REGISTERED NUMBER: 07836018 (England and Wales) |
GROUP STRATEGIC REPORT, |
REPORT OF THE DIRECTORS AND |
CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 JANUARY 2023 |
FOR |
DECIBEL GROUP LONDON LIMITED |
REGISTERED NUMBER: 07836018 (England and Wales) |
GROUP STRATEGIC REPORT, |
REPORT OF THE DIRECTORS AND |
CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 JANUARY 2023 |
FOR |
DECIBEL GROUP LONDON LIMITED |
DECIBEL GROUP LONDON LIMITED (REGISTERED NUMBER: 07836018) |
CONTENTS OF THE CONSOLIDATED FINANCIAL STATEMENTS |
for the Year Ended 31 January 2023 |
Page |
Company Information | 1 |
Group Strategic Report | 2 |
Report of the Directors | 5 |
Report of the Independent Auditors | 7 |
Consolidated Income Statement | 11 |
Consolidated Other Comprehensive Income | 12 |
Consolidated Balance Sheet | 13 |
Company Balance Sheet | 14 |
Consolidated Statement of Changes in Equity | 15 |
Company Statement of Changes in Equity | 16 |
Consolidated Cash Flow Statement | 17 |
Notes to the Consolidated Cash Flow Statement | 18 |
Notes to the Consolidated Financial Statements | 19 |
DECIBEL GROUP LONDON LIMITED |
COMPANY INFORMATION |
for the Year Ended 31 January 2023 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Statutory Auditors |
Herschel House |
58 Herschel Street |
Slough |
Berkshire |
SL1 1PG |
DECIBEL GROUP LONDON LIMITED (REGISTERED NUMBER: 07836018) |
GROUP STRATEGIC REPORT |
for the Year Ended 31 January 2023 |
The directors present their strategic report of the company and the group for the year ended 31 January 2023. |
REVIEW OF BUSINESS |
The principal activity of the Group is providing its digital experience analytics software. The Group sells predominantly to Enterprise customers, with one to three-year contracts. The software is built for use by the customer directly, without significant training. |
In fiscal year 2023 the Group's main priority was to expand its customer base through partnering with the Medallia group following their acquisition of the Decibel Group in March 2021. Revenue fell by 43% to the prior financial period. The Group continues to see the market for its product to be heavily industry agnostic, as any company with significant web traffic needs to analyse its website activity. |
The Group continued its operations in Europe and through its growth strategy aims to grow its customer bases' geographical footprint.The Group balanced its investment during the year across the following areas: |
- Engineering, to improve and continue to stabilise the platform to accommodate heavier usage and more customers. |
- Marketing, which continued to target a wide variety of industries. |
- Sales, which leveraged the relationship with Medallia and their customer base. |
DECIBEL GROUP LONDON LIMITED (REGISTERED NUMBER: 07836018) |
GROUP STRATEGIC REPORT |
for the Year Ended 31 January 2023 |
PRINCIPAL RISKS AND UNCERTAINTIES |
Competitive risks |
The Group services customers in a wide range of industries across many geographies. While competitors exist, the market is considered significant enough for many competitors to succeed. |
Cyber Security Risks |
Cyber-attacks and other malicious internet-based activity continue to occur, with cloud based services targeted in the past. The directors are confident that the procedures designed and implemented by the group are appropriate to mitigate the risk of this occurring. |
Inflation |
Global market pressures have seen interest rates increase globally. This has created a challenging labour market which the directors are continually reviewing due to the group's mix of expenses weighted towards its workforce. |
Credit risk |
The Group's customers are typically large enterprises that do not exhibit credit risk. Historically, there have been minimal write offs. Furthermore, most customers pay for subscriptions upfront and, as such, collection issues would be determined early in the relationship. |
Liquidity risk |
The Group operates in a cash burn business, which is a part of the long-term strategy. Liquidity concerns will always be a concern for such a business, however appropriate debt and equity raises are the solution to any projected shortfalls. |
Foreign currency risk |
The Group has exposure to currency movements related to both trade debtors and creditors. However, as it operates predominantly in USD and GBP, it believes the mix of inflows and outflows in each currency is sufficient to avoid unnecessary exposure to such risks. |
Staff turnover |
