ACCOUNTS - Final Accounts

An analysis of turnover by class of business is as follows:

Unaudited 2020

ALGAL (UK) LIMITED - Company Information

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Registered number: 08487179

ALGAL (UK) LIMITED

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

ALGAL (UK) LIMITED

COMPANY INFORMATION

Directors	A Levillain
	A-L Grapin


Registered number	08487179


Registered office	Leytonstone House
	3 Hanbury Drive
	Leytonstone
	London
	E11 1GA


Independent auditors	Barnes Roffe LLP
	Chartered Accountants & Statutory Auditor
	Leytonstone House
	Leytonstone
	London
	E11 1GA

ALGAL (UK) LIMITED

CONTENTS

	Page
Group strategic report	1 - 2
Directors' report	3 - 4
Independent auditors' report	5 - 8
Consolidated statement of income and retained earnings	9
Consolidated balance sheet	10
Company balance sheet	11
Consolidated statement of changes in equity	12
Company statement of changes in equity	13
Consolidated Statement of cash flows	14 - 15
Consolidated analysis of net debt	16
Notes to the financial statements	17 - 37

ALGAL (UK) LIMITED

GROUP STRATEGIC REPORT

FOR THE YEAR ENDED 31 DECEMBER 2021

Introduction

The principal activity of Algal (UK) Limited is that of an investment company and that of a holding company.
The principal activity of Algal Advisory Limited is that of an investment company.
The principal activity of Zephyrus Partners Limited is to advise corporate clients on the management of their UK Pension schemes.
The principal activity of Knowa Limited is to develop software, and the sale of licences in connection therewith.

Business review

The directors are satisfied with the results for the year and are confident of continued growth for the future.

Principal risks and uncertainties

The principal financial instruments of the Group comprise cash, debtors and creditors.
The Group operates systems and controls to mitigate any adverse effects from the range of risks it faces:
Credit risk
The Group's maximum exposure to credit risk in relation to financial assets is represented by trade and other debtors.
Liquidity risk
The Group’s policy on liquidity risk is to ensure sufficient cash is available to fund ongoing operations. This is managed through careful cashflow planning and control. Currently the Company has no borrowings and does not foresee the need for future borrowings, as it is entirely cash self sufficient.
Foreign currency risk
The Group’s principal foreign currency risk exposures arise from its customers.

Financial key performance indicators

Given the nature of the business, the directors are of the opinion that analysis using key performance indicators is not necessary for an understanding of the development, performance or position of the business.

Page 1

ALGAL (UK) LIMITED

GROUP STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2021

Other key performance indicators

As the Directors of Algal (UK) Limited, we have a legal responsibility under section 172 of the Companies Act 2006 to act in the way we consider, honourable, would be most likely to advocate the company’s achievements for the interest of its members as a whole, and to have regard to the long-term effect our decisions on the company and its stakeholders. This statement addresses the ways in which we as a Board outwork this responsibility.
As ever, we are always conscious of the importance of our staff as it is with them, their skills and passion that we are able to deliver an excellent service to our clients. We are fortunate to have an extremely strong team and maintaining this level of competence, loyalty and commitment is an aspect that requires constant attention. We want to support all of our staff to fulfil their own potential and ambitions. We continue to strive to create a professional environment and a business that the staff are proud of and want to be a part of. We have every confidence that we have the right, dynamic team in place.
We make strategic decisions based on long-term objectives by investing in new systems, processes, and upskilling our people at the expense of short-term gains.

This report was approved by the board on 21 September 2022 and signed on its behalf.

A Levillain

Director

Page 2

ALGAL (UK) LIMITED

DIRECTORS' REPORT

FOR THE YEAR ENDED 31 DECEMBER 2021

The directors present their report and the financial statements for the year ended 31 December 2021.

Directors' responsibilities statement

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.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.

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.

Results and dividends

The profit for the year, after taxation and minority interests, amounted to £2,143,966 (2020 - £1,143,777).

During the year, the directors declared dividends of £400,000 (2020 - £150,000).
Post year end the directors have declared dividends of £350,000.

Directors

The directors who served during the year were:

A Levillain

A-L Grapin

Future developments

The Group continues to provide services under its principal activities and seeks to continue to build upon its
current client base which should result in continued revenue growth.

