Company registration number 09708880 (England and Wales)
EMTEQ LIMITED
UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JULY 2023
PAGES FOR FILING WITH REGISTRAR
EMTEQ LIMITED
CONTENTS
Page
Balance sheet
1 - 2
Statement of changes in equity
3
Notes to the financial statements
4 - 12
EMTEQ LIMITED
BALANCE SHEET
- 1 -
30 July 2023
31 July 2022
as restated
Notes
£
£
£
£
Fixed assets
Intangible assets
3
1,231,017
1,400,500
Tangible assets
4
22,041
30,845
Investments
5
52,521
52,521
1,305,579
1,483,866
Current assets
Debtors
6
440,697
541,913
Cash at bank and in hand
92,145
588,464
532,842
1,130,377
Creditors: amounts falling due within one year
7
(144,763)
(398,929)
Net current assets
388,079
731,448
Total assets less current liabilities
1,693,658
2,215,314
Creditors: amounts falling due after more than one year
8
(1,877,937)
(1,790,732)
Net (liabilities)/assets
(184,279)
424,582
Capital and reserves
Called up share capital
10
31,396
24,948
Share premium account
3,518,113
2,782,849
Share option reserve
409,520
394,809
Profit and loss reserves
(4,143,308)
(2,778,024)
Total equity
(184,279)
424,582
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true
For the financial year ended 30 July 2023 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
EMTEQ LIMITED
BALANCE SHEET (CONTINUED)
- 2 -
The financial statements were approved by the board of directors and authorised for issue on 20 November 2023 and are signed on its behalf by:
Mr C Nduka
Director
Company registration number 09708880 (England and Wales)
EMTEQ LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JULY 2023
- 3 -
Share capital
Share premium account
Share option reserve
Profit and loss reserves
Total
as restated
as restated
Notes
£
£
£
£
£
As restated for the period ended 30 July 2022:
Balance at 31 July 2021
21,670
1,987,483
-
(1,260,584)
748,569
Year ended 30 July 2022:
Loss and total comprehensive income
-
-
-
(1,517,440)
(1,517,440)
Issue of share capital
10
3,278
795,366
-
-
798,644
Transfers
-
-
394,809
394,809
Balance at 30 July 2022
24,948
2,782,849
394,809
(2,778,024)
424,582
Year ended 30 July 2023:
Loss and total comprehensive income
-
-
-
(1,365,284)
(1,365,284)
Issue of share capital
10
6,448
735,264
-
-
741,712
Transfers
-
-
14,711
14,711
Balance at 30 July 2023
31,396
3,518,113
409,520
(4,143,308)
(184,279)
EMTEQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JULY 2023
- 4 -
1
Accounting policies
Company information
Emteq Limited is a private company limited by shares incorporated in England and Wales. The registered office is Sussex Innovation Centre, Science Park Square, Brighton, BN1 9SB.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Revenue includes;
• Grant funding received
• Commercial product sales revenue; and
• Consultancy projects
Grant funding revenue received is recognised in line with the costs incurred. When it is received in arrears, the revenue is accrued to match the appropriate proportion of the costs and when it is received in advance, the revenue is deferred to match the appropriate proportion of costs.
Commercial product sales revenue is recognised net of VAT when the product is shipped to the client.
Consultancy project fee revenue is recognised net of VAT in proportion to the amount of work completed.
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
EMTEQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JULY 2023
1
Accounting policies
(Continued)
- 5 -
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Patents & licences
Amortised over 10 years
Development costs
Amortised over 3 years
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
VR equipment
33% on reducing balance
Office equipment
20% on reducing balance
Computer equipment
33% on reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.7
Fixed asset investments
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.8
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
1.9
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks.
1.10
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
EMTEQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JULY 2023
1
Accounting policies
(Continued)
- 6 -
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
1.11
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
EMTEQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JULY 2023
1
Accounting policies
(Continued)
- 7 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.13
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
Share-based payments
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.
Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.
