Company registration number 13309739 (England and Wales)
PHRASE UK LTD
FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 JANUARY 2024
PAGES FOR FILING WITH REGISTRAR
PHRASE UK LTD
CONTENTS
Page
Directors' responsibilities statement
1
Balance sheet
2
Notes to the financial statements
3 - 8
PHRASE UK LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE PERIOD ENDED 31 JANUARY 2024
- 1 -

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:

 

 

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.

PHRASE UK LTD
BALANCE SHEET
AS AT
31 JANUARY 2024
31 January 2024
- 2 -
31 January 2024
31 December 2022
Notes
£
£
£
£
Fixed assets
Tangible assets
4
27,467
43,708
Current assets
Debtors
5
187,078
591,868
Cash at bank and in hand
93,910
258,397
280,988
850,265
Creditors: amounts falling due within one year
6
(579,122)
(632,944)
Net current (liabilities)/assets
(298,134)
217,321
Total assets less current liabilities
(270,667)
261,029
Creditors: amounts falling due after more than one year
7
(4,617,400)
-
0
Net (liabilities)/assets
(4,888,067)
261,029
Capital and reserves
Called up share capital
1
1
Profit and loss reserves
(4,888,068)
261,028
Total equity
(4,888,067)
261,029

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the board of directors and authorised for issue on 13 July 2024 and are signed on its behalf by:
Giovanni Casnici
Georg Ell
Director
Director
Martin Konop
Director
Company registration number 13309739 (England and Wales)
PHRASE UK LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 JANUARY 2024
- 3 -
1
Accounting policies
Company information

Phrase UK Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 73 Cornhill, London, EC3V 3QQ.

1.1
Reporting period

During the period the company changed its accounting reference from 31 December to 31 January.

 

The comparative figures are for the twelve month period to 31 December 2022.

1.2
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. The principal accounting policies adopted are set out below.

1.3
Going concern

The Directors have prepared these financial statements on the going concern basis, notwithstanding that there is a deficiency of assets as at 31 January 2024, the validity of which is dependent on the availability of a loan in the maximum principal amount of €13,000,000 from group companies.

 

The company has an agreement in place for such facility to enable it to meet its obligation as they fall due for the foreseeable future, and at least 12 months from the date of approval of these financial statements.

 

The financial statements do not include any adjustments that would result from discontinuance of the loan facility. On this basis, the Directors consider that it is appropriate for the financial statement to be prepared on the going concern basis.

1.4
Turnover

Prior to current reporting period, turnover represented management fees recognised when the service had been rendered. The fee was charged at 110% of the expenses incurred in the services required.

 

In the current reporting period, the company changed its service agreement system to recognise income as follows:

 

- 3.5% as service fee on amounts charged by a supplier to a recipient for sales support services.

 

- 5% mark-up as management service on services provided in accordance with the agreement.

 

- 10% as service fee on software development services charged by a supplier to a recipient.

Revenue from contracts for the provision of professional 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.

PHRASE UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 4 -
1.5
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Computers
Straightline over three years

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.

1.6
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.

1.7
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

PHRASE UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 5 -
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.

1.8
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.9
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

PHRASE UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 6 -
1.10
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

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.

3
Employees

The average monthly number of persons (including directors) employed by the company during the period was:

2024
2022
Number
Number
Total
36
16
4
Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 January 2023
58,674
Additions
6,669
At 31 January 2024
65,343
Depreciation and impairment
At 1 January 2023
14,966
Depreciation charged in the period
22,910
At 31 January 2024
37,876
Carrying amount
At 31 January 2024
27,467
At 31 December 2022
43,708
PHRASE UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 JANUARY 2024
- 7 -
5
Debtors
2024
2022
Amounts falling due within one year:
£
£
Trade debtors
161,338
542,986
Other debtors
25,740
48,882
187,078
591,868
6
Creditors: amounts falling due within one year
2024
2022
£
£
Trade creditors
2,434
2,429
Amounts owed to group undertakings
120,573
-
0
Corporation tax
39,961
41,253
Other taxation and social security
161,168
87,161
Other creditors
254,986
502,101
579,122
632,944
7
Creditors: amounts falling due after more than one year
2024
2022
£
£
Amounts owed to group undertakings
4,617,400
-
0

The loan from the parent company is part of a group bank loan. The loan provider has fixed and floating charge over all the assets of the company.

8
Audit report information

As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:

The auditor's report was unqualified.

Emphasis of matter

In forming our opinion our opinion on the financial statement, we have considered the adequacy of the disclosure made in note 1.3 to the financial statements concerning the company's ability to continue as a going concern. The company's principal source of finance is the loan facility from group company; at the date of this report no finance has been put in place to settle this obligation. This indicates the existence of a material uncertainty which may cast significant doubt on the company's ability ability to continue as going concern. The financial statements do not include the adjustments that would result if the company were unable to continue as a going concern. We consider that this matter should be drawn to your attention but our opinion is not qualified.

PHRASE UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 JANUARY 2024
8
Audit report information
(Continued)
- 8 -
Senior Statutory Auditor:
Asgher Sultan
Statutory Auditor:
ZMS Solutions Limited
Date of audit report:
13 July 2024
9
Related party transactions

The company has taken exemption in accordance with paragraph 33.1A of FRS 102 not to disclose transactions entered into between two or more members of a group, provided that any subsidiary which is party to the transaction is wholly owned by such a member.

 

10
Parent company

The immediate parent company is Phrase a.s., a company registered in the Czech Republic. The ultimate parent company is CETP IV Investment 5 Sarl, a company registered in Luxembourg. The registered address is Avenue Charles de Gaulle 2, Luxembourg.

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