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Company registration number: 06710974







ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2023


HARMAN CONNECTED SERVICES UK LIMITED






































img382c.png                        

 


HARMAN CONNECTED SERVICES UK LIMITED
 


 
COMPANY INFORMATION


Directors
M Hartje 
T A Frimpong 




Registered number
06710974



Registered office
The Grosvenor Arena Offices
Basing View

Basingstoke

Hampshire

RG21 4HG




Independent auditors
Menzies LLP
Chartered Accountants & Statutory Auditor

Lynton House

7-12 Tavistock Square

London

WC1H 9LT





 


HARMAN CONNECTED SERVICES UK LIMITED
 



CONTENTS



Page
Strategic Report
1 - 2
Directors' Report
3 - 4
Independent Auditors' Report
5 - 8
Statement of Comprehensive Income
9
Statement of Financial Position
10
Statement of Changes in Equity
11
Notes to the Financial Statements
12 - 23


 


HARMAN CONNECTED SERVICES UK LIMITED
 


 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
The directors present their strategic report for the year ended 31 December 2023.

Business review

The company provides software solution services that include software development, system integration, customization,
and testing. The company has a diverse portfolio of clients that include mobile device manufacturers, software and chipset vendors, hardware platform providers, as well as consumer electronics and automotive customers.
DEVELOPMENTS AND PERFORMANCE OF THE BUSINESS
During the year the revenue increased to £12.3m (2022: £10m) and the company has the total comprehensive income this year of £0.07m loss compared to £0.7m loss at the end of 2022.
POSITION OF THE COMPANY
The company remains in a strong financial position at the year ended 31 December 2023 with net current assets of £7.5m (2022 : £7.6m), and net assets of £7.5m compared to £7.6m in 2022.
FUTURE DEVELOPMENTS
Harman Connected Services UK Limited have a strong history in mobile software development as well as embedded 
design with cluster technologies, Mobile communication, and Application platform services. The Company is focused on connected technologies for consumer, healthcare and enterprise market.
In a world that's swiftly transitioning to mobile, the company has the ability to create best-in-class mobile applications and services. It also has the capability to deliver them across all devices, giving our clients the ability to impact their customers, employees, and machines seamlessly. We have expanded our scope and relationships with reputed analysts. We are hopeful that with continued engagements with these industry advisory firms, we will grow our market and mindshare with our customers. We have reviewed our sales structure and adopted a geo-expansion model and have invested in sales and strategy across geographies, investing in training and building a stronger bond within this team. Our company is the premier partner in providing outsourced product development services, further being part of Samsung group gives an added advantage due to access to latest technologies.

Principal risks and uncertainties
 
The company is always trying to minimize the risks, although some risks may be difficult to influence and predict. Harman Connected Services UK Limited 's business risks include the risk of lower demand for consulting services, customer concentration, and difficulty in attracting and retaining valuable staff, credit risks associated with fixed-price contract, foreign currency risks that can have an impact on profitability.
The company continues to evolve to industry demands and its continued success comes from delivering first class level 
of services to customers. There continues to be a growing demand for technology expertise, and the market remains competitive.

Financial key performance indicators
 
ANALYSIS USING FINANCIAL KPI's 
The directors consider turnover and net profit of the business as the most important KPI's. Turnover for the year ended 31 December 2023 increased by 23% to £12.3m (2022 : £10m). The company generated a net loss of £0.07m in the year ended 31 December 2023, decrease from previous year by £0.7m.

Page 1

 


HARMAN CONNECTED SERVICES UK LIMITED
 



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


This report was approved by the board on 13 January 2025 and signed on its behalf.



M Hartje
Director

Page 2

 


HARMAN CONNECTED SERVICES UK LIMITED
 


 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

The directors present their report and the financial statements for the year ended 31 December 2023.

Directors' responsibilities statement

The directors are responsible for preparing the Strategic Report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and 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 for the Company's financial statements and then apply them consistently;

make judgments 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 2006They 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.

Results and dividends

The loss for the year, after taxation, amounted to £76,745 (2022 - loss £705,594).

No dividends will be distributed for year ended 31 December 2023.

Directors

The directors who served during the year were:

M Hartje 
T A Frimpong (appointed 7 July 2023)
J Stacey (resigned 7 July 2023)
 
Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Page 3

 


HARMAN CONNECTED SERVICES UK LIMITED
 


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

Auditors

Menzies LLP were appointed as auditor to the company in the accordance with section 485 of the Companies Act 2006 and they are deemed to be reappointed under section 487(2) of the Companies Act 2006.

This report was approved by the board on 13 January 2025 and signed on its behalf.
 





M Hartje
Director

Page 4

 


HARMAN CONNECTED SERVICES UK LIMITED
 

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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HARMAN CONNECTED SERVICES UK LIMITED

Opinion


We have audited the financial statements of Harman Connected Services UK Limited (the 'Company') for the year ended 31 December 2023, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 December 2023 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.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the 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.


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.


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.


Page 5

 


HARMAN CONNECTED SERVICES UK LIMITED


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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HARMAN CONNECTED SERVICES UK LIMITED (CONTINUED)

Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


the information given in the 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.


