ACCOUNTS - Final Accounts

ACCOUNTS - Final Accounts

UNITEDLEX LIMITED - Company Information

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Registered number: 07887653










UNITEDLEX LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019


 
UNITEDLEX LIMITED
 

COMPANY INFORMATION


Directors
N G Hinton 
E P Kelly (appointed 7 January 2020)
M Odedra (appointed 1 April 2019)
G L Quinn (appointed 7 January 2020)
D Reed 
D Schirber (resigned 13 June 2019)
N Kapoor (resigned 31 December 2019)




Registered number
07887653



Registered office
42 New Broad Street, 4th Floor

London

EC2M 1JD




Independent auditors
James Cowper Kreston
Chartered Accountants and Statutory Auditor

2 Communications Road

Greenham Business Park

Newbury

Berkshire

RG19 6AB




 
UNITEDLEX LIMITED
 

CONTENTS



Page
Group Strategic Report
1
Directors' Report
2 - 3
Independent Auditors' Report
4 - 6
Consolidated Statement of Comprehensive Income
7
Consolidated Balance Sheet
8
Company Balance Sheet
9
Consolidated Statement of Changes in Equity
10
Company Statement of Changes in Equity
11
Consolidated Statement of Cash Flows
12
Analysis of Net Debt
13
Notes to the Financial Statements
14 - 26

 
UNITEDLEX LIMITED
 

GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019

Introduction
 
The Directors present the Strategic Report for the year ended 31 December 2019.

Business review
 
The Group's principal activity is the provision of consultancy services to the legal sector via corporate clients and legal firms both within the United Kingdom and across Europe. Turnover for the Group has increased during the year to £26.1m from £17.3m in the prior year. The Group has generated a loss of £2.8m in 2019 compared to a profit of £0.7m in 2018. 
The results for the year were driven by an increase in activity across the Group, but also the restructure of the UK business which led to increased administrative costs, particularly within the Litigation part of the business. The Group's intellectual property and contract review remains stable despite the restructure. The restructure to the UK business was in response to changes to the business environment of the Group's clients. 
The Group operates in a niche market and the board anticipates future growth due to the minimal number of competitors in the market. The company offers a different approach through digital transformation that the parent company, UnitedLex Corporation, is currently investing in. The Group benefits from the parent company's global presence, which covers 20-plus jurisdictions, as well as the ever developing technology available. 

Principal risks and uncertainties
 
The Group's success is dependent on the continued investment into technology and pricing by the parent company, UnitedLex Corporation. The Group will continue to focus its efforts on achieving maximum growth in existing market segments, leveraging its technology of digitisation thus serving clients promptly and efficiently. The Group's risks are managed through policies, procedures and internal controls. Policies are subject to Board approval, review by management and internal audits.

Financial key performance indicators
 
The following financial key performance indicators are monitored:
Revenue: £26.1m (2018 : £17.3m)
Gross profit: £12.4m (2018: £10.0m) (includes exchange rate impact)
Profit/(loss) after tax: £(2.8)m (2018: £0.7m) 

Other key performance indicators
 
The Group measures customer satisfaction by way of customer retention, and no clients were lost during the year. New client acquisition success is also measured to ensure that the Group is able to conitnue to grow, while conitnuing to service existing clients.


This report was approved by the board and signed on its behalf.





................................................
M Odedra
Director

Date: 19 July 2021

Page 1
 
UNITEDLEX LIMITED
 

 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019

The directors present their report and the financial statements for the year ended 31 December 2019.

Directors

The directors who served during the year were:

N G Hinton 
M Odedra (appointed 1 April 2019)
D Reed 
D Schirber (resigned 13 June 2019)
N Kapoor (resigned 31 December 2019)

E P Kelly and G L Quinn were appointed as Directors on 7 January 2020.

Results and dividends

The loss for the year, after taxation, amounted to £2,792,862 (2018 - profit £702,840).

