Company No: 11092294 (England and Wales)

Contents

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

DIRECTOR

M A Burgess

REGISTERED OFFICE	20-22 Wenlock Road
	London
	N1 7GU
	United Kingdom

COMPANY NUMBER

11092294 (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 Exaptio Ltd for the financial year ended 31 December 2021 which comprise the Balance Sheet and the related notes 1 to 9 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 Exaptio Ltd 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 profit of Exaptio Ltd. You consider that Exaptio Ltd 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 Exaptio Ltd. 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 Director of Exaptio Ltd, as a body, in accordance with the terms of our engagement letter dated 13 December 2017. Our work has been undertaken solely to prepare for your approval the financial statements of Exaptio Ltd and state those matters that we have agreed to state to the director of Exaptio Ltd, as a body, 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 Exaptio Ltd and its Director as a body for our work or for this report.

Deloitte LLP
Accountant

1 New Street Square
London
EC4A 3HQ
United Kingdom

30 June 2022

	Note	2021		2020
		£		£
Fixed assets
Intangible assets	3	635,982		635,982
Tangible assets	4	547		2,815
Investments	5	0		1
		636,529		638,798
Current assets
Debtors	6	706		2,348
Cash at bank and in hand		188,324		129,753
		189,030		132,101
Creditors
Amounts falling due within one year	7	( 134,776)		( 43)
Net current assets		54,254		132,058
Total assets less current liabilities		690,783		770,856
Provision for liabilities		( 71,999)		( 92,133)
Net assets		618,784		678,723
Capital and reserves
Called-up share capital		15		15
Share premium account		149,985		149,985
Profit and loss account		468,784		528,723
Total shareholders' funds		618,784		678,723

For the financial year ending 31 December 2021 the Company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

Director's responsibilities:

• The member has not required the Company to obtain an audit of its financial statements for the financial year in accordance with section 476;
• The director acknowledges their responsibilities for complying with the requirements of the Companies Act 2006 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 Exaptio Ltd (registered number: 11092294) were approved and authorised for issue by the Director on 30 June 2022. They were signed on its behalf by:

M A Burgess 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, unless otherwise stated.

General information and basis of accounting

Exaptio Ltd (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 20-22 Wenlock Road, London, N1 7GU, 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 Exaptio Ltd is considered to be pounds sterling because that is the currency of the primary economic environment in which the Company operates.

Going concern

The spread of COVID-19 continues to be a significant risk to the global economy and the director continues to monitor the impact of the virus on the business. Whilst the pandemic has caused delays to the launch of the software for the Company, at the time of signing the director does not consider COVID-19 to impact the Company’s ability to continue as a going concern.

The director has assessed the Balance Sheet and likely future cash flows at the date of approving these financial statements. During the year, the Company has minimised its costs including director’s remuneration and negotiated new consultancy contracts which are expected to generate sufficient working capital to support the Company meet its ongoing financial commitments including the forecast costs relating to the software development. Given this, the director has 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.

Group accounts exemption

Group accounts exemption s399
The Company has taken advantage of the exemption under section 399 of the Companies Act 2006 not to prepare consolidated accounts, on the basis that the group of which this is the parent qualifies as a small group. The financial statements present information about the Company as an individual entity and not about its group.

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.

Turnover

Turnover is stated net of VAT and trade discounts and is recognised when the significant risks and rewards are considered to have been transferred to the buyer. Turnover from the supply of services represents the value of services provided under contracts to the extent that there is a right to consideration and is recorded at the fair value of the consideration received or receivable. Where a contract has only been partially completed at the Balance Sheet date turnover represents the fair value of the service provided to date based on the stage of completion of the contract activity at the Balance Sheet date. Where payments are received from customers in advance of services provided, the amounts are recorded as deferred income and included as part of creditors due within one year.

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.

The carrying amount 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.

