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Registered number: 07725512










NEPHOS TECHNOLOGIES LTD










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2023



 
NEPHOS TECHNOLOGIES LTD
 

COMPANY INFORMATION


Directors
L Biggenden 
M Queenan 




Registered number
07725512



Registered office
15-18 Great Newport Street

London

England

WC2H 7JE




Independent auditors
James Cowper Kreston Audit
Chartered Accountants and Statutory Auditor

Reading Bridge House

George Street

Reading

Berkshire

RG1 8LS





 
NEPHOS TECHNOLOGIES LTD
 

CONTENTS



Page
Strategic Report
1 - 2
Directors' Report
3 - 4
Independent Auditors' Report
5 - 8
Statement of Comprehensive Income
9
Balance Sheet
10
Statement of Changes in Equity
11
Statement of Cash Flows
12
Analysis of Net Debt
13
Notes to the Financial Statements
14 - 25


 
NEPHOS TECHNOLOGIES LTD
 

STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023

Introduction
 
The principal activity of Nephos Technologies Ltd (the 'Company') in the period under review was that of providing on a hardware, software and services around IT, primarily focussing around the data integration market. Revenue is also generated from implementation services, training, and other types of professional services.
The results for the year and financial position are as shown in the annexed financial statements. 
The executive management team reviews regularly information covering a range of financial and non-financial key performance indicators, which they consider are effective in measuring delivery of their strategy, and which assist in the management of the business. The only KPI that we actively track as a business is gross margin, and we exceeded the £4.4m gross margin target that we had for the business. 
The Company had turnover of £20,846,168 for the year ended 31 March 2023. This represents a 30.3% increase over the previous year’s turnover of £15,999,590.
The Company ended the year with £3,457,165 net current assets compared to £3,977,627 in 2022. 
Principal risks and uncertainties
There are a variety of competitive and economic factors that impact the way the Company manages its business and influence how the Company maintains and continually improves its work management platform. 
The following principal risks and uncertainties for the Company have been identified: 
Competition 
The overall market for data, and specifically data governance is rapidly evolving and subject to changing technology, shifting customer needs and frequent introductions of new technologies. The company competes against much larger organisations that have greater brand name recognition, longer operating histories and significantly greater resources than the Company does. Some of the Company’s smaller competitors may offer applications on a stand-alone basis at a lower price than us due to lower overheads or other factors, while some of the Company’s larger competitors may offer applications at a lower price in an attempt to cross-sell additional products in the future or retain a customer using a different application. We believe that our managed service is the key differentiator between us and our competitors as it changes the conversation from a product to a service or outcome based project.
People 
It is key to the Company’s success to attract, retain, develop and motivate the best people with the appropriate capabilities at all levels of the organization. Performance could be negatively impacted by the loss of key individuals or the inability to obtain suitable replacements in a timely manner. The Company endeavors to retain key employees by ensuring that appropriate levels of incentives are in place and by having a unique work culture and environment. We will be looking at increasing our EMI share scheme to include the senior management team to make sure they are retained and included as part of the success of the company.

Page 1

 
NEPHOS TECHNOLOGIES LTD
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023


Currency risk 
The Company is exposed to foreign exchange risk in connection with its transactions with both its customers and suppliers as the Company makes sales and purchases in US dollars and the exchange rate continues to be volatile at the moment. 
Credit risk 
Credit risk may arise because of non-payment by customers. This risk is partially mitigated by the fact that we don’t pay out to our distributors or vendors until we have been paid by our customers.  
Liquidity risk 
The company does not see this as a viable concern at the moment with the amount of cash we have on hand and in the bank.
Future Development
The company will continue to invest in its growth, with another likely 30% plus increase in staff next year as well as increased investment into our managed service IP. We believe that the managed services we are building around data are unique in the market place and put us in a strong position for continued growth over the next years


This report was approved by the board and signed on its behalf.