Directors' responsibilities statement

The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the directors are required to:


∙select suitable accounting policies for the Group's financial statements and then apply them consistently;

∙make judgments 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 Group 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 the Group and to 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Future developments

Further details of the Company's future strategy can be found in the Strategic Report.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
∙so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Page 2
 
UNITEDLEX LIMITED
 

 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019

Post balance sheet events

After the reporting period the Covid-19 virus was declared as a pandemic by the World Health Organisation, which resulted in national lockdowns and a significant impact on the broader economy. The business model of the Company has not been significantly impacted by these circumstances.

Auditors

The auditors, James Cowper Kreston, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 





................................................
M Odedra
Director

Date: 19 July 2021

Page 3
 
UNITEDLEX LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF UNITEDLEX LIMITED
 

Opinion


We have audited the financial statements of UnitedLex Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2019, which comprise the Group Statement of Comprehensive Income, the Group and Company Balance Sheets, the Group Statement of Cash Flows, the Group and Company Statement of Changes in Equity and the related notes, including a summary of 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 Group's and of the parent Company's affairs as at 31 December 2019 and of the Group's loss 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.



Basis for opinion


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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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


We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:


∙the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

∙the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Group's or the parent Company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.



Other information


The directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Auditors' Report thereon. 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.


In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
Page 4
 
UNITEDLEX LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF UNITEDLEX LIMITED (CONTINUED)




We have nothing to report in this regard.


Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


∙the information given in the Group 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 Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.



Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or

∙the parent Company financial statements are not in agreement with the accounting records and returns; or

∙certain disclosures of directors' 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 on page 2, 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 Group's and the parent 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 Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Auditors' 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 Auditors' 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.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.


Page 5
 
UNITEDLEX LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF UNITEDLEX LIMITED (CONTINUED)


Use of our report
 

This report is made solely to the Company's members 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 members those matters we are required to state to them in an Auditors' 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 members for our audit work, for this report, or for the opinions we have formed.





Robert Holland BSc FCA (Senior Statutory Auditor)
  
for and on behalf of
James Cowper Kreston
 
Chartered Accountants and Statutory Auditor
  
2 Communications Road
Greenham Business Park
Newbury
Berkshire
RG19 6AB

20 July 2021
Page 6
 
UNITEDLEX LIMITED
 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2019

As restated
2019
2018
Note
£
£

  

Turnover
 4 
26,130,986
17,309,052

Cost of sales
  
(13,708,945)
(7,276,979)

Gross profit
  
12,422,041
10,032,073

Administrative expenses
  
(15,143,605)
(9,396,277)

Operating (loss)/profit
 5 
(2,721,564)
635,796

Interest payable and similar expenses
 8 
-
(424)

(Loss)/profit before tax
  
(2,721,564)
635,372

Tax on (loss)/profit
 9 
(71,298)
67,468

(Loss)/profit for the financial year
  
(2,792,862)
702,840

(Loss)/profit for the year attributable to:
  

Owners of the parent company
  
(2,792,862)
702,840

There was no other comprehensive income for 2019 (2018:£NIL).

The notes on pages 14 to 26 form part of these financial statements.

Page 7
 
UNITEDLEX LIMITED
REGISTERED NUMBER: 07887653

CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2019

2019
2018
Note
£
£

Fixed assets
  

Tangible assets
 10 
719,769
944,592

Current assets
  

Debtors: amounts falling due within one year
 12 
20,242,981
4,664,854

Cash at bank and in hand
 13 
404,656
556,424

  
20,647,637
5,221,278

Creditors: amounts falling due within one year
 14 
(22,936,942)
(4,893,964)

Net current (liabilities)/assets
  
 
 
(2,289,305)
 
 
327,314

Total assets less current liabilities
  
(1,569,536)
1,271,906

Provisions for liabilities
  

Deferred tax
 15 
-
(48,580)

Net (liabilities)/assets
  
(1,569,536)
1,223,326


Capital and reserves
  

Called up share capital 
 16 
100
100

Profit and loss account
  
(1,569,636)
1,223,226

  
(1,569,536)
1,223,326


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




................................................
M Odedra
Director

Date: 19 July 2021

The notes on pages 14 to 26 form part of these financial statements.

