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Registered number: 02980574
DATRIX LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE YEAR ENDED 30 JUNE 2019
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DATRIX LIMITED
REGISTERED NUMBER:02980574
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BALANCE SHEET
AS AT 30 JUNE 2019
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Debtors: amounts falling due after more than one year
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Debtors: amounts falling due within one year
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Current asset investments
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Creditors: amounts falling due within one year
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Net current (liabilities)/assets
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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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Shareholders' (deficit)/funds
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DATRIX LIMITED
REGISTERED NUMBER:02980574
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BALANCE SHEET (CONTINUED)
AS AT 30 JUNE 2019
The financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies' regime as set out within part 15 of the Companies Act 2006 and in accordance with the provisions of FRS 102 Section 1A - small entities.
The profit and loss account has not been delivered to the Registrar of Companies in accordance with the special provisions applicable to companies subject to the small entities regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 4 to 18 form part of these financial statements.
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2019
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At 1 July 2017 (as previously stated)
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At 1 July 2017 (as restated)
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Comprehensive income for the year
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Loss for the year (as restated)
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Contributions by and distributions to owners
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Dividends: Equity capital
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Transfer to/from retained earnings
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At 1 July 2018 (as previously stated)
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At 1 July 2018 (as restated)
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Comprehensive income for the year
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Contributions by and distributions to owners
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Dividends: Equity capital
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As stated in note 15, subsequent to the balance sheet date dividends totalling £50,000 were repaid by a director to the Company.
The fair value reserve relates to increase in the value of tangible fixed assets and current asset investments in excess of their original cost allowing for any associated deferred tax provision.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Datrix Limited is a private company, limited by shares, domiciled and incorporated in England and Wales (registered number: 02980574). The address of the registered office is Gray's Inn House, Fifth Floor, 127 Clerkenwell Road, London, EC1R 5DB.
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 preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The directors have reviewed cash flow forecasts for at least the 12 month period from the date of signing and have assessed to the best of their abilities, the current and potential future impact of the COVID-19 pandemic within the forecasts, to ensure that the Company can continue in maintaining its day-to-day services to its customers and fulfil its statutory obligations.
The directors have reviewed the potential long term impact of COVID-19 on the forecasts. A number of actions have also been taken as a consequence of the pandemic, including short-term wage cuts, redundancies and deferral of discretionary expenditure, until such time as the crisis is over and steady state of operation is achieved. The Company also made use of the HM Government support initiative to defer payment of VAT.
The Company continues to utilise the debt factoring arrangement in place with RBS, and the directors believe that the Company is dependent on this facility for at least the 12 month period from the date of signing. The Company breached the financial covenants of this facility during the financial year. These financial statements do not include any adjustments which may arise from this breach. Although no formal waiver has been obtained from RBS, the directors are in regular communication with the team at RBS and are comfortable on the availability of this financing arrangement for the foreseeable future. The directors believe that an alternative debt factoring provider could readily be secured on similar terms should a change of lenders be required.
The Company made an operating loss in the year ended 30 June 2019 of £2,006,884 (2018: operating loss £1,423,867). The Company has net current liabilities of £2,301,152 (2018: net current assets of £264,127).
The Company has continued to trade providing key infrastructure and network support to its clients in the current COVID-19 impacted environment. However, the impact and duration of the COVID-19 pandemic is highly subjective and there is no guarantee that the expected trading volumes forecast for the next 12 months will be achieved.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
2.Accounting policies (continued)
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Going concern (continued)
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After making inquiries and considering the uncertainties described above, the directors are of the opinion that the use of the going concern basis remains appropriate however a material uncertainty exists that may cast significant doubt upon the Company's ability to continue as a going concern and that, therefore, the Company may be unable to realise its assets and discharge its liabilities in the normal course of business and at the amounts stated in these financial statements.
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, rebates, value added tax and other sales taxes.
Sales of goods relating to the installation of infrastructure are recognised when goods are delivered or installed and title has passed.
Turnover arising from the provision of maintenance services is recognised on a straight-line basis over the term of the maintenance period.
Turnover relating to the delivery of installation services is recognised based on the stage of completion at the balance sheet date.
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.
