Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2020
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FLOMATIK NETWORK SERVICES LIMITED
COMPANY INFORMATION
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FLOMATIK NETWORK SERVICES LIMITED
CONTENTS
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FLOMATIK NETWORK SERVICES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
The directors present their strategic report for the year ending 31 December 2020.
The Company's principal activity during the year remained the supply of consultancy, design and project delivery services for the planning, design and implementation of telecommunication networks.
Through 2020 the Company continued to experience strong demand from the UK’s established Communication Service Providers (CSPs), as well as from an increasing community of alternative service providers (Altnets) specialising in the deployment of full fibre networks, enabling advanced broadband for both business and consumers. With continued rises in data consumption, UK CSPs and Altnets are actively upgrading to higher performing infrastructures. Deeper fibre networks offer increased network speed, capacity and reliability, and are cheaper to operate. Whilst fibre is already commonplace within Core networks, Mobile and Access networks are increasingly leveraging this technology. However, just 11% of UK households and business premises are currently equipped with a true fibre connection. By focusing Flomatik on this technological transformation, the company has been able to expand beyond its traditional market segments, clients and projects. To fully address this transformation, Flomatik has established several market-leading offerings to support the Fibre-to-the-X (FTTX) industry. With a bespoke network planning automation toolchain, Flomatik provides high volumes of customised, cost-optimised and quality assured network designs, supporting these activities with new talent and near-shoring facilities. Virgin Media, CityFibre/FibreNation and Toob are three of Flomatik’s larger clients, each undertaking large, well-publicised Fibre-to-the-Premise projects over the coming years. The ongoing support of Teleste Group saw the expansion of Teleste’s Polish Design Centre which continues to provide strategic and cost advantages to Flomatik. During the year, the Company continued to attract and engage new customers and further reduced the share of business with its largest single customer to <50% of the ongoing turnover. With new master service agreements in place and the company gearing up to be ready to support the anticipated future market growth, this development is expected to continue into 2021 and beyond. We will continue to build on the Companies’ key competencies whilst additionally offering targeted project support to our chosen business partners. With further changes in its senior management team, a new team focus will roll out into 2021, building on the solid foundations established since the company formed back in 2007. Quality in all we do, customer focus and continued investment in our employees remain key to our ongoing growth and success. Whilst the COVID-19 pandemic had little business impact in financial terms, office closures and the majority of the teams working from home where possible meant that less than 10 employees in total were required to be furloughed and then only for a short period of time. To date, the offices remain partially closed and the team continue to operate on a hybrid basis, in accordance with the Government advice and restrictions. Employee welfare both during 2020 and ongoing remains a key area of concern for the company management team. Key Performance Indicators Following the divestment of the loss-making engineering services operations in 2019, the company posted turnover of £11,925.6K (2019: £13,911.5K), down 14.3% and an operating profit of £993.5K, (8.3%) up on last year’s profit of £756.9K, (5.4%). It significantly improved: its cash position from £345.7K in 2019 to £803.0K this year, whilst concurrently managing a significant reduction in Trade Debtors, down 23.9% and the full repayment of the £1.5m Teleste Group loan.
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FLOMATIK NETWORK SERVICES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
The overall outlook for the Company remains positive and with neither COVID-19 or Brexit adding any significant risks or uncertainties our focus here remains on ensuring that we continue to attract and trade with well-established business partners and that we continue to ensure our employee engagement remains high and our staff churn low.
As the work from home regulations relax further, we will continue to consider our future working practices and look to adjust in line with both Government regulations, our employee’s welfare and our business needs.
Government initiatives and private ventures look set to fuel a 10-year ‘full fibre‘ investment cycle.
Within the coming years the company intends to develop its activities across other adjacent sectors and to fully capitalise on the growth of broadband, both wired and wireless, underpinned by deep fibre networks. As the Company consolidates and invests in its operations, increases its focus and innovates further, it is establishing a solid platform to capitalise on this growth. The Company is driven to become the premiere supplier of customer-focused, efficient and effective solutions that reduce project complexity and uncertainty and save clients both time and money. Marrying professional and managed services in design, planning, specialist engineering and project management, with bespoke tools makes it possible for Flomatik to provide a unique capability for its customers.
This report was approved by the board and signed on its behalf.
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FLOMATIK NETWORK SERVICES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
The directors present their report and the financial statements for the year ended 31 December 2020.
The directors who served during the year were:
The profit for the year, after taxation, amounted to £
825,508
(2019 -
£
596,502
)
.
No dividend was proposed for the year.
There were no post balance sheet events for the year ended 31 December 2020.
The directors are responsible for preparing the Strategic Report, the Directors' Report 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;
∙
make judgments 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 to 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.
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FLOMATIK NETWORK SERVICES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
Under section 487(2) of the Companies Act 2006, Price Bailey LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board and signed on its behalf.
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FLOMATIK NETWORK SERVICES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FLOMATIK NETWORK SERVICES LIMITED
We have audited the financial statements of Flomatik Network Services Limited (the 'Company') for the year ended 31 December 2020, which comprise the Statement of Income and Retained Earnings, the Balance Sheet
and the related notes, 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).