Page 8
 
UNITEDLEX LIMITED
REGISTERED NUMBER: 07887653

COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2019

2019
2018
Note
£
£

Fixed assets
  

Tangible assets
 10 
635,987
838,256

Fixed asset investments
 11 
60,013
40,920

  
696,000
879,176

Current assets
  

Debtors: amounts falling due within one year
 12 
13,472,314
3,947,478

Cash at bank and in hand
 13 
117,591
262,888

  
13,589,905
4,210,366

Creditors: amounts falling due within one year
 14 
(17,397,886)
(4,889,044)

Net current liabilities
  
 
 
(3,807,981)
 
 
(678,678)

Total assets less current liabilities
  
(3,111,981)
200,498

  

Provisions for liabilities
  

Deferred taxation
 15 
-
(48,580)

Net (liabilities)/assets
  
(3,111,981)
151,918


Capital and reserves
  

Called up share capital 
 16 
100
100

Profit and loss account brought forward
  
151,818
506,676

Loss for the year
  
(3,263,899)
(354,858)

Profit and loss account carried forward
  
(3,112,081)
151,818

  
(3,111,981)
151,918


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 


................................................
M Odedra
Director

Date: 19 July 2021

The notes on pages 14 to 26 form part of these financial statements.

Page 9
 
UNITEDLEX LIMITED
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019


Called up share capital
Profit and loss account
Equity attributable to owners of parent Company
Total equity

£
£
£
£

At 1 January 2019
100
1,223,226
1,223,326
1,223,326



Loss for the year
-
(2,792,862)
(2,792,862)
(2,792,862)


At 31 December 2019
100
(1,569,636)
(1,569,536)
(1,569,536)



CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2018


Called up share capital
Profit and loss account
Equity attributable to owners of parent Company
Total equity

£
£
£
£

At 1 January 2018
100
520,386
520,486
520,486



Profit for the year
-
702,840
702,840
702,840


At 31 December 2018
100
1,223,226
1,223,326
1,223,326


The notes on pages 14 to 26 form part of these financial statements.

Page 10
 
UNITEDLEX LIMITED
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019


Called up share capital
Profit and loss account
Total equity

£
£
£

At 1 January 2019
100
151,818
151,918



Loss for the year
-
(3,263,899)
(3,263,899)


At 31 December 2019
100
(3,112,081)
(3,111,981)



COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2018


Called up share capital
Profit and loss account
Total equity

£
£
£

At 1 January 2018
100
506,676
506,776



Loss for the year
-
(354,858)
(354,858)


At 31 December 2018
100
151,818
151,918


The notes on pages 14 to 26 form part of these financial statements.

Page 11
 
UNITEDLEX LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2019

2019
2018
£
£

Cash flows from operating activities

(Loss)/profit for the financial year
(2,792,862)
702,840

Adjustments for:

Depreciation of tangible assets
312,131
243,643

Interest paid
-
424

Taxation charge
71,298
(67,468)

(Increase)/decrease in debtors
(3,112,118)
778,389

Increase in creditors
432,727
82,021

Increase/(decrease)) in amounts owed to groups
5,171,086
(1,261,921)

Corporation tax (paid)/received
(127,629)
31,210

Net cash generated from operating activities

(45,367)
509,138


Cash flows from investing activities

Purchase of tangible fixed assets
(91,642)
(283,921)

Sale of tangible fixed assets
4,334
498

Sale of listed investments
(19,093)
-

Purchase of unlisted and other investments
-
(8,655)

Net cash from investing activities

(106,401)
(292,078)

Cash flows from financing activities

Interest paid
-
(424)

Net cash used in financing activities
-
(424)

Net (decrease)/increase in cash and cash equivalents
(151,768)
216,636

Cash and cash equivalents at beginning of year
556,424
339,788

Cash and cash equivalents at the end of year
404,656
556,424


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
404,656
556,424

404,656
556,424


The notes on pages 14 to 26 form part of these financial statements.