Page 3

ALGAL (UK) LIMITED

DIRECTORS' REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2021

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:

∙so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Group since the year end.

Auditors

The auditors, Barnes Roffe LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 21 September 2022 and signed on its behalf.

A Levillain

Director

Page 4

ALGAL (UK) LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ALGAL (UK) LIMITED

Opinion

We have audited the financial statements of Algal (UK) Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2021, which comprise the Group Statement of income and retained earnings, the Group and Company Balance sheets, the Group Statement of cash flows, the Group and 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).

In our opinion the financial statements:

∙give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 December 2021 and of the Group's profit for the year then ended;

∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

∙have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

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.

Conclusions relating to going concern

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.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Page 5

ALGAL (UK) LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ALGAL (UK) LIMITED (CONTINUED)

Other information

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.

Opinion on other matters prescribed by the Companies Act 2006

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.

Matters on which we are required to report by exception

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.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

∙adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or

∙the parent Company financial statements are not in agreement with the accounting records and returns; or

∙certain disclosures of directors' remuneration specified by law are not made; or

∙we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Directors' responsibilities statement set out on page 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Group's and the parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.

Page 6

ALGAL (UK) LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ALGAL (UK) LIMITED (CONTINUED)

Auditors' responsibilities for the audit of the financial statements

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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including
fraud and non-compliance with laws and regulations, was as follows:
• The engagement partner ensured that the engagement team collectively had the appropriate competence,
capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
• We identified the laws and regulations applicable to the company through discussions with directors and
other management, and from our commercial knowledge and experience of the relevant sector;
• We focused on specific laws and regulations, which we considered may have a direct material effect on
the financial statements or the operations of the company, including the Companies Act 2006 and ISO
standards;
• We assessed the extent of compliance with laws and regulations identified above through making
enquires of management and inspecting legal correspondence and identified laws and regulations were
communicated within the audit team regularly and the team remained alert to instances of non-compliance
throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including
obtaining an understanding of how fraud might occur, by:
• Making enquires of management as to where they considered there was susceptibility to fraud, their
knowledge of actual suspected and alleged fraud; and
• Considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and
regulations.
To address the risk of fraud through management bias and override of controls, we:
• Performed analytical procedures to identify and unusual or unexpected relationships;
• Tested journal entries to identify unusual transactions;
• Assessed whether judgements and assumptions made in determining the accounting estimates were
indicative of potential bias; and
• Investigated the rationale behind significant or unusual transactions.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial statements, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect that those that arise from errors as they
may involve deliberate concealment or collusion.

A further description of our responsibilities for the audit of the financial statements is located on the Financial

Page 7

ALGAL (UK) LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ALGAL (UK) LIMITED (CONTINUED)

Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.

Use of our 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.

Adam Dodds (Senior statutory auditor)

for and on behalf of

Barnes Roffe LLP

Chartered Accountants

Statutory Auditor

Leytonstone House

Leytonstone

London

E11 1GA

29 September 2022

Page 8

ALGAL (UK) LIMITED

CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS

FOR THE YEAR ENDED 31 DECEMBER 2021

	2021	Unaudited 2020
Note	£	£


Turnover	4	676,799	-
Gross profit		676,799	-
Administrative expenses		(428,308)	40,079
Goodwill write-back		2,029,292	-
Operating profit	5	2,277,783	40,079
Income from fixed assets investments		7,463	1,200,000
Loss on disposal of investments		(11,123)	(97,530)
Interest receivable and similar income	11	5,796	1,228
Profit before tax		2,279,919	1,143,777
Tax on profit	12	(55,995)	-
Profit after tax		2,223,924	1,143,777



Retained earnings at the beginning of the year	2,694,856	1,701,079
	2,694,856	1,701,079
Profit for the year attributable to the owners of the parent	2,143,966	1,143,777
Dividends declared and paid	-	(150,000)
Retained earnings at the end of the year	4,838,822	2,694,856

Profit for the year attributable to the non-controlling interest	79,958	-
Non-controlling interest upon acquisition	819,165	-
Non-controlling interests - Dividends equity paid	(400,000)	-
Non-controlling interest at the end of the year	499,123	-

The notes on pages 17 to 37 form part of these financial statements.

