Company Registration No. 10986998 (England and Wales)
H3O Digital Limited
Unaudited financial statements
for the year ended 30 September 2023
Pages for filing with the registrar
H3O Digital Limited
Contents
Page
Statement of financial position
1
Statement of changes in equity
2
Notes to the financial statements
3 - 8
H3O Digital Limited
Statement of financial position
As at 30 September 2023
1
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
4
33,421
36,093
Current assets
Debtors
5
867,473
1,049,686
Cash at bank and in hand
455,278
575,698
1,322,751
1,625,384
Creditors: amounts falling due within one year
6
(999,031)
(848,855)
Net current assets
323,720
776,529
Net assets
357,141
812,622
Capital and reserves
Called up share capital
2,500
2,500
Profit and loss reserves
354,641
810,122
Total equity
357,141
812,622
The directors of the company have elected not to include a copy of the income statement within the financial statements.true
For the financial year ended 30 September 2023 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 8 February 2024 and are signed on its behalf by:
Mrugesh Dave
Liam Oliver
Director
Director
Company Registration No. 10986998
H3O Digital Limited
Statement of changes in equity
For the year ended 30 September 2023
2
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 October 2021
2,500
737,241
739,741
Period ended 30 September 2022:
Profit and total comprehensive income for the period
-
397,881
397,881
Dividends
-
(325,000)
(325,000)
Balance at 30 September 2022
2,500
810,122
812,622
Year ended 30 September 2023:
Profit and total comprehensive income for the year
-
364,519
364,519
Dividends
-
(820,000)
(820,000)
Balance at 30 September 2023
2,500
354,641
357,141
H3O Digital Limited
Notes to the financial statements
For the year ended 30 September 2023
3
1
Accounting policies
Company information
H3O Digital Limited is a private company limited by shares incorporated in England and Wales. The registered office is Barratt House, 345 Oxford Street, London, England, W1C 2JE.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of certain assets. The principal accounting policies adopted are set out below.
1.2
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of a digital transformation business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from contracts for the provision services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
1.3
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
25% reducing balance
Fixtures and fittings
25% reducing balance
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.
H3O Digital Limited
Notes to the financial statements (continued)
For the year ended 30 September 2023
1
Accounting policies (continued)
4
1.4
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.5
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.6
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
H3O Digital Limited
Notes to the financial statements (continued)
For the year ended 30 September 2023
1
Accounting policies (continued)
5
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.
1.7
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.8
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. 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.
H3O Digital Limited
Notes to the financial statements (continued)
For the year ended 30 September 2023
1
Accounting policies (continued)
6
1.9
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.11
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
2
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 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.
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
7
7
H3O Digital Limited
Notes to the financial statements (continued)
For the year ended 30 September 2023
7
4
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Total
£
£
£
Cost
At 1 October 2022
41,031
11,823
52,854
Additions
11,318
11,318
Disposals
(7,820)
(7,820)
At 30 September 2023
44,529
11,823
56,352
Depreciation and impairment
At 1 October 2022
13,693
3,068
16,761
Depreciation charged in the year
6,946
2,189
9,135
Eliminated in respect of disposals
(2,965)
(2,965)
At 30 September 2023
17,674
5,257
22,931
Carrying amount
At 30 September 2023
26,855
6,566
33,421
At 30 September 2022
27,338
8,755
36,093
5
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
760,016
925,803
Other debtors
107,457
123,883
867,473
1,049,686
6
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
222,635
614,054
Corporation tax
114,770
101,070
Other taxation and social security
145,728
120,323
Other creditors
515,898
13,408
999,031
848,855
H3O Digital Limited
Notes to the financial statements (continued)
For the year ended 30 September 2023
8
7
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2023
2022
£
£
91,995
214,656
8
Related party transactions
Professional services billed from separate service companies under common directorship
During the year the company entered into the following transactions with related parties:
2023
2022
£
£
Entities with control, joint control or significant influence over the company
555,750
621,223
2023
2022
Amounts due to related parties
£
£
Entities with control, joint control or significant influence over the company
34,710
40,950
The related party transactions above include transactions with personal service companies under common directorship. Services include technical architect and service management work. It has been confirmed these transactions have been concluded under normal market conditions.