Registration number:
Prepared for the registrar
for the
Year Ended 31 December 2023
Cortex Limited
Contents
Company Information |
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Balance Sheet |
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Notes to the Financial Statements |
Cortex Limited
Company Information
Directors |
M Taylor A Edwards |
Registered office |
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Accountants |
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Cortex Limited
(Registration number: 05023238)
Balance Sheet as at 31 December 2023
Note |
31 December 2023 |
(As restated) |
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Fixed assets |
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Intangible assets |
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Tangible assets |
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Investments |
- |
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Current assets |
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Debtors |
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Cash at bank and in hand |
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Creditors: Amounts falling due within one year |
( |
( |
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Net current (liabilities)/assets |
( |
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Total assets less current liabilities |
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|
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Provisions |
(60,000) |
(60,000) |
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Deferred tax liabilities |
(288,753) |
(380,575) |
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Net assets |
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|
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Capital and reserves |
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Called up share capital |
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9,299 |
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Share premium reserve |
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198,641 |
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Profit and loss account |
( |
968,387 |
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Total equity |
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1,176,327 |
For the financial year 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:
• |
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• |
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.
Approved and authorised by the
Director
Cortex Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
General information |
The Company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
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 were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' Section 1A Small Entities.
Basis of preparation
These financial statements have been prepared using the historical cost convention.
The presentational currency of the financial statements is Pounds Sterling, being the functional currency of the primary economic environment in which the Company operates. Monetary amounts in these financial statements are rounded to the nearest Pound.
Going concern
The Directors plan to continue to invest in development of products to generate new revenue streams and have produced forecasts for the 12 month period from the date of approving the financial statements including this further investment and expected growth, and they have a reasonable expectation that the Company will have access to adequate resources to continue in operation for the foreseeable future.
The Directors therefore continue to adopt the going concern basis in preparing the financial statements.
Group accounts not prepared
Changes in accounting policy
The company have revised their accounting policy so that Development Costs are now capitalised in the financial statements. The directors' are in agreement that the revised policy provides more reliable and more relevant information to the users and the new policy has been applied retrospectively in the financial statements. A reconciliation of the impact can be seen in note 14.
Revenue recognition
Revenue represents the fair value of services provided during the period. Revenue is recognised as contract activity progresses and the right to consideration earned. Fair value reflects the amounts expected to be recoverable from customers and is based on time spent and costs incurred to date as a percentage of total anticipated costs. Revenue from support and maintenance agreements is recognised as earned over the period of the agreement. Payments in advance under such agreements are treated as deferred income.
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.
Cortex Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
2 |
Accounting policies (continued) |
Foreign currency transactions and balances
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 the profit and loss account, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
The current 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 on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the Company. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
The carrying amounts of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.
Development costs
Research expenditure is written off as incurred. Development expenditure is also written off, except where the directors are satisfied as to the technical, commercial and financial viability of individual projects. In such cases, the identifiable expenditure is capitalised as an intangible asset and amortised over the period during which the company is expected to benefit. Provision is made for any impairment.
Amortisation
Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:
Asset class |
Amortisation method and rate |
Development costs |
50% of cost |
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.
Depreciation
Depreciation is provided on tangible fixed assets so as to write off the cost, less any estimated residual value, over their expected useful economic life as follows:
Asset class |
Depreciation method and rate |
Leasehold Improvements |
Over term of lease |
Furniture & Fittings |
20-25% of cost |
Computer Equipment |
33% of cost |
Trade debtors
Trade debtors are amounts due from customers for services performed in the ordinary course of business.
Trade debtors are recognised initially at the transaction price. All trade debtors are repayable within one year and hence are included at the undiscounted cost of cash expected to be received. 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 debtors.
Cortex Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
2 |
Accounting policies (continued) |
Financial instruments
Classification
Recognition and measurement
Financial assets and liabilities are only offset in the balance sheet when, and only when, there exists a legally enforceable right to set off the recognised amounts and the Company intends either to settle on a net basis, or to realise the assets and settle the liability simultaneously.
Impairment
A non financial asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.
Where indicators exist for a decrease in impairment loss, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.
For financial assets carried at amortised cost, the amount of an impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.
For financial assets carried at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.
Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.
Trade 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 all are repayable within one year and hence are included at the undiscounted amount of cash expected to be paid.
Cortex Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
2 |
Accounting policies (continued) |
Provisions
Provisions are recognised when the Company has an obligation at the reporting date as a result of a past event, it is probable that the Company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
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.
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.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the 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 initial measurement is on a present value basis.
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.
Critical accounting judgements and key sources of estimation uncertainty
In the application of the Company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.
Key sources of estimation uncertainty
No key sources of estimation uncertainty have been identified by management in preparing these financial statements other than those detailed in these accounting policies.
