Company Registration No. 02948047 (England and Wales)
SYZYGY UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
SYZYGY UK LIMITED
COMPANY INFORMATION
Directors
Mr E Greiner
Mrs I Murphy
Secretary
Mr E Greiner
Company number
02948047
Registered office
Lacon House
84 Theobalds Road
London
WC1X 8NL
Auditor
KPSR LLP
58 High Street
Pinner
Middlesex
HA5 5PZ
SYZYGY UK LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 7
Income statement
8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 25
SYZYGY UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
- 1 -
The directors present the strategic report for the year ended 31 December 2020.
Fair review of the business
In 20
20
we experienced
a decrease
in revenue to £
9,145k (2019: £11,071k) due to the loss of some ongoing client projects.
Some cost savings have been realised along with income from sub-letting surplus office space.
All headcount and delivery resource has been moved to Unique Digital Marketing and therefore Syzygy UK will only maintain the office lease contract going forward. The operating business of Syzygy UK Limited has been consolidated under Unique Digital Marketing Limited however the company will continue to generate income for it's office space.
The financial stability of Syzygy UK is secured by Unique Digital Marketing and Syzygy AG.
The
results and financial position at the year end were
consider
ed to be satisfactory by the directors.
Principal risks and uncertainties
The main financial risks arising from the company's activities are economic risk, currency risk and operating risk. These are stringently monitored by the board of directors and were not considered to be significant at the
end of the reporting period
.
The company's policy in respect of currency risk is to closely monitor exchange rate fluctuations between Sterling, Euro and other major currencies. This may impact the operating profit attained by the company.
The company's policy in respect of economic and operating risk is to manage projects efficiently and exercise tight control on costs.
The directors have considered the impact of COVID – 19 on the company and its operations. At the time of signing this report, the outbreak has significantly subsided. Furthermore, the underlying trend of digitisation of processes in marketing and sales has accelerated. Consumer brands must step up to the challenge by accelerating their own digital transformation efforts. In addition, the government has lifted many restrictions that were put in place at the start of the pandemic.
The directors believe that whilst there will be some impact on its trade in the subsequent period, demand will start increasing in line with the easing of restrictions and the slow-down of the pandemic. The group has seen growth in sales from customers, particularly with clients operating in markets that are favourable to the pandemic.
The directors also believe that the company has enough reserves to sustain itself through the pandemic and has the full support of the parent company.
Other performance indicators
The company uses a number of non-financial performance indicators to monitor and drive the business including measures within the areas of technological advancement. Examples are
online impressions and user engagement.
Mr E Greiner
Director
22 July 2021
SYZYGY UK LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2020.
Principal activities
The principal activity of the company was that of provision of integrated portfolio of corporate internet solutions, from strategic consulting to project planning, concepts, designs and technical realisation.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr E Greiner
Mr P Stelter
(Resigned 25 March 2020)
Mrs I Murphy
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £250,000
(2019: £NIL). The directors do not recommend payment of a further dividend.
Post reporting date events
There are no matters that give rise to a post balance sheet event.
Future developments
The directors are confident that the
rental income received by
the business will underpin the long term stability and growth of the company.
Auditor
KPSR LLP
were appointed auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr E Greiner
Director
22 July 2021
SYZYGY UK LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2020
- 3 -
The directors are responsible for preparing the
Annual
Report 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.
SYZYGY UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SYZYGY UK LIMITED
- 4 -
Opinion
We have audited the financial statements of Syzygy UK Limited (the 'company') for the year ended 31 December 2020 which comprise the income statement, the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 31 December 2020 and of its profit for the year 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.
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
Auditor's
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
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Our evaluation of the directors' assessment of the entity's ability to continue to adopt the going concern basis of accounting included obtaining letters of support and considering the level of future earnings against future commitments of the entity.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
However, because not all future events or conditions can be predicted, this statement is not a guarantee as to
the company's ability to continue as a going concern. For example, the terms on which the United Kingdom may
withdraw from the European Union are not clear and it is difficult to evaluate all of the potential implications on
the company's trade, customers, suppliers and the wider economy.
SYZYGY UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SYZYGY UK LIMITED
- 5 -
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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 our audit
:
-
the information given in the strategic report and the directors' r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report have 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 identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
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.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, 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 is 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.
Auditor's 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 an auditor's report 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.
SYZYGY UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SYZYGY UK LIMITED
- 6 -
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below
.
Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.
The following laws and regulations were identified as being of significance to the entity:
-
Those laws and regulations considered to have a direct effect on the financial statements include UK financial reporting standards, Company Law, Tax and Pensions legislation, and distributable profits legislation.
