Devtech Limited - Period Ending 2018-12-31

Registration number: 08409744

Devtech Limited

Annual Report and Unaudited Financial Statements

for the Year Ended 31 December 2018

Devtech Limited

(Registration number: 08409744)
Balance Sheet as at 31 December 2018

	Note	2018  £	2017  £
Fixed assets
Tangible assets	5	150	2,441
Investments	6	589,502	2
		589,652	2,443
Current assets
Debtors	7	95,348	114,109
Cash at bank and in hand		34,182	9,780
		129,530	123,889
Creditors: Amounts falling due within one year	8	(707,947)	(229,377)
Net current liabilities		(578,417)	(105,488)
Net assets/(liabilities)		11,235	(103,045)
Capital and reserves
Called up share capital		101	101
Share premium reserve		118	118
Profit and loss account		11,016	(103,264)
Total equity		11,235	(103,045)

For the financial year ending 31 December 2018 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

Director's responsibilities:

•	The members have not required the company to obtain an audit of its accounts for the year in question in accordance with section 476; and
•	The director acknowledges his responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.

These financial statements have been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.

These financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime and the option not to file the Profit and Loss Account has been taken.

Approved and authorised by the director on 20 August 2019
 

M Milic
Director

The notes on pages 2 to 8 form an integral part of these financial statements.
- 1 -

Devtech Limited

Notes to the Financial Statements for the Year Ended 31 December 2018

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
1 Fore Street
London
EC2Y 5EJ

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section 1A - 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006.

Basis of preparation

These financial statements have been prepared using the historical cost convention except for, where disclosed in these accounting policies, certain items that are shown at fair value.

The presentational currency of the financial statements is Pounds Sterling, being the functional currency of the primary economic environment in which the company operates. Monetary amounts in these financial statements are rounded to the nearest Pound.

Judgements and key sources of estimation uncertainty

No significant judgements or key sources of estimation uncertainty have been made by management in preparing these financial statements.

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the initial transaction dates.

Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

Tangible assets

Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class	Depreciation method and rate
Office equipment	33.3% straight line

- 2 -

Devtech Limited

Notes to the Financial Statements for the Year Ended 31 December 2018

Intangible assets

Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the company’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date.

Negative goodwill arising on an acquisition is recognised on the face of the balance sheet on the acquisition date and subsequently the excess up to the fair value of non-monetary assets acquired is recognised in profit or loss in the periods in which the non-monetary assets are recovered.

Investments

Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.

Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. All trade debtors are repayable within one year and hence are included at the undiscounted cost of cash expected to be received. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the debtors.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and all are repayable within one year and hence are included at the undiscounted amount of cash expected to be paid.

- 3 -

Devtech Limited

Notes to the Financial Statements for the Year Ended 31 December 2018

Financial instruments

Classification
Financial instruments are classified and accounted for according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Where shares are issued, any component that creates a financial liability of the company is presented as a liability on the balance sheet. The corresponding dividends relating to the liability component are charged as interest expenses in the profit and loss account.

 Recognition and measurement
All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

 Impairment
Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss.
 

3

Staff numbers

The average number of persons employed by the company (including the director) during the year, was as follows:

	2018  No.	2017  No.
Average number of employees	1	2

4

Intangible assets

	Trademarks, patents and licenses  £
Cost
Additions acquired separately	426,614
Disposals	(426,614)
At 31 December 2018	-
Carrying amount
At 31 December 2018	-

- 4 -

Devtech Limited

Notes to the Financial Statements for the Year Ended 31 December 2018

5

Tangible assets

	Furniture, fittings and equipment  £	Total £
Cost
At 1 January 2018	13,276	13,276
At 31 December 2018	13,276	13,276
Depreciation
At 1 January 2018	10,835	10,835
Charge for the year	2,291	2,291
At 31 December 2018	13,126	13,126
Carrying amount
At 31 December 2018	150	150
At 31 December 2017	2,441	2,441