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 directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.


In preparing the financial statements, the directors are responsible for assessing the 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.


Page 6

 


HARMAN CONNECTED SERVICES UK LIMITED


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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HARMAN CONNECTED SERVICES UK LIMITED (CONTINUED)

Auditors' responsibilities for the audit of the financial statements
 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these 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 Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations were most significant:
 
• The Companies Act 2006;
• Financial Reporting Standard 102;
• UK employment legislation;
• General Data Protection Regulations; and
• UK tax legislation. 
We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. 
We understood how the Company is complying with those legal and regulatory frameworks by making inquiries to management and those responsible for legal and compliance procedures. We corroborated our inquiries through our review of relevant documentation.
The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The assessment did not identify any issues
 in this area. We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:
•  Identifying and assessing the design effectiveness of controls management has in place to prevent and detect                                                                          fraud;
• Understanding how those charged with governance considered and addressed the potential for override of controls   or other inappropriate influence over the financial reporting process; 
• Challenging assumptions and judgements made by management in its significant accounting estimates; and
•  Identifying and testing journal entries, in particular any journal entries posted outside of the normal working patterns                                                                         of the accounts team, or with unusual descriptions or account combinations.
As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas:
• The application of inappropriate judgements or estimation to manipulate the financial position in the calculation of    the year end provisions;
•  The posting of unusual journals and complex transactions; or
•  The use of management override of controls to manipulate results, or to cause the Company to enter into                  transactions not in its best interests.
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 is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting
Page 7

 


HARMAN CONNECTED SERVICES UK LIMITED


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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HARMAN CONNECTED SERVICES UK LIMITED (CONTINUED)

Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' 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 2006Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





Ralph Mitchison (Senior Statutory Auditor)
  
for and on behalf of
Menzies LLP
 
Chartered Accountants
Statutory Auditor
  
Lynton House
7-12 Tavistock Square
London
WC1H 9LT

13 January 2025
Page 8

 


HARMAN CONNECTED SERVICES UK LIMITED
 


 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

  

Turnover
 4 
12,306,759
10,012,699

Cost of sales
  
(12,670,687)
(10,510,295)

Gross loss
  
(363,928)
(497,596)

Administrative expenses
  
(57,730)
(193,148)

Operating loss
 5 
(421,658)
(690,744)

Interest receivable and similar income
 8 
344,913
32,053

Loss before tax
  
(76,745)
(658,691)

Tax on loss
 9 
-
(46,903)

Loss for the financial year
  
(76,745)
(705,594)

There was no other comprehensive income for 2023 (2022:£NIL).

The notes on pages 12 to 23 form part of these financial statements.

Page 9

 


HARMAN CONNECTED SERVICES UK LIMITED
REGISTERED NUMBER:06710974



STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

  

Current assets
  

Debtors: amounts falling due within one year
 12 
11,311,171
10,854,785

  
11,311,171
10,854,785

Creditors: amounts falling due within one year
 13 
(3,781,217)
(3,248,086)

Net current assets
  
 
 
7,529,954
 
 
7,606,699

Total assets less current liabilities
  
7,529,954
7,606,699

  

Net assets
  
7,529,954
7,606,699


Capital and reserves
  

Called up share capital 
  
1
1

Profit and loss account
  
7,529,953
7,606,698

  
7,529,954
7,606,699


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 13 January 2025.




M Hartje
Director

The notes on pages 12 to 23 form part of these financial statements.

Page 10

 


HARMAN CONNECTED SERVICES UK LIMITED
 



STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 January 2022
1
8,312,292
8,312,293


Comprehensive income for the year

Loss for the year
-
(705,594)
(705,594)
Total comprehensive income for the year
-
(705,594)
(705,594)



At 1 January 2023
1
7,606,698
7,606,699


Comprehensive income for the year

Loss for the year
-
(76,745)
(76,745)
Total comprehensive income for the year
-
(76,745)
(76,745)


At 31 December 2023
1
7,529,953
7,529,954


The notes on pages 12 to 23 form part of these financial statements.

Page 11

 


HARMAN CONNECTED SERVICES UK LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Harman Connected Services UK Limited is a private company, limited by shares, registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Samsung Electronics Co., Ltd. and its subsidiaries as at 31 December 2023 and these financial statements may be obtained from www.samsung.com/global/ir/financial-information/audited-financial-statements.

 
2.3

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

Page 12

 


HARMAN CONNECTED SERVICES UK LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.4

Revenue

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

Turnover represents net invoiced sales of goods, excluding VAT. Turnover from the supply of services represents the value of services provided under contracts to the extent that there is a right to consideration and is recorded at the value of the consideration due.

 
2.5

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.6

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.

 
2.7

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. 

Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

Page 13

 


HARMAN CONNECTED SERVICES UK LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.8

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

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:

Computer equipment
-
33%

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.