Page 9

ALGAL (UK) LIMITED

REGISTERED NUMBER: 08487179

CONSOLIDATED BALANCE SHEET

AS AT 31 DECEMBER 2021

		2021		Unaudited 2020
Note		£		£

Fixed assets
Intangible assets	15		284,549		-
Tangible assets	16		38,372		-
Investments	17		1,816,086		1,308,211
Current assets
Debtors: amounts falling due within one year	18	2,418,840		1,131,339
Cash at bank and in hand	19	2,128,297		295,812
		4,547,137		1,427,151
Creditors: amounts falling due within one year	20	(1,308,907)		(39,505)
Net current assets			3,238,230		1,387,646
Total assets less current liabilities			5,377,237		2,695,857
Provisions for liabilities
Deferred taxation	21	(38,291)		-
			(38,291)		-
Net assets			5,338,946		2,695,857

Capital and reserves
Called up share capital	22	1,001	1,001
Profit and loss account	23	4,838,822	2,694,856
Equity attributable to owners of the parent Company		4,839,823	2,695,857
Non-controlling interests		499,123	-
		5,338,946	2,695,857

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 21 September 2022.

A Levillain

Director

The notes on pages 17 to 37 form part of these financial statements.

Page 10

ALGAL (UK) LIMITED

REGISTERED NUMBER: 08487179

COMPANY BALANCE SHEET

AS AT 31 DECEMBER 2021

		2021		Unaudited 2020
Note		£		£

Fixed assets
Investments	17		1,848,114		1,308,214
Current assets
Debtors: amounts falling due within one year	18	556,556		1,130,768
Cash at bank and in hand	19	1,148,656		291,990
		1,705,212		1,422,758
Creditors: amounts falling due within one year	20	(6,842)		(12,753)
Net current assets			1,698,370		1,410,005
Total assets less current liabilities			3,546,484		2,718,219

Net assets			3,546,484		2,718,219

Capital and reserves
Called up share capital	22		1,001		1,001
Profit and loss account brought forward		2,717,218		1,721,491
Profit for the year		828,265		1,145,727
Other changes in the profit and loss account		-		(150,000)
Profit and loss account carried forward			3,545,483		2,717,218
			3,546,484		2,718,219

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 21 September 2022.

A Levillain

Director

The notes on pages 17 to 37 form part of these financial statements.

Page 11

ALGAL (UK) LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2021

	Called up share capital	Profit and loss account	Equity attributable to owners of parent Company	Non-controlling interests	Total equity
	£	£	£	£	£
At 1 January 2020	1,001	1,701,079	1,702,080	-	1,702,080
Comprehensive income for the year
Profit for the year	-	1,143,777	1,143,777	-	1,143,777
Dividends: Equity capital	-	(150,000)	(150,000)	-	(150,000)

At 1 January 2021	1,001	2,694,856	2,695,857	-	2,695,857
Comprehensive income for the year
Profit for the year	-	2,143,966	2,143,966	79,958	2,223,924
Non-controlling interest on acquisition of subsidiary	-	-	-	819,165	819,165
Dividends: Equity capital	-	-	-	(400,000)	(400,000)
At 31 December 2021	1,001	4,838,822	4,839,823	499,123	5,338,946

The notes on pages 17 to 37 form part of these financial statements.

Page 12

ALGAL (UK) LIMITED

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2021

	Called up share capital	Profit and loss account	Total equity
	£	£	£
At 1 January 2020	1,001	1,721,491	1,722,492
Comprehensive income for the year
Profit for the year	-	1,145,727	1,145,727
Dividends: Equity capital	-	(150,000)	(150,000)

At 1 January 2021	1,001	2,717,218	2,718,219
Comprehensive income for the year
Profit for the year	-	828,265	828,265
At 31 December 2021	1,001	3,545,483	3,546,484

The notes on pages 17 to 37 form part of these financial statements.

