Spottitt Ltd |
Notes to the Accounts |
for the period from 1 July 2023 to 31 December 2023 |
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1 |
Accounting policies |
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Basis of preparation |
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The accounts have been prepared under the historical cost convention and in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland (as applied to small entities by section 1A of the standard). Convertible loans are treated as a financial liability in accordance with FRS102. Warrants issued in prior years were exercised in this year and converted into Equity. The company changed it's accounting period to end on 31 December to bring it in line with it's subsidiary's year end. |
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Turnover |
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Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the sale of goods and from the rendering of services. Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer. Turnover from the rendering of services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs. |
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Intangible fixed assets |
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Intangible fixed assets are measured at cost less accumulative amortisation and any accumulative impairment losses. Expenditure on development activities may be capitalised if the product or process is technically and commercially feasible and the company intends and has the technical ability and sufficient resources to complete development, future economic benefits are probable and if the company can measure reliably the expenditure attributable to the intangible asset during its development. The expenditure capitalised includes the cost of specialist subcontractors services and direct labour. Other development expenditure is recognised in the profit and loss account as an expense as and when incurred. Capitalised development expenditure is stated at cost less accumulated amortisation less accumulated impairment losses. Amortisation is charged to the profit and loss on a straight line basis over the estimated useful economic lives of the intangible assets. The estimated useful lives of the capitalised development costs is 10 years based on anticipated cashflows relating to the development and the basis is reviewed periodically or when events changes. |
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Tangible fixed assets |
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Tangible fixed assets are measured at cost less accumulative depreciation and any accumulative impairment losses. Depreciation is provided on all tangible fixed assets, other than freehold land, at rates calculated to write off the cost, less estimated residual value, of each asset evenly over its expected useful life, as follows: |
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Plant and machinery |
25% reducing basis |
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Investments |
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Investments in subsidiaries, associates and joint ventures are measured at cost less any accumulated impairment losses. Listed investments are measured at fair value. Unlisted investments are measured at fair value unless the value cannot be measured reliably, in which case they are measured at cost less any accumulated impairment losses. Changes in fair value are included in the profit and loss account. |
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Debtors |
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Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts. |
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Creditors |
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Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. |
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Taxation |
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A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted. |
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Provisions |
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Provisions (i.e. liabilities of uncertain timing or amount) are recognised when there is an obligation at the reporting date as a result of a past event, it is probable that economic benefit will be transferred to settle the obligation and the amount of the obligation can be estimated reliably. |
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Foreign currency translation |
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Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss. |
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Leased assets |
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A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. The rights of use and obligations under finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction in the outstanding liability using the effective interest rate method. The finance charge is allocated to each period during the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability. Leased assets are depreciated in accordance with the company's policy for tangible fixed assets. If there is no reasonable certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the lower of the lease term and its useful life. Operating lease payments are recognised as an expense on a straight line basis over the lease term. |
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Pensions |
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Contributions to defined contribution plans are expensed in the period to which they relate. |
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2 |
Employees |
31/12/23 |
30/6/23 |
Number |
Number |
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Average number of persons employed by the company |
3 |
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2 |
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3 |
Intangible fixed assets |
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Development costs (IP) |
£ |
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Cost |
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At 1 July 2023 |
125,089 |
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Additions (( internally generated) |
8,451 |
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At 31 December 2023 |
133,540 |
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Amortisation |
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At 1 July 2023 |
44,452 |
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Provided during the period |
6,676 |
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At 31 December 2023 |
51,128 |
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Net book value |
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At 31 December 2023 |
82,412 |
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At 30 June 2023 |
80,637 |
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Development cost (IP) is being written off in equal annual instalments over its estimated economic life of 10 years. No impairment charge was recognised in the period (2023 June: £Nil). Development costs relate to systems currently and expected to remain in use by the company. Future economic benefit is expected to derive from all intangible fixed assets and accordingly the directors deem no impairment charge is required. |
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4 |
Tangible fixed assets |
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Plant and machinery etc |
£ |
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Cost |
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At 1 July 2023 |
858 |
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At 31 December 2023 |
858 |
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Depreciation |
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At 1 July 2023 |
705 |
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Charge for the period |
19 |
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At 31 December 2023 |
724 |
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Net book value |
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At 31 December 2023 |
134 |
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At 30 June 2023 |
153 |
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5 |
Investments- subsidiary |
Investments in |
subsidiary |
undertakings |
£ |
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Cost |
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At 1 July 2023 |
23,363 |
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At 31 December 2023 |
23,363 |
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Investments relates to a 100% share holding in Spottitt Sp. Zoo registered in Kiełczów, Poland. As the company held more than a 20% holding, the detailed disclosures as at 31 December 2023 are as stated below: |
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Percentage |
Capital and |
Profit (loss) |
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Company |
Shares held |
held |
reserves |
for the period |
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Class |