The Group believes it offers competitive salaries and benefits, and as such its turnover is at a manageable level. The acquisition by Medallia, Inc. also provided a larger recruitment structure. There is not a deemed risk of an unmanageable level of turnover. |
Coronavirus risk |
The directors continue to monitor the ongoing situation regarding the COVID-19 pandemic and the potential impact on the group and take mitigating actions as required. |
The largest impact of COVID-19 has been changes to our working model and allowing employees to work from home or the office based on their preference. Decibel has seen a high percentage of its workforce decide to work from home. |
To date no refinancing is required and there has been no material adverse effect on the company's results, asset carrying values or statement of financial position. |
DECIBEL GROUP LONDON LIMITED (REGISTERED NUMBER: 07836018) |
GROUP STRATEGIC REPORT |
for the Year Ended 31 January 2023 |
METRICS AND KPIS |
In addition to any others mentioned herein, the business monitors its operations through various metrics that are critical to a Software as a Service business: |
-Bookings Growth is the growth in the total value of signed contracts. It is a key metric for the group to help measure future income and business growth. |
-Billings Growth is the growth in the total amount invoiced to customers and is key for monitoring expected cash flows. |
- Customer Retention percentage is critical to assess regularly as retaining and adding revenue to existing customers is a critical way to improve margins as we mature as a business. |
Through Medallia's network and guidance as well as continued improvements to the platform the Group foresees continued expansion both with new and existing customers. Geographical growth will stay the strongest in the UK, US and Europe however expansion to other geographies remains a viable option. |
FUTURE DEVELOPMENTS |
The directors aim to maintain the existing level of investment in people, in addition to developing new policies and process to deliver sustained and future growth. Over the next year, the Group will show continued investment, and the directors are very confident that this investment will deliver increased growth and open new opportunities to grow market share. |
ON BEHALF OF THE BOARD: |
DECIBEL GROUP LONDON LIMITED (REGISTERED NUMBER: 07836018) |
REPORT OF THE DIRECTORS |
for the Year Ended 31 January 2023 |
The directors present their report with the financial statements of the company and the group for the year ended 31 January 2023. |
PRINCIPAL ACTIVITY |
The Group's principal activity during the year continued to be the provision of digital experience analytics software. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 January 2023. |
DIRECTORS |
The directors who have held office during the period from 1 February 2022 to the date of this report are as follows: |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Group Strategic Report, the Report of the Directors 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 the group and of the profit or loss of the group 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; |
- | 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the group's auditors are aware of that information. |
DECIBEL GROUP LONDON LIMITED (REGISTERED NUMBER: 07836018) |
REPORT OF THE DIRECTORS |
for the Year Ended 31 January 2023 |
AUDITORS |
The auditors, Oury Clark Chartered Accountants, are deemed to be re-appointed under Section 487 (2) of the Companies Act 2006. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
DECIBEL GROUP LONDON LIMITED |
Opinion |
We have audited the financial statements of Decibel Group London Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 January 2023 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the group's and of the parent company affairs as at 31 January 2023 and of the group's 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 group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the 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 group's and the parent company's ability to continue as a going concern for a period of at least twelve months and one day 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 directors are responsible for the other information. The other information comprises the information in the Report of the Directors and Strategic Report, but does not include the financial statements and our Report of the Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be misstated. If we identify such inconsistencies or apparent 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 misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions 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 Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
