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REGISTERED NUMBER: 11546990 (England and Wales)










REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE PERIOD

1 JANUARY 2023 TO 30 DECEMBER 2023

FOR

KIT-AR LIMITED

KIT-AR LIMITED (REGISTERED NUMBER: 11546990)






CONTENTS OF THE FINANCIAL STATEMENTS
For The Period 1 JANUARY 2023 TO 30 DECEMBER 2023




Page

Company Information 1

Report of the Directors 2

Report of the Independent Auditors 5

Income Statement 8

Other Comprehensive Income 9

Balance Sheet 10

Statement of Changes in Equity 11

Cash Flow Statement 12

Notes to the Cash Flow Statement 13

Notes to the Financial Statements 14


KIT-AR LIMITED

COMPANY INFORMATION
For The Period 1 JANUARY 2023 TO 30 DECEMBER 2023







DIRECTORS: Mr J C Costa
Mr I H Gangas
Mr M F Oliveira
Mr L M C De Lemos





REGISTERED OFFICE: Idealondon (Kit-Ar)
69 Wilson Street
London
EC2A 2BB





REGISTERED NUMBER: 11546990 (England and Wales)





AUDITORS: AGK Partners
Chartered Accountants & Statutory Auditors
1 Kings Avenue
London
N21 3NA

KIT-AR LIMITED (REGISTERED NUMBER: 11546990)

REPORT OF THE DIRECTORS
For The Period 1 JANUARY 2023 TO 30 DECEMBER 2023

The directors present their report with the financial statements of the company for the period 1 January 2023 to 30 December 2023.

PRINCIPAL ACTIVITY
The principal activity of the company in the period under review was that of information technology service activities.

REVIEW OF BUSINESS
The turnover of the year under review was £84,922 compared with £93,455 in the previous year, and this decrease is attributable to more focus on business strategy and change i.e. in 2023 group focus was on product market fit, go to market strategy, R&D and infrastructure to support for better solution etc. As a result of this, loss before tax has increased in 2023 (£512,413) compared to 2022 (£186,056) but management expect continuous growth owing to consolidated product suite, client acquisition, and partnership.

KIT-AR remains a pioneering force in the industrial augmented reality landscape, dedicated to the digital augmentation of the human worker on the manufacturing shopfloor with the aim of reducing the cost of poor quality.

In 2023 the group was primarily focused on strengthening our Product-Market Fit and improve Go-to-market strategies, namely with the adoption of product market verticals, starting with Assembly, Quality Inspection and Kitting. As a consequence, the team expanded despite investment constraints. Additionally, there was a focus in increasing the robustness and reliability of the infrastructure to support the industrial deployment of the solution at Bentley Motors in June 2023. What's more, an incentive scheme based on growth shares was implemented and shared with all existing employees in Q3 of 2023.

Throughout the past year, the group has continued to be actively involved in R&D projects both in Portugal and Europe. Moreover, it has pursued strategic partnerships, namely of commercial nature, as to leverage well-established brands that have recognition in defining/implementing digitalisation strategies in manufacturing companies to increase market reach and reduce sales cycles. In 2023, the company established a partnership with PWC Portugal as a channel partner.

Regarding R&D, the PRR Drivolution initiative, initially approved in the beginning of 2023, suffered significant holdup, namely the replacement of the consortium's coordinator. This caused delays, setting a new expected start date in 2024, pending approval of the new consortium by IAPMEI. This had a negative impact on the execution of the business plan for 2023 since it engaged with a key potential customer in the automotive sector.

FUTURE DEVELOPMENTS
Management expects to see a continued growth of the group throughout 2024, as well as a consolidated product suite and client acquisitions within target industries, with the support from the strategic partnership entered with PWC Portugal. In order to further support commercial activity, a Head of Sales has been hired to start in May 2024. However, based on the mismatch of capabilities to meet the market needs, the role of the Chief Marketing Officer was terminated until further notice.

