Company Registration No. 08666682
ZENGINE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
- 10 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 July 2021
2,011,501
13,053,283
15,064,784
Year ended 30 June 2022:
Profit and total comprehensive income for the year
-
2,525,455
2,525,455
Balance at 30 June 2022
2,011,501
15,578,738
17,590,239
Year ended 30 June 2023:
Profit and total comprehensive income for the year
-
2,716,273
2,716,273
Balance at 30 June 2023
2,011,501
18,295,011
20,306,512
ZENGINE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
- 11 -
1
Accounting policies
Company information
Zengine Limited is a private company limited by shares incorporated in England and Wales. The registered office is C/O Mccarthy Tetrault, 1 Angel Court, 18th Floor, London, EC2R 7HJ.
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 £1.
The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position': paragraph 4.12(a)(iv);
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 3 'Financial Statements': Presentation paragraph 3.17(d);
Section 11 ‘Basic Financial Instruments’: paragraphs 11.41(b), 11.41(c), 11.41(e), 11.41(f), 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv); 11.48(b) and 11.48(c);
Section 12 ‘Other Financial Instrument Issues': paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
Section 26 ‘Share based Payment’: paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
Section 33 ‘Related Party Disclosures’: Related Party Disclosures paragraph 33.7.
The financial statements of the company are consolidated in the financial statements of Intellicentrics Global Holdings as at 30 June 2023. The group consolidated accounts are available from the Intellicentrics Global Holdings website and from Companies House.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for 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 professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
ZENGINE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 12 -
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.
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Software
33.33% straight line
Development costs
33.33% straight line
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible 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.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
ZENGINE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 13 -
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ 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 and cash and bank balances, 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.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
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.
ZENGINE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 14 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies that are classified as debt, 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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
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.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
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.
ZENGINE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 15 -
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. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
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.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Foreign exchange
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.
2
Judgements and key sources of estimation uncertainty
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.
Capitalisation of development costs
The key judgements and sources of estimation uncertainty are that development costs are directly attributable to relevant projects during the year, and have therefore been capitalised to the statement of comprehensive income. In addition, the directors consider whether there are any indicators of impairment present for the company as a whole or on a project basis. The directors have not identified any indicators at 30 June 2023 (2022 - None)
ZENGINE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 16 -
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
14,433,164
12,044,399
2023
2022
£
£
Other revenue
Interest income
430,163
391,682
Turnover is wholly attributable to the principal business activity.
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
689,675
(1,080,930)
Research and development costs
6,724,684
6,284,638
Fees payable to the company's auditor for the audit of the company's financial statements
9,150
9,600
Amortisation of intangible assets
4,250,526
4,630,724
5
Employees
The company has no other employees other than 2 directors.
6
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest receivable from group companies
430,163
391,682
7
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
518,612
Adjustments in respect of prior periods
(9,106)
(113,939)
Total current tax
509,506
(113,939)
Deferred tax
Origination and reversal of timing differences
(6,938)
(53,675)
Total tax charge/(credit)
502,568
(167,614)
ZENGINE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
7
Taxation
(Continued)
- 17 -
The actual charge/(credit) for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
3,218,841
2,357,841
Expected tax charge based on the standard rate of corporation tax in the UK of 20.50% (2022: 19.00%)
659,730
447,990
Adjustments in respect of prior years
(9,106)
(113,939)
Group relief
(147,697)
(520,726)
Deferred tax adjustments in respect of prior years
1,087
42,031
Remeasurement of deferred tax for changes in tax rates
(1,446)
(22,970)
Taxation charge/(credit) for the year
502,568
(167,614)
8
Intangible fixed assets
Software
Development costs
Total
£
£
£
Cost
At 1 July 2022
165,050
16,954,856
17,119,906
Additions - internally developed
4,218,426
4,218,426
At 30 June 2023
165,050
21,173,282
21,338,332
Amortisation and impairment
At 1 July 2022
165,050
9,301,181
9,466,231
Amortisation charged for the year
4,250,526
4,250,526
At 30 June 2023
165,050
13,551,707
13,716,757
Carrying amount
At 30 June 2023
7,621,575
7,621,575
At 30 June 2022
7,653,675
7,653,675
ZENGINE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 18 -
9
Debtors
2023
2022
Amounts falling due within one year:
£
£
Corporation tax recoverable
534,599
Amounts owed by group undertakings
12,019,336
9,470,240
Other debtors
38,772
6,724
Prepayments and accrued income
186,683
332,004
12,244,791
10,343,567
2023
2022
Amounts falling due after more than one year:
£
£
Amounts owed by group undertakings
3,208,718
3,018,380
Total debtors
15,453,509
13,361,947
Amounts owed by group are repayable on demand.
10
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
24,842
36,306
Amounts owed to group undertakings
1,460,777
2,698,732
Corporation tax
518,612
Accruals and deferred income
141,146
94,316
2,145,377
2,829,354
Amounts owed to group and non-interest bearing and repayable on demand.
11
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
1,905,394
1,912,332
ZENGINE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
11
Deferred taxation
(Continued)
- 19 -
2023
Movements in the year:
£
Liability at 1 July 2022
1,912,332
Credit to profit or loss
(6,938)
Liability at 30 June 2023
1,905,394
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
12
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
2,011,501
2,011,501
2,011,501
2,011,501
13
Events after the reporting date
Following the year end and change in ownership, Symplr Software Holdings, Inc is now the ultimate parent company.
14
Related party transactions
The company has taken advantage of the exemption available in Section 33.1A of FRS 102 whereby it has not disclosed transactions with the ultimate parent company or any wholly owned subsidiary undertaking of the group.
15
Ultimate controlling party
The company is controlled by the ultimate parent company, Symplr Software Holdings, Inc, a company incorporated in the state of Delaware in the United States. This is the largest and smallest group of undertakings for which group accounts including Inception Point Systems Ltd are drawn up.
The immediate parent undertaking is Symplr Software LLC, a company registered in Houston, Texas.
The group consolidated accounts are available from the Symplr Software Holdings, Inc website and from Companies House.
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