Page 13

ALGAL (UK) LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2021

			2021	Unaudited 2020
			£	£

Cash flows from operating activities
Profit for the financial year	2,223,924	1,143,777
Adjustments for:
Amortisation of intangible assets	12,100	-
Depreciation of tangible assets	2,651	-
Impairments of fixed assets	53,770	-
Loss on disposal of tangible assets	(2,943)	-
Loss on disposal of investment	11,123	97,530
Interest and dividend received	(7,463)	(1,201,228)
Taxation charge	55,995	-
(Increase) in debtors	(1,037,094)	(1,016,900)
Increase in creditors	1,269,402	31,143
Goodwill write-back	(2,029,292)	-
Net cash generated from operating activities	552,173	(945,678)

Cash flows from investing activities
Purchase of intangible fixed assets	2,275,819	-
Sale of tangible fixed assets	2,943	-
Purchase of listed investments	(1,595,117)	(5,263,631)
Sale of listed investments	995,000	3,978,151
Interest received	-	1,228
Dividends received	7,463	1,200,000
Net cash from investing activities	1,686,108	(84,252)

Page 14

ALGAL (UK) LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2021

		2021	2020
		£	£


Cash flows from financing activities
Dividends paid	(400,000)	(150,000)
Interest paid	(5,796)	-
Net cash used in financing activities	(405,796)	(150,000)
Net increase/(decrease) in cash and cash equivalents	1,832,485	(1,179,930)
Cash and cash equivalents at beginning of year	295,812	1,475,742
Cash and cash equivalents at the end of year	2,128,297	295,812

Cash and cash equivalents at the end of year comprise:
Cash at bank and in hand	2,128,297	295,812
	2,128,297	295,812

The notes on pages 17 to 37 form part of these financial statements.

Page 15

ALGAL (UK) LIMITED

CONSOLIDATED ANALYSIS OF NET DEBT

FOR THE YEAR ENDED 31 DECEMBER 2021


At 1 January 2021	Cash flows	At 31 December 2021
£	£	£

Cash at bank and in hand	295,812	1,832,485	2,128,297
Debt due within 1 year	(13,831)	4,844	(8,987)
	281,981	1,837,329	2,119,310

The notes on pages 17 to 37 form part of these financial statements.

Page 16

ALGAL (UK) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

1.	General information

Algal (UK) Limited ("the Company") is a Company limited by shares, incorporated in England and Wales. Its registered office is Leytonstone House, Hanbury Drive, Leytonstone, London, E11 1GA.
The principal activity of Algal (UK) Limited is that of an investment company and that of a holding company.
The principal activity of Algal Advisory Limited is that of an investment company.
The principal activity of Zephyrus Partners Limited is to advise corporate clients on the management of their UK Pension schemes.
The pricincipal activity of Knowa Limited is is to develop software, and the sale of licences in connection therewith.

2.Accounting policies

2.1

Basis of preparation of financial statements

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 (see note 3).

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 income and retained earnings in these financial statements.

The following principal accounting policies have been applied:

2.2

Basis of consolidation

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.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of income and retained earnings from the date on which control is obtained. They are deconsolidated from the date control ceases.

Page 17

ALGAL (UK) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

2.Accounting policies (continued)

2.3

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated statement of income and retained earnings within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

Page 18

ALGAL (UK) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

2.Accounting policies (continued)

2.4

Revenue

The Group provides advice to corporate clients on the management of their UK pension schemes as detailed in the Group's principal activity.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received, excluding discounts, rebates, value added tax and other sales taxes.
The following criteria must also be met before revenue is recognised:
On-going service fees
The Group provides on-going services to corporate clients in relation to their UK pension schemes. The Group will recognise revenue based on a pre-agreed fee set out in the contract entered into between the Company and the client and will recognise this revenue on a monthly basis.
Discretionary service fees
Revenue from discretionary service fees is recognised in the period in which the services are completed in accordance with the stage of completion of the contract and the performance of the Group in meeting its obligations. Revenue is recognised when the following conditions are satisfied:
• The amount of revenue can be measured reliably;
• It is highly likely that the Group will receive the consideration due under the contract.
Ad-hoc fees
The Group provides additional consultancy services to corporate clients in relation to their UK pension schemes which is outside the scope of the on-going services detailed above. The Group recognises revenue in accordance with the time incurred on providing these ad-hoc services in the reporting period in which the services are rendered. The Group will bill all time spent at a pre-agreed rate set out in the contract between the Group and the client in the same month that the service is rendered.

2.5

Operating leases: the Group as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

Page 19

ALGAL (UK) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

2.Accounting policies (continued)

2.6

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

2.7

Interest income

Interest income is recognised in profit or loss using the effective interest method.