Finally, the 3.3€M seed investment round started in 2023 and was finalized later in the year, on the 28th of December, having been led by 3xP Global and BlueCrow Capital, with the funds being received in the first quarter of 2024.

We would like to extend our sincere gratitude to our employees, customers, partners, and shareholders for their continued support and trust in KIT-AR. Our achievements in 2023 are a testament to the dedication and hard work of our team, and we look forward to building on this success in the coming year

EVENTS SINCE THE END OF THE PERIOD
Information relating to events since the end of the period is given in the notes to the financial statements.

DIRECTORS
The directors shown below have held office during the whole of the period from 1 January 2023 to the date of this report.

Mr J C Costa
Mr I H Gangas
Mr M F Oliveira

Other changes in directors holding office are as follows:

Mr L M C De Lemos was appointed as a director after 30 December 2023 but prior to the date of this report.


KIT-AR LIMITED (REGISTERED NUMBER: 11546990)

REPORT OF THE DIRECTORS
For The Period 1 JANUARY 2023 TO 30 DECEMBER 2023

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company has a resilient business model in place and is focusing on several measures for preservation of cash flows and cost optimization including availing of various government relief schemes.

Financial risk factors
The Company is exposed to the following risks from its use of financial instruments:
Credit risk
Liquidity risk
Market risk
Interest rate risk
Currency risk

The Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework.

The Company's risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities.

(i) Credit risk
Credit risk arises when a failure by counter parties to discharge their obligations could reduce the amount of future cash inflows from financial assets on hand at the reporting date.

(ii) Liquidity risk
Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match. An unmatched position potentially enhances profitability but can also increase the risk of losses. The Company has procedures with the object of minimising such losses as maintaining sufficient cash and other highly liquid current assets and by having available an adequate amount of committed credit facilities.

(iii) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company's income or the value of its holdings of financial instruments.

(iv) Interest rate risk
Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates. Borrowings issues at variable rates expose the Company to cash flow interest rate risk. The Company's management monitors the interest rate fluctuations on a continuous basis and acts accordingly.

(v) Currency risk
Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates and liabilities are denominated in a currency that is not the Company's functional currency. The Company is exposed to foreign exchange risk arising from various currency exposures primarily with respect to the Euro dollar.The Company's management monitors the exchange rate fluctuations on a continuous basis and acts accordingly.

ENVIRONMENTAL POLICY
The Board acknowledges that environmental protection is one of the company's business responsibilities. It aims for a continuous improvement in the company's environmental performance and to comply with all relevant regulations. Also the Board does not consider that this line of business has a large adverse impact upon the environment. As a result the company does not manage its business by reference to any environmental key performance indicators. The company seeks to maintain a high proportion of its records electronically and of the paper it does use, over 80% of its paper consumption is recycled through the use of recycling bags.


KIT-AR LIMITED (REGISTERED NUMBER: 11546990)

REPORT OF THE DIRECTORS
For The Period 1 JANUARY 2023 TO 30 DECEMBER 2023

STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

- select suitable accounting policies and then apply them consistently;
- make judgements and accounting estimates that are reasonable and prudent;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS
The auditors, AGK Partners, will be proposed for re-appointment at the forthcoming Annual General Meeting.

This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies.

ON BEHALF OF THE BOARD:





Mr M F Oliveira - Director


8 April 2024

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
KIT-AR LIMITED

Opinion
We have audited the financial statements of Kit-AR Limited (the 'company') for the period ended 30 December 2023 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:
-give a true and fair view of the state of the company's affairs as at 30 December 2023 and of its loss for the period then ended;
-have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information
The directors are responsible for the other information. The other information comprises the information in the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Report of the Directors has been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of directors' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit; or
- the directors were not entitled to take advantage of the small companies' exemption from the requirement to prepare a Strategic Report or in preparing the Report of the Directors.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
KIT-AR LIMITED


Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page four, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
- the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognize non-compliance with applicable laws and regulations;
- we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the industry;
- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:
- performed analytical procedures to identify any unusual or unexpected relationships;
- tested journal entries to identify unusual transactions;
- assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
- investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
- agreeing financial statement disclosures to underlying supporting documentation;
- reading the minutes of meetings of those charged with governance;
- enquiring of management as to actual and potential litigation and claims; and
- reviewing correspondence with HMRC, relevant regulators, and the company's legal advisors.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
KIT-AR LIMITED


Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.