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 United Kingdom, including the Financial Reporting Council'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.
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.
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.
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FLOMATIK NETWORK SERVICES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FLOMATIK NETWORK SERVICES LIMITED (CONTINUED)
The directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Auditors' Report 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.
In our opinion, based on the work undertaken in the course of the audit:
∙
the information given in the Strategic Report and the Directors' Report 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.
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 Strategic Report or the Directors' Report.
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FLOMATIK NETWORK SERVICES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FLOMATIK NETWORK SERVICES LIMITED (CONTINUED)
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 Auditors' 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.
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:
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates and considered the risk of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations. This included those regulations directly related to the financial statements, including financial reporting, tax legislation and distributable profits and industry regulations including GDPR, employment law and health and safety. We communicated the identified laws and regulations with the audit team and remained alert to any indications of non-compliance throughout the audit. We carried out specific procedures to address the risks identified. These included the following: -agreeing the financial statement disclosures to underlying supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements; -enquiries of management including those responsible for key regulations; -performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; -reviewing minutes of board meetings. In addressing the risk of management override of controls, we carried out testing of journal entries and other adjustments for appropriateness, assessing whether the judgements made in making accounting estimates are indicative of a potential bias and evaluating the business rationale of significant transactions outside the normal course of business. Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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 Auditors' Report.
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FLOMATIK NETWORK SERVICES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FLOMATIK NETWORK SERVICES LIMITED (CONTINUED)
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 Auditors' 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.
for and on behalf of
Chartered Accountants
Statutory Auditors
Tennyson House
Cambridge Business Park
CB4 0WZ
Date:
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FLOMATIK NETWORK SERVICES LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2020
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FLOMATIK NETWORK SERVICES LIMITED
REGISTERED NUMBER:
06080342
BALANCE SHEET
AS AT
31 DECEMBER 2020
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 11 to 23 form part of these financial statements.
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FLOMATIK NETWORK SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Flomatik Network Services Limited is a private Company limited by shares incorporated in England and Wales, United Kingdom. The address of the registered office is 9 The Gardens, Broadcut, Fareham, PO16 8SS.
The nature of the Company's operations and principal activity during the year was the supply of consultancy and design services for planning and implementation networks, augmented by the provision of national engineering services for network deployment.
2.
ACCOUNTING POLICIES
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with 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 judgment in applying the Company's accounting policies (see note 3).
The accounts have been rounded to the nearest pound.
The following principal accounting policies have been applied:
The directors have prepared cash flow projections which cover a period in excess of twelve months of the date of approval of these financial statements. These projections indicate that the Company will be
reliant on the continued support of the parent Company in regards to credit facilities forwarded to them In reaching the conclusion that the going concern principal is appropriate the directors have considered the impact of the Covid-19 pandemic on the Company's operations and stakeholders. The Company was protected under key worker status and as such has operated throughout the Covid-19 pandemic and associated restrictions, posting positive results and strong growth in revenue and cash reserves in this post year end period. Whilst future uncertainty is present across the economy, the directors believe the Company is in a strong position. Accordingly, the going concern basis has been adopted in preparing the financial statements. The Company is therefore exempt from the requirement to prepare a cash flow statement.
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FLOMATIK NETWORK SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.
ACCOUNTING POLICIES (CONTINUED)
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful life.
Depreciation is provided on the following basis:
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FLOMATIK NETWORK SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.
ACCOUNTING POLICIES (CONTINUED)
Grants of a revenue nature are recognised in the Statement of Income and Retained Earnings in the same period as the related expenditure.
Functional and presentation currency
Transactions and balances
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FLOMATIK NETWORK SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.
ACCOUNTING POLICIES (CONTINUED)
Provisions are charged as an expense to the Statement of Income and Retained Earnings 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.
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FLOMATIK NETWORK SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Information about assumptions and estimation uncertainties that have a significant risk of resulting in material adjustments in the year ending 31 December 2020 are included below: Accrued Income Accrued income is calculated based on either fixed contract prices or the time and materials that have been recorded or estimated for each project to the end of December 2020.
The whole of the turnover is attributable to the provision and supply of consultancy and design services for the implementation of network solutions.
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FLOMATIK NETWORK SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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FLOMATIK NETWORK SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
There were no factors that may affect future tax charges.
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FLOMATIK NETWORK SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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FLOMATIK NETWORK SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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FLOMATIK NETWORK SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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FLOMATIK NETWORK SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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FLOMATIK NETWORK SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
The Company operates a defined contributions 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 £223,976 (2019 - £197,887). Contributions totalling £28,427 (2019 - £24,240) were payable to the fund at the balance sheet date.
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FLOMATIK NETWORK SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
The company's immediate holding company, ultimate holding company and ultimate controlling party is Teleste Oyj, a company incorporated in Finland.
Copies of the Financial Statements of Teleste Oyj can be obtained from PO Box 323, Finland-20101, Turku, Finland.
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