The directors present the strategic report for the year ended 31 December 2024.

General information

HE Space is a leading contracting company specialised in providing managed services and human resources to the space sector.

We employ space experts in the fields of engineering, science, operations, software development and administration. Our employees contribute to every major European space programme.

HE Space collaborates with institutional space organizations, major space companies, and New Space start-ups.
Notable players like ESA and many more have drawn on our expertise for more than 40 years.

We care about our employees, improve their professional and personal development as well as their work-life balance.

We stand out in the business with a fast response to requests and a database full of space-qualified candidates. Our company provides high quality staff who can quickly contribute to projects.

Our vision:

“Our Vision is to be the market leader in the provision of top-quality manpower, recruitment and human resources services in the European space sector. “

Our mission:

“Based on the foundation of integrity and care for the employee, HE Space recruits talented individuals for the space industry to enable our clients to achieve their goals, prepare for future challenges and execute effective and responsible use of resources.”

Ethic statement:

Our overarching Ethic statement is “Treat others the same way you want them to treat you”

Where we operate

HE Space offices are deliberately sited close to our main customer locations. We have offices in Noordwijk (The Netherlands) and Harwell (UK).

Our employees work side-by-side with our customers on the customer premises all over Europe:

Our main customers are:

• Institutional space organizations and their locations such as European Space Agency (ESA HQ, ESTEC, EAC, ECSAT, ESAC, ESOC, ESRIN).

The financial outlook for 2025 is positive and in line with expectations.

Solvency: The company maintains a solvency ratio of at least 20% of the consolidated balance sheet total as of the end of the book year.

Liquidity: Liquidity and cash flow are being managed on a weekly basis. The company is cash flow positive throughout the year, apart from occasional short dips. For these events, the company has access to a standard working capital facility at Rabobank in the Netherlands. Furthermore, cash flow across the Group is managed at Holding level by the Group Finance Manager.

Financial instruments: no financial instruments have been used at HE Space during 2024. The exchange rate risk of GBP that HE Space is exposed to is perceived as low risk.

Investments: Minor additional Investment has been conducted in 2024 to enhance the refurbishment of the office in Noordwijk.

R&D: There was no R&D activity in 2024.

Internal Operations: Internal operations in 2024 were focused on maintaining stability and current levels of business, strengthening online fraud and security awareness and supporting the transaction process.

Financial Reporting: Monthly and quarterly reports were provided for CS Group – France Space ExCom, and processes have been aligned with CS Group – France requirements.

Social Responsibility: 6 projects and 3 causes have been supported financially by the HE Space Children’s foundation and conducted in 2024. HE Space Children’s foundation is not financially or legally connected to HE Space. It is a stand-alone Dutch foundation with it has its own board of Directors.

At Sopra Steria Level there is a goal to increase the proportion of women in the Workforce (>33.5%) and promoting at least as many women as men (14% vs 12.8%). Training an equivalent share of women as the proportion of women in the workforce (>34.1%) and increasing the proportion of women in management roles (L5+) >20.1%.

Synergies with Sopra Steria Group CSR (Corporate Social Responsibility) has started to be discussed and will be followed in 2025.

HE Space Operations LTD

HE Space Operations LTD experienced some one-off (“extraordinary”) cost during 2024 which caused a decrease of the 2024 Results.

Financial Performance: The total revenue for the fiscal year was £2,237,200 constituting a 4.6% decrease compared to the previous year. This was due to the decreased of Staffing.

The loss before tax amounted to £112,860 of which £115,466 was categorized as extraordinary costs - the normalized profit was £2,606 (-89.3%).

Staffing: The total staff headcount in the LTD was 24 at the end of 2024 with a total of 5 starters and 11 leavers. This figure equates to 22.7 fulltime equivalent (FTE) billable staff by the end of 2024.

HE Space BV won the Marketing and Market Intelligence service at The ESA CIC directorate, which represents a team of 9 FTE with 6 in the UK. These people will be working in Harwell at HE Space Ltd.

HE Space Operations LTD via HE Space Operations BV works have been recognized by ESA. The Company has been awarded Best Supplier in 5 domains. This number is in the top 3 of ESA suppliers.