Page 12
 
UNITEDLEX LIMITED
 

CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2019




At 1 January 2019
Cash flows
At 31 December 2019
£

£

£

Cash at bank and in hand

556,424

(151,768)

404,656


556,424
(151,768)
404,656

The notes on pages 14 to 26 form part of these financial statements.

Page 13
 
UNITEDLEX LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019

1.


General information

Unitedlex Limited is a private company limited by share capital and incorporated in England and Wales.
The address of its registered office and principal place of business is 42 New Broad Street, 4th Floor, London, England, EC2M 1JD.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
In accordance with the transitional exemption available in FRS 102, the group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 01 January 2017.

 
2.3

Going concern

The Directors have considered the impact of the global Covid-19 pandemic on the ability of the company to continue trading for the foreseeable future. This review has included considering the impact of the pandemic to the date of signing the financial statements and updating financial projections and performing rigorous stress testing on these projections in respect of income and the company’s supply chain. Based on this review and taken together with existing financing facilities the directors believe that the financial statements have been prepared appropriately on the going concern basis.

Page 14
 
UNITEDLEX LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019

2.Accounting policies (continued)

 
2.4

Foreign currency translation

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.

On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

 
2.5

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of revenue can be measured reliably;
∙it is probable that the Group will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.

 
2.6

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

Page 15
 
UNITEDLEX LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019

2.Accounting policies (continued)

 
2.7

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group 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 Group in independently administered funds.

 
2.8

Current and deferred taxation

The tax expense for the year 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 and the Group operate and generate 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;
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
∙Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

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.

 
2.9

Tangible fixed assets

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 16
 
UNITEDLEX LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019

2.Accounting policies (continued)


2.9
Tangible fixed assets (continued)

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.

Depreciation is provided on the following basis:

Short-term leasehold property
-
Life of the lease
Fixtures and fittings
-
10 years
Office equipment
-
5 years
Computer equipment
-
3 to 6 years

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.

 
2.10

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.11

Debtors

Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.12

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

 
2.13

Creditors

Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.14

Provisions for liabilities

Provisions are made where an event has taken place that gives the Group 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 profit or loss in the year that the Group 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 17
 
UNITEDLEX LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

Tangible fixed assets
Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values may vary depending on a number of factors.
Bad debt provisions
Provisions are estimated by the company in respect of specific debts based upon the age of the debt and knowledge of known issues.
Taxation
The company establishes provisions based on reasonable estimates, for possible consequences of
audits by the tax authorities. The amount of such provisions is based on various factors, such as
experience with previous tax submissions. Management estimation is required to determine the amount
of deferred tax assets that can be recognised, based upon likely timing and level of future taxable profits
together with an assessment of the effect of future tax planning strategies.
Operating lease commitments
The Company has entered into commercial lease contracts and as a lessee it obtains use of property,
plant and equipment. The classification of such leases as operating or finance lease requires the
Company to determine, based on an evaluation of the terms and conditions of the arrangements,
whether it retains or acquires the significant risks and rewards of ownership of these assets and
accordingly whether the lease requires an asset and liability to be recognised in the Balance Sheet.


4.


Turnover

An analysis of turnover by class of business is as follows:


2019
2018
£
£

Project management and client services revenue
26,130,986
17,309,052


Analysis of turnover by country of destination:

2019
2018
£
£

United Kingdom
4,869,623
3,011,737

Rest of Europe
775,357
-

Rest of the World
20,486,006
14,297,315

26,130,986
17,309,052


Page 18
 
UNITEDLEX LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019

5.


Operating (loss)/profit

The operating (loss)/profit is stated after charging:

2019
2018
£
£

Exchange differences
(181,747)
303,950

Other operating lease rentals
227,234
227,234


6.


Auditors' remuneration

2019
2018
£
£


Fees payable to the Group's auditor and its associates for the audit of the Group's annual financial statements
12,300
-




7.