DECIBEL GROUP LONDON LIMITED |
Matters on which we are required to report by exception |
In light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified any matters in the Group Strategic Report or the Report of the Directors that are inconsistent with our overall view of the financial statements. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the parent company 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 Statement of Directors' Responsibilities set out on page five, 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 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 group's and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
DECIBEL GROUP LONDON LIMITED |
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 a Report of the Auditors 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. |
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: |
Identifying and assessing potential irregularities, including fraud |
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following: |
- | Considering the nature of the industry, sector, control environment and current business activities, including possible financial covenants, performance targets and subsequent remuneration and quality assurance risks. |
- | Enquiring of management concerning policies and procedures relating to: |
1. Complying with laws, regulations and registrations and whether there were any instances of non-compliance. |
2. Mitigating, detecting and responding to fraud risk and whether there has been any actual or possible instances of fraud. |
- | Discussing within the engagement team, with component auditors and internal specialists, where necessary, regarding how and where fraud may occur in the financial statements along with possible indicators of fraud. We identified the following areas most likely to be susceptible to fraud: |
1. Revenue recognition; |
2. Management override. |
- | Discussing within the engagement team, with component auditors and internal specialists, where necessary, the legal and regulatory framework in which the group operates and, in particular, those which would have an impact on the financial statements. The key laws and regulations considered were the Companies Act 2006 and UK tax legislation. |
Audit response to the risks identified |
As noted above, we identified revenue recognition and management override as matters that would be most likely to be susceptible to fraud. Our procedures to respond to these risks included: |
- | Reviewing a sample of sales contracts and invoices to ensure sales are legitimate and recognised in the correct accounting period. |
- | Review of journals posted in the year to ensure there was no evidence of management override. |
Furthermore, we also identified compliance with key laws, regulations and registrations, as above, as being significant areas where there may be potential non-compliance. Our procedures to respond to these risks included the following: |
- | Review financial statements and disclosures to supporting documentation to assess compliance with the Companies Act 2006; |
- | Review of the corporation tax return to ensure it complies with UK tax legislation; |
- | Safeguard review of the accounts by a Chartered Accountant independent of the audit team. |
The above matters and identified laws, regulations and registrations and potential fraud risks were communicated to all the engagement team members, component auditors and internal specialists, where necessary, in order to ensure the audit team have the ability to identify such risks. The whole team remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. |
There are inherent limitations in the audit procedures described above and the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
DECIBEL GROUP LONDON LIMITED |
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 Report of the Auditors. |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Statutory Auditors |
Herschel House |
58 Herschel Street |
Slough |
Berkshire |
SL1 1PG |
DECIBEL GROUP LONDON LIMITED (REGISTERED NUMBER: 07836018) |
CONSOLIDATED |
INCOME STATEMENT |
for the Year Ended 31 January 2023 |
31.1.23 | 31.1.22 |