2.8

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Group in independently administered funds.

Page 20

ALGAL (UK) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

2.Accounting policies (continued)

2.9

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:

∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;

∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and

∙Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

2.10

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.

2.11

Intangible assets

Intangible assets 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.

2.12

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Page 21

ALGAL (UK) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

2.Accounting policies (continued)

2.12

Tangible fixed assets (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 annual bases:

Leasehold improvements	-		Straight line over the remainder of the lease, orthe assets useful economic life if less
Motor vehicles	-	33%	Straight line
Office equipment, fixtures &fittings	-	25%	Straight line
Computer equipment	-	33%	Straight line

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.

2.13

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

Investments in unlisted Group shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Consolidated statement of income and retained earnings for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.

Investments in listed company shares are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in profit or loss for the period.

2.14

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

2.15

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

Page 22

ALGAL (UK) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

2.Accounting policies (continued)

2.16

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

2.17

Provisions for liabilities

Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance sheet.

2.18

Financial instruments

The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

2.19

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

2.20

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.

2.21

Related party transactions

The Group discloses transactions with related parties which are not wholly owned within the same group.

Page 23

ALGAL (UK) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

3.	Judgments in applying accounting policies and key sources of estimation uncertainty

Estimates and judgements are continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the circumstances.
a) Critical judgements in applying the entity’s accounting policies
No significant judgements have had to be made by management in preparing these financial statements.
b) Critical accounting estimates and assumptions
i) Useful economic lives of tangible fixed assets
The annual depreciation charge for tangible fixed assets is sensitive to changes in estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are reassessed annually. They are amended when necessary to reflect current estimates, based on the technological advancement, future investments, economic utilisation and the physical condition of the assets. See note 14 for the carrying amount of the property, plant and equipment, and note 2.11 for useful economic lives for each class of assets.

United Kingdom	676,799	-
	676,799	-

All turnover arose within the United Kingdom.

Depreciation of tangible fixed assets	2,651	-
Defined contribution pension cost	811	-
Amortisation of intangible fixed assets	12,100	-
Exchange differences	14,986	(48,809)
Other operating lease rentals	18,982	-
Goodwill write-back	(2,029,292)	-

Page 24

ALGAL (UK) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

6.	Auditors' remuneration
		2021	Unaudited 2020
		£	£

Fees payable to the Group's auditor and its associates for the audit of the Group's annual financial statements

2,450

Fees payable to the Group's auditor and its associates in respect of:
All other services	6,105	4,950
	6,105	4,950

7.	Research and development expenditure
		2021	Unaudited 2020
		£	£

Staff costs
Wages and salaries	14,473	-
Social security costs	1,824	-
Other pension costs	150	-
	16,447	-

Page 25

ALGAL (UK) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

Employees

Group	Group	Company	Company
2021	2020	2021	2020
£	£	£	£


Wages and salaries	262,966	-	20,000	-
Social security costs	22,210	-	-	-
Cost of defined contribution scheme	811	-	-	-
	285,987	-	20,000	-

The average monthly number of employees, including the directors, during the year was as follows:

	Group	Group	Company	Company
	2021	2020	2021	2020
	No.	No.	No.	No.

Administration	12	2	2	2

9.	Directors' remuneration
		2021	Unaudited 2020
		£	£

	Directors' emoluments	20,000	-

10.	Income from investments
		2021	Unaudited 2020
		£	£

	Dividends received	(7,463)	(1,200,000)

11.	Interest receivable and similar income
		2021	Unaudited 2020
		£	£

Other interest receivable

5,796

1,228

Page 26

ALGAL (UK) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

Corporation tax
Current tax on profits for the year	55,854	-
Adjustments in respect of previous periods	250	-
	56,104	-

Total current tax	56,104	-

Deferred tax
Origination and reversal of timing differences	(109)	-
Total deferred tax	(109)	-


	Taxation on profit on ordinary activities	55,995	-

Page 27

ALGAL (UK) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

12.Taxation (continued)

