Registration number:
Prepared for the registrar
for the
Year Ended
Xenzone Group Limited
Contents
Company Information |
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Balance Sheet |
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Notes to the Financial Statements |
Xenzone Group Limited
Company Information
Directors |
F R Hyman S R M Philips S Jawa T Barker P F Whiting |
Registered office |
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Accountants |
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Xenzone Group Limited
(Registration number: 09795273)
Balance Sheet as at 31 December 2019
Note |
2019 |
(As restated) |
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Fixed assets |
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Intangible assets |
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Tangible assets |
- |
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Investments |
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Current assets |
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Debtors |
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Cash at bank and in hand |
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Creditors: Amounts falling due within one year |
( |
( |
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Net current liabilities |
( |
( |
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Total assets less current liabilities |
( |
( |
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Deferred tax liabilities |
(11,596) |
(113,734) |
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Net liabilities |
( |
( |
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Capital and reserves |
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Called up share capital |
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Share premium reserve |
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- |
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Profit and loss account |
( |
( |
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Total equity |
( |
( |
For the financial year ending 31 December 2019 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
Directors' responsibilities:
• |
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• |
The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts. |
These financial statements have been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.
These financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime and the option not to file the Profit and Loss Account has been taken.
Approved and authorised by the
......................................... |
Xenzone Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office and principal place of business is:
The Epworth 25 City Road
2nd Floor
London
England
EC1Y 1AA
Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section 1A - 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006.
Basis of preparation
These financial statements have been prepared using the historical cost convention except for, where disclosed in these accounting policies, certain items that are shown at fair value.
The presentational currency of the financial statements is Pounds Sterling, being the functional currency of the primary economic environment in which the company operates. Monetary amounts in these financial statements are rounded to the nearest Pound.
Going concern
After reviewing the company's forecasts and projections, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future.
At 31 December 2019, the company has net current liabilities of £9,605,050 and net liabilities if £5,381,703 and is supported by amounts due to connected parties of £9,681,097. These connected parties have presented their intention to provide financial support for the continuing operations of the company to enable it to meet its liabilities as they fall due and carry on its business without a significant curtailment of operations in the twelve months from the date of approval of the financial statements.
On this basis, the directors consider it appropriate to prepare the financial statements on a going concern basis. The financial statements therefore do not include any adjustments that would arise if necessary support from related parties is withdrawn or if further required operational funds are not provided.
Prior period errors
During the preparation of these financial statement the directors identified historic items which were not prepared in accordance with Financial Reporting Standard 102 Section 1A. These accounts include the adjustments required to comply with the reporting standard. A detailed explanation of these adjustments can be found in note 15 of these financial statements.
Xenzone Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
Critical accounting 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 amounts 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.
Judgements
Management is required to use an appropriate pricing model to value the issue of equity to employees or those providing similar services. Any charge to the profit and loss account is therefore a function of the chosen pricing model, which is based on a range of assumptions. All conditional growth shares issued in the year at £0.0001 have a hurdle price calculated to be in excess of the current aggregate value of the company attributable to all other share classes. The cost to the company in issuing these shares at £0.012137 per share is regarded by the directors to be £nil and therefore in their judgement no charge has been made to the profit and loss in the current period nor will be applicable to future periods. |
Key sources of estimation uncertainty
No key sources of estimation uncertainty have been identified by management in preparing these non statutory financial statements other than those detailed in these accounting policies.
Revenue recognition
Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax. The company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the company's activities.
Foreign currency transactions and balances
Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.
Tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in the profit and loss account, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the company. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.
Tangible assets
Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Xenzone Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
Depreciation
Depreciation is charged so as to write off the cost of assets over their estimated useful lives as follows:
Asset class |
Depreciation method and rate |
Furniture, fittings and equipment |
50% straight line |
Development costs
Development expenditure incurred on an individual project is carried forward when its future recoverability can be reasonably regarded as assured. Any expenditure carried forward is amortised in line with the expected future sales from the project.
Amortisation
Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:
Asset class |
Amortisation method and rate |
Development costs |
33.33% straight line |
Investments
Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.
Interest income on debt securities, where applicable, is recognised in income using the effective interest method.
Trade debtors
Trade debtors are amounts due from customers for goods sold or services performed in the ordinary course of business.
Trade debtors are recognised initially at the transaction price. All trade debtors are repayable within one year and hence are included at the undiscounted cost of cash expected to be received. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the debtors.
Trade creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price and all are repayable within one year and hence are included at the undiscounted amount of cash expected to be paid.
Leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments.
Xenzone Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
Financial instruments
Classification
Recognition and measurement
Impairment
A non financial asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.
For financial assets carried at amortised cost, the amount of an impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.
For financial assets carried at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.
Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.
Borrowings
Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.
Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
Xenzone Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
Staff numbers |
The average number of persons employed by the company (including directors) during the year, was as follows:
2019 |
2018 |
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Average number of employees |
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Intangible assets |
Development costs |
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Cost |
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At 1 January 2019 |
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Additions |
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At 31 December 2019 |
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Amortisation |
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Amortisation charge |
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At 31 December 2019 |
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Carrying amount |
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At 31 December 2019 |
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At 31 December 2018 |
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Xenzone Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
Tangible assets |
Furniture, fittings and equipment |
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Cost |
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At 1 January 2019 |
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At 31 December 2019 |
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Depreciation |
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At 1 January 2019 |
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Charge for the year |
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At 31 December 2019 |
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Carrying amount |
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At 31 December 2019 |
- |
At 31 December 2018 |
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Investments |
2019 |
(As restated) |
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Investments in subsidiaries |
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Subsidiaries |
£ |
Cost |
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At 1 January 2019 |
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At 31 December 2019 |
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Provision |
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At 1 January 2019 |
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At 31 December 2019 |
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Carrying amount |
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At 31 December 2019 |
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At 31 December 2018 |
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Xenzone Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
Details of undertakings
Details of the investments (including principal place of business of unincorporated entities) in which the company holds 20% or more of the nominal value of any class of share capital are as follows:
Undertaking |
Registered address |
Holding |
Proportion of voting rights and shares held |
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2019 |
2018 |
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Subsidiary undertakings |
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The Epworth 25 City Road, 2nd Floor, London, England, EC1Y 1AA |
Ordinary shares |
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The Epworth 25 City Road, 2nd Floor, London, England, EC1Y 1AA |
Ordinary shares |
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The Epworth 25 City Road, 2nd Floor, London, England, EC1Y 1AA |
Ordinary shares |
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Debtors |
2019 |
2018 |
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Other debtors |
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Prepayments |
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Loans due from related parties |
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Creditors |
Note |
2019 |
2018 |
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Due within one year |
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Loans and borrowings |
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Trade creditors |
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Amounts due to related parties |
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Social security and other taxes |
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Outstanding defined contribution pension costs |
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Other creditors |
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Accrued expenses |
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Xenzone Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
Deferred tax |
Deferred tax assets and liabilities
2019 |
Liability |
Fixed asset timing differences |
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Short term timing differences |
( |
Tax losses |
( |
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2018 |
Liability |
Fixed asset timing differences |
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Short term timing differences |
( |
Tax losses |
( |
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Loans and borrowings |
2019 |
2018 |
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Current loans and borrowings |
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Other borrowings |
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Other borrowings
Loan from Root Capital Fund II LP with a carrying amount of £5,378,808 (2018 - £4,495,532) is denominated in £ with a nominal interest rate of 8% (2018 - 8%).
This loan is secured by a fixed and floating charge over all assets and undertakings of the company and imposes a negative pledge which prohibits the company from creating any security interest over the assets pledged as security. This loan is repayable upon demand and has been disclosed within creditors falling due within one year.
Share capital |
Allotted, called up and fully paid shares
2019 |
2018 |
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No. |
£ |
No. |
£ |
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100.00 |
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100.00 |
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16.48 |
- |
- |
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New shares allotted
On 4 March 2019, 164,776 B Ordinary shares having an aggregate nominal value of £16 were allotted for an aggregate consideration of £2,000. |
Xenzone Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
Rights, preferences and restrictions
The Ordinary shares have full rights to voting, participation in dividend distribution and capital distribution (including any winding up). They do not confer any rights of redemption. |
Financial commitments, guarantees and contingencies |
Amounts not provided for in the balance sheet
The company has entered into an agreement to be the first subordinated lender in respect of certain borrowings of Xenzone Limited, one of its subsidiaries. The company has provided security in connection with these borrowings in the form of a floating charge over its assets. At 31 December 2019 the borrowings of Xenzone Limited subject to this agreement amounted to £816,599 (2018 - £300,000).
Prior period error |
Reconciliation of equity: |
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Note |
At 1 January 2018 |
At 31 December 2018 |
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£ |
£ |
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Equity previously reported at 31 December 2018 |
(1,716,618) |
(2,760,707) |
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Error corrections |
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Impairment of investment in subsidiary |
1 |
(334,999) |
(334,999) |
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Deferred tax on capitalised development expenditure |
2 |
- |
(113,734) |
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Total of error corrections |
(349,999) |
(448,733) |
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Equity as reported in these financial statements |
(2,051,617) |
(3,209,440) |
Reconciliation of profit (loss) for the financial year ended 31 December 2018: |
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Note |
£ |
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As reported at 31 December 2018 |
(1,044,089) |
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Error corrections: |
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Deferred tax charge on capitalised development costs |
2 |
(113,734) |
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Total of error corrections |
(113,734) |
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Loss for the financial year reported in these financial statements |
(1,157,823) |
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Note 1 |
When reviewing historic calculations, the directors are of the opinion that the carrying value of one of its subsidiaries should have been impaired in the year ended 31 December 2017. An adjustment has therefore been made to recognise this adjustment as at 1 January 2018. There is no taxation implications as a result of this adjustment.
Xenzone Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
Note 2 |
In the year ended 31 December 2018 the company failed to recognised deferred tax in accordance with the requirements of FRS 102. A prior year adjustment has been made to account for the deferred tax assets and liabilities in accordance with the reporting standard.