Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2023
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NAVENIO LIMITED
COMPANY INFORMATION
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NAVENIO LIMITED
CONTENTS
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NAVENIO LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The Company was incorporated on the 28th October 2015 as a spin out from the University of Oxford with the aim of extending the research into the use and commercialisation of its AI led infrastructure free Indoor Location Technology initially developed in the Computer Science department by Dr, A. Trigoni.
In the financial year ended 31 December 2023, the company continued to invest in the development and commercialisation of both its Intelligent Workforce Solutions (IWS) and Intelligent Location Services (ILS), focused on the creation of effective value-added reseller agreements to increase our sales capabilities and reach, and launched in the United States by securing our first customer, National Institute for Health. Additionally, we have expanded our technology capabilities to include IOS devices, improved scalability, and provided access to indoor and outdoor location and tracking across a healthcare campus. Annual Recurring Revenues have increased by 38% to £1,205,168 (2022: £870,507).
Other changes to the business included:
∙Rollout of our partner program – To date, we have signed four value-added reseller agreements, which provides us access to five different distributors across geographic regions and nurse call systems thereby significantly increasing our sales reach.
∙Facilities management organizations (FMO)- During 2023, we have successfully expanded our UK FMO reach with significant expansion with major partners in this market. Given our successful initial site deployments, we are in active conversations with both to close partnership agreements with additional value-added reseller capabilities with both.
∙We continue to conduct research and development in other markets and geographies; Canada, Europe outside of the UK, and Singapore, and conversations ongoing with a large ship refurbishment company after a successful proof-of-concept completed to prove market fit in construction and building, and warehousing and logistics space.
∙Sales and marketing – In addition to the VAR partnerships, we have grown our sales team from 4 to 7 and have initiated an extensive lead generation program. The programs consist of quarterly marketing campaigns with emails, white papers, webinars, articles/blogs and podcasts. We have begun to look at more formal lead generation outsourcing companies to further build our pipeline. Lastly, we are reworking our website, interactive prospect demo, and Navenio overview.
Operating losses decreased by 14.7% to £5,849,341 (2022: £6,864,448).
The principal risks and uncertainties for the Company are the possibility that the research and development work fails to result in products, services or Intellectual Property that can be sold for sums in excess of the cost of producing them or that sufficient finance can be raised to fund future research and development and working capital. The risk posed by the Covid-19 pandemic has to a significant extent been reflected in the financial statements and is primarily linked to delays in customer evaluations and orders due to the widespread disruption in the primary UK healthcare market and the knock-on effects to staffing and moral within the NHS delaying projects and prospect decision making.
The Company aims to mitigate the financial risks by recruiting and retaining technical and sales staff capable of delivering the research and developing the products and services at a price that meets the needs in the market. Should free movement of technical staff be affected by Covid-19, the Company could with minimal disruption employ staff inside the EU or in other areas in the world as staff are already largely working remotely. Risks are further being mitigated by the company’s additional strategies of selling into healthcare markets outside the U.K. (primarily focused on the U.S.), driving business through channel partnerships, and extending into markets outside the healthcare industry.
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NAVENIO LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
During 2023, the Company has progressed from early development stage to commercialization, with new deployments of our technology to customers and completion of key development milestones on new products and technical capabilities with our channel partners. As a result, the Company is focused on delivering profitable performance as sales grow and gain traction in a multitude of ways; through both U.K. and U.S. direct healthcare sales, healthcare channel partner sales, healthcare FMO sales, and other market sales.
The key performance indicators the company will measure include:
∙Growth in ARR
∙EBITDA
∙Cash flow
∙Number of enterprise customers
∙Number of users
∙Geographical and market growth
This report was approved by the board and signed on its behalf.
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NAVENIO LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
The directors who served during the year were:
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments 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 Group 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 the Group and to 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the year, after taxation, amounted to £5,451,855 (2022 - loss £6,037,914).
The directors do not recommend the payment of a dividend.
Whilst the business has produced both the IWS and ILS solutions with a focus on proving the technology by delivering potentially significant benefits in healthcare in the UK, strategically the Navenio Indoor Location Technology is not sector specific and can be provided to businesses both within and outside the healthcare market both inside and outside the UK. The Company is following a strategy to expand rapidly internationally bringing its world class infrastructure free indoor location technology to new markets.
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NAVENIO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
There have been no significant events affecting the Group since the year end.
The auditors, James Cowper Kreston Audit, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on
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NAVENIO LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NAVENIO LIMITED
We have audited the financial statements of Navenio Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, 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).
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 Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
We draw attention to note 2.3 in the financial statements, which indicates that the matters set out in relation to the requirement for additional funding may cast significant doubt on the Company's ability to continue as a going concern. As stated in note 2.3, these events or conditions, along with the other matters as set forth in note 2.3, indicate that a material uncertainty exists that may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
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.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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NAVENIO LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NAVENIO LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. 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. 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 course of 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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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NAVENIO LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NAVENIO LIMITED (CONTINUED)
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 an Auditors' Report 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 Group financial statements.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.