Notes | £ | £ |
TURNOVER | 3 | 6,088,555 | 10,690,661 |
Cost of sales | 5,852 | 2,251,820 |
GROSS PROFIT | 6,082,703 | 8,438,841 |
Administrative expenses | 8,754,051 | 16,865,413 |
OPERATING LOSS | 5 | (2,671,348 | ) | (8,426,572 | ) |
Profit on sale of subsidiary | 6 | - | 13,559,567 |
(2,671,348 | ) | 5,132,995 |
Interest receivable and similar income | 97 | - |
(2,671,251 | ) | 5,132,995 |
Interest payable and similar expenses | 7 | - | (450,585 | ) |
(LOSS)/PROFIT BEFORE TAXATION | (2,671,251 | ) | 5,583,580 |
Tax on (loss)/profit | 8 | 15,969 | 93,103 |
(LOSS)/PROFIT FOR THE FINANCIAL YEAR |
( |
) |
(Loss)/profit attributable to: |
Owners of the parent | (2,687,220 | ) | 5,490,477 |
DECIBEL GROUP LONDON LIMITED (REGISTERED NUMBER: 07836018) |
CONSOLIDATED |
OTHER COMPREHENSIVE INCOME |
for the Year Ended 31 January 2023 |
31.1.23 | 31.1.22 |
Notes | £ | £ |
(LOSS)/PROFIT FOR THE YEAR | (2,687,220 | ) | 5,490,477 |
OTHER COMPREHENSIVE INCOME |
- | (763,392 | ) |
Income tax relating to other comprehensive income |
- |
- |
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX |
- |
(763,392 |
) |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
(2,687,220 |
) |
4,727,085 |
Total comprehensive income attributable to: |
Owners of the parent | (2,687,220 | ) | 4,727,085 |
DECIBEL GROUP LONDON LIMITED (REGISTERED NUMBER: 07836018) |
CONSOLIDATED BALANCE SHEET |
31 January 2023 |
31.1.23 | 31.1.22 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 11 | 42,914 | 60,248 |
Tangible assets | 12 | - | 75,613 |
Investments | 13 | - | - |
42,914 | 135,861 |
CURRENT ASSETS |
Debtors | 14 | 10,887,512 | 21,635,087 |
Cash at bank | 2,729,848 | 3,095,712 |
13,617,360 | 24,730,799 |
CREDITORS |
Amounts falling due within one year | 15 | 13,418,612 | 21,738,304 |
NET CURRENT ASSETS | 198,748 | 2,992,495 |
TOTAL ASSETS LESS CURRENT LIABILITIES |
241,662 |
3,128,356 |
CREDITORS |
Amounts falling due after more than one year |
16 |
22,982 |
179,974 |
NET ASSETS | 218,680 | 2,948,382 |
CAPITAL AND RESERVES |
Called up share capital | 18 | 1 | 185,156 |
Share premium | 19 | 21,442,476 | 21,442,476 |
Translation reserve | 19 | (354,752 | ) | (312,270 | ) |
Retained earnings | 19 | (20,869,045 | ) | (18,366,980 | ) |
SHAREHOLDERS' FUNDS | 218,680 | 2,948,382 |
The financial statements were approved by the Board of Directors and authorised for issue on 29 March 2024 and were signed on its behalf by: |
D E Madden - Director |
DECIBEL GROUP LONDON LIMITED (REGISTERED NUMBER: 07836018) |
COMPANY BALANCE SHEET |
31 January 2023 |
31.1.23 | 31.1.22 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 11 |
Tangible assets | 12 |
Investments | 13 |
CURRENT ASSETS |
Debtors | 14 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 15 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CAPITAL AND RESERVES |
Called up share capital | 18 |
Share premium | 19 |
Retained earnings | 19 |
SHAREHOLDERS' FUNDS |
Company's (loss)/profit for the financial year | (80,044 | ) | 6,837,324 |
The financial statements were approved by the Board of Directors and authorised for issue on |
DECIBEL GROUP LONDON LIMITED (REGISTERED NUMBER: 07836018) |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
for the Year Ended 31 January 2023 |
Called up |
share | Retained | Share |
capital | earnings | premium |
£ | £ | £ |
Balance at 1 February 2021 | 185,156 | (21,915,932 | ) | 21,442,476 |
Changes in equity |
Total comprehensive income | - | 5,490,477 | - |
Transfer to retained earnings |
on share option scheme closure | - | (1,941,525 | ) | - |
Balance at 31 January 2022 | 185,156 | (18,366,980 | ) | 21,442,476 |
Changes in equity |
Reduction in share capital | (185,155 | ) | - | - |
Total comprehensive income | - | (2,687,220 | ) | - |
Reduction in share capital | - | 185,155 | - |
Balance at 31 January 2023 | 1 | (20,869,045 | ) | 21,442,476 |
Share |
Translation | options | Total |
reserve | reserve | equity |
£ | £ | £ |
Balance at 1 February 2021 | 621,826 | 105,627 | 439,153 |
Changes in equity |
Total comprehensive income | (763,392 | ) | - | 4,727,085 |
Foreign exchange on consolidation | (170,704 | ) | - | (170,704 | ) |
Settlement of share options |
granted | - | (2,047,152 | ) | (2,047,152 | ) |
Transfer to retained earnings |
on share option scheme closure | - | 1,941,525 | - |
Balance at 31 January 2022 | (312,270 | ) | - | 2,948,382 |
Changes in equity |
Reduction in share capital | - | - | (185,155 | ) |
Total comprehensive income | - | - | (2,687,220 | ) |
