Registered number: 11062616
CONNECTED KERB LIMITED
FINANCIAL STATEMENTS
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE YEAR ENDED 31 DECEMBER 2022
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CONNECTED KERB LIMITED
REGISTERED NUMBER: 11062616
BALANCE SHEET
AS AT 31 DECEMBER 2022
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Page 1
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CONNECTED KERB LIMITED
REGISTERED NUMBER: 11062616
BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2022
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 statement of comprehensive income 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:
................................................
P E Howe
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The notes on pages 3 to 16 form part of these financial statements.
Page 2
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CONNECTED KERB LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
Connected Kerb Limited is a private limited company, incorporated and domiciled in England and Wales. The registered office of the Company is C/O James Cowper Kreston, 2 Chawley Park, Cumnor Hill, Oxford, OX2 9GG. The trading address of the Company is 51-52 Frith Street, London, England, W1D 4SH.
The principal activity of the Company is the development, installation and operation of electric vehicle charging points.
2.Accounting policies
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Basis of preparation of financial statements
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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 preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The financial statements are rounded to the nearest pound Sterling.
The following principal accounting policies have been applied:
Page 3
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CONNECTED KERB LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
The Company is continuing to expand its network of providing electric vehicle charging points. During the year, the Company secured equity investment of up to £110,000,000 across various tranches, subject to certain conditions being met, with £12,694,293, before direct costs, being received from this equity investment plus £3,758,260 received from non-institutional investors by the Company in the year. During the year ended 31 December 2022, the Company incurred a net loss before tax of £10,422,219 and as at 31 December 2022, the Company had cash and cash equivalents of £1,277,268. Subsequent to the period end, the Company drew down a further £23,000,000 of the secured equity investment via an allotment of Convertible Preference Shares.
The future strategic growth of the Company is dependent on its ability to draw down on the previously secured investment or raise alternative funding to finance its operations. The Directors have prepared cash flow forecasts and considered the cash flow requirement for the Company. These forecasts show that further financing will be required during the next 12 months from the date these financial statements have been approved. Should the Company fail to obtain the funding needed this is likely to have a negative impact on its financial condition and ability to pursue its business strategies.
The Company also has an unsecured loan of £2,250,000 which was repayable on 26 January 2024. The lender has indicated their intention to defer repayment of the unsecured loan until the Company is in receipt of additional funding or until the Company has sufficient working capital to repay the loan.
The Directors, in dialogue with the Company’s existing investors and new potential investors, are confident that the Company will secure additional funding within 12 months from approval of the financial statements to continue to deliver its business plan.
If, however, the funding is not obtained, the Company would cease all growth plans and revert to an operating model with the business operations restructured. The Directors have prepared cash flow forecasts under this scenario which show the Company to be a going concern.
The Directors recognise that the requirement for additional funding and continued support of the lender in deferring repayment of the unsecured loan are material uncertainties that may cast significant doubt upon the Company’s ability to continue as a going concern.
The Directors have concluded that it remains appropriate to prepare the financial statements on a going concern basis, but that this is subject to material uncertainty as outlined above.
Page 4
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CONNECTED KERB LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
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Foreign currency translation
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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.
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 that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company 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:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
∙the Company has transferred the significant risks and rewards of ownership to the buyer;
∙the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙the amount of revenue can be measured reliably;
∙it is probable that the Company will receive the consideration due under the transaction; and
∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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 Company 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.
Page 5
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CONNECTED KERB LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
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Service concession arrangements
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The Company has certain contracts with customers whereby the Company provides electric vehicle charging points and associated services to public sector bodies. The Company recognises such contracts as service concession arrangements as the public sector body (the grantor) controls and regulates what the Company provides and the grantor controls, through ownership, the beneficial entitlement of assets.
The Company recognises service concession arrangements applying the bifurcated model. Revenue for construction and installation of electric vehicle charging points is recognised using the stage of completion basis from which a financial asset is recognised to the extent to which the Company has an unconditional contractual right to receive cash from, or at the direction of, the grantor for the construction services. The Company recognises an intangible asset at fair value for the consideration receivable to the extent that the Company receives a right to charge users of the public service.
The Company derecognises the financial asset at the point which contractual cash flows are received throughout the life of the contract. The intangible asset is amortised from the point at which the Company generates cash inflows from its right to charge electricity to the public. The intangible asset is amortised over the life of the contract which ranges from 10-12 years.
Some contracts contain revenue share agreements which comprise of an agreement with the customer by which the customer receives a share of the power revenue generated by the Company. The Company collects the payment from the end user and remits the payment to the customer.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
Grants are accounted under the accruals or performance obligation model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.
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 6
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CONNECTED KERB LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
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 other creditors as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.
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 operates and generates income.
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
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.
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CONNECTED KERB LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
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Tangible fixed assets (continued)
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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:
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.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
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.
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Cash and cash equivalents
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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.
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.
Page 8
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CONNECTED KERB LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
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Provisions for liabilities
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Provisions are made where an event has taken place that gives the Company 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 Company 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.
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” 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.
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Page 9
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CONNECTED KERB LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
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Financial instruments (continued)
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Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
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Judgements in applying accounting policies and key sources of estimation uncertainty
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The Company makes estimates and assumptions concerning the future and judgements in applying the Company's accounting policies. The resulting accounting estimates will, by definition, seldom equal the actual results. The following estimates and assumptions have a significant risk of causing a material adjustment to the carrying value of assets and liabilities within the next financial year.