The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. The specific procedures for this engagement that we designed and performed to detect material misstatements in respect of irregularities, including fraud, were as follows:
∙Enquiry of management and those charged with governance around actual and potential litigation and claims;
∙Enquiry of management and those charged with governance to identify any material instances of non-compliance with laws and regulations;
∙Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
∙Performing audit work to address the risk of irregularities due to management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for evidence of bias.
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 Auditors' 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 an Auditors' Report 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.
for and on behalf of
Chartered Accountants
2 Chawley Park
Cumnor Hill
Oxfordshire
OX2 9GG
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NAVENIO LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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NAVENIO LIMITED
REGISTERED NUMBER: 09845565
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 14 to 30 form part of these financial statements.
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NAVENIO LIMITED
REGISTERED NUMBER: 09845565
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 14 to 30 form part of these financial statements.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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NAVENIO LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
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NAVENIO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Navenio Limited is a private company, limited by share capital and incorporated in England and Wales.
The Company's registered office is 60 St. Aldates, Floor 2, Oxford, OX1 1ST.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with 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 Group management to exercise judgment in applying the Group's accounting policies.
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
As noted in the Strategic Report, the Company’s primary focus is on sales and marketing across both the UK and North America, which represents an immense addressable market. We remain bullish on our projected year over year ARR growth which we expect to double compared to 2023. Underpinning our confidence is our performance in developing our go-to-market channel strategy. In the last nine months we have executed formal value-added reseller agreements with 9 partners significantly expanding our market coverage by adding over 40 VAR sales representatives to our own sales team of 5 in the United States. These agreements have led to consistent growth in our pipeline as the VAR sales team members leverage their established relationships and access to healthcare executives within their existing customer base and pipeline of new opportunities. Our channel partners are effectively positioning our solution with their enhanced nurse call solutions which are experiencing 23.5% CAGR. In addition, we expect a minimum of 110% NRR from our existing account base tied to customer retention and revenue growth within existing sites. On the marketing front, we have a multi-pronged strategy focused on building market awareness and driving lead generation. We are actively performing targeted outreach utilizing a variety of digital tactics including bylines, blogs, and webinars, website content expansion, enhanced sales collateral as well as white papers and customer testimonials.
Having reviewed the income statement and the cash flow forecasts prepared by management, the directors consider it appropriate to prepare the financial statements on a going concern basis. The current cashflow forecasts indicate that there is sufficient cash in the business in the next 12 months and more, with a strong sales performance expected in the next 18 months. However, although the sales and marketing activities are in place, we have only just started this journey and so until we secure the business that we expect, there is a material uncertainty over sufficient funds being available to continue operations.
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NAVENIO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
Revenue, which excludes value added tax is recognised when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the company and when specific criteria have been met for each of the activities as described below.
Rendering of services Revenues for software license and services agreements are recognised on a straight line basis over the period of the agreement. Where professional services are provided for development, integration, set up or training, the revenues are recognised on delivery of the professional services. Resale of goods and services Revenue from the sale of goods and services provided by third parties are recognised when the Company has transferred the significant risks and rewards of ownership of goods to the buyer or when the services are provided by the third party. Should those services be provided by a third party provider on a time basis then revenue is also recognized on the same time basis.
Grants are accounted under the accruals model as permitted by FRS 102. 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.
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NAVENIO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The fair value of the share options at the date of grant is determined using the Black-Scholes model. This model uses key assumptions including the risk-free rate, share price and volatility of the share price. The fair value of the options at the date of grant is then charged to the Statement of Comprehensive Income over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each Balance Sheet date so that ultimately the cumulative amount recognised over the vesting period is based on the number of options that eventually vest.
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.
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NAVENIO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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.
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.
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NAVENIO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
The Group has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.
Financial instruments are recognised in the Group's Balance Sheet when the Group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
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 Group's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
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 Group after the deduction of all its liabilities.
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NAVENIO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Basic financial liabilities, which include trade and other payables, bank loans, other loans and loans due to fellow group companies 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.
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.
Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.
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NAVENIO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Analysis of turnover by country of destination:
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NAVENIO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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NAVENIO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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NAVENIO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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NAVENIO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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NAVENIO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
11.Tangible fixed assets (continued)
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NAVENIO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 26
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NAVENIO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 27
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NAVENIO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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NAVENIO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The Company has chosen to perform a review of the classification of its costs, which has resulted in the reclassification between administrative expenses and cost of sales. The impact of this change to the prior year is an increase in cost of sales of £573,974 and a decrease in administrative expenses of the same amount. There is no impact in 2023 and 2022 for the loss or net liabilities made in either period.
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NAVENIO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The Company has a contingent liability for dilapidations in relation to the offices let during the year. This has not been recognised due to the Company not being able to reliably estimate the obligation. The maximum exposure to the Company is considered by the directors to be £80,000.
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 £167,466 (2022 - £161,397). Contributions totalling £20,901 (2022 - £29,645) were payable to the fund at the balance sheet date and are included in creditors.
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