Business Funding Research Ltd - Accounts to registrar (filleted) - small 18.2

REGISTERED NUMBER: 07312969 (England and Wales)

REPORT OF THE DIRECTORS AND

UNAUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2019

FOR

BUSINESS FUNDING RESEARCH LTD

Page

Company Information

1

Report of the Directors

2

Balance Sheet

3

Notes to the Financial Statements

5

DIRECTORS:

Dr S J Bence

T A S Austin

C Songhurst

REGISTERED OFFICE:

Cheribourne House

45a Station Road

Willington

Bedford

Bedfordshire

MK44 3QL

REGISTERED NUMBER:

07312969 (England and Wales)

ACCOUNTANTS:

Baker Noel

Cheribourne House

45A Station Road

Willington

Bedford

Bedfordshire

MK44 3QL

The directors present their report with the financial statements of the company for the year ended 31 July 2019.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of the sale of subscriptions to funding software.

REVIEW OF BUSINESS

The company has grown well over the past year, with the majority of its revenue from the sale of annual subscriptions to

our data platform. Over the coming years we expect to continue to grow as well as improving and developing the

services we provide to our customers.

The directors have decided that all development expenditure should be capitalised to provide a more relevant picture of

the company's financial performance and position at this point in time; the effect of this change in accounting policy

means the accounts now reflect the income-generating data platform that has been developed.

As detailed in previous years, standard accounting practices require revenue to be accounted for over the period of the

licence and so the accounts reflect a significant level of deferred revenue shown as a liability on the balance sheet.

The directors are satisfied that the company is sufficiently well financed to continue operations for the foreseeable

future, with various options for funding, including lending facilities or investment.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 August 2018 to the date of this report.

Dr S J Bence

T A S Austin

C Songhurst

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:

T A S Austin - Director

11 October 2019

FIXED ASSETS

Intangible assets

4

2,352,579

1,858,020

Tangible assets

5

128,022

153,721

Investments

6

100

100

2,480,701

2,011,841

CURRENT ASSETS

Debtors

7

568,675

444,246

Cash at bank

355,087

159,589

923,762

603,835

CREDITORS

Amounts falling due within one year

8

2,043,469

1,233,187

NET CURRENT LIABILITIES

(1,119,707

)

(629,352

)

TOTAL ASSETS LESS CURRENT LIABILITIES

1,360,994

1,382,489

CREDITORS

Amounts falling due after more than one year

9

139,999

37,382

NET ASSETS

1,220,995

1,345,107

CAPITAL AND RESERVES

Called up share capital

11

344

332

Share premium

12

5,111,665

4,461,665

Other reserves

12

9,000

11,617

Fair value reserve

12

203,902

52,294

Retained earnings

12

(4,103,916

)

(3,180,801

)

SHAREHOLDERS' FUNDS

1,220,995

1,345,107

The company is entitled to exemption from audit under Section 477 of the Companies Act 2006 for the year ended 31 July 2019.

The members have not required the company to obtain an audit of its financial statements for the year ended 31 July 2019 in accordance with Section 476 of the Companies Act 2006.

The directors acknowledge their responsibilities for:

(a)	ensuring that the company keeps accounting records which comply with Sections 386 and 387 of the Companies Act 2006 and

(b)

preparing financial statements which give a true and fair view of the state of affairs of the company as at the end of each financial year and of its profit or loss for each financial year in accordance with the requirements of Sections 394 and 395 and which otherwise comply with the requirements of the Companies Act 2006 relating to financial statements, so far as applicable to the company.

The financial statements have been prepared and delivered in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies.

In accordance with Section 444 of the Companies Act 2006, the Income Statement has not been delivered.

The financial statements were approved by the Board of Directors on 11 October 2019 and were signed on its behalf by:

T A S Austin - Director

1.	STATUTORY INFORMATION

Business Funding Research Ltd 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 the provisions of Section 1A "Small Entities"

of 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 except for certain financial instruments, which are shown at fair value.

Related party exemption

The company has taken advantage of 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.

Changes in accounting policies

In previous years the company's policy was to expense all development expenditure to the profit and loss in the

year it was incurred. The directors have decided that in order to provide a more relevant picture of the company's

financial performance, development expenditure should be capitalised as an intangible asset so that the accounts

reflect the income generating data platform that has been developed.