Profit on ordinary activities before tax

2,279,919

1,143,777

Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2020 - 19%)	433,185	217,318
Effects of:
Expenses not deductible for tax purposes, other than goodwill amortisation and impairment	(924)	(217,318)
Non-taxable income less expenses not deductible for tax purposes, other than goodwill and impairment	(375,158)	-
Changes in provisions leading to an increase (decrease) in the tax charge	250	-
Unrelieved tax losses carried forward	2,897	-
Group relief	(4,255)	-
Total tax charge for the year	55,995	-

13.	Dividends
		2021	Unaudited 2020
		£	£

Dividends payable on equity capital

150,000

14.	Exceptional items
		2021	2020
		£	£

Goodwill write-back

(2,029,292)

Page 28

ALGAL (UK) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

15.	Intangible assets
	Group and Company

	Software	Goodwill	Total
	£	£	£
Cost
Additions	-	(2,029,292)	(2,029,292)
Additions - post acquisition	2,652	-	2,652
On acquisition of subsidiaries	497,515	-	497,515
Goodwill write-back	-	2,029,292	2,029,292
At 31 December 2021	500,167	-	500,167
Amortisation
On owned assets - post acquisition	12,100	-	12,100
On acquisition of subsidiaries	203,518	-	203,518
At 31 December 2021	215,618	-	215,618
Net book value
At 31 December 2021	284,549	-	284,549
At 31 December 2020	-	-	-

The Software Intangible fixed asset is owned by a subsidiary company.

Page 29

ALGAL (UK) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

16.	Tangible fixed assets
	Group

	Short-term leasehold property	Motor vehicles	Fixtures and fittings	Office equipment	Total
	£	£	£	£	£
Cost
Acquisition of subsidiary	90,631	71,730	80,695	88,297	331,353
At 31 December 2021	90,631	71,730	80,695	88,297	331,353
Depreciation
Charge for the year on owned assets	448	-	1,292	911	2,651
Acquisition of subsidiary	80,642	71,730	63,404	74,554	290,330
At 31 December 2021	81,090	71,730	64,696	75,465	292,981
Net book value
At 31 December 2021	9,541	-	15,999	12,832	38,372
At 31 December 2020	-	-	-	-	-

Page 30

ALGAL (UK) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

17.	Fixed asset investments
	Group

	Listed investments	Other fixed asset investments	Total
	£	£	£
Cost or valuation
At 1 January 2021	1,006,123	302,088	1,308,211
Additions	1,559,768	8,000	1,567,768
Disposals	(1,006,123)	-	(1,006,123)
At 31 December 2021	1,559,768	310,088	1,869,856
Impairment
Charge for the period	-	53,770	53,770
At 31 December 2021	-	53,770	53,770
Net book value
At 31 December 2021	1,559,768	256,318	1,816,086
At 31 December 2020	1,006,123	302,088	1,308,211

Page 31

ALGAL (UK) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

	Company

	Investments in subsidiary undertaking	Investments in associate undertaking	Listed investments	Other fixed asset investments	Total
	£	£	£	£	£
Cost or valuation
At 1 January 2021	2	1	1,006,123	302,088	1,308,214
Additions	32,025	-	1,559,768	8,000	1,599,793
Disposals	-	-	(1,006,123)	-	(1,006,123)
Transfers intra group	1	(1)	-	-	-
At 31 December 2021	32,028	-	1,559,768	310,088	1,901,884
Impairment
Charge for the period	-	-	-	53,770	53,770
At 31 December 2021	-	-	-	53,770	53,770
Net book value
At 31 December 2021	32,028	-	1,559,768	256,318	1,848,114
At 31 December 2020	2	1	1,006,123	302,088	1,308,214

Subsidiary undertakings
The following were subsidiary undertakings of the Company:
Name	Registered office	Class of shares	Holding

Zephyrus Partners Limited	Leytonstone House Hanbury Drive, Leytonstone, London, E11 1GA	Ordinary	69.23%
Algal Advisory Limited	Sheridan Court Flat 11, 55-81 Barkston Gardens, London, United Kingdom, SW5 0ET	Ordinary	100%
Knowa Limited*	Leytonstone House Hanbury Drive, Leytonstone, London, E11 1GA	Ordinary	62.31%

Page 32

ALGAL (UK) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

Subsidiary undertakings (continued)

The aggregate of the share capital and reserves as at 31 December 2021 and the profit or loss for the year ended on that date for the subsidiary undertakings were as follows:
Name	Aggregate of share capital and reserves	Profit/(Loss)
	£	£

Zephyrus Partners Limited	1,848,799	2,146,551
Algal Advisory Limited	(24,310)	(1,950)
Knowa Limited*	(1,007,548)	(299,664)

*Knowa Limited is 90% subsidiary owned by Zephyrus Partners Limited, therefore Algal UK Limited has indirect control.

