Company registration number 10663893 (England and Wales)
EDIPHY RESEARCH LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
EDIPHY RESEARCH LTD
COMPANY INFORMATION
Directors
C D Murphy
D C Wild
Company number
10663893
Registered office
43-45 Dorset Street
2nd Floor
London
England
W1U 7NA
Auditor
Fisher, Sassoon & Marks
43-45 Dorset Street
London
W1U 7NA
EDIPHY RESEARCH LTD
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Profit and loss account
7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 20
EDIPHY RESEARCH LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -
The directors present the strategic report for the year ended 31 March 2023.
Fair review of the business
The results for the period reflect mainly the operational and administrative costs incurred during the year ended 31st March 2023.
Key performance indicators
At 31st March 2023, the company had net liabilities of £4,250,931 (2022: £2,611,401) and loss for the year ended 31st March 2023 £1,639,530 (2022; £1,385,750).
Directors' statement of compliance with duty to promote the success of the Company
The directors of the company have acted in a way that they consider, in good faith, would most likely promote the success of the company for the benefit of its shareholders, employees and customers as a whole, and in doing so, the directors have considered (amongst other matters):
the likely consequences of any decision in the long term,
the interest of the company's employees,
the need to foster the company's business relationships with customer and others,
the impact of the company's operations on the community and environment,
the desirability of the company maintaining a reputation for high standards of business conduct, and
the need to act fairly among shareholders, employees and customers of the company.
C D Murphy
Director
16 January 2024
EDIPHY RESEARCH LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -
The directors present their annual report and financial statements for the year ended 31 March 2023.
Principal activities
The principal activity of the company continued to be that of the development and provision of trading technology services for institutional fixed income investment managers.
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
C D Murphy
D C Wild
Energy and carbon report
As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
Statement of directors' responsibilities
The directors are responsible 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 then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
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.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
EDIPHY RESEARCH LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -
On behalf of the board
C D Murphy
Director
16 January 2024
EDIPHY RESEARCH LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF EDIPHY RESEARCH LTD
- 4 -
Opinion
We have audited the financial statements of Ediphy Research Ltd (the 'company') for the year ended 31 March 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including 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 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.
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.
Material uncertainty relating to going concern
We draw attention to Note 1.2 to the financial statements concerning the Company's ability to continue as a going concern.
As described in more detail in Note 1, the company is seeking new investment. Should the fund raising not complete, the Directors will be required to consider alternative strategic options.
As stated in Note 1, these conditions indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Notwithstanding the above, 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.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's 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.
EDIPHY RESEARCH LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EDIPHY RESEARCH LTD
- 5 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our 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 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, 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.
Extent to which the audit was considered capable of detecting irregularities, including fraud
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.
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the financial services sector;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Financial Conduct Authority (FCA), Companies Act 2006, taxation legislation, anti-bribery, anti-money-laundering, employment;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
EDIPHY RESEARCH LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EDIPHY RESEARCH LTD
- 6 -
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations; and
understanding the design of the company’s remuneration policies.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates as set out in note 2 were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
reading the minutes of meetings of those charged with governance;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HMRC, relevant regulators including the FCA and reviewing the company’s compliance monitoring procedures and findings.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's 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.
Jonathan Marks
Senior Statutory Auditor
For and on behalf of Fisher, Sassoon & Marks
16 January 2024
Chartered Accountants
Statutory Auditor
43-45 Dorset Street
London
W1U 7NA
EDIPHY RESEARCH LTD
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2023
- 7 -
2023
2022
Notes
£
£
Turnover
-
-
Administrative expenses
(1,900,769)
(1,762,548)
Loss before taxation
(1,900,769)
(1,762,548)
Tax on loss
6
261,239
376,798
Loss for the financial year
(1,639,530)
(1,385,750)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
EDIPHY RESEARCH LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
- 8 -
2023
2022
£
£
Loss for the year
(1,639,530)
(1,385,750)
Other comprehensive income
-
-
Total comprehensive income for the year
(1,639,530)
(1,385,750)
EDIPHY RESEARCH LTD
BALANCE SHEET
AS AT
31 MARCH 2023
31 March 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
7
3,282
3,028
Current assets
Debtors
8
324,749
438,112
Cash at bank and in hand
251,817
85,329
576,566
523,441
Creditors: amounts falling due within one year
9
(4,830,779)
(3,137,870)
Net current liabilities
(4,254,213)
(2,614,429)
Net liabilities
(4,250,931)
(2,611,401)
Capital and reserves
Called up share capital
12
58,390
58,390
Profit and loss reserves
(4,309,321)
(2,669,791)
Total equity
(4,250,931)
(2,611,401)
The financial statements were approved by the board of directors and authorised for issue on 16 January 2024 and are signed on its behalf by:
C D Murphy
Director
Company registration number 10663893 (England and Wales)
EDIPHY RESEARCH LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 10 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 April 2021
58,390
(1,284,041)
(1,225,651)
Year ended 31 March 2022:
Loss and total comprehensive income
-
(1,385,750)
(1,385,750)
Balance at 31 March 2022
58,390
(2,669,791)
(2,611,401)
Year ended 31 March 2023:
Loss and total comprehensive income
-
(1,639,530)
(1,639,530)
Balance at 31 March 2023
58,390
(4,309,321)
(4,250,931)
EDIPHY RESEARCH LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
16
(205,255)
(28,779)
Income taxes refunded
376,798
Net cash inflow/(outflow) from operating activities
171,543
(28,779)
Investing activities
Purchase of tangible fixed assets
(5,055)
(184)
Net cash used in investing activities
(5,055)
(184)
Net increase/(decrease) in cash and cash equivalents
166,488
(28,963)
Cash and cash equivalents at beginning of year
85,329
114,292
Cash and cash equivalents at end of year
251,817
85,329
EDIPHY RESEARCH LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 12 -
1
Accounting policies
Company information
Ediphy Research Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 43-45 Dorset Street, 2nd Floor, London, England, W1U 7NA.