Employees

Staff costs were as follows:

Group
2019
Group
2018
Company
2019
Company
2018
£
£
£
£
Wages and salaries

8,302,201

4,836,898

6,328,923
 
3,684,774
 
Social security costs

1,079,764

564,844

711,354
 
375,890
 
Cost of defined contribution scheme

492,233

374,193

492,233
 
374,193
 
9,874,198

5,775,935

7,532,510
 
4,434,857
 

The average monthly number of employees, including the directors, during the year was as follows:

2019
2018
No.
No.
Directors

5

4
 
Employees

69

26
 
74

30
 


8.


Interest payable and similar expenses

2019
2018
£
£


Other interest payable
-
424

Page 19
 
UNITEDLEX LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019

9.


Taxation


2019
2018
£
£

Corporation tax


Current tax on profits for the year
107,656
10,685

Adjustments in respect of previous periods
12,222
(57,298)


Total current tax
119,878
(46,613)

Deferred tax


Origination and reversal of timing differences
(48,580)
(20,855)

Total deferred tax
(48,580)
(20,855)


Taxation on profit/(loss) on ordinary activities
71,298
(67,468)

Factors affecting tax charge for the year

The tax assessed for the year is higher than (2018 - lower than) the standard rate of corporation tax in the UK of 19% (2018 - 19.75%). The differences are explained below:

2019
2018
£
£


(Loss)/profit on ordinary activities before tax
(2,721,564)
635,372


(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2018 - 19.75%)
(517,097)
125,486

Effects of:


Expenses not deductible for tax purposes
4,845
6,242

Utilisation of tax losses
-
55,682

Adjustments to tax charge in respect of prior periods
12,222
(57,298)

Adjustment to deferred tax rate
64,714
2,385

Deferred tax not recognised
506,614
-

Overseas taxation
-
(199,965)

Total tax charge for the year
71,298
(67,468)


Factors that may affect future tax charges

In the Spring Budget 2021, the Government announced that from 1 April 2023 the main corporation tax rate will increase to 25%. As the proposal to increase the rate to 25% had not been substantively enacted at the balance sheet date, its effects are not included in these financial statements. However, it is likely that the overall effect of the change, had it been substantively enacted by the balance sheet date, would be to increase the tax expense for the period and to increase the deferred tax liability. The impact of these changes is not expected to be material.

Page 20
 
UNITEDLEX LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019

10.


Tangible fixed assets

Group






Short-term leasehold property
Fixtures and fittings
Office equipment
Computer equipment
Total

£
£
£
£
£



Cost or valuation


At 1 January 2019
337,080
94,967
25,040
1,072,665
1,529,752


Additions
-
12,481
-
79,161
91,642


Disposals
-
-
-
(4,334)
(4,334)



At 31 December 2019

337,080
107,448
25,040
1,147,492
1,617,060



Depreciation


At 1 January 2019
77,819
9,745
5,902
491,694
585,160


Charge for the year on owned assets
69,422
10,169
4,886
227,654
312,131



At 31 December 2019

147,241
19,914
10,788
719,348
897,291



Net book value



At 31 December 2019
189,839
87,534
14,252
428,144
719,769



At 31 December 2018
259,261
85,222
19,138
580,971
944,592

Page 21
 
UNITEDLEX LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019

           10.Tangible fixed assets (continued)


Company






Short-term leasehold property
Fixtures and fittings
Office equipment
Computer equipment
Total