Outlook for 2025

In 2025, the focus will be on maintaining our current positions and acquiring new positions. Indeed, the transition to Services allows us to reinforce some of our positions and highlight business complementarities with our parent companies and Partners. This exercise will also allow us to prepare the next framework contract with ESA, EFC3.

Acquiring additional customers, with a focus on industrial ones (Thales, Airbus, GMV) will be a point of interest..

Synergies across locations, mainly between NL and UK, will be reinforced this year, to improve operational efficiency and our market intelligence to acquire new business.

The integration into the Sopra Steria Group IT system is expected for the beginning of 2026 and will impact some of our processes.

A growth of 11.7% in revenue is expected for 2025.

For 2025 we expect our headcount to grow by 6.7% compared to 2024.

Risk report.

For the 2024 financial audit, we have created a risk report in which the general environment in which the Company operates, and main risks and mitigations are reviewed for the organization, as perceived by the management team.

I. General risk factors

Major global events and impacts

War in Ukraine - HE Space does not rely on suppliers or partners from either Ukraine or Russia and is therefore not directly impacted from the ongoing war in Ukraine. Management continues to monitor the situation closely and take appropriate actions to minimize any potential business impacts from volatile external factors.

Human Rights

HE Space supports and respects the international human rights contained in the Convention on Human Rights. This means, among other things, that the Company works to ensure equal opportunities regardless of gender, religion, origin or sexual orientation. The Company does not accept forced labour or child labour.

The Company endorses employees' free choice of trade unions and respects their right to participate in collective bargaining, in accordance with applicable laws and standards in respective countries regarding working hours and wages.

The Company has identified the risk of discrimination against employees as the most significant risk in relation to human rights. This can affect our ability to attract and retain employees as well as affect our reputation.

The Company translates human rights principles into action by communicating them to employees and monitoring that the principles are observed, but due to the limited scope of its operations, the Company has not otherwise found it necessary to conduct human rights related due diligence.

In 2023/24, the result of these efforts was that no human rights violations were found in HE Space. The Company expects to continue and where appropriate, expand, these efforts in the future.

Environment and climate

It is the Company’s goal to strive for an operation that limits climate impact using environmentally friendly processes. This includes a choice of processes and materials that are as reusable as possible, but also that the various processes are gentle on the environment.

We believe that the most significant climate- and environment-related risk would be if we use processes that unnecessarily harm the environment. Furthermore, it can be a risk if our processes or approaches unduly impact the environment. We are aware that this risk can have consequences for the local environment as well as have consequences for our reputation and seek to minimize such risks.

The Company’s climate and environment-related processes entail that environmental considerations are included as part of the company's business strategy. Yet, no results have been identified as a result of the efforts, but the Company expects to continue and where appropriate, expand these efforts in the future.

Social and employee relations

In HE Space, we believe that results are created through people. We strive to be a responsible employer that ensures proper employment, healthy and safe working conditions, and a motivating work environment for our employees.

The Company translates these principles into action, inter alia, through the development and maintenance of employees' knowledge and skills, to ensure that the company continues to have high efficiency. The presence of the necessary qualifications is ensured through targeted training of employees as well as collaboration with external partners.

The Company has identified employees not feeling motivated by working at HE Space as the most significant social- and employee-related risk. This is, however, not currently the case. No social and employee-related violations were found in HE Space.

Anti-corruption and business ethics

Over the years, HE Space has built a reputation as a company that maintains a high degree of integrity and ethical conduct. We combat all forms of corruption, including bribery and facilitation payments, by informing our employees of our zero- tolerance approach to bribery and corruption.

We have identified the risk of employees using gifts or other means to unduly influence a stakeholder as the main risk related to bribery and corruption. This may also be the case if one of our employees is unduly influenced by a stakeholder. Both cases could have consequences for our reputation. Due to the limited scope of its operations, the Company has not yet found it necessary to establish processes for anti-bribery and corruption due diligence.

No corruption and bribery offenses have been found or reported in HE Space in 2023/24, and the Company plans to continue and where appropriate, expand these efforts in the future.