1.16
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
EMTEQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JULY 2023
1
Accounting policies
(Continued)
- 8 -
1.17
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
15
16
3
Intangible fixed assets
Patents & licences
Development costs
Total
£
£
£
Cost
At 31 July 2022
253,821
3,592,958
3,846,779
Additions
54,904
653,063
707,967
At 30 July 2023
308,725
4,246,021
4,554,746
Amortisation and impairment
At 31 July 2022
107,158
2,339,121
2,446,279
Amortisation charged for the year
28,333
849,117
877,450
At 30 July 2023
135,491
3,188,238
3,323,729
Carrying amount
At 30 July 2023
173,234
1,057,783
1,231,017
At 30 July 2022
146,663
1,253,837
1,400,500
EMTEQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JULY 2023
- 9 -
4
Tangible fixed assets
VR equipment
Office equipment
Computer equipment
Total
£
£
£
£
Cost
At 31 July 2022
14,317
4,706
41,441
60,464
Additions
1,732
1,732
Transfers
643
(643)
At 30 July 2023
14,960
4,706
42,530
62,196
Depreciation and impairment
At 31 July 2022
6,678
2,311
20,630
29,619
Depreciation charged in the year
2,763
479
7,294
10,536
At 30 July 2023
9,441
2,790
27,924
40,155
Carrying amount
At 30 July 2023
5,519
1,916
14,606
22,041
At 30 July 2022
7,639
2,395
20,811
30,845
5
Fixed asset investments
2023
2022
£
£
Shares in group undertakings and participating interests
52,521
52,521
6
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
43,180
Corporation tax recoverable
411,990
316,725
Other debtors
28,707
182,008
440,697
541,913
7
Creditors: amounts falling due within one year
2023
2022
£
£
Bank loans
10,056
9,788
Trade creditors
93,998
150,963
Taxation and social security
7,823
129,590
Other creditors
32,886
108,588
144,763
398,929
EMTEQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JULY 2023
- 10 -
8
Creditors: amounts falling due after more than one year
2023
2022
as restated
£
£
Bank loans and overdrafts
19,006
29,062
Other creditors
1,858,931
1,761,670
1,877,937
1,790,732
Other loans represents two convertible loans taken by the company which have nominal values of £900,000 and £880,704 with nominal interest rates of 7.4% and 5%. Both the loans are secured by way of a fixed and floating charge against the whole and any part of the undertaking, property and assets of the company.
9
Share-based payment transactions
Number of share options
Weighted average exercise price
2023
2022
2023
2022
as restated
as restated
Number
Number
£
£
Outstanding at 31 July 2022
762,148
674,148
1.52
1.40
Granted
313,596
88,000
1.68
1.78
Forfeited
(479,496)
1.73
Outstanding at 30 July 2023
596,248
762,148
1.32
1.52
Exercisable at 30 July 2023
592,082
666,815
1.32
1.52
The options outstanding at 30 July 2023 had an exercise price ranging from £0.01 to £2.52, and a remaining contractual life of 4 to 10 years.
All the options can be exercised during the option holder's lifetime, only by the option holder.
Liabilities and expenses
During the year, the company recognised total share-based payment expenses of £14,711 (2022: £394,809) which related to equity settled share based payment transactions.
EMTEQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JULY 2023
- 11 -
10
Called up share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 1p each
3,139,557
2,494,750
31,396
24,948
During the year, the company issued 644,807 (2022: 327,791) £0.01 ordinary shares at a premium of £735,264. This amount has been recognised in equity as share premium.
11
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2023
2022
£
£
12,926
49,968
12
Subsidiaries
Details of the company's subsidiaries at 30 July 2023 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
AIDEA LAB DOO SKOPJE
UI. Stefan Jakimov br. 5/4A, Skopeje Cemtar
Ordinary
100.00
EMTEQ LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JULY 2023
- 12 -
13
Prior period adjustment
Reconciliation of changes in equity
31 July
30 July
2021
2022
£
£
Adjustments to prior year
Restate equity element of convertible loan notes
-
(126,095)
Equity as previously reported
-
550,677
Equity as adjusted
-
424,582
Analysis of the effect upon equity
Share option reserve
-
394,809
Equity reserve
-
(122,631)
Profit and loss reserves
-
(398,273)
-
(126,095)
Reconciliation of changes in loss for the previous financial period
2022
£
Adjustments to prior year
Interest on convertible loan notes
(3,463)
Share option expense
(394,810)
Total adjustments
(398,273)
Loss as previously reported
(1,119,167)
Loss as adjusted
(1,517,440)
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