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Registration number: 11424510

Inheriting Earth Limited

Annual Report and Unaudited Financial Statements

for the Period from 1 April 2023 to 31 December 2023

 

Inheriting Earth Limited

Contents

Balance Sheet

1 to 2

Notes to the Financial Statements

3 to 10

 

Inheriting Earth Limited

(Registration number: 11424510)
Balance Sheet as at 31 December 2023

Note

Period Ended 31 December
2023
£

Year Ended 31 March
2023
£

Fixed assets

 

Intangible assets

4

2,536,605

1,509,809

Tangible assets

5

561,396

271,922

 

3,098,001

1,781,731

Current assets

 

Debtors

6

470,747

249,931

Cash at bank and in hand

 

4,585,942

696,109

 

5,056,689

946,040

Creditors: Amounts falling due within one year

7

(339,209)

(297,129)

Net current assets

 

4,717,480

648,911

Total assets less current liabilities

 

7,815,481

2,430,642

Creditors: Amounts falling due after more than one year

7

(848,132)

(667,568)

Provisions for liabilities

-

(57,429)

Net assets

 

6,967,349

1,705,645

Capital and reserves

 

Called up share capital

8

228

138

Share premium reserve

8,652,152

1,320,702

Other reserves

-

1,171,994

Retained earnings

(1,685,031)

(787,189)

Shareholders' funds

 

6,967,349

1,705,645

 

Inheriting Earth Limited

(Registration number: 11424510)
Balance Sheet as at 31 December 2023

For the financial period ending 31 December 2023 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

Directors' responsibilities:

The members have not required the company to obtain an audit of its accounts for the period in question in accordance with section 476; and

The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.

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

These financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime. As permitted by section 444 (5A) of the Companies Act 2006, the directors have not delivered to the registrar a copy of the Profit and Loss Account.

Approved and authorised by the Board on 9 April 2024 and signed on its behalf by:
 

Mr A P Root
Director

   
     
 

Inheriting Earth Limited

Notes to the Financial Statements for the Period from 1 April 2023 to 31 December 2023

1

General information

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

The address of its registered office is:
Matter. Hq, Unit 5
Albert Road,
St. Philips
Bristol
BS2 OXA

These financial statements were authorised for issue by the Board on 9 April 2024.

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

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

Statement of compliance

These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section 1A smaller entities - 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland' and the Companies Act 2006 (as applicable to companies subject to the small companies' regime).

Basis of preparation

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

The financial statements are prepared in sterling, which is the functional currency of the company, and rounded to the nearest £.

Going concern

At 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, despite the ongoing energy and cost of living increases.

The directors have reviewed the operations, key stakeholders and the capital resources available and consider that the company has adequate resources in place to continue trading for the next twelve months.

The directors have also reviewed and considered the company's available financing facilities and have concluded that the company will be able to continue to support itself for the foreseeable future. As such, these accounts have been prepared on a going concern basis.

 

Inheriting Earth Limited

Notes to the Financial Statements for the Period from 1 April 2023 to 31 December 2023

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts.

The company recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the company's activities.

Government grants

Other operating income, which includes government grants, has been recognised on an accruals basis in line with the overall revenue recognition policy.

Foreign currency transactions and balances

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

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

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements.

Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively
enacted by the reporting date and that are expected to apply to the reversal of the timing difference.

Tangible assets

Tangible assets are stated in the Balance Sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

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

 

Inheriting Earth Limited

Notes to the Financial Statements for the Period from 1 April 2023 to 31 December 2023

Depreciation

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

Asset class

Depreciation method and rate

Fixtures, fittings and equipment

Straight line basis at 33%

Plant and machinery

Straight line basis between 33% - 50%

Assets under construction

Nil

Development costs

Research and development expenditure is written off as incurred, except that development expenditure incurred on an individual project is capitalised as an intangible asset when the company can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the asset and the ability to measure reliably the expenditure during development.

Following initial recognition of the development expenditure as an asset, the cost model is applied requiring the asset to be carried at cost less any accumulated amortisation and accumulated impairment losses. Over the years the company have developed a portfolio of intellectual property which is the foundation for the commercialisation of it's technology. As such, the value of intangible assets generated will be amortised in accordance with the commercialisation period of each asset, once the product hits the mass market. It is amortised evenly over the period of expected future benefit. During the period of development the asset is tested for impairment annually.

Cash and cash equivalents

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

Debtors

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

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

 

Inheriting Earth Limited

Notes to the Financial Statements for the Period from 1 April 2023 to 31 December 2023

Creditors

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

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the profit and loss account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the inital measurement is on a present value basis.

 

Inheriting Earth Limited

Notes to the Financial Statements for the Period from 1 April 2023 to 31 December 2023

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund
and the company has no legal or constructive obligation to pay further contributions even if the fund does
not hold sufficient assets to pay all employees the benefits relating to employee service in the current and
prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are
due. If contribution payments exceed the contribution due for service, the excess is recognised as a
prepayment.

