Company registration number 06360167 (England and Wales)
PHOENIX EYE LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023
PHOENIX EYE LTD
COMPANY INFORMATION
Directors
N A Winch
D Winch
(Appointed 13 September 2022)
Secretary
N A Winch
Company number
06360167
Registered office
Patrick House
Gosforth Park Avenue
Gosforth Business Park
Newcastle upon Tyne
NE12 8EG
Auditor
Sumer Auditco Limited
The Beehive, Beehive Ring Road
London Gatwick Airport
Gatwick
United Kingdom
RH6 0PA
PHOENIX EYE 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
Notes to the financial statements
11 - 23
PHOENIX EYE LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 30 APRIL 2023
- 1 -
The directors present the strategic report for the year ended 30 April 2023.
Review of the business
The directors review performance of the business based upon key performance criteria:
2023 2022 Variance
Turnover £10.0m £15.3m (£5.3m)
Gross profit/ (loss) £3.7m £4.1m £0.4m
EBITDA £366k* £1.2m (£0.8m)
Net current (liabilities) £1.2m (£5k) £1.2m
Net assets/ (liabilities) £1.6m £0.7m £0.9m
*without impact of exceptional item recognised in the P&L
Turnover decreased to £10.0m in 2023 from £15.3m in 2022 following the sale of the Door Supervision Division (DSD) in September 2022. In the year to 30 April 2022, DSD income accounted for just just under 70% of total company income and the disposal in the year is the main contributing factor to reduced turnover in the current year, as can be seen in note 3. Turnover from other security services has actually increased in the year from £4.7m to £5.7m.
Managing and monitoring risks
The directors continually analyse key risks to the company:
People:
The company is reliant on its ability to recruit, develop and retain staff to protect the business it has today and to deliver its future growth plans. Employees are provided with training and support that allow them to reach their potential within the company. Remuneration packages and pay rates are compared against security industry data to ensure that they remain competitive.
Reputational and regulatory risk:
The company has achieved “Approved Contractor Status” with the Security Industry Authority. This is a recognised hallmark within the security industry and provides assurance to our customers that we have appropriate training and systems in place to ensure our services are delivered to a high standard. Should we lose this status our reputation will suffer and we may lose significant customers as a result. To mitigate this, all employees are required to gain appropriate qualifications and registrations. Training and support is available to all employees. In addition, we continually measure our performance against key consumer indicators and management carry out regular venue audits.
Events after the reporting date
Post year end the remaining trade and net assets were hived up into parent company Phoenix FM Services Limited and the company has remained inactive since. As at date of approval the directors have no intention of liquidating the company in the next 12 months and therefore the financial statements have been prepared on the going concern basis.
Key performance indicators
The directors monitor and manage the performance of the Company, assisted by the production of detailed monthly management reports containing accounts and a number of key financial and non-financial performance measures including; turnover, profit margins, working capital levels and cash flows.
N A Winch
Director
07 February 2024
PHOENIX EYE LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 APRIL 2023
- 2 -
The directors present their annual report and financial statements for the year ended 30 April 2023.
Principal activities
The principal activity of the company continued to be that of the provision of security services.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £300,000. 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:
N A Winch
S W Howe
(Resigned 13 September 2022)
D Winch
(Appointed 13 September 2022)
Auditor
Sumer Auditco Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
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;
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.
Strategic report
The group has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of risk management and future developments.
PHOENIX EYE LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 3 -
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.
On behalf of the board
N A Winch
Director
07 February 2024
PHOENIX EYE LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF PHOENIX EYE LTD
- 4 -
Opinion
We have audited the financial statements of Phoenix Eye Ltd (the 'company') for the year ended 30 April 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity 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 30 April 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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.
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.
PHOENIX EYE LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF PHOENIX EYE LTD
- 5 -
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.
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.
PHOENIX EYE LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF PHOENIX EYE LTD
- 6 -
Capability of the audit in detecting irregularities, including fraud
Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.
The following laws and regulations were identified as being of significance to the entity:
Those laws and regulations considered to have a direct effect on the financial statements including UK financial reporting standards, Company Law, Tax and Pensions legislation, and distributable profits legislation.
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).