Foreign exchange on consolidation | (42,482 | ) | - | (42,482 | ) |
Reduction in share capital | - | - | 185,155 |
Balance at 31 January 2023 | (354,752 | ) | - | 218,680 |
DECIBEL GROUP LONDON LIMITED (REGISTERED NUMBER: 07836018) |
COMPANY STATEMENT OF CHANGES IN EQUITY |
for the Year Ended 31 January 2023 |
Called up | Share |
share | Retained | Share | options | Total |
capital | earnings | premium | reserve | equity |
£ | £ | £ | £ | £ |
Balance at 1 February 2021 | ( |
) |
Changes in equity |
Total comprehensive income | - | - |
Share options expense | - | - | - | (19,016 | ) | (19,016 | ) |
Transfer to retained earnings | - | 86,611 | - | (86,611 | ) | - |
Balance at 31 January 2022 |
Changes in equity |
Reduction in share capital | ( |
) | - | - | (185,155 | ) |
Total comprehensive income | - | ( |
) | - | ( |
) |
Reduction in share capital | - | - | 185,155 |
Balance at 31 January 2023 |
DECIBEL GROUP LONDON LIMITED (REGISTERED NUMBER: 07836018) |
CONSOLIDATED CASH FLOW STATEMENT |
for the Year Ended 31 January 2023 |
31.1.23 | 31.1.22 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | (4,039,661 | ) | (6,800,632 | ) |
Tax paid | 1,074,908 | (109,473 | ) |
Net cash from operating activities | (2,964,753 | ) | (6,910,105 | ) |
Cash flows from investing activities |
Purchase of tangible fixed assets | - | (8,245 | ) |
Interest received | 97 | - |
Net cash from investing activities | 97 | (8,245 | ) |
Cash flows from financing activities |
Movement in loans due to group members | (7,004,446 | ) | 18,926,299 |
Movement in loans due from group members | 9,603,238 | (14,076,362 | ) |
Net cash from financing activities | 2,598,792 | 4,849,937 |
Decrease in cash and cash equivalents | (365,864 | ) | (2,068,413 | ) |
Cash and cash equivalents at beginning of year |
2 |
3,095,712 |
5,164,125 |
Cash and cash equivalents at end of year | 2 | 2,729,848 | 3,095,712 |
DECIBEL GROUP LONDON LIMITED (REGISTERED NUMBER: 07836018) |
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT |
for the Year Ended 31 January 2023 |
1. | RECONCILIATION OF (LOSS)/PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
31.1.23 | 31.1.22 |
£ | £ |
(Loss)/profit before taxation | (2,671,251 | ) | 5,583,580 |
Depreciation charges | 53,956 | 88,115 |
Loss/(profit) on disposal of fixed assets | 38,991 | (603 | ) |
Loss on revaluation of fixed assets | - | 4,447 |
Share options expense | - | (19,016 | ) |
Translation reserve movement | (42,483 | ) | (934,096 | ) |
Movement of share option reserve | - | (2,028,136 | ) |
Finance costs | - | (450,585 | ) |
Finance income | (97 | ) | - |
(2,620,884 | ) | 2,243,706 |
Decrease/(increase) in trade and other debtors | 53,596 | (3,971,848 | ) |
Decrease in trade and other creditors | (1,472,373 | ) | (5,072,490 | ) |
Cash generated from operations | (4,039,661 | ) | (6,800,632 | ) |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 31 January 2023 |
31.1.23 | 1.2.22 |
£ | £ |
Cash and cash equivalents | 2,729,848 | 3,095,712 |
Year ended 31 January 2022 |
31.1.22 | 1.2.21 |
£ | £ |
Cash and cash equivalents | 3,095,712 | 5,164,125 |
3. | ANALYSIS OF CHANGES IN NET FUNDS |
At 1.2.22 | Cash flow | At 31.1.23 |
£ | £ | £ |
Net cash |
Cash at bank | 3,095,712 | (365,864 | ) | 2,729,848 |
3,095,712 | (365,864 | ) | 2,729,848 |
Total | 3,095,712 | (365,864 | ) | 2,729,848 |
DECIBEL GROUP LONDON LIMITED (REGISTERED NUMBER: 07836018) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
for the Year Ended 31 January 2023 |
1. | STATUTORY INFORMATION |
Decibel Group London Limited is a |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
The group financial statements consolidate the financial statements of Decibel Group London Limited and all its subsidiary undertakings drawn up to 31 January 2023. |
The financial statements are presented in Sterling (£), which is the functional currency of the company. |
Financial Reporting Standard 102 - reduced disclosure exemptions |
The group has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": |
• | the requirement of paragraph 3.17(d); |
• | the requirement of paragraph 33.7. |
Going concern |
The financial statements have been prepared on a going concern basis as Medallia, Inc, an intermediate parent company, will continue to support the group for a period of at least 12 months and 1 day from the date the audit report attached to these financial statements is signed. |
Related party exemption |
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements. |
