Registration number:
Codify Ltd.
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Brebners
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Codify Ltd.
Contents
Company Information |
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Directors' Report |
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Statement of Directors' Responsibilities |
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Independent Auditor's Report |
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Statement of Income and Retained Earnings |
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Statement of Financial Position |
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Notes to the Financial Statements |
Codify Ltd.
Company Information
Directors |
P Norgate D Bruce J F Mottard |
Registered office |
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Auditor |
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Codify Ltd.
Directors' Report for the Year Ended 31 December 2021
The directors present their report and the financial statements for the year ended 31 December 2021.
Directors of the company
The directors who held office during the year were as follows:
Disclosure of information to the auditor
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.
Small companies provision statement
This report has been prepared in accordance with the small companies regime under the Companies Act 2006.
Approved by the director on
.........................................
P Norgate
Director
Codify Ltd.
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities for preparing the Annual 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 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 apply them consistently; |
• |
make judgements and accounting estimates that are reasonable and prudent; |
• |
state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
• |
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.
Codify Ltd.
Independent Auditor's Report to the Members of Codify Ltd.
for the Year Ended 31 December 2021
Opinion
We have audited the financial statements of Codify Ltd. (the 'company') for the year ended 31 December 2021, which comprise the Statement of Income and Retained Earnings, Statement of Financial Position, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
• | give a true and fair view of the state of the company's affairs as at 31 December 2021 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. |
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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 director's 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 original financial statements were 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.
Other information
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 auditor’s 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.
Codify Ltd.
Independent Auditor's Report to the Members of Codify Ltd.
for the Year Ended 31 December 2021
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• |
the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
• |
the Directors' Report has been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception
In the light of our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Directors' Report.
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. |
• |
the directors were not entitled to take advantage of the small companies' exemption in preparing the Directors' Report and from the requirement to prepare a Strategic Report. |
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities (set out on page 3), 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.
Codify Ltd.
Independent Auditor's Report to the Members of Codify Ltd.
for the Year Ended 31 December 2021
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:
Based on our understanding of the company and the industry in which it operates, we determined that the principle risks of non-compliance with laws and regulations related to the reporting framework (FRS 102 and the Companies Act 2006), UK corporate taxation laws, health and safety legislation and data protection legislation. These risks were communicated to our audit team and we remained alert to any indications of non-compliance throughout our audit.
We understood how the company is complying with relevant legislation by making enquiries of management. We also considered the results of our audit procedures and to what extent these corroborate this understanding and assessed the susceptibility of the company's financial statements to material misstatement. This included consideration of how fraud might occur and evaluation of management's incentives and opportunities for fraudulent manipulation of the financial statements.
We designed our audit procedures to identify any non-compliance with laws and regulations. Such procedures included, but were not limited to, inspection of any regulatory or legal correspondence; challenging assumptions and judgements made by management; identifying and testing journal entries with a focus on large or unusual transactions as determined based on our understanding of the business; and identifying and assessing the effectiveness of controls in place to prevent and detect fraud.
Owing to the inherent limitations of an audit, there remains a risk that a material misstatement may not have been detected, even though we have properly planned and performed our audit in accordance with auditing standards. We are not responsible for preventing non-compliance with laws and regulations and cannot be expected to detect all instances of non-compliance.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
The primary responsibility for the detection and prevention of fraud rests with those responsible for governance and management. The further removed non-compliance with laws and regulations is from the events reflected in the financial statements, the less likely the auditor will become aware of it.
The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment, collusion, omission, misrepresentation or forgery.
Codify Ltd.
Independent Auditor's Report to the Members of Codify Ltd.
for the Year Ended 31 December 2021
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in 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.
......................................
For and on behalf of
130 Shaftesbury Avenue
London
W1D 5AR
Codify Ltd.
Statement of Income and Retained Earnings for the Year Ended 31 December 2021
Note |
2021 |
2020 |
|
Turnover |
|
|
|
Cost of sales |
( |
( |
|
Gross profit |
|
|
|
Administrative expenses |
( |
( |
|
Other operating income |
- |
|
|
Operating profit/(loss) |
|
( |
|
Profit/(loss) before tax |
|
( |
|
Taxation |
( |
|
|
Profit/(loss) for the financial year |
|
( |
|
Retained earnings brought forward |
630,621 |
634,200 |
|
Retained earnings carried forward |
996,848 |
630,621 |
Codify Ltd.
Statement of Financial Position as at 31 December 2021
Note |
2021 |
2020 |
|
Fixed assets |
|||
Tangible assets |
|
|
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Current assets |
|||
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Total assets less current liabilities |
|
|
|
Provisions for liabilities |
( |
( |
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
75 |
75 |
|
Capital redemption reserve |
25 |
25 |
|
Profit and loss account |
996,848 |
630,621 |
|
Shareholders' funds |
996,948 |
630,721 |
Company registration number: SC205314
Approved and authorised by the
......................................................................