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 member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Paul Gainford
Senior Statutory Auditor
For and on behalf of Sumer Auditco Limited
Statutory Auditor
The Beehive, Beehive Ring Road
London Gatwick Airport
Gatwick
United Kingdom
RH6 0PA
07 February 2024
PHOENIX EYE LTD
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 APRIL 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
9,998,702
15,256,976
Cost of sales
(6,273,130)
(11,183,953)
Gross profit
3,725,572
4,073,023
Administrative expenses
(3,536,522)
(3,095,040)
Other operating income
983
15,131
Exceptional item
4
1,856,702
Operating profit
5
2,046,735
993,114
Interest payable and similar expenses
7
(77,359)
(44,666)
Other gains and losses
8
(742,679)
-
Profit before taxation
1,226,697
948,448
Tax on profit
9
(7,182)
(206,079)
Profit for the financial year
1,219,515
742,369
The profit and loss account has been prepared on the basis that all operations are continuing operations.
PHOENIX EYE LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 APRIL 2023
- 8 -
2023
2022
£
£
Profit for the year
1,219,515
742,369
Other comprehensive income
-
-
Total comprehensive income for the year
1,219,515
742,369
PHOENIX EYE LTD
BALANCE SHEET
AS AT
30 APRIL 2023
30 April 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
11
56,139
Tangible assets
12
881,800
929,064
881,800
985,203
Current assets
Stocks
13
137,732
145,957
Debtors
14
8,286,560
6,778,548
Cash at bank and in hand
125
8,424,417
6,924,505
Creditors: amounts falling due within one year
15
(7,242,688)
(6,929,441)
Net current assets/(liabilities)
1,181,729
(4,936)
Total assets less current liabilities
2,063,529
980,267
Creditors: amounts falling due after more than one year
16
(238,224)
(71,912)
Provisions for liabilities
Deferred tax liability
19
176,709
179,274
(176,709)
(179,274)
Net assets
1,648,596
729,081
Capital and reserves
Called up share capital
21
100
100
Profit and loss reserves
1,648,496
728,981
Total equity
1,648,596
729,081
The financial statements were approved by the board of directors and authorised for issue on 07 February 2024 and are signed on its behalf by:
N A Winch
Director
Company registration number 06360167 (England and Wales)
PHOENIX EYE LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 May 2021
100
(13,388)
(13,288)
Year ended 30 April 2022:
Profit and total comprehensive income
-
742,369
742,369
Balance at 30 April 2022
100
728,981
729,081
Year ended 30 April 2023:
Profit and total comprehensive income
-
1,219,515
1,219,515
Dividends
10
-
(300,000)
(300,000)
Balance at 30 April 2023
100
1,648,496
1,648,596
PHOENIX EYE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023
- 11 -
1
Accounting policies
Company information
Phoenix Eye Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Patrick House, Gosforth Park Avenue, Gosforth Business Park, Newcastle upon Tyne, NE12 8EG.
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 £.
The financial statements have been prepared under the historical cost convention. 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’: Interest income/expense and net gains/losses for financial instruments not measured at fair value;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Danieli Group Limited. These consolidated financial statements are available from its registered office, Patrick House, Gosforth Park Avenue, Gosforth Business Park, Newcastle upon Tyne, NE12 8EG.
1.2
Going concern
The directors have prepared detailed forecasts on activity levels, working capital and overall funding requirements. The Directors, with reference to these forecasts and the working capital of the group, believe that the entity has adequate resources to continue in operational existence for a period of no less than 12 months from the date of approval of the financial statements. In addition, the Directors have had confirmation from the parent company that they will provide the support as required. As such the Directors consider it appropriate to prepare the financial statements on a going concern basis.true
1.3
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. Turnover is recognised at the point the service is provided.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
PHOENIX EYE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 12 -
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation 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:
Customer list
10 years straight line
1.6
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:
Plant and equipment
10% - 20% straight line
Fixtures and fittings
10% straight line or 20% reducing balance
CCTV equipment
8 - 15% straight line
Motor vehicles
20% 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.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible 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).
1.8
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
1.9
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.
PHOENIX EYE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 13 -
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.
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
PHOENIX EYE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 14 -
1.10
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.
1.11
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.
1.12
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, if considered material to financial statements.
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
PHOENIX EYE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 15 -
1.15
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
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 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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Assessing indicators of impairment
In assessing whether there have been any indicators of impairment in assets, the directors have considered both external and internal sources of information such as market conditions and experience of recoverability. There have been no indicators of impairments identified during the current financial year.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Determining residual values and useful economic lives of fixed assets
The group depreciates tangible fixed assets over their estimated useful lives. The estimation of the useful lives of assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied by management.