Intangible assets relate to trademarks acquired by the Company. The initial cost of these was capitalised with any renewal costs being written off when incurred. The directors are of the opinion that whilst these trademarks are in place they provide security to the business and in particular protect the Company name and identity. As such, the directors have estimated their useful life to be in accordance with the life of the trademarks concerned which is indefinite.
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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.
At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.
Depreciation is provided on the following basis:
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5 years straight-line/over the term of relevant customer contracts
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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.
Investments in listed company shares are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Statement of Comprehensive Income for the period.
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow-moving items.
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 the Statement of Comprehensive Income.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
2.Accounting policies (continued)
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Provisions for liabilities
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Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to the Statement of Comprehensive Income in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance Sheet.
Financial assets and financial liabilities are recognised in the Balance Sheet when the Company becomes a party to the contractual provisions of the instrument.
Investments in listed shares are classified as basic financial instruments. They are initially measured at transaction price and subsequently measured at fair value, with changes in fair value being recognised in the Statement of Comprehensive Income. Fair value is determined using the quoted bid price at the balance sheet date.
Trade and other debtors and creditors are classified as basic financial instruments and measured at initial recognition at transaction price. Debtors and creditors are subsequently measured at amortised cost using the effective interest rate method. A provision is established when there is objective evidence that the Company will not be able to collect all amounts due.
Cash and cash equivalents are classified as basic financial instruments and comprise cash in hand and at bank, short-term bank deposits with an original maturity of three months or less and bank overdrafts which are an integral part of the Company’s cash management.
Financial liabilities and equity instruments issued by the Company are classified in accordance with the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
Interest bearing bank loans, overdrafts and other loans which meet the criteria to be classified as basic financial instruments are initially recorded at the present value of cash payable to the lender, which is ordinarily equal to the proceeds received net of direct issue costs. These liabilities are subsequently measured at amortised cost, using the effective interest rate method.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
2.Accounting policies (continued)
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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.
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.
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Finance leases: the Company as lessee
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Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership of the leased asset to the Company. All other leases are classified as operating leases.
Assets held under finance leases are recognised initially at the fair value of the leased asset (or, if lower, the present value of minimum lease payments) at the inception of the lease, or when the asset is brought into use, whichever occurs late. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation using the effective interest method so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are deducted in measuring profit or loss. Assets held under finance leases are included in tangible fixed assets and depreciated and assessed for impairment losses in the same way as owned assets.
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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.
Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight-line basis over the lease term.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
2.Accounting policies (continued)
Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.
Finance costs are charged to the Statement of Comprehensive Income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
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.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
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Judgements in applying accounting policies and key sources of estimation uncertainty
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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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The directors consider that the following key sources of estimation uncertainty have had the most significant effect on amounts recognised in the financial statements:
Revenue recognition
The estimate for the stage of completion of service installations is based upon the historical installation periods of similar contracts. The Company review all installations that are not reflective of the historical installation periods separately. The revenue recognised in relation to such installations is adjustment accordingly.
Depreciation
The directors have applied depreciation policies which are summarised in note 2.5 that they consider match the useful life of the assets.
Assets held under finance lease are depreciated over 5 years to match the typical length of sales contracts between the Company and its customers whereby the sales contract includes the provision of network infrastructure equipment.
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The average monthly number of employees, including directors, during the year was 43 (2018: 48).
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
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At 1 July 2018 (as previously stated)
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At 1 July 2018 (as restated)
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At 1 July 2018 (as previously stated)
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At 1 July 2018 (as restated)
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At 30 June 2018 (as restated)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
6.Tangible fixed assets (continued)
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At 1 July 2018 (as previously stated)
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At 1 July 2018 (as restated)
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At 1 July 2018 (as previously stated)
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At 1 July 2018 (as restated)
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At 30 June 2018 (as restated)
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The net carrying amount of assets held under finance leases is £427,211 (2018: £614,857).
Depreciation methods
During the year ended 30 June 2019, the Company reassessed the depreciation methods and amended from reducing balance to straight-line for Plant and machinery, and Fixtures and fittings to more accurately align the depreciation policies with the useful lives of these categories of asset.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
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Due after more than one year
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Prepayments and accrued income
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The trade debtors balance includes £1,559,413 (2018: £1,946,449) which forms part of a debt factoring arrangement. These assets have not been derecognised from the Balance Sheet because the Company remains ultimately responsible for any unpaid balances, so the directors consider significant risks to have been retained.