Critical accounting judgements and key sources of estimation uncertainty |
In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. |
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of revision and future periods where the revision affects both the current and future periods. |
Recoverability of receivables |
The recoverability of the receivables is determined by the group management. Management monitors the circumstances relating to the payments due from third parties, together with the recoverability of the amounts due. Any indication of non-recoverability and change in fair value is adjusted for accordingly. |
Turnover |
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. |
Turnover includes revenue earned from the rendering of services. Revenue is recognised over the life of the contracts. Where work has been invoiced but not yet performed, deferred revenue is accounted for within the financial statements. |
DECIBEL GROUP LONDON LIMITED (REGISTERED NUMBER: 07836018) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 January 2023 |
2. | ACCOUNTING POLICIES - continued |
Intangible assets |
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. |
Software, IP Rights & Trademarks are being amortised evenly over their estimated useful life of five years. |
Tangible fixed assets |
Fixtures and fittings | - |
Computer equipment | - |
Tangible fixed assets are initially included at cost and reviewed for impairment. |
Financial instruments |
Financial assets measured at fair value through profit or loss comprise cash at bank and in hand and loan notes. |
Financial assets that are debt instruments measured at amortised cost comprise trade and other debtors, amounts owed by group companies and prepayments. |
All financial assets are basic financial insturments. |
Financial liabilities measured at fair value through profit or loss comprise loan warrant options. The loan warrant options are complex financial instruments. |
Financial liabilities measured at amortised cost comprise loans, trade and other creditors, accruals and deferred income. All financial liabilities measured at amortised cost are basic financial instruments. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Foreign currencies |
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
DECIBEL GROUP LONDON LIMITED (REGISTERED NUMBER: 07836018) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 January 2023 |
2. | ACCOUNTING POLICIES - continued |
Investments in subsidiaries |
Investments in subsidiaries by the parent company are held at the lower of cost and net realisable value. Impairment reviews are undertaken annually and if required, investment are impaired to their net realisable value. |
Statement of cash flows |
The statement of cash flows was prepared using the indirect method. |
3. | TURNOVER |
The turnover and loss (2022 - profit) before taxation are attributable to the one principal activity of the group. |
An analysis of turnover by class of business is given below: |
31.1.23 | 31.1.22 |
£ | £ |
Software as a service | 6,088,555 | 10,690,661 |
6,088,555 | 10,690,661 |
An analysis of turnover by geographical market is given below: |
31.1.23 | 31.1.22 |
£ | £ |
United Kingdom | 2,975,238 | 3,395,907 |
Europe | 1,369,175 | 2,285,923 |
United States of America | 1,744,142 | 4,265,516 |
Rest of the World | - | 743,315 |
6,088,555 | 10,690,661 |
4. | EMPLOYEES AND DIRECTORS |
31.1.23 | 31.1.22 |
£ | £ |
Wages and salaries | - | 2,787,115 |
Social security costs | - | 427,602 |
Other pension costs | - | 33,688 |
- | 3,248,405 |
The average number of employees during the year was as follows: |
31.1.23 | 31.1.22 |
Administration | - | 3 |
Customer success | - | 2 |
Engineering | - | 8 |
Marketing | - | 4 |
Sales | - | 3 |
Sales delivery | - | 4 |
DECIBEL GROUP LONDON LIMITED (REGISTERED NUMBER: 07836018) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 January 2023 |
4. | EMPLOYEES AND DIRECTORS - continued |
During 2022 wages costs were taken over by Medallia Ltd (a fellow group entity). During the current year Medallia Ltd recharged wages costs of £7,645,650 (2022: £6,486,312) in relation to 41 employees. |
The directors are also key management personnel. |
Directors are remunerated by a fellow group company, and therefore there are no Directors' remuneration shown in the accounts (2022: £40,000). |
No contributions were made during the year in respect of the Director who takes part in the group pension scheme (2022: £4,000). |
