Registered number: 08107385 (England and Wales)
NEXSAN UK LTD.
DIRECTORS' REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
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COMPANY INFORMATION
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Units 33-35 Parker Centre
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ZEDRA Corporate Reporting Services (UK) Limited
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CONTENTS
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Statement of Changes in Equity
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Notes to the Financial Statements
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NEXSAN UK LTD.
REGISTERED NUMBER:08107385
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BALANCE SHEET
AS AT 31 DECEMBER 2023
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Debtors due within 1 year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Provisions for liabilities
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Page 1
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NEXSAN UK LTD.
REGISTERED NUMBER:08107385
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BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023
The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 4 to 11 form part of these financial statements.
Page 2
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STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2023
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The notes on pages 4 to 11 form part of these financial statements.
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Page 3
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
1.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland' and the requirements of the Companies Act 2006. 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.
These financial statements cover an 18 month period from 1 July 2022 to 31 December 2023. Therefore, the prior year figures are not entirely comparable.
Nexsan UK Ltd changed its presentational currency from USD to GBP for the financial statements for the period ended 31 December 2023 for group reporting purposes. The comparative figures for the year ended 30 June 2022 have also been translated from USD to GBP for presentational purposes.
The following principal accounting policies have been applied:
The Company is in a net asset position at the period end, this is primarily the result of a significant stock balance for which the Company has a promising pipeline of orders expected to support continued trading for a period of at least 12 months. Should the Company require further financial support, the parent company, Nexsan Holdings LLC, has provided written confirmation that it will provide financial support for a period of at least 12 months from the date of signing these financial statements.
In assessing the Company's ability to continue as a going concern, the directors have considered the availability of financing from the parent company through a review of their financial position and the budgeted cash requirements of the Company, as well as the group's access to additional funding. However, due to the business still being in its relative infancy and the fact that it was acquired from another business who had entered into bankruptcy proceedings, there is doubt over the continued ability of the group to be in sufficient financial health to support the UK over the next 12 months. Despite this uncertainty, the directors have determined that the financial statements should continue to be prepared on the going concern basis.
Page 4
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
1.Accounting policies (continued)
Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.
Sale of goods
Turnover from the sale of goods is recognised when all of the following conditions are satisfied:
∙the Company has transferred the significant risks and rewards of ownership to the buyer;
∙the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙the amount of turnover can be measured reliably;
∙it is probable that the Company will receive the consideration due under the transaction; and
∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Intercompany sales are generated from sales of products made to the Company's parent company on a recharge basis to obtain a margin of 45% based on the cost of the items sold. Turnover continues to be recognised as stated above.
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Current and deferred taxation
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The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Page 5
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
1.Accounting policies (continued)
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Tangible fixed assets (continued)
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Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
The estimated useful lives range as follows:
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Short-term leasehold property
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
Page 6
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
1.Accounting policies (continued)
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.
Short term debtors are measured at transaction price, less any impairment. Amounts owed by group undertakings are intercompany loans measured at cost. These loans are unsecured, interest free and repayable on demand.
Short term creditors are measured at the transaction price. Amounts owed to group undertakings are intercompany loans measured at cost. These loans are unsecured, interest free and repayable on demand.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions.
Interest income is recognised in profit or loss using the effective interest method.
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Provisions for liabilities
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Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to the Statement of Comprehensive Income in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Balance Sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance Sheet.
Page 7
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
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Judgements in applying accounting policies and key sources of estimation uncertainty
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The preparation of financial statements in conformity with FRS 102 requires management to make judgements, estimates and assumptions that affect the application of policies and reported amount of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
In respect of the judgements, estimates and assumptions made by management in preparing these financial statements none are considered to have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities presented.
Impairment and valuation of stock
Stock is valued at the lower of cost and net realisable value. In almost all cases management estimates that stock will be sold for greater than cost and as a result no impairment is recorded. In the case of slow moving stock, management have recognised a provision for 15% of the total stock value. This estimate is based on historic experience of slow moving stock and this is continually reviewed to ensure prudent estimates for provisions are made.
Provision for warranties
The directors have reviewed the need for a provision in the accounts against their expectation for future probable economic outflows and concluded that it is appropriate to include a provision based on these. The provision is in respect of economic outflows associated with servicing the warranty agreements entered into with customers upon the sale of products. These costs are estimated as 15% of total revenue still to be earned on active customers at the year end. The estimate is based on historic experience, real time information and is continually reviewed to ensure prudent estimates for provisions are made.
The auditors' report on the financial statements for the period ended 31 December 2023 was unqualified.
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In their report, the auditors emphasised the following matter without qualifying their report:
The auditor drew attention to note 1.2 to the accounts which indicates the existence of material uncertainty which may cause significant doubt about the Company's ability to continue as a going concern.
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The audit report was signed on 15 November 2024 by Dominic King FCA (Senior Statutory Auditor) on behalf of ZEDRA Corporate Reporting Services (UK) Limited.
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The average monthly number of employees during the period was 21 (2022 - 1).
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Page 8
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
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Short-term leasehold property
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Charge for the period on owned assets
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Finished goods and goods for resale
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Page 9
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
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Amounts owed by group undertakings
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Prepayments and accrued income
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income
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Charged to profit or loss
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The Company has also recognised a provision against stock at the year end, for £574,908. Please refer to note 2 for information surrounding judgements in applying accounting policies and key sources of estimation uncertainty when calculating these provisions.
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Page 10
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
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Allotted, called up and fully paid
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1 (2022 - 1) Ordinary shares share of £1.00
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Commitments under operating leases
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At 31 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Nexsan Holdings, LLC. is the parent of the smallest group of which the Company is a member for which consolidated financial statements are prepared. The registered office address of the parent company is 1287 Anvilwood Avenue, Sunnyvale, CA 92089.
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Post balance sheet events
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There were no adjusting or non-adjusting events occurring between the end of the reporting period and the date these financial statements were approved.
Page 11
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