The comparative figures for 2018 now reflect a change in other intangible assets and reserves. The original

accounts at 31st July 2018 showed retained earnings of (£4,974,238) and intangible fixed assets of £64,583.

The comparatives at 31st July 2018 to these accounts now show retained reserves of (£3,180,801) and intangible

assets of £1,858,020.

Turnover

Turnover represents the amounts earned on subscriptions to a software service net of VAT. Income is recognised

on a straight-line basis over the term of the subscription period. Where sales invoices for subscriptions run

beyond the year end that proportion of the income is not recognised in sales but shown in creditors as deferred

revenue.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2016 and another business in

2018, is being amortised evenly over its estimated useful life of five years for each business respectively.

Goodwill is reviewed by the directors annually for impairment.

Other intangible assets

Other 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.

Patents and licences are being amortised over estimated useful life of five years.

Development expenditure is amortised over estimated useful life of five years.

Tangible fixed assets

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

Improvements to property

-

The period of the lease

Fixtures and fittings

-

20% on cost

Computer equipment

-

33% on cost

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Taxation

Taxation for the year 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 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 year 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.

Research and development

Expenditure on research is written off against profits in the year in which it is incurred. Development expenditure

is capitalised and amortised over its useful life. Development expenditure is capitalised so as to reflect the

income-generating data platform that has been developed.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the

lease.

Lease incentives are recognised on a straight-line basis over the period of the lease.

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.

Employee benefits

When employees have rendered service to the company, short-term employee benefits to which the employees

are entitled are recognised at the undiscounted amount expected to be paid in exchange for that service.

Loans and borrowings

Loans and borrowings are initially recognised at the transaction price including transaction costs. Subsequently,

loans due in more than one year are measured at amortised cost using the effective interest rate method.

Share-based payment transactions

The company operates equity-settled share-based compensation plans. The fair value of the services received in

exchange for the grant of options is recognised within personnel expenses, with a corresponding increase in

equity, over the period that the employees unconditionally become entitled to the awards. The fair value of the

options granted is measured using the Black Scholes model, taking into account the terms and conditions upon

which the options were granted. The total amount to be expensed over the vesting period is determined by

reference to the fair value of the options granted, excluding the impact of any non-market vesting conditions.

At each reporting date, the entity revises its estimates of the number of options that are expected to become

exercisable. It recognises the impact of the revision of original estimates, if any, in the income statement, and a

corresponding adjustment to equity.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was 57 (2018 - 50 ) .

4.	INTANGIBLE FIXED ASSETS

Other

intangible

Goodwill

assets

Totals

£

£

£

COST

At 1 August 2018

125,000

2,260,297

2,385,297

Additions

30,000

985,501

1,015,501

At 31 July 2019

155,000

3,245,798

3,400,798

AMORTISATION

At 1 August 2018

60,417

466,860

527,277

Charge for year

30,000

451,359

481,359

Impairments

39,583

-

39,583

At 31 July 2019

130,000

918,219

1,048,219

NET BOOK VALUE

At 31 July 2019

25,000

2,327,579

2,352,579

At 31 July 2018

64,583

1,793,437

1,858,020

There has been a change in accounting policy during the year and the directors now capitalise the relevant

development expenditure as intangible assets.

The comparative figures for 2018 now reflect a change in reserves and intangible assets. The accounts at 31st

July 2018 showed intangible fixed assets of £64,583.

Within the accounts to 31st July 2019 the comparatives at 31st July 2018 now show intangible assets of

£1,858,020.

5.	TANGIBLE FIXED ASSETS

Improvements

Fixtures

to

and

Computer

property

fittings

equipment

Totals

£

£

£

£

COST

At 1 August 2018

99,826

67,752

98,088

265,666

Additions

-

3,447

16,575

20,022

At 31 July 2019

99,826

71,199

114,663

285,688

DEPRECIATION

At 1 August 2018

19,966

29,728

62,251

111,945

Charge for year

9,983

12,920

22,818

45,721

At 31 July 2019

29,949

42,648

85,069

157,666

NET BOOK VALUE

At 31 July 2019

69,877

28,551

29,594

128,022

At 31 July 2018

79,860

38,024

35,837

153,721

6.	FIXED ASSET INVESTMENTS

Shares in

group

undertakings

£

COST

At 1 August 2018

and 31 July 2019

100

NET BOOK VALUE

At 31 July 2019

100

At 31 July 2018

100

7.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.7.19

31.7.18

£

£

Trade debtors

367,425

238,280

Other debtors

201,250

205,966

568,675

444,246

Other debtors includes £144,923 (2018 £144,923) relating to a rent deposit, which is repayable in more than one

year.