18.

Debtors

Group	Group	Company	Company
2021	2020	2021	2020
£	£	£	£


Trade debtors	1,645,806	-	-	-
Amounts owed by group undertakings	105,968	1,129,669	123,172	1,129,669
Other debtors	577,309	1,670	433,384	1,099
Prepayments and accrued income	89,757	-	-	-
	2,418,840	1,131,339	556,556	1,130,768

19.	Cash and cash equivalents
		Group	Group	Company	Company
		2021	2020	2021	2020
		£	£	£	£

	Cash at bank and in hand	2,128,297	295,812	1,148,656	291,990

Page 33

ALGAL (UK) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

20.	Creditors: Amounts falling due within one year
		Group	Group	Company	Company
		2021	2020	2021	2020
		£	£	£	£

Trade creditors	90,475	840	5,340	600
Corporation tax	152,300	-	-	-
Other taxation and social security	346,819	-	-	-
Other creditors	16,348	36,165	2	10,653
Accruals and deferred income	702,965	2,500	1,500	1,500
	1,308,907	39,505	6,842	12,753

Page 34

ALGAL (UK) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

21.	Deferred taxation
	Group

		2021
		£

	Arising on acquisition	(39,163)
	Utilised in year	872
	At end of year	(38,291)

		Group
		2021
		£

	Accelerated capital allowances	(3,149)
	Accelerated allowances on amortisation due to R&D	(35,142)
		(38,291)

22.	Share capital
		2021	Unaudited 2020
		£	£

Allotted, called up and fully paid

1 (2020 - 1) Ordinary A share of £1.00	1	1
1,000 (2020 - 1,000) Ordinary shares of £1.00 each	1,000	1,000

	1,001	1,001

The Ordinary A share will be non-voting and has no rights to any assets on a winding up.
The Ordinary shares rank pari-passu in all respects. There are no restrictions on the distribution of dividends and the repayment of capital.

23.

Reserves

Profit and loss account

The profit and loss account represents cumulative distributable profits and losses net of dividends and
other adjustments.

Page 35

ALGAL (UK) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

24.	Business combinations

On 15 November 2021 the group increased its shareholding in Zephyrus Partners Limited to 69%.

Fixed Assets
Tangible	41,023	41,023
Intangible	293,997	293,997
	335,020	335,020
Current Assets
Debtors	1,695,465	1,695,465
Cash at bank and in hand	2,275,819	2,275,819
Total Assets	4,306,304	4,306,304
Creditors
Due within one year	(1,290,525)	(1,290,525)
Deferred taxation	(38,291)	(38,291)
Total Identifiable net assets	2,977,488	2,977,488


	Non-controlling interests	(916,173)
	Goodwill	(2,029,287)
	Total purchase consideration	32,028

	Consideration
					£


	Cash	32,028

Cash outflow on acquisition

Page 36

ALGAL (UK) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

24.Business combinations (continued)

	The results of Zephyrus Partners Limited since acquisition are as follows:
				Current period since acquisition
				£

	Turnover	1,976,800
	Profit for the period since acquisition	272,065

25.	Pension commitments

The Group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £6,486 (2020 - £Nil). There was an amount of £5,807 (2020 - £Nil) outstanding at the balance sheet date.

26.	Commitments under operating leases
	At 31 December 2021 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
		Group	Group
		2021	2020
		£	£

Not later than 1 year	140,410	-
Later than 1 year and not later than 5 years	606,926	-
Later than 5 years	35,818	-
	783,154	-

27.	Related party transactions
	At the year end the Group was owed £374,127 (2020 - £10,651 owed to) by a director of the company. Interest was charged at the HMRC official rate. At the year end the Group was owed £103,920 (2020- £103,920) from its parent company.

28.	Controlling party

Mr A Levillain is deemed to be the ultimate controlling party.

Page 37