Judgements
No significant judgements have been made by management in preparing these financial statements. |
Cortex Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Staff numbers |
The average number of persons employed by the Company (including directors) during the year, was as follows:
Year ended 31 December 2023 |
1 October 2021 to 31 December 2022 |
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Average number of employees |
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Intangible assets |
(As restated) |
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Cost |
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At 1 January 2023 |
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Additions |
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At 31 December 2023 |
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Amortisation |
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At 1 January 2023 |
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Amortisation charge |
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At 31 December 2023 |
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Carrying amount |
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At 31 December 2023 |
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At 31 December 2022 |
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Tangible assets |
Leasehold Improvements |
Furniture & Fittings |
Computer Equipment |
Total |
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Cost |
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At 1 January 2023 |
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Additions |
- |
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At 31 December 2023 |
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Depreciation |
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At 1 January 2023 |
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Charge for the period |
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At 31 December 2023 |
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Carrying amount |
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At 31 December 2023 |
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At 31 December 2022 |
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- |
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Cortex Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Investments |
31 December |
30 September |
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Investments in subsidiaries |
- |
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Cortex Limited held 100% of the Ordinary shares in Innovise IES Limited, a dormant company registered in England & Wales. On 28 February 2023, Innovise IES Limited was dissolved.
Debtors |
31 December 2023 |
31 December 2022 |
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Trade debtors |
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Amounts owed by group undertakings |
- |
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Other debtors |
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Prepayments |
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Accrued income |
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Corporation tax asset |
230,294 |
487,111 |
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Details of non-current trade and other receivables
£40,800 (2022 - £40,800) of other debtors is classified as non-current.
Creditors |
Note |
31 December 2023 |
31 December 2022 |
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Due within one year |
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Loans and borrowings |
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- |
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Trade creditors |
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Amounts owed to group undertakings |
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- |
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Social security and other taxes |
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Other creditors |
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Accrued expenses and deferred income |
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Loans and borrowings |
2023 |
2022 |
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Current loans and borrowings |
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Other borrowings |
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- |
Other borrowings
Other borrowings are secured by a debenture over all assets held by the company.
Cortex Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Provisions |
Dilapidations |
Total |
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At 1 January 2023 |
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At 31 December 2023 |
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Provisions for dilapidations relate to estimated costs of rectification works required under tenant repairing leases.
Deferred tax |
Deferred tax assets and liabilities
2023 |
Liability |
Fixed asset timing differences |
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Short term timing differences |
( |
Losses and other deductions |
( |
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2022 |
Liability |
Fixed asset timing differences |
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Short term timing differences |
( |
Losses and other deductions |
( |
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Obligations under leases |
Operating leases
As at 31 December 2023 the company had total commitments under non-cancellable operating leases of £221,000 (2022 - £289,000). Of this amount, £68,000 (2022 - £68,000) is due in under 1 year and £153,000 (2022 - £221,000) is due in more than 1 year.
Share capital |
Allotted, called up and fully paid shares
31 December 2023 |
31 December 2022 |
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No. |
£ |
No. |
£ |
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1,306 |
|
299 |
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9,000 |
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9,000 |
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9,299 |
Cortex Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
13 |
Share capital (continued) |
Issue of shares
During the year, 100,761 Ordinary A shares of £0.01 each were issued for total consideration of £1,007,610.
Share rights
Shares rights are the same in all respects except that profits distributable to Ordinary B shareholders are at the prior sanction of Ordinary A shareholders and there are restrictive rights on the Ordinary B shares in the event of a sale of the Company.
Reconciliation of prior period restatement following a change of policy in capitalised development costs |
The tables below reconcile profit for the financial period ending 31 December 2022 and equity as at 31 December 2022 from those reported in the prior period financial statements.
Reconciliation of loss for the financial period ended 31 December 2022:
£ |
|
Loss for the financial period as previously reported in 31 December 2022 financial statements |
(520,460) |
Adjustments on transition to revised accounting policy: |
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Capitalisation of development expenditure previously expensed |
1,501,339 |
Amortisation of development costs |
(1,289,243) |
Deferred tax charge |
(53,909) |
Loss for the financial period ended 31 December 2022 as restated |
(362,273) |
Reconciliation of equity as at 31 December 2022:
1 October 2021 |
31 December 2022 |
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£ |
£ |
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Equity reported under previous accounting policy |
552,698 |
32,238 |
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Adjustments to equity on application of revised accounting policy |
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Capitalised development expenditure |
2,041,258 |
3,542,597 |
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Amortisation on development expenditure |
(728,690) |
(2,017,933) |
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Deferred tax on timing differences as a result of capitalised development expenditure |
(326,666) |
(380,575) |
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Total adjustments to equity on application of revised accounting policy |
985,902 |
1,144,089 |
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Equity reported after application of revised accounting policy |
1,538,600 |
1,176,327 |
On 1 January 2022 the company changed its accounting policy in respect of development expenditure whereby qualifying expenditure is capitalised as detailed in note one of these financial statements. Prior to this date all such expenditure was charged to the profit and loss account as it was incurred. In accordance with the requirements of FRS 102 the policy has been applied retrospectively and the balance sheets as at 1 October 2021 & 31 December 2022 as well as the profit and loss account for the year ended 31 December 2022 have been restated as detailed above.