Within Other debtors as at 30 June 2018 was an amount of £2,373,123 relating to funds due to the Company for the sale of a long leasehold property.
Also included within Other debtors are amounts due from a director totalling £358,168 (2018: £338,560). The highest overdrawn balance during the year was £358,168.
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Current asset investments
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(Losses)/gains in foreign exchange
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Listed investments are shown at market value.
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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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Other taxation and social security
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Obligations under finance lease
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Accruals and deferred income
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Creditors: amounts falling due after more than one year
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Obligations under finance lease
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Bank loans
Within Bank and other loans falling due within one year in 2018 were bank loans held by National Westminster Bank Plc., secured against either the long leasehold property, by way of guarantees provided by the directors or against assets owned by the directors. Following the sale of the long leasehold property during the prior period, these loans were repaid in full during the current period and all guarantees were released.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
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Dilapidations provision has been made in respect of the Company's leased property at Gray's Inn House. These are reviewed annually and adjusted as necessary to reflect the best estimates of the liability.
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A prior year adjustment has been recognised in these financial statements to accurately reflect the nature and substance of certain equipment financing arrangements as finance leases under FRS102 Section 20. Tangible fixed assets, Bank and other loans and Obligations under finance lease have been restated alongside interest and depreciation.
The adjustment has been made retrospectively and therefore impacts the Balance Sheet, Statement of Comprehensive Income and Statement of Changes in Equity for the year ended 30 June 2018 and prior period reserves.
Summary of prior year accounting impact:
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Loss for the year (as previously stated)
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Loss for the year (as restated)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
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Prior year adjustment (continued)
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Amounts falling due within one year
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Obligations under finance lease
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Amounts falling due after more than one year
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Obligations under finance lease
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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 amounted to £77,051 (2018: £54,460). There were no outstanding or prepaid contributions at either the beginning or end of the financial year.
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Related party transactions
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During the period under review, the Company made payments to a director amounting to £11,820 (2018: £11,820) in respect of rent paid for the use of his property. There was no balance outstanding at the balance sheet date.
During the period under review, the Company made payments to Meguro LLP (a business in which a director is a member) amounting to £12,000 (2018: £14,000) in respect of fees payable as a non-executive director. These payments were made in accordance with a service contract between the Company and Meguro LLP and there was no balance outstanding at the balance sheet date.
Included in Other debtors are amounts due by a director of the Company amounting to £358,168 (2018: £345,935). During the year, the Company advanced £165,583 (2018: £326,284) to the director. The advances are unsecured interest-free and repayable on demand. During the year, amounts of £153,350 (2018: £231,768) were repaid to the Company.
During the year the Company disposed of listed investments to a director for £145,000 (2018: £Nil).
During the year dividends amounting to £300,000 (2018: £10,000) were paid to the directors of the Company. Subsequent to the balance sheet date, dividends totalling £50,000 were repaid by a director to the Company and commitment to repay the remaining dividend amounts was confirmed by the directors.
Total remuneration in the year, including fees and expenses, for directors and key management personnel amounted to £698,187 (2018: £533,533).
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
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Post balance sheet events
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The COVID-19 worldwide pandemic is affecting companies in a number of industries including markets in which the Company, its suppliers and customers operate. At the date of the approval of these financial statements, the directors believe it difficult to estimate the total impact that COVID-19 will have on the Company but the pandemic is expected to significantly reduce contract renewals from customers in the private sector. Due to the timing of the outbreak being after the balance sheet date, COVID-19 has been treated as a non-adjusting post balance sheet event.
On 28 February 2020, the Company granted 3 employees EMI Share Options over 500 Ordinary £1 shares respectively. These Options were exercised by the respective employees on 29 April 2020, giving them each a 5% shareholding in the Company via share transfers from existing shareholders.
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Ultimate controlling party
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The ultimate controlling parties is the shareholders by virtue of their shareholding in the business. Day-to-day control vests with the directors and key management personnel.
The auditor's report on the financial statements for the year ended 30 June 2019 was unqualified.
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In their report, the auditors drew attention by way of emphasis of matter to the material uncertainty relating to going concern and drew attention to notes 2.2 and 15 in the financial statements.
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The audit report was signed on 18 August 2020 by Chetan Mistry (Senior Statutory Auditor) on behalf of Nexia Smith & Williamson.
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