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Registered number: 10123376












H2O.AI LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022

 

H2O.AI LIMITED

CONTENTS



Page
Company information
 
1
Balance sheet
 
2
Statement of changes in equity
 
3
Notes to the financial statements
 
4 - 11


 

H2O.AI LIMITED
 
COMPANY INFORMATION


Directors
S Ambati 
J Bhattacharjee 




Company secretary
Taylor Wessing Secretaries Limited



Registered number
10123376



Registered office
5 New Street Square

London

EC4A 3TW




Independent auditor
Blick Rothenberg Audit LLP
Chartered Accountants & Statutory Auditor

16 Great Queen Street

Covent Garden

London

WC2B 5AH




Page 1


 
REGISTERED NUMBER:10123376
H2O.AI LIMITED

BALANCE SHEET
AS AT 31 JANUARY 2022

2022
2021
Note
£
£

Fixed assets
  

Tangible assets
 4 
4,845
35,795

Current assets
  

Debtors: amounts falling due within one year
 5 
2,762,197
2,042,933

Cash at bank and in hand
  
204,794
16,044

  
2,966,991
2,058,977

Creditors: amounts falling due within one year
 6 
(958,219)
(733,378)

Net current assets
  
 
 
2,008,772
 
 
1,325,599

Net assets
  
2,013,617
1,361,394


Capital and reserves
  

Called up share capital 
 8 
1,000
1,000

Share based payment reserve
  
561,477
385,426

Profit and loss account
  
1,451,140
974,968

  
2,013,617
1,361,394


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 profit and loss account 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: 




S Ambati
Director

Date: 2 October 2023

The notes on pages 4 to 11 form part of these financial statements.

Page 2

 

H2O.AI LIMITED

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2022


Called up share capital
Share based payment reserve
Profit and loss account
Total equity

£
£
£
£


At 1 January 2020
1,000
250,903
489,893
741,796



Profit for the period
-
-
458,694
458,694

Share option expense
-
160,904
-
160,904

Share options exercised
-
(26,381)
26,381
-



At 1 February 2021
1,000
385,426
974,968
1,361,394



Profit for the year
-
-
404,942
404,942

Share option expense
-
247,281
-
247,281

Share options exercised
-
(71,230)
71,230
-


At 31 January 2022
1,000
561,477
1,451,140
2,013,617


Page 3

 

H2O.AI LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022

1.


General information

H2O.ai Limited is a private company limited by shares incorporated in England and Wales. The address of its registered office is 5 New Street Square, London, EC4A 3TW.
These financial statements are prepared for the 12 month period ended 31 January 2022. The prior period financial statements were prepared for the 13 month period from 1 January 2020 to 31 January 2021 in order to align the company's year end date with that of its parent company. As such, the comparative figures are not entirely comparable.
The financial statements are presented in Sterling (£), which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

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 Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The following principal accounting policies have been applied:

 
2.2

Going concern

After making enquiries, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence and meet its liabilities as they fall due for the foreseeable future, being a period of at least twelve months from the date these financial statements were approved. The directors consider this basis to be appropriate as the company has received a letter of financial support from its parent company. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

 
2.3

Revenue

Revenue from contracts to provide sales, marketing and R&D services to the parent company is recognised in the period in which the services are provided. Revenue is recognised to the extent that is probable that the company will receive the consideration due under the contract and the amount of revenue can be measured reliably. Revenue is measured as the fair value of the consideration received or receivable.

 
2.4

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.

At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

The company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.

Page 4

 

H2O.AI LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022

2.Accounting policies (continued)


2.4
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:

Fixtures and fittings
-
20%
Computer equipment
-
50%

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.

  
2.5

Share capital

Ordinary shares are classified as equity.


2.6

Financial instruments

The company has elected to apply Sections 11 and 12 of FRS 102 in respect of financial instruments.

Financial assets and financial liabilities are recognised when the company becomes party to the contractual provisions of the instrument. 

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. 
 
The company’s policies for its major classes of financial assets and financial liabilities are set out below. 

Financial assets
Basic financial assets, including cash and bank balances and intercompany working capital balances, are initially recognised at transaction price, 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 for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.

Such assets are subsequently carried at amortised cost using the effective interest method, less any impairment.

