Inovus Limited - Accounts to registrar (filleted) - small 18.2

REGISTERED NUMBER: 07919081 (England and Wales)

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 JANUARY 2022

FOR

INOVUS LIMITED

Page

Company Information

1

Balance Sheet

2

Notes to the Financial Statements

3

DIRECTORS:

G C Cooper

E Street

J V Flute

Ms L Gao

REGISTERED OFFICE:

Unit 14

Wharton Street

Sherdley Road Industrial Estate

St Helens

Merseyside

WA9 5AA

REGISTERED NUMBER:

07919081 (England and Wales)

AUDITORS:

MHA Moore and Smalley

Chartered Accountant

Richard House

9 Winckley Square

Preston

Lancashire

PR1 3HP

FIXED ASSETS

Intangible assets

4

24,088

15,470

Tangible assets

5

292,482

362,989

316,570

378,459

CURRENT ASSETS

Stocks

152,329

127,850

Debtors

6

235,688

297,998

Cash at bank

784,310

891,027

1,172,327

1,316,875

CREDITORS

Amounts falling due within one year

7

242,498

244,710

NET CURRENT ASSETS

929,829

1,072,165

TOTAL ASSETS LESS CURRENT LIABILITIES

1,246,399

1,450,624

CREDITORS

Amounts falling due after more than one year

8

393,869

438,248

NET ASSETS

852,530

1,012,376

CAPITAL AND RESERVES

Called up share capital

9

10

10

Share premium

579,498

579,498

Retained earnings

273,022

432,868

SHAREHOLDERS' FUNDS

852,530

1,012,376

The financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

In accordance with Section 444 of the Companies Act 2006, the Profit and Loss Account has not been delivered.

The financial statements were approved by the Board of Directors and authorised for issue on 22 April 2022 and were signed on its behalf by:

E Street - Director

1.	STATUTORY INFORMATION

Inovus Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts are rounded to the nearest £. The financial statements have been prepared under the historical cost convention.

Going concern

The directors have prepared financial and cash flow forecasts for a period at least 12 months following the approval of these financial statements.

Despite the challenges faced during the first 24 months of the Covid-19 pandemic, the company has been resilient and has continued to grow during this period. A series of forecast sensitivities have been prepared to stress test the business for a range of scenarios and in particular their effects on cash resources.

Following a review of the financial and cash flow forecasts, including sensitivities, the directors have concluded that it remains appropriate to prepare these financial statements on the going concern basis. The directors have a reasonable expectation that the company will continue to have adequate resources to continue to operate for the foreseeable future.

Turnover

Turnover represents the total invoice value, excluding value added tax, of sales made during the year and derives from the provision of goods and services falling within the company's ordinary activities. Sales are recognised at the point at which the company has fulfilled its contractual obligations to the customer.

Revenue from the sales of goods is recognised when the significant risks and rewards of ownership of the goods has passed to the buyer [usually on despatch of the goods], the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the company and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Other intangibles is being amortised evenly over its estimated useful life of three years.

Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Freehold property - 2% on cost

Improvements to property - 10% on cost

Plant and machinery - 25% on cost

Fixtures and fittings - 25% on cost

Computer equipment - 25% on cost

The gain or loss arising on 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.

Impairment of Fixed Assets

At each reporting end date, the company reviews the carrying amounts of its tangible fixed assets to determine whether there is any indication that those assets have suffered an impairment loss.

If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). 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.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in the profit or loss account.

Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks.

Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention 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.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in the profit or loss account.

Classification of financial liabilities

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.

Basic financial liabilities

Basic financial liabilities, including creditors, 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.

Equity instruments

Equity instruments issued by the company are recorded at the proceeds received. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Foreign exchange

Transactions denominated in foreign currency are recorded at the rates of exchange ruling at the dates of the transactions, or at an average rate for the period if the rates do not fluctuate significantly. Monetary assets and liabilities are translated at year end exchange rates or, where appropriate, at the rates of exchange fixed under the terms of the relevant transaction. The resulting exchange rate differences are charged to the profit and loss account.

Research and development

The company does not capitalise research and development expenditure, instead it is written off to profit and loss account as incurred.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was 22 (2021 - 16 ) .

4.	INTANGIBLE FIXED ASSETS

Other

intangibles

£

COST

At 1 February 2021

18,032

Additions

16,077

At 31 January 2022

34,109

AMORTISATION

At 1 February 2021

2,562

Amortisation for year

7,459

At 31 January 2022

10,021

NET BOOK VALUE

At 31 January 2022

24,088

At 31 January 2021

15,470

5.	TANGIBLE FIXED ASSETS

Plant and

Land and

machinery

buildings

etc

Totals

£

£

£

COST

At 1 February 2021

161,579

401,184

562,763

Additions

-

28,311

28,311

At 31 January 2022

161,579

429,495

591,074

DEPRECIATION

At 1 February 2021

9,696

190,078

199,774

Charge for year

3,232

95,586

98,818

At 31 January 2022

12,928

285,664

298,592

NET BOOK VALUE

At 31 January 2022

148,651

143,831

292,482

At 31 January 2021

151,883

211,106

362,989

6.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.1.22

31.1.21

£

£

Trade debtors

183,903

188,896

Other debtors

51,785

109,102

235,688

297,998

7.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.1.22

31.1.21

£

£

Bank loans and overdrafts

12,226

9,750

Trade creditors

50,210

60,721

Taxation and social security

51,089

53,903

Other creditors

128,973

120,336

242,498

244,710

Included within other creditors are amounts payable under finance leases and hire purchase contracts of £33,142 (2021: £33,142) which are secured by fixed charges on the relevant assets to which they relate.

8.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

31.1.22

31.1.21

£

£

Bank loans

141,393

152,630

Other creditors

252,476

285,618

393,869

438,248

Amounts falling due in more than five years:

Repayable by instalments

Bank loans more than 5 years

96,077

103,630

The bank loans are secured by fixed charges on the properties concerned together with a debenture over the assets of the company.

Included within other creditors are amounts payable under finance leases and hire purchase contracts of £52,476 (2021: £85,618) which are secured by fixed charges on the relevant assets to which they relate.

9.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

31.1.22

31.1.21

value:

£

£

800,000

Ordinary shares

£0.00001

8

8

150,000

A Ordinary shares

£0.00001

2

2

20,000

B Ordinary shares

£0.00001

-

-

10

10

10.	DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006

The Report of the Auditors was unqualified.

Paul Spencer (Senior Statutory Auditor)

for and on behalf of MHA Moore and Smalley

11.	OPERATING LEASE COMMITMENTS

Non- cancellable operating

leases

31.01.22

31.01.21

£

£

Within one year

-

318

Between one and five years

-

8,878

-

9,196

12.	RELATED PARTY TRANSACTIONS

Included within other creditors greater than 1 year is a director’s loan, which is unsecured, bears interest at 4% pa payable quarterly and the capital is redeemable in full in November 2023 by way of a single bullet repayment at that time. The amount of interest charged on the loan was £8,000 (2021: £8,000). The loan was granted under UK Immigration Rules in respect of Tier 1 (Entrepreneur) of the Points Based System.

13.	POST BALANCE SHEET EVENTS

On 12 April 2022, the company agreed a multi-million pound venture debt agreement to support the next phase of business growth. The debt solution accrues warrants in favour of the finance provider, on a defined value of equity. An initial tranche will be drawn imminently, and further tranches are accessible dependent on agreed milestones. Each tranche is repayable over 36 months, with the first 12 months being interest-only.