Incentive schemes

The company operates a reward scheme for Directors and key Management roles, this retains staff and ensures alignment of interests between staff and shareholder(s). The current incentive schemes will be aligned with Sopra Steria one in the coming years.

Skills and Expertise

HE Space is driven by the expertise and engagement of its employees; this is the core of the Company. Therefore, further investment in staff and facilities is foreseen in 2025 to allow expansion of the Company so that it can meet its future goals. This requires intense involvement and engagement from employees. This means not only going the extra mile to ensure our customers’ satisfaction but also invoking that same mindset in the onboarding of new employees while keeping our minds open to new ideas and improvements arising from new dynamics.

HE Space’s success is based on the talent of the employees, and we strive to make the working environment agile and inclusive, providing flexibility to our employees’ needs. We maintain a high level of trust that the same flexibility flows back to ensure we overcome the challenges at hand and that the commitment to improve and grow is a shared vision between the entire staff.

Internal control and risk management

HE Space’s internal control systems and procedures in relation to financial reporting are to contribute to ensuring that the financial statements give a true and fair view of the Company’s financial position and are free from material misstatement.

HE Space’s Board of Directors is responsible for the establishment and approval of an effective internal control and follow-up system for purposes of the Company’s risk management, including relevant guidelines, policies and significant accounting principles.

The Executive Management is responsible for risk management and maintaining an efficient control system, considering applicable legislation and other internal guidelines and procedures. Risk management is focused on risk identification, probability and impact assessment, and risk mitigation measures. The purpose of control activities is to prevent, detect and correct any errors or irregularities. The activities have been integrated in HE Space’s accounting and reporting procedures. These activities include procedures for verification, authorization, approval, reconciliation, result analysis, IT application controls, and general IT controls.

Detailed monthly accounting data is prepared, analysed, and monitored at entity and Company level. HE Space’s integrated IT controls and general controls contribute to ensuring that the financial statements give a true and fair view. Reporting instructions, including estimation and close-of- month procedures, are updated and implemented on a regular basis. Combined with other policies, these are available to all relevant employees.

Any control weaknesses identified by internal control or external auditors are presented to the Board of Directors, which oversees that Management implements the necessary measures to remedy the weaknesses in a timely manner.

The remuneration of the Management consists of a fixed salary and incentive programmes, the weighting of the individual remuneration elements is intended to support the Company's positive performance in the short and long term. The BSC cash bonus is performance-based relative to the annual budget to promote the Management’s focus on both revenue and costs.

Data ethics

HE Space is following the regulations related to data ethics and the processing of personal data. As the Company provides contracting staff it has direct access to the processing of personal information.

Protection and handling of such information is always done in accordance with legal requirements. Internally for HR administration the processing of employee personal data follows the given regulations pertaining to the area. Data is not obtained or harvested without prior consent and not shared with third parties. New employees are instructed in the policy and Management regularly assesses whether further measures are needed.

II. Company risk factors

The risk factors below are not listed in any order of priority according to significance or probability. It is not possible to quantify the significance to HE Space of each individual risk factor as each of the risk factors mentioned below may materialize individually or simultaneously to a greater or lesser degree and have a material adverse effect on HE Space’s business, operating profit and financial position.

Online security

To reduce the risk of digital fraud, (email) hacking and privacy breaches, a companywide security course was initiated and implemented in 2022 by our Security Officer. The security program covers all relevant topics related to online security and is mandatory for all HE Space corporate office staff. The main purpose is to tighten our security measures, to raise awareness and reduce potential risks in all our offices.

The modules are taking place online and they are hosted by Privacy Engine, the software we use for privacy/ personal data management. Progress for each employee is regularly monitored by our Security Officer.

Financial fraud, payment and transactions, cash flow handling.

Through proper establishment, segregation of duties, documented procedures, and security measures, HE Space Operations aims to safeguard its finances and feel confident that its employees are producing accurate and ethical results.

The company financial policies and procedures are described in the Internal Cash Management Handbook, which applies to all corporate staff members who hold financial duties and to those whose work affects the security of company funds or company confidential financial information.