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.
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 £.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.The company is undertaking a fund raise to raise the required funding for the company to meet its current budgeted spending requirements and regulatory capital requirements. Should the fund raising not be successful, the Directors will be required to consider alternative strategic options.
These conditions indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern.
Notwithstanding the uncertainty, the Directors are confident that fund raising will complete successfully and accordingly, these financial statements have been prepared on a going concern basis which the Directors consider appropriate in these circumstances.
Were the Company no longer a going concern, adjustments may be required to the carrying value of assets, provisions would be required for the future liabilities arising as a consequence of the Company ceasing business and assets currently classified as non-current would be reclassified as current.
1.3
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Computers
25% Straight Line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.4
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
EDIPHY RESEARCH LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 13 -
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
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
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
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.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
EDIPHY RESEARCH LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 14 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
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.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
EDIPHY RESEARCH LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 15 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
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.
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.
EDIPHY RESEARCH LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 16 -
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 critical judgements are the following:
The calculation of the company's current corporation tax charge involves a degree of estimation and judgement with respect of certain items, such as the research and development tax credit, whose tax treatment cannot be finally determined until resolution has been reached with the relevant tax authority. The amount ultimately receivable may be materially different, therefore have an impact on the overall losses and cash flows of the company in future periods.
Determining the useful life for tangible fixed assets requires management to make an estimate based on the value in use and life of the asset.
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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Operating loss
2023
2022
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange gains
(35)
(28)
Fees payable to the company's auditor for the audit of the company's financial statements
16,000
6,500
Depreciation of owned tangible fixed assets
4,801
2,189
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Mangement and Administration
13
9
Directors
2
3
Total
15
12
EDIPHY RESEARCH LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
4
Employees
(Continued)
- 17 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,220,178
1,091,579
Social security costs
159,481
136,202
Pension costs
12,413
10,517
1,392,072
1,238,298
5
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
272,673
333,833
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
142,673
186,667
6
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
(261,239)
(231,238)
Adjustments in respect of prior periods
(145,560)
Total current tax
(261,239)
(376,798)
EDIPHY RESEARCH LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
6
Taxation
(Continued)
- 18 -
The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Loss before taxation
(1,900,769)
(1,762,548)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
(361,146)
(334,884)
Unutilised tax losses carried forward
361,194
334,884
Permanent capital allowances in excess of depreciation
(49)
Research and development tax credit
(261,238)
(376,798)
Taxation credit for the year
(261,239)
(376,798)
7
Tangible fixed assets
Computers
£
Cost
At 1 April 2022
14,767
Additions
5,055
At 31 March 2023
19,822
Depreciation and impairment
At 1 April 2022
11,739
Depreciation charged in the year
4,801
At 31 March 2023
16,540
Carrying amount
At 31 March 2023
3,282
At 31 March 2022
3,028
8
Debtors
2023
2022
Amounts falling due within one year:
£
£
Corporation tax recoverable
261,239
376,798
Amounts owed by group undertakings
5,003
5,003
Other debtors
58,507
56,311
324,749
438,112
EDIPHY RESEARCH LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 19 -
9
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
13,994
Amounts owed to group undertakings
4,762,000
3,097,000
Taxation and social security
46,122
40,870
Other creditors
8,663
4,830,779
3,137,870
10
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
63,510
61,314
Carrying amount of financial liabilities
Measured at amortised cost
4,784,657
3,097,000
11
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
12,413
10,517
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
12
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of 1p each
5,400,000
5,400,000
54,000
54,000
Founder Shares of 1p each
219,500
219,500
2,195
2,195
Early Term Shares of 1p each
219,500
219,500
2,195
2,195
5,839,000
5,839,000
58,390
58,390
Every issued Founder share has one voting right per share.
The Early Team shares and Ordinary shares have no voting right. On a return of assets on Liquidation, capital reduction or otherwise (other than a conversion of purchase of shares), the assets of the company remaining after the payment of its liabilities shall be applied (to the extent that the company is lawfully able to do so) in the following order of priority:
First, in paying to the holders of the Founder shares in respect of the total amount of Founder shares held the sum of £10,000,000 and thereafter, in distributing the balance among the holders of the shares pro rata to the number of shares held, as if they all constituted shares of the same class.
EDIPHY RESEARCH LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 20 -
13
Events after the reporting date
There are no events to report.
14
Related party transactions
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 applicable in the UK and Republic of Ireland, not to disclose related party transactions with Wholly owned subsidiaries within the group.
15
Ultimate controlling party
The parent entity is Ediphy Group Limited a company registered in England and Wales.
The ultimate controlling party is Mr C Murphy by virtue of owning majority of the parent company's issued share capital.
16
Cash absorbed by operations
2023
2022
£
£
Loss for the year after tax
(1,639,530)
(1,385,750)
Adjustments for:
Taxation credited
(261,239)
(376,798)
Depreciation and impairment of tangible fixed assets
4,801
2,189
Movements in working capital:
Increase in debtors
(2,196)
(13,218)
Increase in creditors
1,692,909
1,744,798
Cash absorbed by operations
(205,255)
(28,779)
17
Analysis of changes in net funds
1 April 2022
Cash flows
31 March 2023
£
£
£
Cash at bank and in hand
85,329
166,488
251,817
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