-
Those laws and regulations for which non-compliance may be fundamental to the operating aspects of the business and therefore may have a material effect on the financial statements include
General Data Protection Requirement and general health and safety legislation.
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; review of board minutes; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
COVID-19 and uncertainties
With the current pandemic it is difficult to evaluate all the potential implications on the company’s trade,
customers, suppliers and wider economy.
SYZYGY UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SYZYGY UK LIMITED
- 7 -
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 an auditor's report 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.
Mr Rishil Patel (Senior Statutory Auditor)
For and on behalf of KPSR LLP
22 July 2021
Chartered Accountants
Statutory Auditor
58 High Street
Pinner
Middlesex
HA5 5PZ
SYZYGY UK LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2020
- 8 -
2020
2019
Notes
£
£
Revenue
3
9,145,393
11,071,059
Cost of sales
(7,767,776)
(10,635,698)
Gross profit
1,377,617
435,361
Administrative expenses
(1,351,714)
(1,439,734)
Other operating income/(expenses)
858
(48,599)
Operating profit/(loss)
4
26,761
(1,052,972)
Investment income
7
783
4,945
Finance costs
8
(7,534)
(7,302)
Profit/(loss) before taxation
20,010
(1,055,329)
Tax on profit/(loss)
9
24,102
37,045
Profit/(loss) for the financial year
44,112
(1,018,284)
The income statement has been prepared on the basis that all operations are continuing operations.
SYZYGY UK LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
- 9 -
2020
2019
£
£
Profit/(loss) for the year
44,112
(1,018,284)
Other comprehensive income
-
-
Total comprehensive income for the year
44,112
(1,018,284)
SYZYGY UK LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2020
31 December 2020
- 10 -
2020
2019
Notes
£
£
£
£
Fixed assets
Intangible assets
11
8,702
Property, plant and equipment
12
1,125,359
1,408,894
1,125,359
1,417,596
Current assets
Trade and other receivables falling due after more than one year
13
58,594
34,492
Trade and other receivables falling due within one year
13
2,709,775
3,413,143
Cash and cash equivalents
336,729
909,110
3,105,098
4,356,745
Current liabilities
14
(3,498,368)
(5,078,974)
Net current liabilities
(393,270)
(722,229)
Total assets less current liabilities
732,089
695,367
Non-current liabilities
15
(479,925)
(237,315)
Net assets
252,164
458,052
Equity
Called up share capital
18
1,000
1,000
Retained earnings
251,164
457,052
Total equity
252,164
458,052
The financial statements were approved by the board of directors and authorised for issue on 22 July 2021 and are signed on its behalf by:
Mr E Greiner
Director
Company Registration No. 02948047
SYZYGY UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
- 11 -
Share capital
Retained earnings
Total
Notes
£
£
£
Balance at 1 January 2019
1,000
1,475,336
1,476,336
Year ended 31 December 2019:
Loss and total comprehensive income for the year
-
(1,018,284)
(1,018,284)
Balance at 31 December 2019
1,000
457,052
458,052
Year ended 31 December 2020:
Profit and total comprehensive income for the year
-
44,112
44,112
Dividends
10
-
(250,000)
(250,000)
Balance at 31 December 2020
1,000
251,164
252,164
SYZYGY UK LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2020
- 12 -
2020
2019
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
23
(325,918)
(70,774)
Interest paid
(7,534)
(7,302)
Income taxes refunded
4,027
48,131
Net cash outflow from operating activities
(329,425)
(29,945)
Investing activities
Purchase of intangible assets
(12,695)
Purchase of property, plant and equipment
(790)
(336,004)
Proceeds on disposal of property, plant and equipment
7,051
16,705
Interest received
783
4,945
Net cash generated from/(used in) investing activities
7,044
(327,049)
Financing activities
Dividends paid
(250,000)
Net cash used in financing activities
(250,000)
Net decrease in cash and cash equivalents
(572,381)
(356,994)
Cash and cash equivalents at beginning of year
909,110
1,266,104
Cash and cash equivalents at end of year
336,729
909,110
SYZYGY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
- 13 -
1
Accounting policies
Company information
Syzygy UK Limited
("the company")
is a limited company domiciled and incorporated in England and Wales.
The registered office is
Lacon House, 84 Theobalds Road, London, WC1X 8NL.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 and FRC Abstracts.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements are prepared on a going concern basis, under the historical cost convention.
The preparation of financial statements in conformity with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 2.
1.2
Going concern
A
true
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future.
The group will also continue to support the subsidiary.
Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Revenue
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services rendered, stated net of discounts and Value Added Tax. When the consideration receivable in cash or cash equivalents is deferred, and the arrangement constitutes in effect a financing transaction, the fair value of the consideration is measured at the present value of all future receipts determined using an imputed rate of interest, normally the rate that discounts the nominal amount of consideration to the cash sales price. In respect of the rendering of services, turnover represents revenue measured by reference to the stage of completion of the contract activity or the service transaction at the end of the reporting period.
Rendering of Services
When the outcome of a project contract can be estimated reliably in terms of completion, future costs to complete and collectability of billings, the Company recognises revenue and expenses on the contract by reference to the stage of completion of the contract at the end of the reporting period. The stage of completion is determined on the basis of the proportion of the contact costs incurred and time spent to date over the total contract.
Interest Income
Interest income is recognised using the effective interest method.
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date
where
it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the
fair
value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
SYZYGY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 14 -
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Software licences
Straight line over the life of the licence
1.5
Property, plant and equipment
Property, plant and equipment
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Land and buildings short leasehold
Straight line over the life of the lease, over 10 years
Fixtures and fittings
20% on cost
Computer equipment
33% on cost
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to the income statement
.
1.6
Impairment of non-current assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in
the income statement
, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
SYZYGY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 15 -
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other receivables and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Trade receivables
, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.
Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through the income statement
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in the income statement.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
SYZYGY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 16 -
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities
,
including trade and other payables, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at market rate of interest
.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective rate method.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Other financial liabilities
Derivatives, including interest swaps and foreign exchange contracts, are not financial instruments. Derivatives are initially recognised at fair value on the date a derivative is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
SYZYGY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 17 -
1.10
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or non-current assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
The company operates a defined contribution scheme. Contributions payable are charged to the
income statement
in the year they are payable.
SYZYGY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 18 -
1.14
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
the income statement
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed.
1.15
Foreign exchange
Transactions in currencies other than pound sterling are recorded at the rates of exchange prevailing at dates of the transactions
.
At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated
at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the income statement for the period.
2
Judgements and key sources of estimation uncertainty
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.
3
Revenue
An analysis of the company's revenue is as follows:
2020
2019
£
£
Revenue analysed by class of business
Design and build revenue
9,145,393
11,071,059
2020
2019
£
£
Other significant revenue
Interest income
783
4,945
2020
2019
£
£
Revenue analysed by geographical market
United Kingdom
917,058
1,377,232
Europe
318,816
2,303,614
Rest of the World
7,909,519
7,390,213
9,145,393
11,071,059
SYZYGY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 19 -
4
Operating profit/(loss)
2020
2019
Operating profit/(loss) for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
(858)
48,599
Fees payable to the company's auditor for the audit of the company's financial statements
1,750
19,000
Depreciation of owned property, plant and equipment
277,274
294,744
Amortisation of intangible assets
8,702
17,119
Operating lease charges
1,480,334
1,050,735
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2020
2019
Number
Number
Administration
2
1
Production and development
-
38
Total
2
39
Their aggregate remuneration comprised:
2020
2019
£
£
Wages and salaries
2,896,865
Social security costs
310,356
Pension costs
64,981
3,272,202
6
Directors' remuneration
2020
2019
£
£
Remuneration for qualifying services
359,670
Company pension contributions to defined contribution schemes
13,557
373,227
SYZYGY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
6
Directors' remuneration
(Continued)
- 20 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2020
2019
£
£
Remuneration for qualifying services
n/a
237,951
Company pension contributions to defined contribution schemes
n/a
13,124
As total directors' remuneration was less than £200,000 in the current year, no disclosure is provided for that year.
