Company registration number 05950794 (England and Wales)
NOVALIA LIMITED
UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
PAGES FOR FILING WITH REGISTRAR
NOVALIA LIMITED
CONTENTS
Page
Balance sheet
1 - 2
Notes to the financial statements
3 - 11
NOVALIA LIMITED
BALANCE SHEET
AS AT
30 SEPTEMBER 2023
30 September 2023
- 1 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
4
1,027,844
874,681
Tangible assets
5
7,827
5,040
Investments
6
143
143
1,035,814
879,864
Current assets
Debtors
7
718,516
409,894
Cash at bank and in hand
10,195
345,841
728,711
755,735
Creditors: amounts falling due within one year
8
(4,522,092)
(3,850,648)
Net current liabilities
(3,793,381)
(3,094,913)
Total assets less current liabilities
(2,757,567)
(2,215,049)
Creditors: amounts falling due after more than one year
9
(128,647)
(12,191)
Net liabilities
(2,886,214)
(2,227,240)
Capital and reserves
Called up share capital
11
21
21
Share premium account
1,148,303
1,148,303
Profit and loss reserves
(4,034,538)
(3,375,564)
Total equity
(2,886,214)
(2,227,240)
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 September 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.
NOVALIA LIMITED
BALANCE SHEET (CONTINUED)
AS AT
30 SEPTEMBER 2023
30 September 2023
- 2 -
The financial statements were approved by the board of directors and authorised for issue on 12 February 2024 and are signed on its behalf by:
Dr K Stone
Director
Company registration number 05950794 (England and Wales)
NOVALIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 3 -
1
Accounting policies
Company information
Novalia Limited is a private company limited by shares incorporated in England and Wales. The registered office is St John's Innovation Centre, Cowley Road, Cambridge, CB4 0WS.
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
These financial statements are prepared on the going concern basis. The directors have a reasonable expectation that the company will continue in operational existence for the foreseeable future.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
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.
NOVALIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 4 -
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.
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
7 years straight line
Development costs
7 years straight line
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:
Plant and equipment
4 - 7 years straight line
Fixtures and fittings
2 - 3 years straight line
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 at bank and in hand are the basic financial assets and include cash and bank only.
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.
NOVALIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 5 -
Basic financial assets
Basic financial assets, which include trade debtors, corporation tax recoverable, amounts owed by group undertakings, other 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, bank loans, convertible loans, trade creditors, taxation and social security and 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. 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
Compound instruments
The component parts of compound instruments issued by the company are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument. This amount is recorded as a liability on an amortised cost basis using the effective interest method until extinguished upon conversion or at the instrument's maturity date. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised and included in equity net of income tax effects and is not subsequently remeasured.
1.12
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs.
1.13
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.
NOVALIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 6 -
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.
1.14
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 fixed assets.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.16
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.
The company has taken advantage of transitional exemptions not to apply FRS102 1A to any share-based payment transactions entered into before the transition date of 1 July 2015.
1.17
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.
1.18
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.
1.19
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
NOVALIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 7 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
8
7
4
Intangible fixed assets
Patents
Development costs
Total
£
£
£
Cost
At 1 October 2022
2,483,848
2,483,848
Additions
12,000
399,717
411,717
At 30 September 2023
12,000
2,883,565
2,895,565
Amortisation and impairment
At 1 October 2022
1,609,167
1,609,167
Amortisation charged for the year
258,554
258,554
At 30 September 2023
1,867,721
1,867,721
Carrying amount
At 30 September 2023
12,000
1,015,844
1,027,844
At 30 September 2022
874,681
874,681
NOVALIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 8 -
5
Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 October 2022
36,321
Additions
7,689
At 30 September 2023
44,010
Depreciation and impairment
At 1 October 2022
31,281
Depreciation charged in the year
4,902
At 30 September 2023
36,183
Carrying amount
At 30 September 2023
7,827
At 30 September 2022
5,040
6
Fixed asset investments
2023
2022
£
£
Shares in group undertakings and participating interests
143
143
7
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,169
Corporation tax recoverable
83,596
55,218
Amounts owed by group undertakings
606,619
319,601
Other debtors
28,301
32,906
718,516
409,894
NOVALIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 9 -
8
Creditors: amounts falling due within one year
2023
2022
£
£
Bank loans and overdrafts
3,811
3,765
Convertible loans
8.1
4,375,128
3,636,939
Trade creditors
86,000
129,677
Taxation and social security
46,280
11,758
Other creditors
10,873
68,509
4,522,092
3,850,648
8.1
Convertible Loans
2023
2022
£
£
Nominal value of convertible loan notes brought forward
3,164,804
2,494,163
New loan notes issued
500,000
653,333
Exchange rate movement
(9,551)
17,308
Nominal value of convertible loan notes carried forward
3,655,253
3,164,804
Interest accrued
719,875
472,135
Total convertible loans
4,375,128
3,636,939
During the year 500,000 (2022: 653,333) secured convertible loan notes were allotted. The security of the loan notes is in the form of a fixed and floating charge over the company's assets.
The nominal amount of 3,573,333 of the notes is £1 and the aggregate "Principle Amount" of these notes is £3,573,333. The nominal amount of 100,000 of the notes is USD $1 and the aggregate "Principle Amount" of these notes is $100,000.
Interest is payable on the outstanding 3,573,333 £ notes at an annual rate of 3% over the base rate of the Bank of England. Interest shall be payable on the redemption/conversion date of 31 December 2024.
On the Conversion Date, the Directors shall convert the principal amount of the Notes into new fully paid Series A Shares at the nominal amount.
Interest is payable on the outstanding 100,000 USD$ notes at an annual rate of 5% per annum, compounded annually. Interest is payable on the maturity date, being when the Relevant Fund Raising is proposed.
NOVALIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 10 -
9
Creditors: amounts falling due after more than one year
2023
2022
£
£
Bank loans
128,647
12,191
Included within creditors falling due within more than one year is a loan balance of £120,220 (2022: £Nil), that is secured by a fixed and floating charge over the company's assets.
10
Share-based payment transactions
The company has taken advantage of transitional exemptions not to apply FRS102 1A to any share-based payment transactions entered into before the transition date of 1 October 2015.
The total number of share options granted prior to transition to FRS102 1A was 62,222 which have an exercise price of £1.00 per share. All of these share options lapsed during the year.
11
Called up share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 0.001p each
1,000,000
1,000,000
10
10
Series A shares of 0.001p each
1,055,223
1,055,223
11
11
2,055,223
2,055,223
21
21
12
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
£
£
9,000
13
Related party transactions
Included within debtors falling due within one year are amounts from group undertakings totalling £606,619 (2022 : £319,601).
NOVALIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 11 -
14
Directors' transactions
Description
% Rate
Opening balance
Amounts repaid
Closing balance
£
£
£
Directors loan account
-
19,949
(19,949)
-
19,949
(19,949)
-
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