MS Modernisation Services UK, Ltd. - Limited company accounts 20.1

REGISTERED NUMBER: 04283023 (England and Wales)

Report of the Directors and

Financial Statements for the Period 1 January 2019 to 29 February 2020

for

MS Modernisation Services UK, Ltd.

Page

Company Information

1

Report of the Directors

2

Report of the Independent Auditors

4

Income Statement

6

Balance Sheet

7

Notes to the Financial Statements

8

DIRECTORS:

A W Hicks

G J Wilson

REGISTERED OFFICE:

Ditton Park

Riding Court Road

Datchet

Berkshire

SL3 9LL

REGISTERED NUMBER:

04283023 (England and Wales)

SENIOR STATUTORY AUDITOR:

Jeremy Harrod FCCA

AUDITORS:

Grant Harrod Lerman Davis LLP

Chartered Accountants

Statutory Auditor

1st Floor

Healthaid House

Marlborough Hill

Harrow

Middlesex

HA1 1UD

The directors present their report with the financial statements of the company for the period 1 January 2019 to 29 February 2020.

FUTURE DEVELOPMENTS

The Directors continue to look for opportunities for the company and hope to expand the business in the coming year. These opportunities include gaining new customers, new potential geographical areas, and new potential industries.

EVENTS SINCE THE END OF THE PERIOD

Information relating to events since the end of the period is given in the notes to the financial statements.

DIRECTORS

The directors who have held office during the period from 1 January 2019 to the date of this report are as follows:

S Miller - resigned 2 July 2019

B Edenfield - resigned 2 July 2019

A W Hicks - appointed 2 July 2019

G J Wilson - appointed 2 July 2019

COVID-19

Since the year-end the coronavirus pandemic has impacted upon many companies. At present, the Directors' cannot currently quantify the financial impact the pandemic will have on the company. The Directors' have also considered a number of scenarios and although careful and close management of income and expenditure will be needed, the Directors' believe the company will return to greater financial strength once the economy begins to grow again.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Grant Harrod Lerman Davis LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies.

ON BEHALF OF THE BOARD:

A W Hicks - Director

23 February 2021

Opinion

We have audited the financial statements of MS Modernisation Services UK, Ltd. (the 'company') for the period ended 29 February 2020 which comprise the Income Statement, Balance Sheet and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 29 February 2020 and of its loss for the period then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Report of the Directors has been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit; or

-	the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption from the requirement to prepare a Strategic Report or in preparing the Report of the Directors.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page two, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Jeremy Harrod FCCA (Senior Statutory Auditor)

for and on behalf of Grant Harrod Lerman Davis LLP

Chartered Accountants

Statutory Auditor

1st Floor

Healthaid House

Marlborough Hill

Harrow

Middlesex

HA1 1UD

23 February 2021

TURNOVER

1,457,603

3,831,759

Cost of sales

534,128

848,910

GROSS PROFIT

923,475

2,982,849

Administrative expenses

1,316,978

908,748

OPERATING (LOSS)/PROFIT and

(LOSS)/PROFIT BEFORE TAXATION

(393,503

)

2,074,101

Tax on (loss)/profit

-

-

(LOSS)/PROFIT FOR THE FINANCIAL PERIOD

(393,503

)

2,074,101

FIXED ASSETS

Intangible assets

5

-

-

Tangible assets

6

1,290

2,900

1,290

2,900

CURRENT ASSETS

Debtors

7

423,979

708,532

Cash at bank

63,251

1,269,585

487,230

1,978,117

CREDITORS

Amounts falling due within one year

8

1,893,658

2,992,652

NET CURRENT LIABILITIES

(1,406,428

)

(1,014,535

)

TOTAL ASSETS LESS CURRENT LIABILITIES

(1,405,138

)

(1,011,635

)

CAPITAL AND RESERVES

Called up share capital

9

2

2

Retained earnings

(1,405,140

)

(1,011,637

)

SHAREHOLDERS' FUNDS

(1,405,138

)

(1,011,635

)

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the Board of Directors and authorised for issue on 23 February 2021 and were signed on its behalf by:

A W Hicks - Director

1.	STATUTORY INFORMATION

MS Modernisation Services UK, Ltd. is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Turnover

Turnover represents income receivable for the year, excluding value added tax.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2006, is being amortised evenly over its estimated useful life of five years.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Plant and machinery etc

-

at varying rates on cost

Taxation

Taxation for the period comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the period end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Related party disclosure

The company has taken advantage of the exemption conferred by Financial reporting Standard 8, 'Related party disclosures', not to disclose transactions with members or investees of the group headed by ModSys International Limited on the grounds that at least 90% of the voting rights in the company are controlled within that group and the company is included in consolidated financial statements.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the period was 6 (2018 - 6 ) .

4.	OPERATING (LOSS)/PROFIT

The operating loss (2018 - operating profit) is stated after charging:

period

1.1.19

to

year ended

29.2.20

31.12.18

£

£

Depreciation - owned assets

1,610

1,390

5.	INTANGIBLE FIXED ASSETS

Goodwill

£

COST

At 1 January 2019

and 29 February 2020

538,492

AMORTISATION

At 1 January 2019

and 29 February 2020

538,492

NET BOOK VALUE

At 29 February 2020

-

At 31 December 2018

-

6.	TANGIBLE FIXED ASSETS

Plant and

machinery

etc

£

COST

At 1 January 2019

and 29 February 2020

307,067

DEPRECIATION

At 1 January 2019

304,167

Charge for period

1,610

At 29 February 2020

305,777

NET BOOK VALUE

At 29 February 2020

1,290

At 31 December 2018

2,900

7.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2020

2018

£

£

Trade debtors

168,544

373,570

Other debtors

255,435

334,962

423,979

708,532

8.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2020

2018

£

£

Trade creditors

11,850

87,599

Amounts owed to group undertakings

1,593,165

2,461,927

Taxation and social security

74,402

54,733

Other creditors

214,241

388,393

1,893,658

2,992,652

9.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2020

2018

value:

£

£

2

Ordinary

1

2

2

10.	POST BALANCE SHEET EVENTS

Since the year-end the coronavirus pandemic has impacted both nationally and internationally. At this stage the Directors' are unable to estimate with any certainty the financial impact that the pandemic will have on the company. However, the directors have taken steps to minimise the financial impact on the company.

11.	ULTIMATE CONTROLLING PARTY

On 2 July 2019 the entire share capital of ModSys International, Limited, the ultimate controlling party was acquired by Transoft Group Limited, a company incorporated in England with registration number 01974716.

12.

PENSIONS

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 charge for the directors and employees amounted to £NIL (2018 - £NIL). Contributions amounting to £NIL (2018 - £NIL) were payable to the fund and are included in creditors.