M Queenan
Director

Date: 25 October 2023

Page 2

 
NEPHOS TECHNOLOGIES LTD
 

 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023

The directors present their report and the financial statements for the year ended 31 March 2023.

Directors

The directors who served during the year were:

L Biggenden 
M Queenan 

Directors' responsibilities statement

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 2006They 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.

Principal activity

Nephos Technologies Ltd is a consultancy led systems integrator that builds solutions for customers, or creates its own managed services, to help customers solve problems around data.

Results and dividends

The loss for the year, after taxation, amounted to £145,821 (2022 - profit £492,893).

Disclosure of information to auditors

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Page 3

 
NEPHOS TECHNOLOGIES LTD
 

 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023


Auditors

The auditorsJames Cowper Kreston Auditwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 





M Queenan
Director

Date: 25 October 2023

Page 4

 
NEPHOS TECHNOLOGIES LTD
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NEPHOS TECHNOLOGIES LTD
 

Opinion


We have audited the financial statements of Nephos Technologies Ltd (the 'Company') for the year ended 31 March 2023, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe 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 March 2023 and of its loss 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 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.


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.


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.


Other information


The other information comprises the information included in the Annual Report other than the financial statements and  our Auditors' 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.


Page 5

 
NEPHOS TECHNOLOGIES LTD
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NEPHOS TECHNOLOGIES LTD (CONTINUED)


Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the 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.


Matters on which we are required to report by exception
 

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


We have nothing to report in respect of the following matters in relation to which 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' Responsibilities Statement 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.


Page 6

 
NEPHOS TECHNOLOGIES LTD
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NEPHOS TECHNOLOGIES LTD (CONTINUED)


Auditors' responsibilities for the audit of the financial statements
 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue 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.

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. 

The specific procedures for this engagement that we designed and performed to detect material misstatements in respect of irregularities, including fraud, were as follows:
 
Enquiry of management and those charged with governance around actual and potential litigation and claims;  
Enquiry of management and those charged with governance to identify any material instances of non-compliance with laws and regulations; 
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations; 
Performing audit work to address the risk of irregularities due to management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for evidence of bias.  

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.

Page 7

 
NEPHOS TECHNOLOGIES LTD
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NEPHOS TECHNOLOGIES LTD (CONTINUED)


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 2006Our 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.





Darren O'Connor BSc (Hons) FCCA ACA (Senior Statutory Auditor)
  
for and on behalf of
James Cowper Kreston Audit
 
Chartered Accountants and Statutory Auditor
  
Reading Bridge House
George Street
Reading
Berkshire
RG1 8LS

3 November 2023
Page 8

 
NEPHOS TECHNOLOGIES LTD
 

STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023

2023
2022
Note
£
£

  

Turnover
 4 
20,846,168
15,999,590

Cost of sales
  
(15,100,355)
(11,672,264)

Gross profit
  
5,745,813
4,327,326

Administrative expenses
  
(5,664,109)
(3,667,103)

Operating profit
 5 
81,704
660,223

Interest receivable and similar income
  
3
16

Interest payable and similar expenses
  
(325,938)
(48,074)

(Loss)/profit before tax
  
(244,231)
612,165

Tax on (loss)/profit
 9 
98,410
(119,272)

(Loss)/profit for the financial year
  
(145,821)
492,893

There were no recognised gains and losses for 2023 or 2022 other than those included in the statement of comprehensive income.

There was no other comprehensive income for 2023 (2022:£NIL).

The notes on pages 14 to 25 form part of these financial statements.

