Hybrid Software Group PLC Annual Report 2022 Hybrid Software Group Strategic report Governance Financial statements Other information Hybrid Software Group PLC Annual Report 2022 116 117 NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED) 1. PRINCIPAL ACCOUNTING POLICIES (CONTINUED) Share based payments The share option programme allows employees of the Group to acquire shares of the Company. The fair value of the options and shares granted is recognised as an employee expense, with a corresponding increase in equity, and is measured at grant date and spread over the period during which the employees become unconditionally entitled to the options or shares. The fair value of the options granted is measured using an appropriate valuation model, taking into account the terms and conditions upon which the options were granted. At each reporting date, the amount recognised as an expense is adjusted to reflect the actual number of share options or shares for which the related service and non-market conditions are met. The proceeds received, net of any directly attributable transaction costs, are credited to share capital for the par value of the shares issued and to share premium for the balance, when the share options are exercised. Going concern The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Directors have prepared cash flow forecasts for a period of at least 12 months from the date of approval of these financial statements and have no reason to believe that a material uncertainty exists that may cast significant doubt about the Group’s ability to continue as a going concern, notably because of a cash position of €6.32 million as at 31 December 2022 (2021: €9.23 million). Those forecasts take into account reasonably possible downsides, including the potential impact of the COVID-19 pandemic. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements. Refer to Note 2 ‘Basis of preparation’ of the consolidated financial statements for further details. 2. EMPLOYEES AND REMUNERATION OF DIRECTORS The Company employed an average of nil employees (including executive Directors) during the year (2021: nil). Directors’ emoluments are disclosed in the Directors' remuneration report on pages 55 to 62 and in Note 12 ‘Remuneration of Directors’ of the consolidated financial statements. 3. SERVICES PROVIDED BY THE COMPANY'S AUDITOR Fees payable to the Company’s auditor for the audit of the Company’s accounts and for other services are set out in Note 11 ‘Services provided by the Group’s auditor’ to the consolidated financial statements. 4. INVESTMENTS In thousands of euros Shares in subsidiary undertakings Cost At 31 December 2020 79,053 Additions – business combinations 79,826 At 31 December 2021 158,879 At 31 December 2022 158,879 Provision At 31 December 2021 and 31 December 2022 57,758 Net book value At 31 December 2021 101,121 At 31 December 2022 101,121 Additions from business combinations refer to the acquisitions of HYBRID Software Group S.à r.l. and ColorLogic GmbH. See Note 34 ‘Acquisitions’ of the consolidated financial statements for further details. Investments are assessed at each reporting date to determine whether there is any objective evidence that they are impaired. An investment is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that investment. An impairment loss in respect of an investment is measured as the difference between its carrying amount and the present value of the estimated future cash flows. The estimated fair value of the investments has been determined by the present value of future cash flows over a five-year period from 2023 to 2027 using the same discount rate and exchange rates that were used for the impairment review of Goodwill in the consolidated financial statements (see Note 17 ‘Goodwill’ of the consolidated financial statements). Management considers the use of a five-year period is justified because the underlying businesses have been established for between 10 and 25 years, have recurring revenues and continue to develop new products and gain new customers. NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED) 4. INVESTMENTS (CONTINUED) At 31 December 2021 the Company had the following interests in the ordinary share capital of group undertakings: Class of shares held Ownership interest Company name Registered office address Principal Activities 2022 2021 Global Graphics (UK) Limited 2030 Cambourne Business Park, Cambourne, CB23 6DW, UK Dormant holding company. Ordinary 100% 100% Global Graphics Software Limited* 2030 Cambourne Business Park, Cambourne, CB23 6DW, UK Computer software development, sales and technical support. Ordinary 100% 100% Global Graphics Software Incorporated* 5996 Clark Center Avenue, Sarasota, FL 34238, USA Computer software development, sales and technical support. Ordinary 100% 100% Global Graphics Kabushiki Kaisha* 610 AIOS Nagatacho Bldg, 2-17-17 Nagatacho, Chiyoda-ku, Tokyo 1000014, Japan Technical support of computer software. Ordinary 100% 100% Global Graphics EBT Limited 2030 Cambourne Business Park, Cambourne, CB23 6DW, UK Dormant. Ordinary 100% 100% Meteor Inkjet Limited Harston Mill, Royston Road, Harston, Cambridge, CB22 7GG, UK Design and supply of technology for digital inkjet printing. Ordinary 100% 100% Xitron, LLC* 4750 Venture Drive, Suite 200A, Ann Arbor, Michigan 48108, USA Computer software development, sales and technical support. n/a 100% 100% HYBRID Software Group S.à r.l.^ 19-21 route d’Arlon, LU-8009 Strassen, Luxembourg Holding company. Ordinary 100% 100% eXplio NV* Guldensporenpark 18, Block B, 9820 Merelbeke, Belgium Computer software development, sales and technical support. Ordinary 99.93% 99.93% HYBRID Software Development NV* Guldensporenpark 18, Block B, 9820 Merelbeke, Belgium Computer software development, sales and technical support. Ordinary 100% 100% HYBRID Integration LLC* Eight Neshaminy Interplex, Suite 111, Trevose, Pennsylvania 19053, USA Computer software sales and technical support. Ordinary 100% 100% HYBRID Software NV* Guldensporenpark 18, Block B, 9820 Merelbeke, Belgium Computer software sales and technical support. Ordinary 100% 100% HYBRID Software China Co. Limited* Room 2504, 25th Floor, Building 2, No. 900 Yishan Road, Xuhui District, Shanghai, China Computer software sales and technical support. Ordinary 100% 100% HYBRID Software GmbH* Uhlandstrabe 9, 79102 Freiburg, Germany Computer software sales and technical support. Ordinary 100% 100% HYBRID Software Italy SRL* Viale Sondrio 2, IT-20124 Milano, Italy Computer software sales and technical support. Ordinary 100% 100% HYBRID Software France SAS* 15 Rue Marsollier, F-75002 Paris, France Computer software sales and technical support. Ordinary 100% 100% HYBRID Software UK Limited* 2030 Cambourne Business Park, Cambourne, CB23 6DW, UK Computer software sales and technical support. Ordinary 100% 100% HYBRID Software Australia Pty Limited* Suite 2, Level 14, 9 Castlereagh Street, Sydney, NSW 2000, Australia Computer software sales and technical support. Ordinary 100% 100% HYBRID Software Iberia S.L.U.*+ Riera dels Frares, 8 – E08907 L’Hospitalet, Barcelona, Spain Computer software sales and technical support. Ordinary 100% 100% ColorLogic GmbH# Landersumer Weg 40, D-48431 Rheine, Germany Computer software development, sales and technical support. Ordinary 100% 100% * indirectly held by the Company. ^ HYBRID Software Group S.à r.l was acquired on 12 January 2021 # ColorLogic GmbH was acquired on 27 October 2021 + HYBRID Software Iberia S.L.U. was acquired on 21 December 2021 See Note 34 ‘Acquisitions’ of the consolidated financial statements for further details of these three acquisitions.
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