- 5 -

Devtech Limited

Notes to the Financial Statements for the Year Ended 31 December 2018

6

Investments

	2018 £	2017 £
Investments in subsidiaries	2	2
Investments in associates	589,500	-
	589,502	2

Subsidiaries	£
Cost
At 1 January 2018	2
At 31 December 2018	2
Carrying amount
At 31 December 2018	2
At 31 December 2017	2

Associates	£
Cost
Additions	589,500
Provision
Carrying amount
At 31 December 2018	589,500

During the year, Intellectual Property valued at $604,000 (£426,614) was transferred to Matter 365 Inc., a company in which Devtech Limited has a 45% interest.

Consideration was in the form of a $200,000 (£141,263) priority asset loan and a sub-ordinated asset loan of $404,000 (£285,351), in line with the shareholder agreement.

Devtech Limited also holds 500 ordinary shares of $0.10 CAD each (£29), which it acquired in the year.

During the year, Devtech Limited invested a further $216,000 (£162,857) in Matter 365 Inc.

This total investment in Matter 365 Inc. at 31 December 2018 was £589,500.

At 31 December 2018, the investment in Matter 365 Inc. was deemed to be valued at cost.
 

- 6 -

Devtech Limited

Notes to the Financial Statements for the Year Ended 31 December 2018

Details of undertakings

Details of the investments (including principal place of business of unincorporated entities) in which the company holds 20% or more of the nominal value of any class of share capital are as follows:

Undertaking	Registered office	Holding	Proportion of voting rights and shares held
			2018	2017

Subsidiary undertakings
Devtech d.o.o.	Serbia	Ordinary shares	100%	100%
Devtech Employee Holdings Limited	1 Fore Street London EC2Y 5EJ	Ordinary shares	100%	100%

Associates
Matter 365 Inc.	22 Abbotsfield Road Toronto M2N 2P8	500 Ordinary Shares at $0.10 CAD per share	45%	0%
	Canada

The principal activity of Devtech d.o.o. is that of IT Services.

The principal activity of Devtech Employee Holdings Limited is that of a share holding company.

The principal activity of Matter 365 Inc. is that of IT services.

The profit for the financial period of Devtech d.o.o. was £107,158 and the aggregate amount of capital and reserves at the end of the period was £483,089.

The profit for the financial period of Devtech Employee Holdings Limited was £- and the aggregate amount of capital and reserves at the end of the period was £1.

The loss for the financial period of Matter 365 Inc. was £389,587 and the aggregate amount of capital and reserves at the end of the period was £(389,651).

7

Debtors

	2018  £	2017  £
Trade debtors	88,451	103,099
Other debtors	-	8,386
Prepayments	6,897	2,624
	95,348	114,109

- 7 -

Devtech Limited

Notes to the Financial Statements for the Year Ended 31 December 2018

8

Creditors

Creditors: amounts falling due within one year

	2018  £	2017  £
Due within one year
Trade creditors	560,324	184,358
Amounts due to related parties	62,079	-
Social security and other taxes	83,290	42,430
Other creditors	129	464
Accrued expenses	2,125	2,125
	707,947	229,377

9

Related party transactions

Summary of transactions with subsidiaries

During the year, Devtech Limited made sales to Devtech d.o.o. of £nil (2017: £224,565), purchased services from Devtech d.o.o. of £1,227,904 (2017: £178,347) and purchased Intellectual Property of £426,614 (2017: £nil).

At 31 December 2018, Devtech Limited owed Devtech d.o.o. £489,663 (2017: £178,347) for services purchased during the year, and £62,079 (2017: £nil) for Intellectual Property transferred at market value to Devtech Limited during the year.

During the year, Devtech Limited made sales to Matter 365 Inc. of £299,045 (2017: £nil) and sold Intellectual Property of £426,614 (2017: £nil).

At 31 December 2018, Matter 365 Inc. owed Devtech limited £15,669 (2017: £nil) for services provided during the year.
 

- 8 -