5. | OPERATING LOSS |
The operating loss is stated after charging/(crediting): |
31.1.23 | 31.1.22 |
£ | £ |
Other operating leases | 1,432 | 51,068 |
Depreciation - owned assets | 36,622 | 68,575 |
Loss on disposal of fixed assets | 38,991 | - |
Software, IP Rights & Trade Marks amortisation | 17,334 | 19,541 |
Auditors' remuneration | 68,224 | 136,641 |
Foreign exchange differences | (89,622 | ) | (1,001,259 | ) |
6. | EXCEPTIONAL ITEMS |
31.1.23 | 31.1.22 |
£ | £ |
Profit on sale of subsidiary | - | 13,559,567 |
Exceptional items in the prior year relate to the sale of the entire shareholding of Decibel Insight Inc to the parent company, Medallia Inc. |
7. | INTEREST PAYABLE AND SIMILAR EXPENSES |
31.1.23 | 31.1.22 |
£ | £ |
Fair value movement |
of warrants | - | (450,585 | ) |
- | (450,585 | ) |
8. | TAXATION |
Analysis of the tax charge |
The tax charge on the loss for the year was as follows: |
31.1.23 | 31.1.22 |
£ | £ |
Current tax: |
UK corporation tax | 15,969 | 81,862 |
Foreign tax | - | 11,241 |
Tax on (loss)/profit | 15,969 | 93,103 |
DECIBEL GROUP LONDON LIMITED (REGISTERED NUMBER: 07836018) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 January 2023 |
8. | TAXATION - continued |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
31.1.23 | 31.1.22 |
£ | £ |
(Loss)/profit before tax | (2,671,251 | ) | 5,583,580 |
(Loss)/profit multiplied by the standard rate of corporation tax in the UK of 19 % (2022 - 19 %) |
(507,538 |
) |
1,060,880 |
Effects of: |
Expenses not deductible for tax purposes | 12,500 | 6,470 |
Adjustments to tax charge in respect of previous periods | - | (6,431 | ) |
Income not taxable | (8,572 | ) | (2,643,981 | ) |
Effects of group relief | 488,985 | - |
Other | 30,594 | - |
R&D tax credit claim |
Share option adjustments | - | (579,917 | ) |
Losses available for future use | - | 2,292,527 |
Adjustments from sold subsidiary | - | (36,445 | ) |
Total tax charge | 15,969 | 93,103 |
Tax effects relating to effects of other comprehensive income |
31.1.22 |
Gross | Tax | Net |
£ | £ | £ |
Translation reserve movement | (763,392 | ) | - | (763,392 | ) |
9. | INDIVIDUAL INCOME STATEMENT |
As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements. |
10. | OTHER COMPREHENSIVE INCOME |
Other comprehensive income of £nil (2022: £763,392) relates entirely to foreign exchange movements on restatement of historic balances. |
DECIBEL GROUP LONDON LIMITED (REGISTERED NUMBER: 07836018) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 January 2023 |
11. | INTANGIBLE FIXED ASSETS |
Group |
Software, |
IP Rights |
& Trade |
Marks |
£ |
COST |
At 1 February 2022 |
and 31 January 2023 | 397,702 |
AMORTISATION |
At 1 February 2022 | 337,454 |
Amortisation for year | 17,334 |
At 31 January 2023 | 354,788 |
NET BOOK VALUE |
At 31 January 2023 | 42,914 |
At 31 January 2022 | 60,248 |
12. | TANGIBLE FIXED ASSETS |
Group |
Fixtures |
and | Computer |
fittings | equipment | Totals |
£ | £ | £ |
COST |
At 1 February 2022 | 3,172 | 310,466 | 313,638 |
Disposals | (3,172 | ) | (310,466 | ) | (313,638 | ) |
At 31 January 2023 | - | - | - |
DEPRECIATION |
At 1 February 2022 | 1,777 | 236,248 | 238,025 |
Charge for year | 635 | 35,987 | 36,622 |
Eliminated on disposal | (2,412 | ) | (272,235 | ) | (274,647 | ) |
At 31 January 2023 | - | - | - |
NET BOOK VALUE |
At 31 January 2023 | - | - | - |
At 31 January 2022 | 1,395 | 74,218 | 75,613 |
DECIBEL GROUP LONDON LIMITED (REGISTERED NUMBER: 07836018) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 January 2023 |
13. | FIXED ASSET INVESTMENTS |
Company |
Shares in |
group |
undertakings |
£ |
COST |
At 1 February 2022 |
Additions |
Disposals | ( |
) |
At 31 January 2023 |
NET BOOK VALUE |
At 31 January 2023 |
At 31 January 2022 |
The group or the company's investments at the Balance Sheet date in the share capital of companies include the following: |
Subsidiaries |
Registered office: 3rd Floor, Ashley Road, Altrincham WA14 2DT |
Nature of business: |
% |
Class of shares: | holding |
31.1.23 | 31.1.22 |
£ | £ |
Aggregate capital and reserves | ( |
) | ( |
) |
Loss for the year | ( |
) | ( |
) |
Registered office: 3rd Floor, Ashley Road, Altrincham WA14 2DT |
Nature of business: |
% |
Class of shares: | holding |
31.1.23 | 31.1.22 |
£ | £ |
Aggregate capital and reserves |
Profit for the year |
DECIBEL GROUP LONDON LIMITED (REGISTERED NUMBER: 07836018) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 January 2023 |
13. | FIXED ASSET INVESTMENTS - continued |