Page 9

 
NEPHOS TECHNOLOGIES LTD
REGISTERED NUMBER: 07725512

BALANCE SHEET
AS AT 31 MARCH 2023

2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 10 
28,761
25,957

  
28,761
25,957

Current assets
  

Debtors: amounts falling due after more than one year
 11 
21,357
21,357

Debtors: amounts falling due within one year
 11 
3,121,920
2,019,802

Cash at bank and in hand
 12 
2,973,944
4,693,295

  
6,117,221
6,734,454

Creditors: amounts falling due within one year
 13 
(2,660,056)
(2,756,827)

Net current assets
  
 
 
3,457,165
 
 
3,977,627

Total assets less current liabilities
  
3,485,926
4,003,584

Creditors: amounts falling due after more than one year
 14 
(650,000)
(950,000)

Provisions for liabilities
  

Deferred tax
 17 
-
(1,837)

  
 
 
-
 
 
(1,837)

Net assets
  
2,835,926
3,051,747


Capital and reserves
  

Called up share capital 
 18 
970
985

Capital redemption reserve
 19 
30
15

Profit and loss account
 19 
2,834,926
3,050,747

  
2,835,926
3,051,747


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 

M Queenan
Director

Date: 25 October 2023

The notes on pages 14 to 25 form part of these financial statements.

Page 10

 
NEPHOS TECHNOLOGIES LTD
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023


Called up share capital
Capital redemption reserve
Profit and loss account
Total equity

£
£
£
£

At 1 April 2022
985
15
3,050,747
3,051,747


Comprehensive income for the year

Loss for the year
-
-
(145,821)
(145,821)

Purchase of own shares
-
15
(70,000)
(69,985)

Shares cancelled during the year
(15)
-
-
(15)


At 31 March 2023
970
30
2,834,926
2,835,926


The notes on pages 14 to 25 form part of these financial statements.


STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022


Called up share capital
Capital redemption reserve
Profit and loss account
Total equity

£
£
£
£

At 1 April 2021
1,000
-
2,627,854
2,628,854


Comprehensive income for the year

Profit for the year
-
-
492,893
492,893

Purchase of own shares
-
15
(70,000)
(69,985)

Shares cancelled during the year
(15)
-
-
(15)


At 31 March 2022
985
15
3,050,747
3,051,747


The notes on pages 14 to 25 form part of these financial statements.

Page 11

 
NEPHOS TECHNOLOGIES LTD
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023

2023
2022
£
£

Cash flows from operating activities

(Loss)/profit for the financial year
(145,821)
492,893

Adjustments for:

Depreciation of tangible assets
13,447
18,520

Interest paid
325,938
48,074

Interest received
(3)
(16)

Taxation charge
(123,397)
119,272

(Increase)/decrease in debtors
(1,058,256)
1,026,868

Increase/(decrease) in creditors
22,829
(457,158)

Corporation tax (paid)
(41,902)
(204,646)

Net cash generated from operating activities

(1,007,165)
1,043,807


Cash flows from investing activities

Purchase of tangible fixed assets
(16,251)
(9,386)

Interest received
3
16

Net cash from investing activities

(16,248)
(9,370)

Cash flows from financing activities

Repayment of loans
(300,000)
(250,000)

Repayment of/new finance leases
-
(24,111)

Interest paid
(325,938)
(48,074)

Share buy back
(70,000)
(70,000)

Net cash used in financing activities
(695,938)
(392,185)

Net (decrease)/increase in cash and cash equivalents
(1,719,351)
642,252

Cash and cash equivalents at beginning of year
4,693,295
4,051,043

Cash and cash equivalents at the end of year
2,973,944
4,693,295


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
2,973,944
4,693,295

2,973,944
4,693,295


The notes on pages 14 to 25 form part of these financial statements.

Page 12

 
NEPHOS TECHNOLOGIES LTD
 

ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 MARCH 2023




At 1 April 2022
Cash flows
At 31 March 2023
£

£

£

Cash at bank and in hand

4,693,295

(1,719,351)

2,973,944

Debt due after 1 year

(950,000)

300,000

(650,000)

Debt due within 1 year

(300,000)

-

(300,000)

Finance leases

(7,416)

-

(7,416)


3,435,879
(1,419,351)
2,016,528

The notes on pages 14 to 25 form part of these financial statements.