7
Investment income
2020
2019
£
£
Interest income
Interest on bank deposits
783
4,945
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
783
4,945
8
Finance costs
2020
2019
£
£
Interest on financial liabilities measured at amortised cost:
Interest payable to group undertakings
7,534
7,302
9
Taxation
2020
2019
£
£
Current tax
Adjustments in respect of prior periods
18,082
Deferred tax
Origination and reversal of timing differences
(24,102)
(55,127)
Total tax credit
(24,102)
(37,045)
SYZYGY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
9
Taxation
(Continued)
- 21 -
The actual credit for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
2020
2019
£
£
Profit/(loss) before taxation
20,010
(1,055,329)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 19.00% (2019: 19.00%)
3,802
(200,513)
Tax effect of expenses that are not deductible in determining taxable profit
54,335
63,522
Unutilised tax losses carried forward
136,236
Adjustments in respect of prior years
18,082
Group relief
23,400
Permanent capital allowances in excess of depreciation
(18,846)
(22,645)
Deferred taxation
(24,102)
(55,127)
Utilisation of tax losses
(39,291)
Taxation credit for the year
(24,102)
(37,045)
10
Dividends
2020
2019
£
£
Final paid
250,000
11
Intangible fixed assets
Software licences
£
Cost
At 1 January 2020 and 31 December 2020
112,901
Amortisation and impairment
At 1 January 2020
104,199
Amortisation charged for the year
8,702
At 31 December 2020
112,901
Carrying amount
At 31 December 2020
At 31 December 2019
8,702
SYZYGY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 22 -
12
Property, plant and equipment
Land and buildings short leasehold
Fixtures and fittings
Computer equipment
Total
£
£
£
£
Cost
At 1 January 2020
1,579,698
8,018
414,464
2,002,180
Additions
790
790
Disposals
(249,482)
(249,482)
At 31 December 2020
1,580,488
8,018
164,982
1,753,488
Depreciation and impairment
At 1 January 2020
350,455
2,419
240,412
593,286
Depreciation charged in the year
177,670
1,604
98,000
277,274
Eliminated in respect of disposals
(242,431)
(242,431)
At 31 December 2020
528,125
4,023
95,981
628,129
Carrying amount
At 31 December 2020
1,052,363
3,995
69,001
1,125,359
At 31 December 2019
1,229,243
5,599
174,052
1,408,894
13
Trade and other receivables
2020
2019
Amounts falling due within one year:
£
£
Trade receivables
1,334,373
1,804,021
Corporation tax recoverable
4,027
Amounts owed by group undertakings
512,656
818,072
Other receivables
378,781
386,738
Prepayments and accrued income
483,965
400,285
2,709,775
3,413,143
2020
2019
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 16)
58,594
34,492
Total debtors
2,768,369
3,447,635
SYZYGY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 23 -
14
Current liabilities
2020
2019
£
£
Trade payables
240,969
245,407
Amounts owed to group undertakings
1,822,895
2,775,974
Taxation and social security
99,839
Other payables
938
Accruals and deferred income
1,434,504
1,956,816
3,498,368
5,078,974
15
Non-current liabilities
2020
2019
£
£
Other payables
479,925
237,315
16
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Assets
Assets
2020
2019
Balances:
£
£
Decelerated capital allowances
58,594
34,492
2020
Movements in the year:
£
Asset at 1 January 2020
(34,492)
Credit to profit or loss
(24,102)
Asset at 31 December 2020
(58,594)
The deferred tax asset
set out above
is expected to reverse
in the foreseeable future and relates to decelerated capital allowances that are expected to mature within the same period.
SYZYGY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 24 -
17
Retirement benefit schemes
2020
2019
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
-
64,981
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
18
Share capital
2020
2019
2020
2019
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 1p each
100,000
100,000
1,000
1,000
19
Operating lease commitments
Lessee
The company entered into a 10 year operating lease for use of its current office space which expires in August 2027. A rent review date exists in August 2022. A rent free period was granted from the landlord until July 2019.
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2020
2019
£
£
Within one year
1,054,352
1,054,352
Between two and five years
4,217,408
4,217,408
In over five years
1,669,371
2,723,743
6,941,131
7,995,503
20
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sales
Purchases
2020
2019
2020
2019
£
£
£
£
Ars Thanea S.A.
5,766
-
410,224
-
The entity has taken advantage of disclosure exemptions for fully owned group companies.
SYZYGY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 25 -
21
Controlling party
The Company's immediate parent company is Unique Digital Marketing Limited, a company incorporated in England. Unique Digital Marketing is controlled by
Syzygy AG
, a listed company incorporated in Germany.
Copies of the financial statements of the parent company are available from Investor Relations at Syzygy AG, Horexstraße 28, 61352 Bad Homburg vor der Höhe, Germany
The ultimate parent is
WPP Plc
a company fully listed on the London Stock Exchange, copies of this company's financial statements are available from WPP Plc, Queenway House, Hilgrove Street, St.Helier, Jersey JE1 1ES.
22
Analysis of changes in net funds
1 January 2020
Cash flows
31 December 2020
£
£
£
Cash at bank and in hand
909,110
(572,381)
336,729
23
Cash generated from operations
2020
2019
£
£
Profit/(loss) for the year after tax
44,112
(1,018,284)
Adjustments for:
Taxation credited
(24,102)
(37,045)
Finance costs
7,534
7,302
Investment income
(783)
(4,945)
Amortisation and impairment of intangible assets
8,702
17,119
Depreciation and impairment of property, plant and equipment
277,274
294,744
Movements in working capital:
Decrease in trade and other receivables
692,839
403,970
(Decrease)/increase in trade and other payables
(1,331,494)
266,365
Cash absorbed by operations
(325,918)
(70,775)
2020-12-31
2020-01-01
false
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