Company No: 11011754 (England and Wales)

Contents

• Company Information
• Accountant's Report
• Balance Sheet
• Notes to the Unaudited Financial Statements

DIRECTORS	R J Cruise
	P M Davies
	R K W Palmer
	H Thomas
REGISTERED OFFICE	C/O Gateley Legal Ship Canal House
	98 King Street
	Manchester
	M2 4WU
	United Kingdom
COMPANY NUMBER	11011754(England and Wales)
ACCOUNTANT	Deloitte LLP
	1 New Street Square
	London
	EC4A 3HQ
	United Kingdom

In order to assist you to fulfil your duties under the Companies Act 2006, we have prepared for your approval the financial statements of Magway Limited for the financial year ended 31 October 2020 which comprises the Balance Sheet and the related notes 1 to 10 from the Company’s accounting records and from information and explanations you have given us.

We are subject to the ethical and other professional requirements of the Institute of Chartered Accountants in England and Wales (ICAEW) which are detailed at _http://www.icaew.com/en/members/regulations-standards-and-guidance/_.

It is your duty to ensure that Magway Limited has kept adequate accounting records and to prepare statutory financial statements that give a true and fair view of the assets, liabilities, financial position and loss of Magway Limited. You consider that Magway Limited is exempt from the statutory audit requirement for the financial year.

We have not been instructed to carry out an audit or a review of the financial statements of Magway Limited. For this reason, we have not verified the accuracy or completeness of the accounting records or information and explanations you have given to us and we do not, therefore, express any opinion on the statutory financial statements.

This report is made solely to the Board of Directors of Magway Limited, as a body, in accordance with the terms of our engagement letter dated 24 September 2019. Our work has been undertaken solely to prepare for your approval the financial statements of Magway Limited and state those matters that we have agreed to state to you in this report in accordance with ICAEW Technical Release 07/16 AAF. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Magway Limited and its Board of Directors as a body for our work or for this report.

Deloitte LLP
Accountant

1 New Street Square
London
EC4A 3HQ
United Kingdom

16 December 2020

		2020		2019
	Note	£		£
Fixed assets
Intangible assets	3	156,630		138,616
Tangible assets	4	34,102		3,208
		190,732		141,824
Current assets
Debtors	5	52,776		22,659
Cash at bank and in hand		718,804		36,694
		771,580		59,353
Creditors
Amounts falling due within one year	6	( 112,128)		( 70,463)
Net current assets/(liabilities)		659,452		(11,110)
Total assets less current liabilities		850,184		130,714
Creditors
Amounts falling due after more than one year	7	( 46,068)		0
Net assets		804,116		130,714
Capital and reserves
Called-up share capital		131		122
Share premium account		2,451,365		707,478
Profit and loss account		( 1,647,380 )		( 576,886 )
Total shareholders' funds		804,116		130,714

For the financial year ending 31 October 2020 the Company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

Directors’ responsibilities:

• The members have not required the Company to obtain an audit of its financial statements for the financial year in accordance with section 476;
• The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of financial statements; and
• These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and a copy of the Profit and Loss Account has not been delivered.

The financial statements of Magway Limited (registered number: 11011754) were approved and authorised for issue by the Board of Directors on 16 December 2020. They were signed on its behalf by:

P M Davies Director

1. Accounting policies

The principal accounting policies are summarised below. They have all been applied consistently throughout the financial year and to the preceding financial year.

General information and basis of accounting

Magway Limited (the Company) is a private company, limited by shares, incorporated in the United Kingdom under the Companies Act 2006 and is registered in England and Wales. The address of the Company's registered office is C/O Gateley Legal Ship Canal House, 98 King Street, Manchester, M2 4WU, United Kingdom.

The financial statements have been prepared under the historical cost convention and in accordance with Section 1A of Financial Reporting Standard 102 (FRS 102) ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ issued by the Financial Reporting Council.

The functional currency of Magway Limited is considered to be pounds sterling because that is the currency of the primary economic environment in which the Company operates.

Going concern

The rapid spreading of COVID-19 continues to be a significant emerging risk to the global economy. The directors continue to monitor the impact of the virus on the business as more information about the pandemic emerges. At the time of signing the directors do not consider COVID-19 to impact the Company’s ability to continue as a going concern.

The directors have assessed the Balance Sheet and likely future cash flows at the date of approving these financial statements. During the year, the Company received £1.7m of equity investment to support development and post year-end, the directors anticipate additional investment via two investments rounds, the first of which they are expecting to raise approximately £0.5m.

Based on the Company's existing cash resources and the forecast cash burn rate, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence and to meet its financial obligations as they fall due for at least 12 months from the date of signing these financial statements. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

Foreign currency

Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the Balance Sheet date are reported at the rates of exchange prevailing at that date.

Exchange differences are recognised in the Profit and Loss Account in the period in which they arise except for exchange differences arising on gains or losses on non-monetary items which are recognised in the Statement of Comprehensive Income.

Interest income

Interest income is recognised when it is probable that the economic benefits will flow to the Company and the amount of revenue can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.

Employee benefits

The Company operates a defined contribution scheme. The amount charged to the Profit and Loss Account in respect of pension costs and other post-retirement benefits is the contributions payable in the financial year. Differences between contributions payable in the financial year and contributions actually paid are included as either accruals or prepayments in the Balance Sheet.

Finance costs

Finance costs are charged to the Profit and Loss Account over the term of the debt using the effective interest method so the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

Taxation

Current tax
Current tax is provided at amounts expected to be paid (or recoverable) using the tax rates and laws that have been enacted or substantively enacted at the Balance Sheet date.