P Norgate
Director
Codify Ltd.
Notes to the Financial Statements for the Year Ended 31 December 2021
General information |
The company is a private company limited by share capital, incorporated in Scotland.
The address of its registered office is:
Scotland
The principal activity of the company is that of providing IT consultancy services and software development
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 were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
Basis of preparation
These financial statements have been prepared using the historical cost convention except any items disclosed in the accounting policies as being shown at fair value and are presented in sterling, which is the functional currency of the entity.
Summary of disclosure exemptions
The entity satisfied the criteria of being a qualifying entity as defined in FRS 102. Its financial statements are consolidated into the financial statements of Sword Group SE, which can be obtained from www.sword-group.com/en/investors. As such, advantage has been taken of the following disclosure exemptions available under paragraph 1.12 of FRS 102.
(a) No cash flow statement has been presented for the company.
(b) Disclosures in respect of financial instruments have not been presented.
(c) Disclosure in respect of aggregate remuneration of key management personnel has not been presented.
(d) Disclosure in respect of share capital has not been presented.
Codify Ltd.
Notes to the Financial Statements for the Year Ended 31 December 2021
Going concern
The company made a profit for the year ended 31 December 2021 and had net assets of £996,948 at that date.
As we have now moved out of the COVID crisis we are fortunate to be able to report that over the past year business has been robust and the financial performance of the business has remained strong in spite of the challenging economic climate.
Our business to date has proven resilient and maintained profitability. As Codify Ltd. is a project based business, we have seen the deferral of certain pieces of work, however we are now seeing the pent up demand coming back to the market and our pipeline for future work is looking strong.
As such, having made enquiries, the directors have a reasonable expectation that the company has adequate resources to continue operating for the foreseeable future. Accordingly, the directors continue to adopt the going concern basis in preparing the financial statements.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual income. Key assumptions and other estimation uncertainty may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.
Judgements and estimates that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are as follows:
Useful economic lives of tangible assets
Tangible fixed assets are depreciated to their estimated residual values over their estimated useful lives. The company exercises judgement to determine these useful lives and residual values.
Deferred tax
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 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. The company exercises judgement to estimate such recoverability.
Codify Ltd.
Notes to the Financial Statements for the Year Ended 31 December 2021
Revenue recognition
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as income.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
Government grants
Government grants have been recognised when there is reasonable assurance that the entity will comply with the conditions attaching to them and that the grants will be received. The grants have been recognised based on the accrual model as a grant relating to revenue, which has been recognised in other operating income in the period in which it becomes receivable.
Foreign currency transactions and balances
Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.
Tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively.
Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Tangible assets
Tangible assets are stated in the statement of financial position 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.
Codify Ltd.
Notes to the Financial Statements for the Year Ended 31 December 2021
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
Asset class |
Depreciation method and rate |
Fixtures, fittings and equipment |
33 % straight line |
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% straight line |
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Trade debtors
Trade and other debtors are initially recognised at the transaction price and thereafter stated at amortised cost using the effective interest method, less impairment losses for bad and doubtful debts except where the effect of discounting would be immaterial. In such cases, the receivables are stated at cost less impairment losses for bad and doubtful debts.
Trade creditors
Trade and other creditors are initially recognised at the transaction price and are thereafter stated at amortised cost using the effective interest method unless the effect of discounting would be immaterial, in which case they are stated at cost.
Provisions
Provisions are recognised when the company has an obligation at the reporting date as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
Finance leases
Assets held under hire purchase contracts are capitalised at the lesser of fair value or present value of minimum lease payments in the statement of financial position. The present value of the minimum lease payments is calculated using the interest rate implicit in the lease. A corresponding liability is recognised at the same value in the statement of financial position. The asset is then depreciated over its useful life.
The minimum lease payments are apportioned between the finance charge recognised in the income statement and the reduction of the outstanding liability using the effective interest method. The finance charge in each period is allocated so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Codify Ltd.
Notes to the Financial Statements for the Year Ended 31 December 2021
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.
Revenue |
The analysis of the company's revenue for the year from continuing operations is as follows:
2021 |
2020 |
|
Rendering of services |
|
|
Other operating income |
The analysis of the company's other operating income for the year is as follows:
2021 |
2020 |
|
Government grants |
- |
|
Operating profit/(loss) |
Arrived at after charging/(crediting)
2021 |
2020 |
|
Depreciation expense |
|
|
Foreign exchange losses |
|
- |
Codify Ltd.