Registered office: 3rd Floor, Ashley Road, Altrincham, WA14 2DT |
Nature of business: |
% |
Class of shares: | holding |
31.1.23 | 31.1.22 |
£ | £ |
Aggregate capital and reserves | ( |
) |
Profit for the year |
Registered office: Neuturmstraße 5, c/o WeWork, Medallia, 80331 München |
Nature of business: |
% |
Class of shares: | holding |
31.1.23 | 31.1.22 |
£ | £ |
Aggregate capital and reserves | ( |
) | ( |
) |
Profit/(loss) for the year | ( |
) |
14. | DEBTORS |
Group | Company |
31.1.23 | 31.1.22 | 31.1.23 | 31.1.22 |
£ | £ | £ | £ |
Amounts falling due within one year: |
Trade debtors | 215,700 | 607,354 |
Amounts owed by group undertakings | 4,473,124 | 14,076,362 |
Other debtors | - | 1,194 |
R&D tax credit receivable | - | 1,090,741 |
Prepayments and accrued income | 6,324 | 151,306 |
4,695,148 | 15,926,957 |
Amounts falling due after more than one | year: |
Amounts owed by group undertakings | - | - |
Other debtors | 6,192,364 | 5,708,130 |
6,192,364 | 5,708,130 |
Aggregate amounts | 10,887,512 | 21,635,087 |
Non-current other debtors includes £6,192,364 (2022: £5,708,130) relating to loan notes which accrue interest at a rate of 0.12% per annum, and are repayable in full for cash on 31 July 2024. |
Amounts owed by group companies refers to companies not included in the consolidated financial statements, but that are part of the wider group. |
DECIBEL GROUP LONDON LIMITED (REGISTERED NUMBER: 07836018) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 January 2023 |
15. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
31.1.23 | 31.1.22 | 31.1.23 | 31.1.22 |
£ | £ | £ | £ |
Trade creditors | 9,112 | 35,427 |
Amounts owed to group undertakings | 11,921,853 | 18,926,299 |
Tax | 2,554 | 2,418 |
VAT | 5,083 | 54,697 | - | - |
Other creditors | 3,344 | 5 |
Accruals and deferred income | 1,476,666 | 2,719,458 |
13,418,612 | 21,738,304 |
Amounts owed to group companies refers to companies not included in the consolidated financial statements, but that are part of the wider group. |
16. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
Group |
31.1.23 | 31.1.22 |
£ | £ |
Accruals and deferred income | 22,982 | 179,974 |
17. | FINANCIAL INSTRUMENTS |
Financial assets | Group | Company |
31.1.23 | 31.1.22 | 31.1.23 | 31.1.22 |
£ | £ | £ | £ |
Financial assets measured at fair value through profit and loss |
8,922,212 |
8,803,842 |
6,192,3494 |
5,828,180 |
Financial assets measured at amortised cost |
4,695,148 |
15,926,957 |
23,246,505 |
23,748,011 |
Total | 13,617,360 | 24,730,799 | 29,438,999 | 29,576,191 |
Financial liabilities | Group | Company |
31.1.23 | 31.1.22 | 31.1.23 | 31.1.22 |
£ | £ | £ | £ |
Financial liabilities measured at fair value through profit and loss |
0 |
0 |
0 |
0 |
Financial liabilities measured at amortised cost |
(13,441,594 |
) |
(21,918,278 |
) |
(2,885,518 |
) |
(2,928,423 |
) |
Total | (13,441,594 | ) | (21,918,278 | ) | (2,888,518 | ) | (2,928,423 | ) |
DECIBEL GROUP LONDON LIMITED (REGISTERED NUMBER: 07836018) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the Year Ended 31 January 2023 |
18. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: |
Class: |
Nominal value: |
31.1.23 |
31.1.22 |
100 (2022: 9,752,812) | Ordinary | £0.01 | 1 | 97,528 |
0 (2022: 3,460,635) | Series A preference | £0.01 | 0 | 34,606 |
0 (2022: 5,302,197) | Series B preference | £0.01 | 0 | 53,022 |
1 | 185,156 |
The Company undertook a reduction in share capital in the year, reducing share capital from £185,156 to £1. |
19. | RESERVES |
Group |
Retained | Share | Translation |
earnings | premium | reserve | Totals |
£ | £ | £ | £ |
At 1 February 2022 | (18,366,980 | ) | 21,442,476 | (312,270 | ) | 2,763,226 |
Deficit for the year | (2,687,220 | ) | (2,687,220 | ) |
Foreign exchange on consolidation | - | - | (42,482 | ) | (42,482 | ) |
Reduction in share capital | 185,155 | - | - | 185,155 |
At 31 January 2023 | (20,869,045 | ) | 21,442,476 | (354,752 | ) | 218,679 |
Company |
Retained | Share |
earnings | premium | Totals |
£ | £ | £ |
At 1 February 2022 | 26,486,792 |
Deficit for the year | ( |
) | ( |
) |
Reduction in share capital | 185,155 | - | 185,155 |
At 31 January 2023 | 26,591,903 |
20. | ULTIMATE CONTROLLING PARTY |
Medallia, Inc. was the Company's immediate parent company during and at the end of the period to 31 January 2023. The registered office is 6220 Stoneridge Mall Rd., 2nd Floor, Pleasanton, CA 94588, USA. |
The directors believe there is no ultimate controlling party. |