Share based payments

The cost of equity-settled transactions with employees is measured by reference to the fair value at
the date on which they are granted and is recognised as an expense over the vesting period, which
ends on the date on which the relevant employees become fully entitled to the award. Fair value is
determined using an appropriate pricing model. In valuing equity-settled transactions, no account is
taken of any vesting conditions other than conditions linked to the price of the shares of the company
(market conditions).

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is
conditional upon a market condition, which are treated as vesting irrespective of whether or not the
market condition is satisfied, provided that all other performance conditions are satisfied.

At each balance sheet date before vesting, the cumulative expense is calculated, representing the
extent to which the vesting period has expired and managements best estimate of the achievement or
otherwise of non-market conditions and of the number of equity instruments that will ultimately vest or,
in the case of an instrument subject to a market condition, be treated as vesting as described above.
The movement in cumulative expense since the previous balance sheet date is recognised in the
profit and loss account, with a corresponding entry in equity.

Where the terms of an equity-settled award are modified or a new award is designated as replacing a
cancelled or settled award, the cost based on the original award terms continues to be recognised
over the original vesting period. In addition, an expense is recognised over the remainder of the new
vesting period for the incremental fair value of any modification, based on the difference between the
fair value of the original award and the fair value of the modified award, both as measured on the date
of modification. No reduction is recognised if this difference is negative.

Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation,
and any cost not yet recognised in the income statement for the award is expensed immediately. Any
compensation paid up to the fair value of the award at the cancellation or settlement date is deducted
from equity, with any excess over fair value being treated as an expense in the profit and loss
account.

3

Staff numbers

The average number of persons employed by the company (including directors) during the period was 26 (2023 - 17).

 

Inheriting Earth Limited

Notes to the Financial Statements for the Period from 1 April 2023 to 31 December 2023

4

Intangible assets

Development costs
 £

Total
£

Cost or valuation

At 1 April 2023

1,509,809

1,509,809

Additions

1,026,796

1,026,796

At 31 December 2023

2,536,605

2,536,605

Carrying amount

At 31 December 2023

2,536,605

2,536,605

At 31 March 2023

1,509,809

1,509,809

5

Tangible assets

Plant and machinery
 £

Fixtures, fittings and equipment
£

Assets under contruction
 £

Total
£

Cost or valuation

At 1 April 2023

23,359

42,660

247,111

313,130

Additions

17,700

22,059

277,689

317,448

At 31 December 2023

41,059

64,719

524,800

630,578

Depreciation

At 1 April 2023

17,048

24,160

-

41,208

Charge for the period

10,041

17,933

-

27,974

At 31 December 2023

27,089

42,093

-

69,182

Carrying amount

At 31 December 2023

13,970

22,626

524,800

561,396

At 31 March 2023

6,311

18,500

247,111

271,922

 

Inheriting Earth Limited

Notes to the Financial Statements for the Period from 1 April 2023 to 31 December 2023

6

Debtors

Period Ended 31 December
2023
£

Year Ended 31 March
2023
£

Trade debtors

-

46,705

Prepayments

86,847

20,064

Other debtors

383,900

183,162

470,747

249,931

7

Creditors

Due within one year

Note

Period Ended 31 December
2023
£

Year Ended 31 March
2023
£

 

Loans and borrowings

9

12,671

12,325

Trade creditors

 

43,780

49,007

Social security and other taxes

 

84,520

22,474

Other creditors

 

29,781

12,130

Accruals and deferred income

 

168,457

201,193

 

339,209

297,129

Due after one year

 

Loans and borrowings

9

848,132

667,568

8

Share capital

Allotted, called up and fully paid shares

 

Period Ended 31 December
2023

Year Ended 31 March
2023

 

No.

£

No.

£

Ordinary shares of £0.001

113,341

113.34

108,661

108.66

Seed shares of £0.001

29,639

29.64

29,639

29.64

Series A of £0.001

85,364

85.36

-

-

 

228,344

228.34

138,300

138.30

 

Inheriting Earth Limited

Notes to the Financial Statements for the Period from 1 April 2023 to 31 December 2023

The movement in share capital is represented as follows:

- 4,680 Ordinary £0.001 shares were alloted for a total consideration of £363,080.
- 85,364 Series A shares were alloted for total consideration of £6,968,581.

9

Loans and borrowings

Period Ended 31 December
2023
£

Year Ended 31 March
2023
£

Non-current loans and borrowings

Bank borrowings

15,641

23,959

Hire purchase contracts

-

1,796

Other borrowings

832,491

641,813

848,132

667,568

Period Ended 31 December
2023
£

Year Ended 31 March
2023
£

Current loans and borrowings

Bank borrowings

10,111

9,216

Hire purchase contracts

2,560

3,109

12,671

12,325

Creditors include bank loans totalling £25,752 (March 2023 - £33,175).

At 31 March 2023 the company had secured borrowings of £832,491 (March 2023 - £641,813) secured by fixed and floating charges over the properties in favour of Innovation UK Loans Limited.

10

Financial commitments, guarantees and contingencies

Amounts not provided for in the balance sheet

The total amount of financial commitments not included in the balance sheet is £77,000 (March 2023 - £22,000).

Amounts disclosed in the balance sheet

Included in the balance sheet are pensions of £18,273 (March 2023 - £3,647).