% |
£ |
£ |
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Spottitt Sp. Zoo (registered in Poland) |
Ordinary |
100 |
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(72,070) |
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(4,708) |
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6 |
Debtors |
31/12/23 |
30/6/23 |
£ |
£ |
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Trade debtors |
110,887 |
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- |
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Amounts owed by group undertakings and undertakings in which the company has a participating interest |
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169,571 |
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- |
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Other debtors |
785 |
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- |
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281,243 |
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- |
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7 |
Creditors: amounts falling due within one year |
31/12/23 |
30/6/23 |
£ |
£ |
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Convertible Loans ( June 2023:Non-equity warrants see note 11.) |
- |
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50,477 |
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Trade creditors |
36,665 |
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71,635 |
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Taxation and social security costs |
12,775 |
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3,245 |
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Other creditors ( incl. DLA 2023 Dec: £3,203 & 2023 Jun: £4,703 LK ) |
22,409 |
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8,203 |
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71,849 |
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133,560 |
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8 |
Creditors: amounts falling due after one year |
31/12/23 |
30/6/23 |
£ |
£ |
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Accrued interest on shareholders loans |
22,535 |
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19,511 |
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Bounce Back Loan (re: Covid Loan Government secured) |
17,937 |
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20,885 |
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Convertible loan ( matures 25.02.2025) |
80,000 |
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Other creditors ( shareholders loan advances see note 11) |
78,558 |
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78,558 |
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199,030 |
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118,954 |
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On 26.08.2023 convertible loans were received from KIC InnoEnergy (£19,028) Lucy Kennedy (£30,486) and Threa SRL (£30,486) total £80,000 at a rate of 8% p.a payable on maturity date 25.02.2025. If before the maturity date a qualifying equity investment round of £300,000 or more is closed, then this convertible loan notes will automatically convert to equity at a 30% discount for all lenders. |
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The original 2018 shareholders loan agreement has been carried forward on the same basis for a further 5 years to June 2028. Interest is accrued at a rate of 4% above the Bank of England rate and payable on the repayment date. Repayment of this debt will be the earlier of Spottitt Ltd receiving funding in any financial year of £860,000 or the Board of directors unanimously agree that the post tax profits are sufficient for repayment or five years from the effective date being in June 2028. |
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9 |
Loans |
31/12/23 |
30/6/23 |
£ |
£ |
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Creditors include Bounce Back Loan (re: Covid Government secured): |
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Instalments falling due for payment within five years |
17,937 |
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20,885 |
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Bounce bank loan secured by Government |
17,937 |
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20,885 |
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On 13.11.2020 the company received a 6-year term Bounce Back Loan of £30,000, 100% guaranteed by the Government with no fee or interest for the first 12 months and thereafter at a rate of 2.5% interest p.a. to help with the working capital. |
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10 |
Events after the reporting date |
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After the balance sheet date, on 12 February 2024, KIC InnoEnergy SE company registered in The Netherlands ( a corporate director and 21.753% shareholder in Spottitt Ltd) were issued additional new shares in order that their holding would not be diluted when the employee share option for 80,000 A ordinary shares were exercised by Niccolo Teodori ( the Chief Growth Officer at Spottitt Ltd). On 31 May 2024 Spottitt Ltd received an Advance Subscription Agreement funds from RSCM Fund V, L.P. of USD$ 500,000 for AS ordinary shares to be issued pursuant to an Exit Event or a Qualifying Financing at a price lower of 20% discount to subscription price or ( as applicable) the exit price. |
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11 |
Related party transactions |
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During the period the total amount of sales invoices issued to the subsidiary company Spottitt Sp Zoo in Poland was £74,869. The total consultancy charges from the subsidiary to the parent company during the period was £nil (nil LN). During the period the company advanced loans totalling £169,571 (853,300 PLN) repayable by 31 December 2024 with interest due at maturity at WIBOR 3M +2.4%. The company's investment at 100% in the subsidiary remained unchanged at £23,363 (130,000PLN). see note 5. above. During the period total consultancy costs from Threa SRL (a Belgium company in which P Senes is the director) amounted to £3,904 ( Euros 4,500) and the balance outstanding as at the year end was £nil (Euros nil). Included within note 8 above, is total loan advances of £78,558 in March 2018 from shareholders, two of whom are also directors, i.e. L Kennedy £28,124 and P Senes £23,670 via his Belgium company (Paolo Senes SPRL). The balance £26,764 was advanced by M Deplano who is a shareholder but not a director. Interest provision thereto for the period amounts to £3,024 making the cumulative amount £22,535 which remains unpaid until maturity in June 2028. Included in note 7. above under other creditors is brought forward amounts owed to L Kennedy (director) of £3,203 with regards to previous years short term cashflow advances. On 10 December 2021 KIC InnoEnergy SE company registered in The Netherlands ( a corporate director and 21.753% shareholder in Spottitt Ltd) acquired warrants of £50,477 ( Euros 60,000) as disclosed per note 7. which were exercised and converted into 76,071 ordinary shares of £0.0001 each in December 2023 as well as receiving additional 14,734 new shares on 12 February 2024 to offset any dilution of ownership following the exercise of the employee share option by Niccolo Teodori see note 10. above. Niccolo Teodori charged £36,017 (US$ 45,133) consultancy and commission fees during the period. On 26 August 2023 Spottitt Ltd entered a convertible loan agreement with three shareholders and or directors, KIC InnoEnergy SE (£19,028), L Kennedy (£30,486) and Threa SRL (£30,486, a Belgium company in which P Senes is a director) totalling £80,000 at an annual interest rate of 8% p.a. maturing on 25 February 2025 unless if before maturity a qualifying equity round of £300,000 is closed then this convertible loan will automatically convert to equity at a 30% discount for all three lenders. |
12 |
Controlling party |
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The company is owned by several shareholders, following new issues in the period with majority holdings being, The corporate director KIC InnoEnergy SE ( owns 21.753% ) with the other two company directors ( L Kennedy and P Senes, who owns 34.426% each) along with the original cofounder M Deplano who owns 5.188% with the remaining 4.207% being owned by new subscribers in the period. The new share issues in the period created a share premium of £275,254. Accordingly there is no individual ultimate controlling party. |
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13 |
Other information |
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Spottitt Ltd is a private company limited by shares and incorporated in England. Its registered office is: |
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Electron Building |
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Fermi Avenue |
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Harwell Oxford |
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Oxon |
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OX11 0QR |