Hybrid Software Group PLC Annual Report 2022 Hybrid Software Group Strategic report Governance Financial statements Other information Hybrid Software Group PLC Annual Report 2022 90 91 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 14. FINANCE INCOME AND FINANCE EXPENSES In thousands of euros 2022 2021 Interest income 23 1 Finance income on net investment in leases 20 2 Total interest income 43 3 Forgiveness of government-backed COVID support loans in the United States - 867 Total finance income 43 870 Interest expense (29) (17) Interest expense on loan from related undertaking (see note 32) (245) (286) Interest on lease liabilities (see note 26) (150) (163) Total finance expenses (424) (466) Net finance (expenses)/income (381) 404 Net finance expense, net of loan forgiveness of €513,000 (2021: €463,000) has been disclosed within cash generated from operating activities in the consolidated statement of cash flows. 15. PROPERTY, PLANT AND EQUIPMENT In thousands of euros Leasehold improvements Computer equipment Office equipment Motor vehicles Total Cost At 31 December 2020 719 1,715 968 - 3,402 Additions 224 280 379 371 1,254 Additions – business combinations (see note 34) 26 36 118 187 367 Disposals - (170) (27) (75) (272) Effect of movement in exchange rates 56 122 77 - 255 At 31 December 2021 1,025 1,983 1,515 483 5,006 Additions 35 230 177 363 805 Additions – business combinations (see note 34) - 16 - - 16 Disposals - (9) (117) (72) (198) Effect of movement in exchange rates (46) (78) (65) (9) (198) At 31 December 2022 1,014 2,142 1,510 765 5,431 Depreciation At 31 December 2020 652 1,325 851 - 2,828 Charge for the year 61 235 191 83 570 Disposals - (169) (27) (65) (261) Effect of movement in exchange rates 49 92 66 - 207 At 31 December 2021 762 1,483 1,081 18 3,344 Charge for the year 84 278 232 144 738 Disposals - (6) (111) (72) (189) Effect of movement in exchange rates (39) (68) (55) (2) (164) At 31 December 2022 807 1,687 1,147 88 3,729 Net book value At 31 December 2021 263 500 434 465 1,662 At 31 December 2022 207 455 363 677 1,702 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 16. OTHER INTANGIBLE ASSETS In thousands of euros Software technology Customer relationships Patents Trade- marks Know-how Driver electronics Total Cost At 31 December 2020 40,314 13,710 2,689 575 764 3,055 61,107 Additions – purchased 77 - - - - - 77 Additions – internally developed 2,963 - - - - 433 3,396 Additions – business combinations (see note 34) 36,701 6,758 - - 210 - 43,669 Effect of movement in exchange rates 3,034 1,008 190 42 58 224 4,556 At 31 December 2021 83,089 21,476 2,879 617 1,032 3,712 112,805 Additions – purchased 75 - - - - - 75 Additions – internally developed 3,349 - - - - 632 3,981 Additions – business combinations (see note 34) 1,458 - - - 378 - 1,836 Effect of movement in exchange rates (2,020) (694) (144) (31) (6) (211) (3,106) At 31 December 2022 85,951 20,782 2,735 586 1,404 4,133 115,591 At 31 December 2020 37,633 13,530 2,537 575 764 2,494 57,533 Charge for the year 4,289 807 10 - 35 648 5,789 Effect of movement in exchange rates 2,796 996 188 42 58 198 4,278 At 31 December 2021 44,718 15,333 2,735 617 857 3,340 67,600 Charge for the year 5,512 908 10 - 458 223 7,111 Effect of movement in exchange rates (2,025) (705) (137) (31) (6) (175) (3,079) At 31 December 2022 48,205 15,536 2,608 586 1,309 3,388 71,632 Net book value At 31 December 2021 38,371 6,143 144 - 175 372 45,205 At 31 December 2022 37,746 5,246 127 - 95 745 43,959 On 1 December 2022, the Group acquired the intellectual property of Quadraxis Technology (“Quadraxis”) from Quadraxis Technology (“Quadraxis Technology”) for €75,000. This acquisition strengthens Hybrid Software Group’s offering in 3D and additive manufacturing solutions. The Group plans to integrate Quadraxis software into its extensive portfolio which includes other 3D applications such as iC3D and Met3D. The amortisation of patents is included in cost of sales, the amortisation charge for software technology and driver electronics is included in research and development expenses and amortisation charges related to any other intangible assets acquired through business combinations are included in selling, general and administrative expenses. The amortisation charge is recognised in the following line items in the consolidated statement of comprehensive income: In thousands of euros 2022 2021 Cost of sales 10 10 Selling, general and administrative expenses 1,366 842 Research and development expenses 5,735 4,937 Total amortisation charge 7,111 5,789 Intangible assets that are subject to amortisation are reviewed annually for indicators of impairment or whenever events or changes in accounting estimates indicate that the carrying amount may not be recoverable. If an indicator of impairment is identified, a full impairment review is performed with the calculations being based on the discounted cash flows over the remaining period of amortisation of the capitalised development expense and use the same discount rate and exchange rates that were used for the impairment review of Goodwill (see Note 17 ‘Goodwill’). These intangible assets are also allocated to a CGU containing goodwill and are tested annually for impairment as part of the goodwill impairment review (see Note 17 ‘Goodwill’). There was no significant change during the year to the indicators that were used at 31 December 2021 to identify the requirement to impair any of these intangible assets. It was concluded that no impairment was required for the year ended 31 December 2022 (2021: €nil).
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