Hybrid Software Group PLC Annual Report 2022 Hybrid Software Group Strategic report Governance Financial statements Other information Hybrid Software Group PLC Annual Report 2022 88 89 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 7. REVENUE (CONTINUED) For continuing operations, the ten largest customers represented 29.9% (2021: 42.3%) of the Group’s revenue, the five largest customers represented 24.5% (2021: 35.1%) of the Group’s revenue and the single largest customer represented 9.8% (2021: 13.94%) of the Group’s revenue. There was no customer (2021: 1) during the year that represented 10% or more of total revenue. Revenue from that customer totalled €nil million (2021: 1 customer in the Printhead Solutions segment totalling €6.74 million). Within the North & South America geographical market, €18.13 million of revenue was generated in the United States of America (2021: €16.98 million). During the year a customer in the Printing Software segment exercised an option in their contract, which extended the term of the contract and resulted in €1.65 million of revenue being recognised in the year. In 2021 a different customer exercised an option in their contract which resulted in €2.70 million of revenue being recognised in that year. The following table shows revenue expected to be recognised in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as at 31 December 2022. In thousands of euros next 12 months 12-24 months after 24 months Total Products and services 1,015 - - 1,015 After-sale support 2,458 251 155 2,864 Total 3,473 251 155 3,879 The Group applies the practical expedient in paragraph 63 of IFRS 15 and does not adjust the promised amount of consideration for the effects of a significant financing component for contracts where payments are due within one year. Contract balances The following table provides information about receivables, accrued revenue and contract liabilities from contracts with customers. In thousands of euros 2022 2021 Trade receivables (see notes 20 and 22) 6,563 7,050 Accrued revenue (see notes 20 and 22) 8,384 7,181 Contract liabilities (see note 28) (3,879) (3,592) The movement in the Group’s provision for impairment of trade receivables and accrued revenue was €202,000 (2021: €119,000). Revenue recognised in the year that was included in the contract liability balance at the beginning of the year was €1.05 million (2021: €1.55 million). 8. OTHER OPERATING EXPENSES Other operating expenses incurred during the year were: In thousands of euros 2022 2021 Acquisition related expenses (see note 34) 3 180 Total other operating expenses 3 180 9. OTHER INCOME In thousands of euros 2022 2021 Fair value adjustment to contingent consideration (see note 27) 4 3 Government grant - 30 Gain on disposal of IPv4 addresses 3,297 - Total other income 3,301 33 On 25 July 2022 the Group completed the sale of a range of IPv4 addresses that were no longer in use and had an historic acquisition cost of €nil. The pre-tax proceeds after commissions were €3.30 million, which have been received in full. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 10. EXPENSES BY NATURE In thousands of euros 2022 2021 Employee benefit expense (see note 13) 27,586 26,483 Depreciation expenses (see note 15 and 26) 1,559 1,394 Capitalisation of R&D expenses (see note 16) (3,981) (3,396) Amortisation of intangible assets (see note 16) 7,101 5,779 Other operating expenses, net of other operating income 4,766 5,057 Total operating expenses, net of other operating income 37,031 35,317 11. SERVICES PROVIDED BY THE GROUP’S AUDITOR In thousands of euros 2022 2021 For the audit of Parent and Consolidated Financial Statements 551 391 For the audit of the prior year Parent and Consolidated Financial Statements 114 - For other services provided: - audit of financial statements of subsidiaries of the company 109 93 Total fees payable to the Group’s auditor and its associates 774 484 12. REMUNERATION OF DIRECTORS The aggregate amount of remuneration (all salary, fees and bonuses, sums paid by way of expense allowance and money value of other noncash benefits) paid or receivable by Directors for the year was €1,225,000 (2021: €1,507,000). The aggregate value of gains made by Directors during the year on the exercise of share options was €nil (2021: €nil). The Group only operates defined contribution pension schemes for the Directors. During the year, for two Directors (2021: two), €27,000 (2021: €36,000) of pension contributions were paid. Further information is available in the Directors’ remuneration report on pages 55 to 62. 13. EMPLOYEE INFORMATION The average number of people, including executive Directors, employed by the Group during the year was: 2022 2021 By activity Research and development 102 89 Sales, maintenance and support 146 126 General and administrative 41 37 Total average number of people employed 289 252 Employee benefit expenses were made up of: In thousands of euros 2022 2021 Wages and salaries 22,942 22,137 Social security contributions 2,757 2,373 Medical insurance contributions 478 562 Pension contributions to defined contribution plans 986 867 Share-based payments (see note 30) - 15 Other employee related expenses 423 529 Total employee benefit expenses 27,586 26,483 Of the total employee benefit expenses, €1,243,000 (2021: €984,000) was recognised in cost of sales and €26,343,000 (2021: €25,499,000) was recognised in operating expenses within Selling, general and administrative expenses and Research and development expenses.
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