8.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.7.19

31.7.18

£

£

Trade creditors

128,042

122,269

Taxation and social security

195,689

153,545

Other creditors

1,719,738

957,373

2,043,469

1,233,187

The figure for other creditors includes accruals and deferred revenue of £1,494,803 (2018: £800,384).

9.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

31.7.19

31.7.18

£

£

Other creditors

139,999

37,382

Other creditors due in more than one year includes a loan of £39,999 (2018: £37,382) from Spin-Out Strategy

Consultancy DWC-LLC. The loan from Spin-Out Strategy Consultancy DWC-LLC will be repaid when the

company has cumulative profits of £1m, which the directors believe will be in three years time. The loan has

been shown at amortised cost using the effective interest rate method, assuming that the loan will be repaid in 3

years from the balance sheet date and that an effective market rate of interest is 7%.

10.	LEASING AGREEMENTS

The minimum lease payments falling due for operating leases total £360,431 (2018: £513,405).

11.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

31.7.19

31.7.18

value:

£

£

340,981

Ordinary

0.001

341

329

3,261

A Ordinary

0.001

3

3

344

332

The following fully paid shares were allotted during the year at a premium as shown below:

Date

Class

No. ofshares

NominalValue£

SharePremium£

19/10/2018

Ordinary £0.001

8,444

8.44

419,489

04/03/2019

Ordinary £0.001

4,037

4.04

200,554

12,481

12.48

620,043

Date

Class

No. ofshares

NominalValue£

SharePremium£

19/10/2018

A Ordinary £0.001

603

0.60

29,956

603

0.60

29,956

12.

RESERVES

Fair

Retained

Share

Other

value

earnings

premium

reserves

reserve

Totals

£

£

£

£

£

At 1 August 2018

(3,180,801

)

4,461,665

11,617

52,294

1,344,775

Deficit for the year

(925,732

)

(925,732

)

Share options

-

-

-

151,608

151,608

Cash share issue

-

650,000

-

-

650,000

Capital contribution reserve

2,617

-

(2,617

)

-

-

At 31 July 2019

(4,103,916

)

5,111,665

9,000

203,902

1,220,651

There has been a change in accounting policy during the year and the directors now capitalise the relevant

development expenditure as intangible assets.

The comparative figures for 2018 now reflect a change in reserves and intangible assets. The accounts at 31st

July 2018 showed retained earnings of (£4,974,238).

Within the accounts to 31st July 2019 the comparatives at 31st July 2018 now show retained reserves of

(£3,180,801).

13.	RELATED PARTY DISCLOSURES

14.	SHARE-BASED PAYMENT TRANSACTIONS

In February 2018 an equity-settled share-based payment plan was implemented; the company granted 10,920

share options with an exercise date of 31 July 2020. The strike price for these options being £8 per share with the

expectation that 80% will be taken up. The fair value, using the Black Scholes model, is £17.86 per share.

Throughout year ended 31st July 2019 a total of 16,445 additional share options were issued to new staff as part

of this scheme, with an exercise date of 31 July 2020.

The options issued in September 2018 had a strike price of £10 per share with the expectation that 80% will be

taken up. The fair value, using the Black Scholes model, is £18.07 per share.

The options issued in April 2019 had a strike price of £11.50 per share with the expectation that 80% will be

taken up. The fair value, using the Black Scholes model, is £22.40 per share.

The accounts reflect the amount of £151,608 (2018: 52,294) applicable to the year as a cost in the profit and loss

reflected as a fair value reserve.

15.	GOING CONCERN

The financial statements have been prepared on a going concern basis. The shareholders will continue to support

the company for the foreseeable future.

16.	DEFERRED REVENUE

Invoices raised for the subscription service which run beyond the year end have been treated as deferred revenue.

The balance of deferred revenue at 31 July 2019 was £1,446,139 (2018: £756,352).