Alekos Christofi (Senior Statutory Auditor)
for and on behalf of AGK Partners
Chartered Accountants & Statutory Auditors
1 Kings Avenue
London
N21 3NA

8 April 2024

KIT-AR LIMITED (REGISTERED NUMBER: 11546990)

INCOME STATEMENT
For The Period 1 JANUARY 2023 TO 30 DECEMBER 2023

Period
1.1.23
to Year Ended
30.12.23 31.12.22
Notes £    £   

REVENUE 84,922 93,455

Administrative expenses 597,335 327,557
(512,413 ) (234,102 )

Other operating income - 48,046
OPERATING LOSS and
LOSS BEFORE TAXATION (512,413 ) (186,056 )

Tax on loss 5 - -
LOSS FOR THE FINANCIAL PERIOD (512,413 ) (186,056 )

KIT-AR LIMITED (REGISTERED NUMBER: 11546990)

OTHER COMPREHENSIVE INCOME
For The Period 1 JANUARY 2023 TO 30 DECEMBER 2023

Period
1.1.23
to Year Ended
30.12.23 31.12.22
Notes £    £   

LOSS FOR THE PERIOD (512,413 ) (186,056 )


OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME FOR
THE PERIOD

(512,413

)

(186,056

)

KIT-AR LIMITED (REGISTERED NUMBER: 11546990)

BALANCE SHEET
30 DECEMBER 2023

2023 2022
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 6 196,720 212,387
Property, plant and equipment 7 16,265 14,894
Investments 8 1,199,410 1,199,410
1,412,395 1,426,691

CURRENT ASSETS
Debtors 9 315,801 18,517
Cash at bank 213,834 702,402
529,635 720,919
CREDITORS
Amounts falling due within one year 10 40,455 89,837
NET CURRENT ASSETS 489,180 631,082
TOTAL ASSETS LESS CURRENT
LIABILITIES

1,901,575

2,057,773

CREDITORS
Amounts falling due after more than one
year

11

403,585

47,373
NET ASSETS 1,497,990 2,010,400

CAPITAL AND RESERVES
Called up share capital 12 12 9
Share premium 2,399,704 2,399,704
Retained earnings (901,726 ) (389,313 )
SHAREHOLDERS' FUNDS 1,497,990 2,010,400

The financial statements were approved by the Board of Directors and authorised for issue on 8 April 2024 and were signed on its behalf by:





Mr M F Oliveira - Director


KIT-AR LIMITED (REGISTERED NUMBER: 11546990)

STATEMENT OF CHANGES IN EQUITY
For The Period 1 JANUARY 2023 TO 30 DECEMBER 2023

Called up
share Retained Share Total
capital earnings premium equity
£    £    £    £   
Balance at 1 January 2022 5 (203,257 ) 395,005 191,753

Changes in equity
Issue of share capital 4 - 2,004,699 2,004,703
Total comprehensive income - (186,056 ) - (186,056 )
Balance at 31 December 2022 9 (389,313 ) 2,399,704 2,010,400

Changes in equity
Issue of share capital 3 - - 3
Total comprehensive income - (512,413 ) - (512,413 )
Balance at 30 December 2023 12 (901,726 ) 2,399,704 1,497,990

KIT-AR LIMITED (REGISTERED NUMBER: 11546990)

CASH FLOW STATEMENT
For The Period 1 JANUARY 2023 TO 30 DECEMBER 2023

Period
1.1.23
to Year Ended
30.12.23 31.12.22
Notes £    £   
Cash flows from operating activities
Cash generated from operations 1 (482,386 ) 1,848,447
Tax paid - 43,439
Net cash from operating activities (482,386 ) 1,891,886

