Company registration number 06545405 (England and Wales)
BABEL SYSTEMS LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 DECEMBER 2022
PAGES FOR FILING WITH REGISTRAR
BABEL SYSTEMS LIMITED
CONTENTS
Page
Balance sheet
1
Statement of changes in equity
2
Notes to the financial statements
3 - 7
BABEL SYSTEMS LIMITED
BALANCE SHEET
AS AT
29 DECEMBER 2022
29 December 2022
- 1 -
2022
2021
Notes
£
£
£
£
Fixed assets
Investments
4
1,416
1,416
Current assets
Debtors falling due after more than one year
5
7,436,169
Debtors falling due within one year
5
1,573,698
1,738,428
Cash at bank and in hand
8,997
12,831
9,018,864
1,751,259
Creditors: amounts falling due within one year
6
(5,986,875)
(7,484,800)
Net current assets/(liabilities)
3,031,989
(5,733,541)
Net assets/(liabilities)
3,033,405
(5,732,125)
Capital and reserves
Called up share capital
26,394
26,394
Share premium account
2,226,051
2,226,051
Equity reserve
184,491
154,503
Profit and loss reserves
596,469
(8,139,073)
Total equity
3,033,405
(5,732,125)
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 17 January 2024 and are signed on its behalf by:
P Strudley
R Kirby
Director
Director
Company registration number 06545405 (England and Wales)
BABEL SYSTEMS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 29 DECEMBER 2022
- 2 -
Share capital
Share premium account
Equity reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 30 December 2020
26,394
2,226,051
(6,284,714)
(4,032,269)
Year ended 29 December 2021:
Loss and total comprehensive income
-
-
-
(1,854,359)
(1,854,359)
Equity share based payments
-
-
154,503
-
154,503
Balance at 29 December 2021
26,394
2,226,051
154,503
(8,139,073)
(5,732,125)
Year ended 29 December 2022:
Profit and total comprehensive income
-
-
-
8,735,542
8,735,542
Equity share based payments
-
-
29,988
-
29,988
Balance at 29 December 2022
26,394
2,226,051
184,491
596,469
3,033,405
The notes on pages 3 to 7 form part of these financial statements.
BABEL SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 DECEMBER 2022
- 3 -
1
Accounting policies
Company information
Babel Systems Limited is a private company limited by shares incorporated in England and Wales. The registered office is 77 Shaftesbury Avenue, 5th Floor, London, W1D 5DU.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of InvestCloud Holdings LLC. These consolidated financial statements are available from its registered office, 700 N San Vicente Blvd Ste G605, West Hollywood, CA 90069, USA.
1.2
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and 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 interest income.
Revenue from contracts for the provision of 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.
1.3
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
BABEL SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 DECEMBER 2022
1
Accounting policies
(Continued)
- 4 -
1.4
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
1.5
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.6
Financial instruments
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
1.7
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.8
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
BABEL SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 DECEMBER 2022
1
Accounting policies
(Continued)
- 5 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.9
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.11
Share-based payments
For cash-settled share-based payments, a liability is recognised for the goods and services acquired, measured initially at the fair value of the liability. At the balance sheet date until the liability is settled, and at the date of settlement, the fair value of the liability is remeasured, with any changes in fair value recognised in profit or loss for the year.
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black-Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
BABEL SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 DECEMBER 2022
1
Accounting policies
(Continued)
- 6 -
When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.
Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The directors have made no such material judgements or key estimates in preparing these financial statements.
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Total
8
8
4
Fixed asset investments
2022
2021
£
£
Shares in group undertakings and participating interests
1,416
1,416
5
Debtors
2022
2021
Amounts falling due within one year:
£
£
Amounts owed by group undertakings
1,528,967
1,732,417
Other debtors
44,731
6,011
1,573,698
1,738,428
BABEL SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 DECEMBER 2022
5
Debtors
(Continued)
- 7 -
2022
2021
Amounts falling due after more than one year:
£
£
Amounts owed by group undertakings
7,436,169
Total debtors
9,009,867
1,738,428
Debtors over one year relate to a promissory loan note from the parent company of $9,000,000 which carries interest at 7% annually and is repayable with the capital on the maturity date of 1 December 2032.
6
Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
600
Amounts owed to group undertakings
5,022,403
7,382,739
Taxation and social security
898,410
16,116
Other creditors
65,462
85,945
5,986,875
7,484,800
7
Equity-settled share based payments
The 2021 Omnibus Incentive Plan provides for the granting of options subject to time-based vesting conditions to the company employees. The options vest in equal instalments on each of the first five anniversaries of the vesting start date, if the participant has not undergone a termination.
The shares are valued under the Black-Scholes model as detailed in the accounting policies and during the year the amount recognised in respect of the valuation measurement based on fair value was £29,988 (2021 £154,503).
8
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
Senior Statutory Auditor:
Vincent Chandler FCA FCCA
Statutory Auditor:
Moore Green
Date of audit report:
5 February 2024
9
Parent company
The immediate and ultimate controlling party is InvestCloud Inc. which is incorporated in the USA. The registered office address is 700 N San Vincente Boulevard, Suite G605, West Hollywood, CA 90069, USA.