Notes to the Financial Statements for the Year Ended 31 December 2021
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
2021 |
Unaudited |
|
Wages and salaries |
|
|
Social security costs |
|
|
Pension costs, defined contribution scheme |
|
|
Other employee expense |
|
|
|
|
The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:
2021 |
Unaudited |
|
Production |
|
|
Administration and support |
|
|
|
|
Directors' remuneration |
The directors' remuneration for the year was as follows:
2021 |
2020 |
|
Remuneration |
- |
|
Directors remuneration is paid by other members within the group.
Auditor's remuneration |
2021 |
2020 |
|
Audit of the financial statements |
|
|
Taxation |
Tax charged/(credited) in the income statement
Codify Ltd.
Notes to the Financial Statements for the Year Ended 31 December 2021
2021 |
2020 |
|
Current taxation |
||
UK corporation tax |
|
( |
UK corporation tax adjustment to prior periods |
|
- |
89,923 |
(630) |
|
Deferred taxation |
||
Arising from origination and reversal of timing differences |
( |
( |
Tax expense/(receipt) in the income statement |
|
( |
The tax on profit before tax for the year is higher than the standard rate of corporation tax in the UK (2020 - higher than the standard rate of corporation tax in the UK) of
The differences are reconciled below:
2021 |
2020 |
|
Profit/(loss) before tax |
|
( |
Corporation tax at standard rate |
|
( |
Deferred tax credit from unrecognised tax loss or credit |
( |
( |
Increase in UK and foreign current tax from adjustment for prior periods |
|
- |
Tax increase from other short-term timing differences |
- |
|
Total tax charge/(credit) |
|
( |
Codify Ltd.
Notes to the Financial Statements for the Year Ended 31 December 2021
Deferred tax
Deferred tax assets and liabilities
2021 |
Liability |
Accelerated capital allowances |
|
Pension accrual |
( |
Other movements |
|
|
2020 |
Liability |
Accelerated capital allowances |
|
Pension accrual |
( |
Other movements |
|
|
Intangible assets |
Other intangible assets |
Total |
|
Cost or valuation |
||
At 1 January 2021 |
|
|
At 31 December 2021 |
|
|
Amortisation |
||
At 1 January 2021 |
|
|
At 31 December 2021 |
|
|
Carrying amount |
||
At 31 December 2021 |
- |
- |
At 31 December 2020 |
- |
- |
Codify Ltd.
Notes to the Financial Statements for the Year Ended 31 December 2021
Tangible assets |
Furniture, fittings and equipment |
Total |
|
Cost or valuation |
||
At 1 January 2021 |
|
|
Additions |
|
|
Disposals |
( |
( |
At 31 December 2021 |
|
|
Depreciation |
||
At 1 January 2021 |
|
|
Charge for the year |
|
|
Eliminated on disposal |
( |
( |
At 31 December 2021 |
|
|
Carrying amount |
||
At 31 December 2021 |
|
|
At 31 December 2020 |
|
|
Debtors |
2021 |
2020 |
|
Trade debtors |
|
|
Prepayments |
|
|
Corporation tax asset |
- |
|
Total current trade and other debtors |
|
|
Codify Ltd.
Notes to the Financial Statements for the Year Ended 31 December 2021
Creditors |
Note |
2021 |
2020 |
|
Due within one year |
|||
Trade creditors |
|
|
|
Amounts due to related parties |
|
- |
|
Social security and other taxes |
|
|
|
Other payables |
|
|
|
Accrued expenses |
|
|
|
Corporation tax liability |
62,201 |
- |
|
|
|
Provisions for liabilities |
Deferred tax |
Other provisions |
Total |
|
At 1 January 2021 |
|
- |
|
Additional provisions |
- |
|
|
Increase/(decrease) in existing provisions |
( |
- |
( |
At 31 December 2021 |
|
|
|
|
Other provisions relate to a dilapidations provision to cover the costs of restoring the Migvie House property at the end of the lease agreement
Pension and other schemes |
Defined contribution pension scheme
The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £
Contributions totalling £Nil (2020: £Nil) were payable to the scheme at the end of the year and are included in creditors.
Share capital |
Allotted, called up and fully paid shares
2021 |
2020 |
|||
No. |
£ |
No. |
£ |
|
|
|
75 |
|
75 |
Codify Ltd.
Notes to the Financial Statements for the Year Ended 31 December 2021
Obligations under leases and hire purchase contracts |
Operating leases
The total of future minimum lease payments is as follows:
2021 |
2020 |
|
Not later than one year |
|
|
Later than one year and not later than five years |
|
|
|
|
The amount of non-cancellable operating lease payments recognised as an expense during the year was £
Parent and ultimate parent undertaking |
The company's immediate parent is
The ultimate parent is
The most senior parent entity producing publicly available financial statements is
Sword Group SE, whose registered office is located at Route d'Arlon 2-4, L-8399 Windhof, Luxembourg, is the parent of the smallest and largest group preparing consolidated financial statements incorporating the results of the company.