Intangible assets

Intangible assets are stated at cost or valuation, net of amortisation and any provision for impairment. Amortisation is provided on all intangible assets at rates to write off the cost or valuation of each asset over its expected useful life as follows:

Development costs

not amortised

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. Provision is made for any impairment.

Development expenditure is not currently being amortised, as the development of the intangible asset is not yet complete and therefore the company is not receiving any financial benefit. See note 3 for further details.

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 basis over its expected useful life, as follows:

Computer equipment

3 years 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.

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

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
At each balance sheet date, the company reviews its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Financial 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.

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.

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 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.

Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.

Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) 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.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the Balance Sheet date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

2. Employees

	2021		2020
	Number		Number
Monthly average number of persons employed by the Company during the year, including the director	3		4

3. Intangible assets

	Development costs		Total
	£		£
Cost
At 01 January 2021	635,982		635,982
At 31 December 2021	635,982		635,982
Accumulated amortisation
At 01 January 2021	0		0
At 31 December 2021	0		0
Net book value
At 31 December 2021	635,982		635,982
At 31 December 2020	635,982		635,982

The Company has been focused on extensive development of its principal software asset for a number of years. This custom designed software platform is considered to be unique, and as such, the cost of development provides the framework for the Company's business model. In accordance with the requirements of FRS 102, the director evaluates the expected future economic benefits of the capitalised costs to the extent that he is satisfied with reasonable certainty that those benefits will exceed the cost.

Whilst it is possible to measure the costs with reasonable certainty, the economic benefit of the development expenditure is that of the entire business undertaking, since such development is fundamental to the main business activity. As such, the director has concluded that, as well as following the requirements of FRS102, it is a logical imperative that the development expenditure be capitalised as an intangible asset.

The expected useful life of the asset created cannot be assessed easily, because, in the nature of software development, the useful life will depend on the changes in technology introduced over the coming years. The director has evaluated the useful life at ten years initially, to take account of the fast changing environment of computer technology, but intend to review this estimate in the light of future developments in the field. Based upon Company forecasts, the Company is confident the software asset will generate significant revenues in due course upon its beta launch. Plans are in place in the current year to re-start this development work, with previous delays in completion being due to the ongoing impact of COVID-19.

4. Tangible assets

	Computer equipment		Total
	£		£
Cost
At 01 January 2021	13,439		13,439
At 31 December 2021	13,439		13,439
Accumulated depreciation
At 01 January 2021	10,624		10,624
Charge for the financial year	2,268		2,268
At 31 December 2021	12,892		12,892
Net book value
At 31 December 2021	547		547
At 31 December 2020	2,815		2,815

5. Fixed asset investments

Investments in subsidiaries

	2021
	£
Cost
At 01 January 2021	1
Disposals	( 1)
At 31 December 2021	0
Carrying value at 31 December 2021	0
Carrying value at 31 December 2020	1

Investments in shares

Name of entity	Registered office	Nature of business	Class of shares	Ownership 31.12.2021	Ownership 31.12.2020
Team Machine Ltd	20-22 Wenlock Road, London, N1 7GU	Business and domestic software development	Ordinary	0.00%	100.00%

The subsidiary was dissolved on 13 July 2021.

6. Debtors

	2021		2020
	£		£
Other taxation and social security	473		1,894
Other debtors	233		454
	706		2,348

7. Creditors: amounts falling due within one year

	2021		2020
	£		£
Trade creditors	0		41
Amounts owed to Group undertakings	0		1
Other creditors	110,136		0
Other taxation and social security	24,640		1
	134,776		43

Amounts owed to Group undertakings are unsecured, interest-free and repayable on demand.

8. Related party transactions

Total aggregate directors' remunerations for the year was £29,200 (2020: £154,799). The directors were the only key management personnel of the Company.

The directors were paid an aggregate amount of £63,000 (2020: £nil) as dividends during the year.

In accordance with FRS 102 Section 33, the Company has not disclosed any related party transactions between this Company and its subsidiary, due to being a wholly-owned entity.

9. Ultimate controlling party

The director does not consider there to be one controlling party at the year end.