Cash flows from investing activities
Purchase of intangible fixed assets - (7,438 )
Purchase of tangible fixed assets (6,185 ) (1,134 )
Purchase of fixed asset investments - (1,198,527 )
Net cash from investing activities (6,185 ) (1,207,099 )

Cash flows from financing activities
Share issue 3 4
Net cash from financing activities 3 4

(Decrease)/increase in cash and cash equivalents (488,568 ) 684,791
Cash and cash equivalents at beginning
of period

2

702,402

17,611

Cash and cash equivalents at end of
period

2

213,834

702,402

KIT-AR LIMITED (REGISTERED NUMBER: 11546990)

NOTES TO THE CASH FLOW STATEMENT
For The Period 1 JANUARY 2023 TO 30 DECEMBER 2023

1. RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS
Period
1.1.23
to Year Ended
30.12.23 31.12.22
£    £   
Loss before taxation (512,413 ) (186,056 )
Depreciation charges 20,480 19,057
(491,933 ) (166,999 )
(Increase)/decrease in trade and other debtors (503,295 ) 19,144
Increase in trade and other creditors 512,842 1,996,302
Cash generated from operations (482,386 ) 1,848,447

2. CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Period ended 30 December 2023
30.12.23 1.1.23
£    £   
Cash and cash equivalents 213,834 702,402
Year ended 31 December 2022
31.12.22 1.1.22
£    £   
Cash and cash equivalents 702,402 17,611


3. ANALYSIS OF CHANGES IN NET FUNDS

At 1.1.23 Cash flow At 30.12.23
£    £    £   
Net cash
Cash at bank 702,402 (488,568 ) 213,834
702,402 (488,568 ) 213,834
Total 702,402 (488,568 ) 213,834

KIT-AR LIMITED (REGISTERED NUMBER: 11546990)

NOTES TO THE FINANCIAL STATEMENTS
For The Period 1 JANUARY 2023 TO 30 DECEMBER 2023

1. STATUTORY INFORMATION

Kit-AR Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2. ACCOUNTING POLICIES

Basis of preparing the financial statements
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Significant judgements and estimates
The preparation of financial statements in accordance with the Companies Act 2006 and FRS102 requires from Management the exercise of judgement, to make estimates and assumptions that influence the application of accounting principles and the related amount of assets and liabilities income and expenses. The estimates and underlying assumptions are based on historical experience and various other factors that are deemed to be reasonable based on knowledge available at the time. Actual results may deviate from such estimates.

Revisions in accounting estimates are recognised in the period during which the estimate is revised, if the estimate affects only that period, or in the period of the revision and future periods. If the revision affects the present as well as future periods, the estimates and underlying assumptions are revised on a continuous basis.

Turnover
Revenue is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Intangible assets
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Development costs are being amortised evenly over their estimated useful life of fifteen years.

Investments in subsidiaries
Investments in subsidiary undertakings are recognised at cost less any impairment.

Taxation
Taxation for the period comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the period end and that are expected to apply to the reversal of the timing difference.

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

KIT-AR LIMITED (REGISTERED NUMBER: 11546990)

NOTES TO THE FINANCIAL STATEMENTS - continued
For The Period 1 JANUARY 2023 TO 30 DECEMBER 2023

2. ACCOUNTING POLICIES - continued

Research and development
Directly attributable expenses related to internally generated intangible assets is capitalised when following
criteria are met:
- Company is able to generate probable future economic benefits from use or sale of intangible asset.
- Company has intention to complete the intangible asset so that it will be available for use or sale of the intangible asset.
- Company has availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset.
- Company has ability to use or sell the intangible asset.
- Company has technical feasibility of completing the intangible asset so that it will be available for use or sale of the intangible asset.
- Company has ability to reliably measure the expenditure attributable to the intangible asset during its development.