The aim of the Internal Cash Management Handbook is to define the controls necessary at all organizational levels to prevent or detect unintentional and/or intentional mishandling of company funds.

Liquidity risk

The Company’s liquidity position has historically in some months been supported by the Rabo Bank if large payments have moved. Management assesses that there are several options to ensure an sufficient liquidity position is maintained.

The Company is dependent on a few large customers.

HE Space is dependent on a few large and long-standing customers. The European Space Agency, ESA (end customer), typically delegates the overall responsibility for a space programme to the largest European space companies – Airbus Defense & Space, Thales Alenia Space or OHB (” Prime Contractors”) – through contracts. Although, when awarding a contract to a Prime Contractor, ESA also requires an open competitive process in the selection of subcontractors, it is crucial for the Company’s future development in the space industry to maintain its good relations with ESA and Prime Contractors. There can be no assurance of this, and the opposite scenario could lead to a loss of future orders and materially affect the Company’s future earnings and results.

Technological developments may impair the Company's competitiveness.

Even though the Company is not dependent on individual technologies or processes, technological developments may occur in the future which may impair the Company’s competitiveness, including if the Company's fails to maintain a certain level of investment in the maintenance and development of its key infrastructure.

Tenders may be unsuccessful.

The Company’s large customers launch a limited number of calls for tenders a year. The outcome of these tenders can have a significant impact on the Company’s revenue, earnings and future competitiveness. The outcome of such tenders depends on various factors which are beyond the Company's control, including the quality and price offered by the other tenderers. As there are only a limited number of tenders, there is a risk of losing more than expected or them all, which will materially affect the Company's future results.

HE Space is ISO- certified, if this certification is not maintained there is a risk of being rejected for lack of ISO-certification as supplier to certain customers in the commercial space industry, and this may have a negative impact on the Company’s future development opportunities.

Transition to Services

ESA is transitioning its activities for MAS positions to Services. This is a change in the way of working with this Customer and a change for our employees as well. The company needs to be proactive in this transition, to guarantee a leading position and support the employees. If the company fails to lead this transition, there is a risk of losing several positions.

HE Space will have the support of the Group, having experience in such transition in France and Germany.

Lack of contract opportunities due to fully allocated return quota

For each ESA programme, a ratio applies to the aggregate contract amount permitted in each participating member state. There is a risk that other companies in The Netherlands are awarded large contracts that in turn reduce HE Space’s contract opportunities.

Risk of infringement of intellectual property rights

HE Space’s does not have specific products or developments that generate intellectual property rights. Despite this, there is a risk that on-site staff use products that infringe third party rights, including patent rights. Such infringement may involve substantial claims from the rightsholders and/or cause rightsholders to obtain injunctions against such use which may materially affect HE Space’s results.

Fixed-price contracts may involve losses.

Although HE Space provides services to its main customer (ESA) under a fixed period frame contract, there remains some contracts that are undertaken on a fixed -price basis. For this HE Space must prepare estimates of the cost required to fulfil the individual contracts. There is a risk that HE Space underestimates the costs and therefore cannot achieve the budgeted contribution margins and/or incur losses in connection with such contracts.

Insufficient insurance cover

There is no guarantee that the insurance cover acquired is sufficient to compensate for a loss arising due to a claim. The Company strives to minimize its exposure by way of its general terms of sales and delivery and its commercial liability, but there is no certainty that all situations have been agreed in such a way as to prevent an error from having a negative impact on the Company’s earnings.

In addition, a loss for which the Company is liable or jointly liable may potentially damage the Company’s opportunities to enter future contracts, as the Company’s business concept involves protecting customers against such losses.

From 2024, HE Space will be covered by Sopra Steria Group insurance, which presents higher cover.

Wrong assessment of market penetration time and demand in new markets

Penetration of new markets involves several uncertainties – not least in terms of market penetration time. The Company has significant references from the space industry but does not yet possess detailed knowledge of all markets as regards applications. Both the penetration time and the fact that services provided by the Company are often competing with internal resources of other companies, are subject to uncertainty. These factors may materially affect the Company’s future revenue and earnings.

