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Registered number: 07613922
SIPSYNERGY LIMITED
FINANCIAL STATEMENTS
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE YEAR ENDED 30 JUNE 2019
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SIPSYNERGY LIMITED
REGISTERED NUMBER: 07613922
BALANCE SHEET
AS AT 30 JUNE 2019
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Debtors: amounts falling due within one year
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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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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.
Page 1
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SIPSYNERGY LIMITED
REGISTERED NUMBER: 07613922
BALANCE SHEET (CONTINUED)
AS AT 30 JUNE 2019
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
................................................
Mr T Gold
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The notes on pages 3 to 12 form part of these financial statements.
Page 2
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SIPSYNERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Sipsynergy Limited is a limited liability company incorporated in England and Wales. The address of its registered office and principal place of business is Wessex House, Upper Market Street, Eastleigh, Hampshire, SO50 9FD
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 Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The following principal accounting policies have been applied:
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP.
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 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 the Statement of comprehensive income within ''administrative expenses''
Page 3
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SIPSYNERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
2.Accounting policies (continued)
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:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
∙the Company has transferred the significant risks and rewards of ownership to the buyer;
∙the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙the amount of revenue can be measured reliably;
∙it is probable that the Company will receive the consideration due under the transaction; and
∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Where the risks and rewards of ownership transfer to the buyer over a fixed term, revenue from the sale of goods is calculated by reference to the percentage of completion of the transaction at the end of the reporting period.
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.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to the Statement of comprehensive income on a straight line basis over the lease term.
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
Page 4
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SIPSYNERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
2.Accounting policies (continued)
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 the Statement of comprehensive income when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.
Tax is recognised in the Statement of comprehensive income, 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 balance sheet 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 Balance sheet 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 balance sheet date.
Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Page 5
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SIPSYNERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
2.Accounting policies (continued)
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:
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Hardware held with third parties
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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.
The Company enters into term contracts with customers that use hardware owned by the Company. With these term contracts being cancellable and the customer having the option to return the goods on completion of the contract, it is considered that the Company retains ownership of the hardware for the duration of the contract. The hardware is depreciated on a straight line basis over the term of contract.
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Impairment of tangible and intangible assets
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Assets that are subject to depreciation or amortisation are assessed at each balance sheet date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each balance sheet date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first outbasis. Work in progress and finished goods include labour and attributable overheads.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Page 6
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SIPSYNERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
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.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.
Short term debtors and creditors are measured at the transaction price. Other financial instruments,
including loans, are measured initially at fair value, net of transaction costs, and are measured
subsequently at amortised cost using the effective interest method, less any impairment.
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The average monthly number of employees, including directors, during the year was 16 (2018 - 23).
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At 1 July 2018 (as restated)
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At 1 July 2018 (as restated)
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At 30 June 2018 (as restated)
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Page 7
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SIPSYNERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
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Hardware held with third parties
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At 1 July 2018 (as restated)
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At 1 July 2018 (as restated)
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At 30 June 2018 (as restated)
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At 1 July 2018 (as restated)
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At 1 July 2018 (as restated)
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At 30 June 2018 (as restated)
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Page 8
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SIPSYNERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
5.Tangible fixed assets (continued)
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The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
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Finished goods and goods for resale
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Amounts owed by group undertakings
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Amounts owed by connected parties
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Prepayments and accrued income
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Cash and cash equivalents
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Page 9
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SIPSYNERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Obligations under finance lease and hire purchase contracts
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Accruals and deferred income
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Obligations under finance lease and hire purchase contracts are secured against the assets to which they relate.
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Creditors: Amounts falling due after more than one year
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Obligations under finance leases and hire purchase contracts
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Allotted, called up and fully paid
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100 (2018 - 100) Ordinary Shares shares of £1.00 each
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Page 10
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SIPSYNERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Fixed assets
Computer software to the value of £64,987 was reclassified from tangible fixed assets to intangible fixed assets to better reflect the nature of the balance. From this balance £60,000 has been impaired to £nil value in 2018 in respect of unidentifiable licenses.
Hardware held with third parties to the value of £30,852 was reclassified to tangible fixed assets from other debtors to better reflect the nature of the balance.
Stocks
Stock totalling £15,364 has been reclassified from other debtors to better reflect the nature of the balance.
Debtors
Prepayments totalling £42,799 has been reclassified from other debtors to better reflect the nature of the balance.
Accrued income totalling £19,188 has been reclassified from other creditors to better reflect the nature of the balance.
Creditors
An amount of £89,423 was deferred in respect of directors' salaries unpaid in 2018. This has been included in other creditors.
An amount of £17,845 has subsequently been accrued for in 2018 in respect of hardware received but not yet invoiced by the supplier and £5,000 in respect of the audit fee.
An amount of £220,075 has been reclassified from other creditors to accruals and deferred income in 2018 to better reflect the nature of the liability.
The above adjustments has resulted in a reduction of profits and net assets by £172,268.
The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amount to £26,571 (2018: £33,625). Contributions totalling £5,027 (2018: £1,495) were payable to the fund at the balance sheet date.
Throughout the year the company has been controlled by Hosted Network Services Limited, the immediate parent company. The parent company is exempt from preparing consolidated accounts.
The Directors believe there is no ultimate controlling party, for the following reasons:
• The institutional investor position is managed by YFM Equity Partners LLP on behalf of three separate investment vehicles,
• All of these investment vehicles are independent of each other,
• None of them has a majority stake,
• The largest of these is BSC VCT which is listed on the LSE and invested in by thousands of retail investors.
Page 11
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SIPSYNERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
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Related party transactions
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The Company is exempt from disclosing related party transactions with other 100% owed members of the group headed by Hosted Network Services Limited by virtue of FRS102 section 33.1A.
The Company has not entered into material transactions with any related parties that were not concluded under normal market conditions.
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Post balance sheet events
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The Company has entered into a new lease on 18 September 2019 for the rental of office space for 10 years at a charge of £45,000 per year. The non-cancellable period ends on 18 September 2024.
The auditors' report on the financial statements for the year ended 30 June 2019 was qualified.
The qualification in the audit report was as follows:
We were appointed as auditors of the Company on 26 August 2019 and thus did not observe the counting of the physical stock at the beginning of the year and we were unable to satisfy ourselves by alternative means concerning stock quantities held at 30 June 2018. Since opening stocks enter into the determination of the financial performance, we were unable to determine whether adjustments might have been necessary in respect of the profit for the year reported in the statement of comprehensive income.
The audit report was signed on 3 March 2020 by Louise Hallsworth FCA (Senior statutory auditor) on behalf of James Cowper Kreston.
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