Technology under development is not depreciated until the asset is brought into commercial use.

Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Pension costs and other post-retirement benefits
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. In current year, there is no pensionable employee.

Cash and cash equivalent
Cash and cash equivalents in the statement of financial position comprise cash at banks and in hand, short term deposits with an original maturity date of one month. Cash equivalents are defined as short-term, highly liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of changes in value.

Going concern
These financial statements are prepared on a going concern basis because the parent company has undertaken to provide continuing financial support so that the company is able to pay its debts as and when they fall due.

KIT-AR LIMITED (REGISTERED NUMBER: 11546990)

NOTES TO THE FINANCIAL STATEMENTS - continued
For The Period 1 JANUARY 2023 TO 30 DECEMBER 2023

2. ACCOUNTING POLICIES - continued

Tangible fixed assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses.

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life:

Equipment - 15% straight line

Government grants
Government grants are recognized when it is reasonable to expect that the grants will be received and that all related conditions are met, usually on submission of a valid claim for payment. Government grants in respect of capital expenditure are credited to a deferred income account and are released to profit over the expected useful lives of the relevant assets by equal annual instalments. Grant of a revenue nature are credited to profit and loss so as to match them with the expenditure to which they related.

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.

Basic financial liabilities
Basic financial liabilities, including creditors and bank loans are classified as debt, 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.

3. EMPLOYEES AND DIRECTORS
Period
1.1.23
to Year Ended
30.12.23 31.12.22
£    £   
Wages and salaries 164,528 130,425
Social security costs 27,234 14,619
Other pension costs - 1,597
191,762 146,641

The average number of employees during the period was as follows:
Period
1.1.23
to Year Ended
30.12.23 31.12.22

Staff 3 3

KIT-AR LIMITED (REGISTERED NUMBER: 11546990)

NOTES TO THE FINANCIAL STATEMENTS - continued
For The Period 1 JANUARY 2023 TO 30 DECEMBER 2023

3. EMPLOYEES AND DIRECTORS - continued

It is the policy of the Company to encourage and develop all members of staff to realise their maximum potential. Wherever possible, vacancies are filled from within the Company and adequate opportunities for internal promotion are created. The Board is committed to a systematic training policy and has a comprehensive training and development potential to a maximum level of attainment. In this way, staff will make their best possible contribution to the organization's success.

The Company supports the principle of equal opportunities in employment and opposes all forms of unlawful or unfair discrimination on the grounds of race, age, nationality, religion, ethnic or national origin, sexual orientation, gender or gender reassignment, marital status or disability. It is also the policy of the Company, where possible, to give sympathetic consideration to disabled persons in their application for employment with the Company and to protect the interests of existing members of the staff who are disabled. The company has made the necessary provision for allowing employees to work remotely and be connected to the company intranet.

The Company has in place an Equity Incentive Plan (EIP) for eligible employees, directors, officers and consultants to encourage them to make significant and extraordinary contribution to the performance and growth of the Company. The EIP extends to the Company's subsidiary, SkillAugment Lda.

Period
1.1.23
to Year Ended
30.12.23 31.12.22
£    £   
Directors' remuneration - 16,000

4. OPERATING LOSS

The operating loss is stated after charging/(crediting):

Period
1.1.23
to Year Ended
30.12.23 31.12.22
£    £   
Other operating leases 2,225 2,570
Depreciation - owned assets 4,814 3,887
Development costs amortisation 15,667 15,170
Auditors' remuneration 3,750 3,750
Foreign exchange differences 1,873 (48,027 )

Other operating leases relates to rent.

5. TAXATION

Analysis of the tax charge
No liability to UK corporation tax arose for the period ended 30 December 2023 nor for the year ended 31 December 2022.