Service concession arrangements
The Company has certain contracts with customers whereby the Company provides electric vehicle charging points and associated services to public sector bodies. The Company recognises such contracts as service concession arrangements as the public sector body (the grantor) controls and regulates what the Company provides and the grantor controls, through ownership, the beneficial entitlement of assets.
The Company recognises service concession arrangements applying the bifurcated model. Revenue for construction and installation of electric vehicle charging points is recognised using the stage of completion basis from which a financial asset is recognised to the extent to which the Company has an unconditional contractual right to receive cash from, or at the direction of, the grantor for the construction services. The percentage of completion method depends on an accurate estimate of the costs to complete the contract.
Furthermore, the Company must estimate the fair value receivable in respect of construction services provided under service concession arrangements. The estimation of fair value requires the Directors to determine the best estimate of the profitability of the construction work undertaken.
These estimates are made by personnel who have adequate and sufficient knowledge of the contracts. The nature of the estimations mean that actual outcomes may differ from those made in forecasts and budgets.
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The average monthly number of employees, including Directors, during the year was 77 (2021 - 36).
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Page 10
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CONNECTED KERB LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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Service concession arrangements
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Page 11
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CONNECTED KERB LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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Prepayments and accrued income
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Page 12
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CONNECTED KERB LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Other taxation and social security
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Accruals and deferred income
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Creditors: Amounts falling due after more than one year
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Analysis of the maturity of loans is given below:
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Amounts falling due within one year
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Amounts falling due 1-2 years
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Amounts falling due 2-5 years
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Bank loans represent a Bounce Back loan of £25,000 received on 12 May 2020. This loan was subject to an interest and repayment holiday up to 12 June 2021. With effect from 12 June 2021, the loan is repayable in equal installments with a final repayment date of 12 June 2027, is unsecured and is interest bearing at a rate of 2.5% per annum.
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Page 13
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CONNECTED KERB LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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Onerous contract provision
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Charged to profit or loss
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The dilapidation provision represents Management's best estimate of the expected cost to return leased premises to the condition at the commencement of the lease.
The onerous contract provision represents Management's best estimate of the expected costs not recoverable to complete contracted construction agreements. This provision is expected to be utilised within 12 months from the balance sheet date.
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Allotted, called up and fully paid
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159,201 (2021 - 137,175) Ordinary shares of £0.0001 each
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On 30 August 2022, 5,121 Ordinary shares of £0.0001 each were issued for total consideration of £3,511,521.
On 1 September 2022, 108 Ordinary shares of £0.0001 each were issued for total consideration of £76,125.
On 6 September 2022, 16,798 Ordinary shares of £0.0001 each were issued for total consideration of £12,871,890.
Included in the allotment of Ordinary shares on 6 September 2022 was £1,655,000 of convertible loan notes issued during the year ended 31 December 2022 that were converted into Ordinary shares.
Ordinary shareholders are entitled to one vote per share and entitle the holder to participate in dividend distributions and capital distributions (including on winding up).
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 £374,030 (2021 - £150,975). Contributions totaling £25,357 (2021 - £143,265) were payable to the fund at the balance sheet date and are included in creditors.
Page 14
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CONNECTED KERB LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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Related party transactions
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During the year ended 31 December 2022, the Company incurred fees from Directors totaling £nil (2021: £30,000) in respect of advisory matters. At 31 December 2022, £nil (2021: £nil) was outstanding.
At 31 December 2022, the Company owed £387,478 (2021: £574,799) in respect of Directors' loan accounts.
Total remuneration in respect of key management personnel was £580,399 (2021: £635,125).
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Post balance sheet events
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On 20 January 2023, the Company allotted 1,500,000 Convertible Preference Shares of £10 each for total consideration of £15,000,000.
On 25 September 2023, the Company received an unsecured term loan facility of £1,000,000.
26 October 2023, the Company received an unsecured term loan facility of £1,250,000.
On 11 November 2023, the Company authorised the allotment of 800,000 Convertible Preference Shares of £8,000,000.
On 15 November 2023, the Company allotted 330,000 Convertible Preference Shares of £0.0001 each for total consideration of £3,300,000.
On 23 November 2023, the Company allotted 470,000 Convertible Preference Shares of £0.0001 each for total consideration of £4,700,000.
In the opinion of the Directors there is no ultimate controlling party.
Page 15
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CONNECTED KERB LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
The auditor's report on the financial statements for the year ended 31 December 2022 was qualified.
The qualification in the audit report was as follows:
Basis for qualified opinion
With respect to stocks with a carrying value at 31 December 2021 of £706,254 the audit evidence available to us was limited because, subsequent to an attendance of a post year end physical stock, we were unable to reconcile the counting of the physical stock at that time to the year-end recorded stock quantities held. Owing to the nature of the Company's records we were unable to obtain sufficient, appropriate audit evidence regarding the stock quantities held at 31 December 2021 by alternative audit procedures. As a result, we are also unable to obtain sufficient, appropriate audit evidence regarding the cost of sales of £7,910,444 for the year ended 31 December 2022.
Furthermore, the auditor reporting the following in respect of going concern:
Material uncertainty related to going concern
We draw attention to note 2.2 in the financial statements, which indicates that the Company is dependent on additional funding and the continued support of its lender which may cast significant doubt on the Company's ability to continue as a going concern. As stated in note 2.2, these events or conditions, along with the other matters as set forth in note 2.2, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. The financial statements do not include adjustments that would result if the Company was unable to continue as a going concern.
Our opinion is not modified in respect of this matter.
Other matters
The financial statements for the prior period were unaudited.
The audit report was signed on 18 April 2024 by James Pitt BA BFP FCA (Senior Statutory Auditor) on behalf of James Cowper Kreston Audit.
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