Judgement is applied by management when determining the residual values of tangible fixed assets. When determining the residual value management aim to assess the amount that the group would currently obtain for the disposal of the asset, if it were already of the condition expected at the end of its useful economic life.
The carrying amount of tangible fixed assets at the reporting date was £881,800 (2022 - £929,064).
PHOENIX EYE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 16 -
3
Turnover
2023
2022
£
£
Turnover analysed by class of business
Provision of security services
5,744,087
4,729,173
Provision of door supervision services
4,254,615
10,527,803
9,998,702
15,256,976
The company's turnover is wholly derived from within the United Kingdom.
4
Exceptional item
2023
2022
£
£
Expenditure
Exceptional - profit on disposal of business segment
(1,856,702)
-
In September 2022 the company sold its Door Supervision Division (DSD), including the customer list, which resulted in the profit recognised above. A new subsidiary was formed into which the DSD was transferred and this company was then sold to the acquirer.
5
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
10,250
10,250
Depreciation of owned tangible fixed assets
160,860
157,086
Depreciation of tangible fixed assets held under finance leases
5,129
4,705
Loss/(profit) on disposal of tangible fixed assets
3,789
(10,486)
Amortisation of intangible assets
9,783
20,583
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Operations
401
768
Admin
16
13
Management
3
8
Directors
2
2
Total
422
791
PHOENIX EYE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
6
Employees
(Continued)
- 17 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
7,147,545
11,523,912
Social security costs
442,194
820,547
Pension costs
87,155
121,834
7,676,894
12,466,293
7
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
21,944
14,912
Interest on finance leases and hire purchase contracts
3,258
4,663
Other interest
52,157
25,091
77,359
44,666
8
Other gains and losses
2023
2022
£
£
Impairment of amounts due from related parties
(742,679)
-
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
9,747
176,241
Adjustments in respect of prior periods
(23,102)
Total current tax
9,747
153,139
Deferred tax
Origination and reversal of timing differences
(2,565)
52,940
Total tax charge
7,182
206,079
The main rate of corporation tax increased to 25% from 1 April 2023 under the Finance Bill 2021. Deferred tax has been provided at the rates expected to be in place when the timing differences reverse. A marginal rate of 19.49% has been used for the period to 30 April 2023 when assessing the corporation tax charge as below.
PHOENIX EYE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
9
Taxation
(Continued)
- 18 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
1,226,697
948,448
Expected tax charge based on the standard rate of corporation tax in the UK of 19.49% (2022: 19.00%)
239,083
180,205
Tax effect of expenses that are not deductible in determining taxable profit
170,336
10,200
Tax effect of income not taxable in determining taxable profit
(367,946)
(7,813)
Adjustments in respect of prior years
(23,102)
Effect of change in corporation tax rate
(32)
43,026
Group relief
(34,259)
Permanent capital allowances in excess of depreciation
3,563
Taxation charge for the year
7,182
206,079
10
Dividends
2023
2022
£
£
Interim paid
300,000
11
Intangible fixed assets
Goodwill
Customer list
Total
£
£
£
Cost
At 1 May 2022
280,000
205,827
485,827
Disposals
(280,000)
(205,827)
(485,827)
At 30 April 2023
Amortisation and impairment
At 1 May 2022
280,000
149,688
429,688
Amortisation charged for the year
9,783
9,783
Disposals
(280,000)
(159,471)
(439,471)
At 30 April 2023
Carrying amount
At 30 April 2023
At 30 April 2022
56,139
56,139
PHOENIX EYE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 19 -
12
Tangible fixed assets
Plant and equipment
Fixtures and fittings
CCTV equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 May 2022
103,238
691,445
1,496,392
206,015
2,497,090
Additions
16,492
61,120
48,270
125,882
Disposals
(97,590)
(33,930)
(224,372)
(164,008)
(519,900)
At 30 April 2023
5,648
674,007
1,333,140
90,277
2,103,072
Depreciation and impairment
At 1 May 2022
96,316
378,668
899,673
193,369
1,568,026
Depreciation charged in the year
1,580
54,151
107,619
2,639
165,989
Eliminated in respect of disposals
(93,733)
(33,930)
(224,372)
(160,708)
(512,743)
At 30 April 2023
4,163
398,889
782,920
35,300
1,221,272
Carrying amount
At 30 April 2023
1,485
275,118
550,220
54,977
881,800
At 30 April 2022
6,922
312,777
596,719
12,646
929,064
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases:
2023
2022
£
£
Fixtures and fittings
36,856
41,561
Motor vehicles
46,361
83,217
41,561
13
Stocks
2023
2022
£
£
Finished goods and goods for resale
137,732
145,957
PHOENIX EYE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 20 -
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,257,573
1,676,857
Amounts owed by group undertakings
5,065,266
Other debtors
1,746,582
4,897,626
Prepayments and accrued income
217,139
204,065
8,286,560
6,778,548
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
17
222,199
152,418
Obligations under finance leases
18
25,945
15,683
Trade creditors
124,385
144,016
Amounts owed to group undertakings
2,663,221
Corporation tax
78,234
68,487
Other taxation and social security
2,402,888
2,222,193
Other creditors
1,616,988
3,986,988
Accruals and deferred income
108,828
339,656
7,242,688
6,929,441
Included within other creditors are debt factor liabilities of £1,116,079 (2022: £1,419,843). These are secured by way of a debenture on certain assets.