£
£
£
£
£

Cost or valuation


At 1 January 2019
337,080
93,036
24,432
940,463
1,395,011


Additions
-
12,481
-
79,161
91,642



At 31 December 2019

337,080
105,517
24,432
1,019,624
1,486,653



Depreciation


At 1 January 2019
77,819
9,286
5,294
464,355
556,754


Charge for the year on owned assets
69,422
10,169
4,886
209,435
293,912



At 31 December 2019

147,241
19,455
10,180
673,790
850,666



Net book value



At 31 December 2019
189,839
86,062
14,252
345,834
635,987



At 31 December 2018
259,261
83,750
19,138
476,108
838,257







11.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost or valuation


At 1 January 2019
40,920


Additions
19,093



At 31 December 2019
60,013




Page 22
 
UNITEDLEX LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019

Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Registered office

Class of shares

Holding

UnitedLex Denmark APS
Denmark
Information technology consultancy services
100%
UnitedLex Germany GmbH
Germany
Information technology consultancy services
100%
UnitedLex Bulgaria Ltd
Bulgaria
Information technology consultancy services
100%
UnitedLex Sweden
Sweden
Information technology consultancy services
100%
UnitedLex ITA
Italy
Information technology consultancy services
100%
UnitedLex Fi Oy
Finland
Information technology consultancy services
100%
UnitedLex Poland
Poland
Information technology consultancy services
100%
UnitedLex Belgium
Belgium
Information technology consultancy services
100%



Name










12.


Debtors

Group
Group
Company
Company
2019
2018
2019
2018
£
£
£
£
Page 23
 
UNITEDLEX LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019

12.Debtors (continued)



Trade debtors
3,642,755
717,955
3,295,249
717,955

Amounts owed by group undertakings
15,610,337
3,178,621
9,347,625
2,567,967

Other debtors
724,651
487,032
619,609
450,714

Prepayments and accrued income
265,238
281,246
209,831
210,842

20,242,981
4,664,854
13,472,314
3,947,478



13.


Cash and cash equivalents

Group
Group
Company
Company
2019
2018
2019
2018
£
£
£
£

Cash at bank and in hand
404,656
556,424
117,591
262,889



14.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2019
2018
2019
2018
£
£
£
£

Trade creditors
286,363
223,953
256,905
209,146

Amounts owed to group undertakings
21,589,242
4,005,533
16,492,273
4,303,486

Corporation tax
59,381
32,839
-
-

Other taxation and social security
84,915
236,887
-
142,503

Other creditors
266,175
158,280
-
-

Accruals and deferred income
650,866
236,472
648,708
233,909

22,936,942
4,893,964
17,397,886
4,889,044


Page 24
 
UNITEDLEX LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019

15.


Deferred taxation


Group





2019
2018


£

£






At beginning of year
(48,580)
(69,437)


Charged to profit or loss
48,580
20,857



At end of year
-
(48,580)

Company




2019
2018


£

£






At beginning of year
(48,580)
(69,437)


Charged to profit or loss
48,580
20,857



At end of year
-
(48,580)
Group
Group
Company
Company
2019
2018
2019
2018
£
£
£
£

Accelerated capital allowances
-
(81,930)
-
(81,930)

Tax losses carried forward
-
29,180
-
29,180

Short term timing differences
-
4,170
-
4,170

-
(48,580)
-
(48,580)


16.


Share capital

2019
2018
£
£
Allotted, called up and fully paid



100 (2018 - 100) Ordinary shares of £1 each
100
100



17.


Pension commitments

The Company opertes a defined contributions pension scheme. The assets of the schem are held seperately from those of the Company in an independently administered fund. The pension cost charge reporesents contributions payable by the Company to the fund and amounted to £492,233 (2018: £374,193).

Page 25
 
UNITEDLEX LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019

18.


Commitments under operating leases

At 31 December 2019 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
Group
2019
2018
£
£

Not later than 1 year
227,234
227,234

Later than 1 year and not later than 5 years
908,936
908,936

Later than 5 years
587,021
814,255

1,723,191
1,950,425

19.


Related party transactions

The company is exempt under Paragraph 33.1A of FRS 102 from disclosing related party transactions with entities that are part of the group headed by UnitedLex Corporation Inc, where 100% of the voting rights are controlled within the Group.
Key management personnel comprise the directors, who are no remunerated by the company.


20.


Controlling party

The ultimate controlling party is UnitedLex Corporation Inc, a company incorporated in the United States of America.

Page 26