Page 13

 
NEPHOS TECHNOLOGIES LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

1.


General information

Nephos Technologies Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 15-18 Great Newport Street, London, England, WC2H 7JE.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

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 following principal accounting policies have been applied:

 
2.2

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

 
2.3

Revenue

Managed Service activities are invoiced and recognised on a monthly basis as it is a monthly  service. 
Buy and sell contracts are invoiced at the beginning of each contract. If the contract is a hardware or a single year subscription that is recognised 100% upfront as there is no further contractual obligation to the customer. If it is a multiple year subscription contract the revenue is recognised on a time apportioned basis over the length of the contract. The associated costs are also time apportioned over the length of the contract. 

 
2.4

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Page 14

 
NEPHOS TECHNOLOGIES LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)

 
2.5

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.

 
2.6

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

 
2.7

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Page 15

 
NEPHOS TECHNOLOGIES LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)


2.7
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Office equipment
-
33%
straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.8

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.9

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

 
2.10

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.11

Financial instruments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Page 16

 
NEPHOS TECHNOLOGIES LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The following judgements have had the most significant effect on amounts recognised in the financial statements.
Bad debt provisions
Provisions are estimated by the company in respect of specific debts based upon the age of the debt and knowledge of known issues.


4.


Turnover

An analysis of turnover by class of business is as follows:


2023
2022
£
£

Sales
20,846,168
15,999,590


Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
20,846,168
15,999,590



5.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Depreciation of tangible fixed assets
13,447
18,520

Exchange differences
96,680
(65,368)

Other operating lease rentals
94,883
87,202


6.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors:


2023
2022
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
12,380
11,050

Fees payable to the Company's auditors in respect of tax compliance
1,090
970
Page 17

 
NEPHOS TECHNOLOGIES LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

7.


Employees

Staff costs, including directors' remuneration, were as follows:


2023
2022
£
£

Wages and salaries
3,676,905
2,599,961

Social security costs
485,688
332,796

Cost of defined contribution scheme
50,804
87,202

4,213,397
3,019,959


The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Employees
48
33


8.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
344,500
308,400

Company contributions to defined contribution pension schemes
2,422
58,937

346,922
367,337


The highest paid director received remuneration of £203,785 (2022 - £154,414).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £1,101 (2022 - £57,617).

The directors comprise the key management personnel of the company.

Page 18

 
NEPHOS TECHNOLOGIES LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

9.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
-
119,600

Adjustments in respect of previous periods
(77,698)
-


(77,698)
119,600

Foreign tax


Foreign tax on income for the year
24,987
-

24,987
-

Total current tax
(52,711)
119,600

Deferred tax


Origination and reversal of timing differences
(45,699)
(328)

Total deferred tax
(45,699)
(328)


Tax on (loss)/profit
(98,410)
119,272
Page 19

 
NEPHOS TECHNOLOGIES LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
 
9.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is lower than (2022 - lower than) the standard rate of corporation tax in the UK of 19% (2022 - 19%). The differences are explained below:

2023
2022
£
£


(Loss)/profit on ordinary activities before tax
(244,231)
612,165


(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2022 - 19%)
(46,404)
116,311

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
12,087
3,180

Capital allowances for year in excess of depreciation
(790)
(661)

Adjustments to tax charge in respect of prior periods
(52,478)
(17,283)

Other timing differences leading to an increase (decrease) in taxation
376
650

Adjustment in research and development tax credit leading to an increase (decrease) in the tax charge
-
17,294

Changes in provisions leading to an increase (decrease) in the tax charge
-
(219)

Other differences leading to an increase (decrease) in the tax charge
(11,201)
-

Total tax charge for the year
(98,410)
119,272


Factors that may affect future tax charges

There were no factors that may affect future tax charges.

Page 20

 
NEPHOS TECHNOLOGIES LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

10.