Trade restrictions may impact future business.

Being associated or recruiting staff from restricted countries such as Russia/China, may affect the possibilities for supplying staff to the company’s key market(s) Europe. HE Space therefore monitors the evolution of the trade and political conflicts between such countries.

Accumulation of application know-how may be affected by lack of recruitment.

The Company’s strategy is initially to accumulate market knowledge, technical skills and marketing skills in the global aerospace market, primarily through recruitment at the board, management, support and sales level. When entering new market areas, the headcount will increase with a resulting risk that capacity adjustment problems may arise.

There is a risk that the Company will not succeed in balancing the capacity to ensure coherence between the contracts concluded and the availability of sufficient capacity in terms of both quality and quantity, which may affect the Company’s future revenue and results.

The Company is dependent on key people.

The future development of the Company relies on contributions from current and future employees. The Company’s employees are its greatest asset. The Company’s ability to attract, retain and develop talented employees is therefore considered essential to the Company’s future activities, results and financial position.

The Company’s development to date in respect of management, development and marketing has been driven extensively by individuals. The loss of one or more of these employees may have a material adverse effect on the Company’s business. However, there can be no assurance that this will not happen.

Unsatisfactory contribution margins of services may impact on the results.

The Company’s earnings rely strongly on its ability to secure satisfactory contribution margins of its contracts. The contribution margin depends on the Company’s ability to maintain a high level of expertise within its areas of business and maintaining a stable cost base, a lack of the same will have negative consequences.

III. Industry specific risk factors

Competitors may drive the Company out of the market.

The Company is competing in an ever-changing market with many businesses in Europe, including a few in The Netherlands.

There is a risk that one or more competitors will become a market leader in the provision of staff. This and/or the general competition from other development businesses may entail a substantial reduction of the Company’s revenue and may in that case materially affect the Company’s results going forward.

The aerospace market may be affected by ESA membership.

The Company’s market segment mainly consists of the institutional European aerospace market and exclusively exists owing to ESA membership.

If the very unlikely case that the Netherlands terminates its membership or reduces its contribution considerably, a very substantial part of HE Space’s market will cease to exist, and this will have a very significant impact on the Company’s activities, results and financial position. Changes to the geographical return rules may affect the Company’s earnings. Lastly, stricter enforcement of the rules, e.g. so that the four large countries (Great Britain, France, Italy and Germany) of ESA’s 22-member states gain a larger portion of the contracts, will make the market conditions much more difficult.

This also involves a risk to the Company’s future development in the European space industry. At the last ministerial meeting in November 2023 the ministers agreed to an increase in its overall budget by 10% in 2024, so any such risk is thought to be minimized.

ESA contracts involve a process in which the individual companies that have submitted bids for the individual project are assessed, and the individual project participants are subsequently selected. A kick-off meeting is held where the selected project participant receives approval to commence the project, but the actual contract is signed at a later point in time. This process involves a risk that the contracts are never signed and that only the approved part is completed. HE Space has never experienced a situation where a kicked-off contract was not completed, but there is no guarantee that this will not happen. In that case, such a process may involve substantial losses for the Company.

Warranty costs

HE Space’s staff are not directly involved in the development/delivery of products; therefore, the warranty risk is thought to be minimal.

IV. Continuity of the company

Overall, the continuity risk is perceived as relatively low for the following reasons:

Long-term contracts in place

HE Space has been one of the preferred suppliers for ESA staff in Europe for many years. The company has long-term contracts in place, ensuring stable growth and continuity as the poaching of staff between competitors is restricted under the contracts. Every 5 years the contracts are renewed, but in principle the contractor keeps the positions already in place. Which means there is no risk of sudden revenue loss. Also, we have decided to expand our proposal writing capacities to increase the number of bids submitted. This has led to new contracts and customers.

The current EFC2 framework contract has been extended until the end of 2026.

Stability of the business

The business has always been very stable. Even throughout the Covid crisis and subsequent lockdowns, the business has been stable and even growing, which reflects the stability of the business and the flexibility of the organization to adapt to changing situations. The company is very strong in terms of taking care of its people and employees, which we believe is one of the major strengths of the company and a key reason why customers prefer to work with HE Space, because we take good care of our staff.

