Registered number: 12543220
PENTERA SECURITY UK LTD
FINANCIAL STATEMENTS
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE YEAR ENDED 31 DECEMBER 2023
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PENTERA SECURITY UK LTD
REGISTERED NUMBER: 12543220
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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PENTERA SECURITY UK LTD
REGISTERED NUMBER: 12543220
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2023
The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 4 to 11 form part of these financial statements.
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PENTERA SECURITY UK LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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Comprehensive income for the year
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Contributions by and distributions to owners
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Share based payment credit
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Comprehensive income for the year
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Contributions by and distributions to owners
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Share based payment credit
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The notes on pages 4 to 11 form part of these financial statements.
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PENTERA SECURITY UK LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The principal activity of Pentera Security UK Limited ("the Company") is selling and promoting the automated penetration technology developed by the parent entity, Pentera Security Limited.
The Company is a private company limited by shares and is incorporated in England and Wales.
The Registered Office address is 35 Ballards Lane, London N3 1XW.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland' ("FRS 102") and the requirements of the Companies Act 2006. The disclosure requirements of Section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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.
The following principal accounting policies have been applied:
The financial statements have been prepared on the going concern basis, which assumes that the Company will continue to trade for the foreseeable future, being a period of at least twelve months from the date of approval of these financial statements, and will be able to meet its debts as they fall due.
As at 31 December 2023, the Company had net assets of £656,896 (2022: £490,162). Included within creditors is an amount of £1,306,015 (2022: £1,447,318) owed to the parent company and the Company is dependent on the continued support of the parent company to allow it to meet its financial obligations as they fall due and also not seeking repayment of existing loans made to the Company.
The directors have reviewed group forecasts and budgets and are confident that the support from the parent company will continue for at least the next 12 months from the date of signature of these financial statements and believe that this support will be sufficient to cover all ongoing cash requirements.
Based on all of the above, the directors believe that the Company has access to adequate resources to continue being in operational existence for the foreseeable future and that it is appropriate to continue to use the going concern basis for the preparation of these financial statements.
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PENTERA SECURITY UK LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is Sterling.
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 comprehensive income 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 comprehensive income within 'other operating income'.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of revenue can be measured reliably;
∙it is probable that the Company will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
On-premises software revenue is recognised based on a percentage split that represents the sale of the software and the after sale service that the Company offer. On the sale of the software, 95% of the revenue is recognised, with the remaining spread over the life of the contract.
Software as a service revenue is recognised evenly over the life of the contract.
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PENTERA SECURITY UK LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Finance costs are charged to the Statement of Comprehensive Income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
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.
Where share options are awarded to employees, the fair value of the options at the date of grant is charged to the Statement of Comprehensive Income over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Company keeping the scheme open or the employee maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to The Statement of Comprehensive Income over the remaining vesting period.
Where equity instruments are granted to persons other than employees, the Statement of Comprehensive Income is charged with fair value of goods and services received.
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PENTERA SECURITY UK LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Current and deferred taxation
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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.
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:
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 the Statement of Comprehensive Income.
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PENTERA SECURITY UK LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Cash and cash equivalents
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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.
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The average monthly number of employees, including directors, during the year was 12 (2022 - 11).
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Charge for the year on owned assets
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Creditors: Amounts falling due after more than one year
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Accruals and deferred income
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PENTERA SECURITY UK LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Charged to Comprehensive Income
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The deferred taxation balance is made up as follows:
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Accelerated capital allowances
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Short term timing differences
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Allotted, called up and fully paid
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1 (2022 - 1) Ordinary share of £1.00
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Capital contribution
The capital contribution represents the valuation of share options granted to employees in the ultimate parent undertaking, Pentera Security Ltd.
Profit and loss account
This represents total undistributed profits.
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PENTERA SECURITY UK LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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The ultimate parent undertaking, Pentera Security Ltd., operates a share-based payment scheme for its employees and has granted share options. Where the relevant option holders are employees of this
Company, the charge is treated as an expense in the financial statements of this Company in accordance
with Section 26 of FRS 102.
A reconciliation of share option movements is shown below:
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Weighted average exercise price (pence)
($) 2023
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Weighted average exercise price
(pence)
($) 2022
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Outstanding at the beginning of the year
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Forfeited during the year
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Exercised during the year
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Outstanding at the end of the year
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The Company is unable to directly measure the fair value of employee services received. Instead, the fair value of the share options during the period was determined using a simplified Black-Scholes model, with the following parameters:
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Option pricing model used
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Fair value at grant date (US$ per share)
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Expected dividend growth rate
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PENTERA SECURITY UK LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
9.Share-based payments (continued)
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The total charge for the period in respect of the share-based payments was £188,928 (2022: £268,760). The charge is treated as an expense in the Statement of Comprehensive Income and as a capital contribution by the ultimate parent undertaking, Pentera Security Ltd.
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The comparative information has been restated from the figures previously reported in the prior year financial statements to reclassify consulting costs of £920,962 from administration expenses to cost of sales. This presentational adjustment has had no impact on net assets or profits as previously reported.
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. Included in other creditors
are contributions of £9,162 (2022: £6,609) payable to the fund at the Statement of Financial Position date.
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Related party transactions
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The Company has taken advantage of the exemption conferred by section 33.1A of FRS102 from the requirement to disclose transactions with other wholly owned group undertakings.
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The ultimate parent undertaking is Pentera Security Ltd., a company incorporated in Israel. The Registered Office and principal place of business is 94 Em Ha’Moshavot Road, Petach Tikva, 4970602, Israel.
Consolidated financial statements are prepared by the parent undertaking and are publically available from the above address.
The auditors' report on the financial statements for the year ended 31 December 2023 was unqualified.
The audit report was signed on 10 April 2025 by David Landau FCA (Senior Statutory Auditor) on behalf of BKL Audit LLP.
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