Deferred tax
Deferred tax arises as a result of including items of income and expenditure in taxation computations in periods different from those in which they are included in the Company's financial statements. Deferred tax is provided in full on timing differences which result in an obligation to pay more or less tax at a future date, at the average tax rates that are expected to apply when the timing differences reverse, based on current tax rates and laws.

Deferred tax assets and liabilities are not discounted.

Reclassification

Cost of sales in the prior year has been reclassified as administrative expenses, for consistency with the current year presentation. The reclassification has had no effect on the previously reported loss.

Intangible assets

Intangible fixed assets are not currently being amortised due to the asset not generating revenue at this stage, which is in line with the directors' expectations based on current forecasts.

Research and development

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.

Trademarks, patents and licences

Separately acquired patents and trademarks are included at cost and amortised in equal annual instalments over its estimated useful economic life. Provision is made for any impairment. This same treatment has been used for separately acquired computer software.

Other intangible assets

The cost capitalised under the heading other intangible assets relate to intellectual property rights and are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

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.

Tangible fixed assets

Tangible fixed assets are stated at cost or valuation, net of depreciation and any provision for impairment. Depreciation is provided on all tangible fixed assets, other than investment properties and freehold land, at rates calculated to write off the cost or valuation, less estimated residual value, of each asset on a straight-line or reducing balance basis over its expected useful life, as follows:

Leasehold improvements - 10% reducing balance.
Plant and machinery - 25% reducing balance.
Office equipment - 3 year straight line.

Residual value represents the estimated amount which would currently be obtained from disposal of an asset, after deducting estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life.

Leases

The Company as lessee
Rentals under operating leases are charged on a straight-line basis over the lease term, even if the payments are not made on such a basis. Benefits received and receivable as an incentive to sign an operating lease are similarly spread on a straight-line basis over the lease term.

Impairment of assets

Assets, other than those measured at fair value, are assessed for indicators of impairment at each Balance Sheet date. If there is objective evidence of impairment, an impairment loss is recognised in the Profit and Loss Account as described below.

Non-financial assets
An 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.

Financial assets
For financial assets carried at amortised cost, the amount of 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.

Financial instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.

Financial assets and liabilities
All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through the Profit and Loss Account, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

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 asset and settle the liability simultaneously.

Financial assets are derecognised when and only when a) the contractual rights to the cash flows from the financial asset expire or are settled, b) the Company transfers to another party substantially all of the risks and rewards of ownership of the financial asset, or c) the Company, despite having retained some, but not all, significant risks and rewards of ownership, has transferred control of the asset to another party.

Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled or expires.

Government grants

Government grants are recognised based on the accrual model and are measured at the fair value of the asset received or receivable. Grants are classified as relating either to revenue or to assets. Grants relating to revenue are recognised in income over the period in which the related costs are recognised. Grants relating to assets are recognised over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income.

.

2. Employees

	2020	2019
	Number	Number
Monthly average number of persons employed by the Company during the year, including directors	8	6

3. Intangible assets

	Computer software	Trademarks, patents and licences	Other intangible assets	Total
	£	£	£	£
Cost
At 01 November 2019	18,616	0	120,000	138,616
Additions	0	18,014	0	18,014
At 31 October 2020	18,616	18,014	120,000	156,630
Accumulated amortisation
At 01 November 2019	0	0	0	0
At 31 October 2020	0	0	0	0
Net book value
At 31 October 2020	18,616	18,014	120,000	156,630
At 31 October 2019	18,616	0	120,000	138,616

4. Tangible assets

	Leasehold improvements	Plant and machinery	Office equipment	Total
	£	£	£	£
Cost/Valuation
At 01 November 2019	0	4,611	0	4,611
Additions	22,975	2,756	8,502	34,233
At 31 October 2020	22,975	7,367	8,502	38,844
Accumulated depreciation
At 01 November 2019	0	1,403	0	1,403
Charge for the financial year	905	964	1,470	3,339
At 31 October 2020	905	2,367	1,470	4,742
Net book value
At 31 October 2020	22,070	5,000	7,032	34,102
At 31 October 2019	0	3,208	0	3,208

5. Debtors

	2020	2019
	£	£
Other debtors	52,776	22,659
	52,776	22,659

6. Creditors: amounts falling due within one year

	2020	2019
	£	£
Bank loans and overdrafts	3,932	0
Trade creditors	87,821	43,430
Other creditors	5,030	17,504
Other taxation and social security	15,345	9,529
	112,128	70,463

7. Creditors: amounts falling due after more than one year

	2020	2019
	£	£
Bank loans	46,068	0
	46,068	0

There are no amounts included above in respect of which any security has been given by the small entity.

Amounts repayable after more than 5 years are included in creditors falling due over one year:

	2020	2019
	£	£
Bank loans (repayable by instalments)	6,160	0
	6,160	0

8. Financial commitments

Commitments

Total future minimum lease payments under non-cancellable operating leases are as follows:

	2020	2019
	£	£
- within one year	70,008	14,000
- between one and five years	180,854	0
	250,862	14,000

Pensions

The Company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the Company in an independently administered fund. Contributions of £2,030 (2019: £3) due in respect of the current reporting period had not yet been paid over to the scheme at the Balance Sheet date.

9. Related party transactions

Remuneration was paid to the directors of £209,000 (2019: £185,000). The directors are the only key management personnel of the Company.

Included in other creditors is a loan of £nil (2019: £15,000) owed to P M Davies. The loan is unsecured, does not bear interest, and is repayable on demand.

10. Ultimate controlling party

The directors do not consider there to be one controlling party.