The challenge in this area is to support the transition to Services, for which the company will have the support of the Group and gain from its experience.

Business Development

To mitigate the risk of losing contracts, we increased our Business Development (BD) activities and capacities, hiring new BD managers and focusing on writing and submitting new proposals outside the current customers and contracts. Also, we focused on new business segments such as the New Space sector, exploring new revenue opportunities and potential business models.

Long term budgets in place

All government spending in the space industry comes from ESA and the EU. The budgets for the space sector are committed long term as some programs run for >20 years. ESA budgets are generally reviewed every 5 years by the member states.

The Dutch government has decided to support the Space market and substantial investments have been announced.

Space market is growing.

The space sector is becoming increasingly important for the EU, which also means that the space budget committed by ESA is growing and expanding into new areas and domains. On top of this, billions of euros are invested in New Space sector by industrial players and new space ventures, focusing on applications, services, space tourism and space defense. The one need that all these companies share is they all need qualified and skilled staff. This offers many new opportunities for HE Space, as we are one of the few recruiting companies dedicated to and specializing in space.

The company has always been stable and the cash flow positive.

Since its inception. HE Space has grown steadily on a yearly basis and as a result, has been cash flow positive.

Rolling cash flow forecast

To monitor our expected liquidity and prevent unwanted surprises, our Finance department keeps a detailed and comprehensive cash flow forecast to track and plan all inbound and outbound payments on a periodic basis.

Limited investment and/or working capital need.

The company is financed with equity and its own resources provided by the shareholder. The nature of the business is contracting and because of the advanced payment system under the ESA frame contract, the company does not need extensive working capital or external funding to finance its operation. The risk of running out of cash is therefore low.

Bank facility in place for short-term cash flow needs.

HE Space has a longstanding relationship with Rabobank, who understand the business and working of the ESA frame contract. The company has a working facility as back-up in place, in case of short-term cash flow needs.

Integration within Sopra Steria

The integration into the Sopra Steria Group IT system is expected for the beginning of 2026 and will impact some of our processes. As for all changes, this has to be managed in order to decrease as much as possible the impact on the operations, the customers’ satisfaction, and the employees’ well-being.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2024.

The principal activity of the company continued to be that of human resources provision and management of human resource functions.

The results for the year are set out on page 17.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Ellacotts Audit Services Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

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; and

• 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.

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.

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

We have audited the financial statements of HE Space Operations Ltd (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows 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 31 December 2024 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 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.

Other information

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.

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.

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.

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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

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.

As part of an audit in accordance with ISAs (UK),we exercise professional judgment and maintain professional scepticism throughout the audit. We performed the following procedures:

• Enquiry of management, those charged with governance around actual and potential litigation and claims.

• Enquiry of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations.

• Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.

• Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.

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.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

HE Space Operations Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Link C, Ground Floor Hq Building, Harwell Science & Innovation Campus, Didcot, England, OX11 0RL.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

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. Despite the net current liabilities and overall net liability position of the balance sheet, the company has the ongoing support of the parent company for a period of at least twelve months following the date of signing these financial statements.

Thus, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

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.

The company recognises revenue from the following major sources:

The nature, timing of satisfaction of performance obligations and significant payment terms of the company's major sources of revenue are as follows:

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 are recoverable.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation 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:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset 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 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 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.

Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks.

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, 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, 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.

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.

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.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares 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.

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.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

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.

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.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

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.

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.

In the opinion of the directors there are no significant accounting estimates or judgements.

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

The actual charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

The immediate parent is HE Space Operations B.V., registered in the Netherlands at the following address; Huygensstraat 44, 2201 DK Noordwijk, the Netherlands.

The ultimate parent is Sopra Steria Group, registered in France at the following address: 1, Avenue André-Marie Ampère 31770 Colomiers.

A prior period adjustment was made in the financial statements to reflect expenses passed on to the parent company. The total of these expenses were £209,340 and the adjustment was made between sales and cost of sales. Therefore, there was no impact on the balance sheet, nor to the profit for that period.