KIT-AR LIMITED (REGISTERED NUMBER: 11546990)

NOTES TO THE FINANCIAL STATEMENTS - continued
For The Period 1 JANUARY 2023 TO 30 DECEMBER 2023

5. TAXATION - continued

Reconciliation of total tax charge included in profit and loss
The tax assessed for the period is higher than the standard rate of corporation tax in the UK. The difference is explained below:

Period
1.1.23
to Year Ended
30.12.23 31.12.22
£    £   
Loss before tax (512,413 ) (186,056 )
Loss multiplied by the standard rate of corporation tax in the UK of 25%
(2022 - 19%)

(128,103

)

(35,351

)

Effects of:
Expenses not deductible for tax purposes - 17
Income not taxable for tax purposes - 1,801
Capital allowances in excess of depreciation (343 ) -
Depreciation in excess of capital allowances - 2,243
Unutilised tax losses 128,446 31,290
Total tax charge - -

6. INTANGIBLE FIXED ASSETS
Development
costs
£   
COST
At 1 January 2023
and 30 December 2023 227,557
AMORTISATION
At 1 January 2023 15,170
Amortisation for period 15,667
At 30 December 2023 30,837
NET BOOK VALUE
At 30 December 2023 196,720
At 31 December 2022 212,387

7. PROPERTY, PLANT AND EQUIPMENT
Equipment
£   
COST
At 1 January 2023 25,907
Additions 6,185
At 30 December 2023 32,092
DEPRECIATION
At 1 January 2023 11,013
Charge for period 4,814
At 30 December 2023 15,827
NET BOOK VALUE
At 30 December 2023 16,265
At 31 December 2022 14,894

KIT-AR LIMITED (REGISTERED NUMBER: 11546990)

NOTES TO THE FINANCIAL STATEMENTS - continued
For The Period 1 JANUARY 2023 TO 30 DECEMBER 2023

8. FIXED ASSET INVESTMENTS
Shares in
group
undertakings
£   
COST
At 1 January 2023
and 30 December 2023 1,199,410
NET BOOK VALUE
At 30 December 2023 1,199,410
At 31 December 2022 1,199,410

9. DEBTORS
2023 2022
£    £   
Amounts falling due within one year:
Trade debtors - 4,178
Amounts owed by group undertakings 280,134 -
Other debtors 20,897 3,931
VAT 4,808 2,455
Prepayments 7,356 4,342
313,195 14,906

Amounts falling due after more than one year:
Amounts owed by group undertakings 2,606 3,611

Aggregate amounts 315,801 18,517

10. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£    £   
Trade creditors 10,039 37,656
Social security and other taxes 19,526 16,223
Other creditors 257 -
Accrued expenses 10,633 35,958
40,455 89,837

11. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
2023 2022
£    £   
Creditors 403,585 47,373

KIT-AR LIMITED (REGISTERED NUMBER: 11546990)

NOTES TO THE FINANCIAL STATEMENTS - continued
For The Period 1 JANUARY 2023 TO 30 DECEMBER 2023

12. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number Class Nominal value 2023 2022
£    £   
324,042 Ordinary share 3.24042 3 3
297,697 Seed share 2.97697 3 3
324,273 Growth share 3.24273 3
286,019 Pre-seed share 2.86019 3 3
12 9

The Growth shares were allotted as part of an Equity Incentive Plan (EIP) for eligible employees, directors, officers and consultants to encourage them to make significant and extraordinary contribution to the performance and growth of the Company. The EIP extends to eligible staff of the Company's subsidiary, SkillAugment Lda.

13. ULTIMATE PARENT COMPANY

Criteria Venture Tech Sicc Sa (Criteria) and Fcr Armilar Venture Partners Techtransfer Fund (Armilar) were persons with significant control, and after the conclusion of an investment round in December 2023, Armilar and Criteria now share the right of nominating a director and not an ultimate parent company.

14. RELATED PARTY DISCLOSURES

The company has exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group related to consultancy and Safe notes.

15. POST BALANCE SHEET EVENTS

Seed shares with nominal value of £0.00001 per share, after the year end, has increased from 297,697 to 401,661 (51,180 allotted on 1st January 2024, and 52,784 allotted on 1st February 2024).