Tangible fixed assets





Office equipment

£



Cost or valuation


At 1 April 2022
82,704


Additions
16,251



At 31 March 2023

98,955



Depreciation


At 1 April 2022
56,747


Charge for the year
13,447



At 31 March 2023

70,194



Net book value



At 31 March 2023
28,761



At 31 March 2022
25,957

Page 21

 
NEPHOS TECHNOLOGIES LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

11.


Debtors

2023
2022
£
£

Due after more than one year

Other debtors
21,357
21,357

21,357
21,357


2023
2022
£
£

Due within one year

Trade debtors
2,647,470
1,910,223

Other debtors
20,453
7,668

Prepayments
410,135
101,911

Deferred taxation
43,862
-

3,121,920
2,019,802



12.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
2,973,944
4,693,295



13.


Creditors: Amounts falling due within one year

2023
2022
£
£

CBILS loan
300,000
300,000

Trade creditors
1,852,383
1,492,619

Corporation tax
-
119,600

Other taxation and social security
99,978
266,799

Obligations under finance lease and hire purchase contracts
7,416
7,416

Other creditors
94,431
101,022

Accruals
305,848
469,371

2,660,056
2,756,827


See note 15 for details on the CBILS loan.
The obligations under hire purchase are secured on the underlying assets.

Page 22

 
NEPHOS TECHNOLOGIES LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

14.


Creditors: Amounts falling due after more than one year

2023
2022
£
£

CBILS loan
650,000
950,000

650,000
950,000


See note 15 for details on the CBILS loan.


15.


Loans


Analysis of the maturity of loans is given below:


2023
2022
£
£

Amounts falling due within one year

CBILS loan
300,000
300,000

Amounts falling due 1-2 years

CBILS loan
300,000
300,000


Amounts falling due after more than 5 years

CBILS loan
350,000
650,000

950,000
1,250,000


The company took out a loan for £1,500,000 under the UK CBILS scheme. The loan is being repaid by way of monthly repayments of £25,000, with interest being charged at 3.99% above Bank of England base rate.


16.


Financial instruments

2023
2022
£
£

Financial assets


Financial assets that are debt instruments measured at amortised cost
6,073,359
6,734,454


Financial liabilities


Financial liabilities measured at amortised cost
3,202,662
3,579,811


Financial assets that are debt instruments measured at amortised cost comprise trade debtors, other debtors and cash at bank and in hand.


Financial liabilities measured at amortised cost comprise trade creditors, bank loans, amounts owed to group undertakings and other creditors.

Page 23

 
NEPHOS TECHNOLOGIES LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

17.


Deferred taxation




2023


£






At beginning of year
(1,837)


Charged to profit or loss
45,699



At end of year
43,862

The deferred taxation balance is made up as follows:

2023
2022
£
£


Accelerated capital allowances
(4,422)
(1,837)

Tax losses carried forward
48,284
-

43,862
(1,837)


18.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



97,000 (2022 - 98,500) Ordinary shares of £0.01 each
970
985

During the year, 1,500 Ordinary shares, with a nominal value of £0.01 each, were bought back and subsequently cancelled for a consideration of £70,000. 



19.


Reserves

Capital redemption reserve

This reserve records the nominal value of shares repurchased by the Company.

Profit and loss account

Includes all current and prior year retained profit and losses.


20.


Pension commitments

The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £50,804 (2022: £87,202). Contributions totalling £7,819 (2022: £12,353) were payable to the fund at the balance sheet date.

Page 24

 
NEPHOS TECHNOLOGIES LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

21.


Commitments under operating leases

At 31 March 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£


Not later than 1 year
97,681
58,495

Later than 1 year and not later than 5 years
80,491
25,006

178,172
83,501


22.


Related party transactions

At 31 March 2023, £84,362 was owed to the directors (2022: £86,419).


23.


Controlling party

In the opinion of the directors, the company is not controlled by any one person. 


Page 25