 
2.9

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.10

Cash and cash equivalents

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

The company is part of two cash pool accounts which are being used by all UK entities of Harman. One  is held in the name of Harman International Industries Limited and the other is held in the name of Harman Holding GmbH & Co. KG, both are part of Harman group companies. The balance from both the current accounts are swept into these cash pool accounts on the daily basis. This helps in meeting payment obligations of the individual group entities.

 
2.11

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.

The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.

Financial instruments are recognised in the Company's Statement of Financial Position 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
Page 14

 


HARMAN CONNECTED SERVICES UK LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.11
Financial instruments (continued)


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.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

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.

Page 15

 


HARMAN CONNECTED SERVICES UK LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.11
Financial instruments (continued)

Other financial instruments

Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.

Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.

Derecognition of financial instruments

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Revenue recognition
Revenue is recognised in the financial statements according to the stage of completion of contracts.

Page 16

 


HARMAN CONNECTED SERVICES UK LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.


Turnover

An analysis of turnover by class of business is as follows:


2023
2022
£
£

Rendering of services
12,306,759
10,012,699

12,306,759
10,012,699


Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
10,371,078
9,388,559

Rest of Europe
974,552
551,236

Rest of the world
961,129
72,904

12,306,759
10,012,699



5.


Operating loss

The operating loss is stated after charging:

2023
2022
£
£

Exchange differences
(73,331)
126,084


6.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors and their associates:


2023
2022
£
£

Fees payable to the Company's auditors and their associates for the audit of the Company's financial statements
18,500
12,300

The Company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent Company.

Page 17

 


HARMAN CONNECTED SERVICES UK LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

7.


Employees

Staff costs were as follows:


2023
2022
£
£

Wages and salaries
832,976
542,988

Social security costs
57,818
48,145

Cost of defined contribution scheme
10,030
1,222

900,824
592,355


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


        2023
        2022
            No.
            No.







Employees
9
9


8.


Interest receivable

2023
2022
£
£


Interest receivable from group companies
343,455
29,082

Bank and other interest receivable
1,458
2,971

344,913
32,053


9.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
-
46,903


-
46,903


Total current tax
-
46,903

Deferred tax

Total deferred tax
-
-


Tax on loss
-
46,903
Page 18

 


HARMAN CONNECTED SERVICES UK LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
9.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 23.50% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Loss on ordinary activities before tax
(76,745)
(658,691)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.50% (2022 - 19%)
(18,051)
(125,151)

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
2,590
9

Capital allowances for year in excess of depreciation
-
49

Tax losses carried forward
-
125,093

Adjustments to tax charge in respect of prior periods
-
(2,104)

Other timing differences leading to an increase (decrease) in taxation
15,461
-

Withholding tax
-
49,007

Total tax charge for the year
-
46,903

Page 19

 


HARMAN CONNECTED SERVICES UK LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

10.


Tangible fixed assets





Computer equipment

£



Cost or valuation


At 1 January 2023
2,015



At 31 December 2023

2,015



Depreciation


At 1 January 2023
2,015



At 31 December 2023

2,015



Net book value



At 31 December 2023
-



At 31 December 2022
-

Page 20

 


HARMAN CONNECTED SERVICES UK LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

11.


Fixed asset investments





Investments in subsidiary companies

£







Harman Connected Services Morocco Sarlau
 
  
Registered office: Morocco   
Nature of business: provision of software solutions   
   
Class of shares:  % holding  
Ordinary                  100  
                                                                        2023                     2022
                                                                                           £                           £
Aggregate capital and reserves             (23,402)       (3,140)
(Loss)/profit for the year                          (48,813)           (294,645)
The above subsidiary is in the process of being liquidated.

Page 21

 


HARMAN CONNECTED SERVICES UK LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

12.


Debtors

2023
2022
£
£


Trade debtors
1,117,360
1,212,067

Amounts owed by group undertakings
9,217,566
8,777,511

Other debtors
861,941
808,396

Prepayments and accrued income
775
892

Tax recoverable
113,529
55,919

11,311,171
10,854,785



13.


Creditors: Amounts falling due within one year

2023
2022
£
£

Trade creditors
37,320
27,683

Amounts owed to group undertakings
1,867,821
2,155,245

Other taxation and social security
646,713
361,824

Other creditors
23,787
171,013

Accruals and deferred income
1,205,576
532,321

3,781,217
3,248,086



14.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



100 (2022 - 100) Ordinary shares of £0.01 each
1
1



15.


Pension commitments

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  £10,030 (2022 - £1,222). Contributions  totalling £22,938 (2022 - £70,246) were payable to the fund at the balance sheet date and are included in creditors.

Page 22

 


HARMAN CONNECTED SERVICES UK LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

16.


Related party transactions

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.


17.


Controlling party

The company is a subsidiary undertaking of Samsung Electronics Co. Ltd, a company registered in the Republic of Korea.
The smallest and largest group in which the results of the company are consolidated is that headed by Samsung Electronics Co. Ltd.
The immediate parent of the companny is Harman Connected Services Inc, a company registered in the United States.
The ultimate controlling party of the company is Samsung Electronics Co. Ltd, listed on the Korea Stock Exchange under the symbol KRX. Copies of the financial statements can be seen at the website www.samsung.com.

 
Page 23