Page 5

 

H2O.AI LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022

2.Accounting policies (continued)





Financial instruments (continued)

Financial liabilities

Basic financial liabilities, including other creditors, 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 for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Impairment of financial assets
Financial assets measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the profit and loss account. 

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between the asset's carrying amount and the best estimate of the amount the company would receive for the asset if it were to be sold at the reporting date. 

For financial assets measured at amortised cost, the impairment loss is measured as the difference between the asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If the financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets and financial liabilities
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions. 
 
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.

Offsetting of financial assets and financial liabilities
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is an 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.

Page 6

 

H2O.AI LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022

2.Accounting policies (continued)

 
2.7

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. 

 
2.8

Operating leases

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

 
2.9

Pensions

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.

  
2.10

Holiday pay accrual

A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the balance sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the balance sheet date.

 
2.11

Foreign currency translation

Functional and presentation currency

The company's functional and presentational currency is Sterling (£).

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 except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses are presented in profit or loss within 'administrative expenses'.

Page 7

 

H2O.AI LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022

2.Accounting policies (continued)

 
2.12

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in the profit and loss account.
Current tax is the amount of income tax payable in respect of taxable profit for the year or prior years.
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 arises from timing differences that are differences between taxable profits and total comprehensive income as stated in the financial statements. These timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements.
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. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

 
2.13

Share-based payments

Where share options are awarded to employees, the fair value of the options at the date of grant is charged to profit or loss over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the company keeping the scheme open or the employee maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.
Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services received.


3.


Employees

The average monthly number of employees, including directors, during the year was 51 (2021 - 53).

Page 8

 

H2O.AI LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022

4.


Tangible fixed assets





Fixtures and fittings
Computer equipment
Total

£
£
£



Cost


At 1 February 2021 and 31 January 2022

33,644
197,523
231,167



Depreciation


At 1 February 2021
25,065
170,307
195,372


Charge for the year
4,178
26,772
30,950



At 31 January 2022

29,243
197,079
226,322



Net book value



At 31 January 2022
4,401
444
4,845



At 31 January 2021
8,579
27,216
35,795


5.


Debtors

2022
2021
£
£


Amounts owed by group undertakings
2,591,197
1,913,870

Other debtors
31,391
-

Deferred taxation
139,609
129,063

2,762,197
2,042,933



6.


Creditors: amounts falling due within one year

2022
2021
£
£

Trade creditors
31,651
-

Corporation tax
199,337
208,206

Other creditors
110,709
128,264

Accruals and deferred income
616,522
396,908

958,219
733,378


Page 9

 

H2O.AI LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022

7.


Deferred taxation




2022


£






At beginning of period
129,063


Charged to profit or loss
10,546



At end of year
139,609

The deferred tax asset is made up as follows:

2022
2021
£
£


Accelerated capital allowances
(921)
(6,801)

Share based payments
140,369
73,231

Other timing differences
161
62,633

139,609
129,063


8.


Share capital

2022
2021
£
£
Allotted, called up and fully paid



1,000 (2021 - 1,000) Ordinary shares of £1 each
1,000
1,000



9.


Pension commitments

The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company  in an independently administered fund. The pension cost charge represents contributions payable by the company  to the fund and amounted to £210,516 (2021: £35,522). Contributions totalling £9,251 (2021 - £Nil) were payable to the fund at the balance sheet date and are included in creditors.

Page 10

 

H2O.AI LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022

10.


Commitments under operating leases

At 31 January 2022 the company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2022
2021
£
£



Not later than 1 year
97,908
52,031

Later than 1 year and not later than 5 years
77,511
-

175,419
52,031


11.


Related party transactions

The company has taken advantage of the exemption contained in FRS 102 section 33 "Related Party Disclosures" from disclosing transactions with entities which are a wholly owned part of a group.


12.


Parent undertaking

The smallest group for which consolidated financial statements are drawn up is headed by H2O.ai, Inc. whose registered office is 2307 Leghorn, Mountain View, CA 94043, United States.


13.


Auditor's information

The auditor's report on the financial statements for the year ended 31 January 2022 was unqualified.

The audit report was signed on 11 October 2023 by James Rimell (senior statutory auditor) on behalf of Blick Rothenberg Audit LLP.

 
Page 11