Obligations under finance lease are secured under the assets to which they relate.
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans
17
207,972
61,456
Obligations under finance leases
18
30,252
10,456
238,224
71,912
Obligations under finance lease are secured under the assets to which they relate.
PHOENIX EYE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 21 -
17
Loans and overdrafts
2023
2022
£
£
Bank loans
311,197
131,456
Bank overdrafts
118,974
82,418
430,171
213,874
Payable within one year
222,199
152,418
Payable after one year
207,972
61,456
The bank loans are secured by a debenture on certain assets and are supported by an unlimited guarantee from a number of entities related to the company, as set out in the related party note. The bank loans incur interest of 5.90%-13.56% and are repayable in monthly instalments over a 5 year term. The loans are secured by a personal guarantee provided by one of the directors of the company.
18
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
25,945
15,683
In two to five years
30,252
10,456
56,197
26,139
Finance lease payments represent rentals payable by the company for certain items of fixtures and fittings. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The finance lease liabilities are secured on the assets to which they relate.
19
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Origination and reversal of timing differences
176,709
179,274
PHOENIX EYE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
19
Deferred taxation
(Continued)
- 22 -
2023
Movements in the year:
£
Liability at 1 May 2022
179,274
Credit to profit or loss
(2,565)
Liability at 30 April 2023
176,709
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
87,155
121,834
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.
Included within other creditors due within one year are £17,817 (2022: £44,001) of outstanding pension contributions.
21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
22
Events after the reporting date
Post year end the remaining trade and net assets were hived up into parent company Phoenix FM Services Limited and the company has remained inactive since. As at date of approval the directors have no intention of liquidating the company in the next 12 months and therefore the financial statements have been prepared on the going concern basis.
PHOENIX EYE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 23 -
23
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sales
Sales
Purchases
Purchases
2023
2022
2023
2022
£
£
£
£
Other related parties
891,058
-
48,000
2023
2022
Amounts due to related parties
£
£
Other related parties
472,881
2,500,200
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due from related parties
£
£
Other related parties
1,746,582
4,897,626
Other information
Other related parties consist of entities under the control of the company's directors and majority shareholders. Outstanding balances are unsecured, interest free and have no fixed repayment terms.
The company is party to an unlimited guarantee between all companies in the Danieli Group; Danieli Group Limited, Danieli Holdings Limited, Phoenix Eye Limited, Phoenix FM Services Limited, Student Accommodation (UK) Limited, Education & Training Services (UK) Limited, Leisuretime (Leasehold) Limited, Homecare Plus Limited, Northridge Healthcare Limited, YOLO (Ponteland) Limited, YOLO (Newcastle) Limited, Boutique Bar and Tipi Company Limited, Stack Containers Limited, Stack Trading Limited, Stack (Seaburn) Limited and The Muddler (Newcastle) Limited.
24
Ultimate controlling party
The ultimate parent company is Danieli Group Limited, a company registered in England and Wales. The consolidated accounts are available at the parent company’s registered office Patrick House, Gosforth Park Avenue, Gosforth Business Park, Newcastle upon Tyne, NE12 8EG.
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