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Registered number: 13363008
MARTLET CAPITAL LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
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MARTLET CAPITAL LIMITED
REGISTERED NUMBER: 13363008
STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2023
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Convertible debt option reserve
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The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
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MARTLET CAPITAL LIMITED
REGISTERED NUMBER: 13363008
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 30 SEPTEMBER 2023
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
................................................
I Iliev
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R D Marshall
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The notes on pages 3 to 16 form part of these financial statements.
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MARTLET CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
The principal activity of Martlet Capital Limited is the investment in deep technology and life science startups with high growth potential.
The company is a private company limited by shares and is incorporated in England and Wales.
The registered office address is 9 Hills Road, Cambridge, England, CB2 1GE.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The following principal accounting policies have been applied:
Investments in unlisted Company shares, whose market value can be reliably determined, are remeasured to market value at each Statement of Financial Position. Gains and losses on remeasurement are recognised in the Statement of Comprehensive Income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.
Realised fair value gains and losses are recognised within revenue in the Statement of Comprehensive Income. Unrealised fair value gains and losses are recognised within fair value movements in the Statement of Comprehensive Income.
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Foreign currency translation
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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.
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MARTLET CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
2.Accounting policies (continued)
1. Sale of investments
Revenue is recognised on the sale of investments during the year as the value of the proceeds received or receivable from the sale of the investment.
Revenue is recognised once the following conditions have been met:
• The Company has transferred the significant risk and rewards of ownership to the buyer;
• The Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the shares sold;
• the amount of revenue can be measured reliably;
• it is probable that the Company will receive the consideration due under the transaction; and
• the costs incurred or to be incurred in respect of the transaction can be measured reliably.
2. Dividends received
The Company recognises as revenue any dividends received from the investments held during the financial period.
Dividends are recognised as revenue once the dividends have been declared, provided the following conditions are met:
• The amount of the dividend can be measured reliably;
• It is probable that the dividend will be received by the Company.
3. Interest received
The Company recognises as revenue any interest earned from the investments held during the financial period.
The interest is recognised as revenue once the following conditions are met :
• The amount of the interest can be measured reliably;
• It is probable that the interest will be received by the Company.
4. Fair value movements
Fair value gains or losses are recognised as part of the revenue of the Company upon sale of the investment held and the fair value gains or losses become realised.
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MARTLET CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
2.Accounting policies (continued)
1. Sale of investments
The Company recognises in cost of sales, the carrying amount of any investments sold during the period, measured as follows:
• The original costs incurred as part of the acquisition of the investment that were included in the cost price of the investment;
• Any fair value gains or losses capitalised onto the carrying amount of the investment;
•Any incidental costs of disposal.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
Interest income, other than that recognised as revenue, is recognised in profit or loss using the effective interest method.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company 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 Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.
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MARTLET CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
2.Accounting policies (continued)
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Current and deferred taxation
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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 reporting date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting 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; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
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 reporting date.
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.
At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
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MARTLET CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
2.Accounting policies (continued)
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Tangible fixed assets (continued)
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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 basis:
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.
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Provisions for liabilities
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Provisions are made where an event has taken place that gives the Company 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 Company becomes aware of the obligation, and are measured at the best estimate at the reporting 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 Statement of Financial Position.
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MARTLET CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
2.Accounting policies (continued)
The Company 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.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the reporting date.
Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position when there is an 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.
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MARTLET CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
2.Accounting policies (continued)
The proceeds received on issue of the Company's convertible debt are allocated into their liability and equity components and presented separately in the Statement of Financial Position.
The amount initially attributed to the debt component equals the discounted cash flows using a market rate of interest that would be payable on a similar debt instrument that did not include an option to convert.
The difference between the net proceeds of the convertible debt and the amount allocated to the debt component is credited direct to equity and is not subsequently remeasured. On conversion, the debt and equity elements are credited to share capital and share premium as appropriate.
Transaction costs that relate to the issue of the instrument are allocated to the liability and equity components of the instrument in proportion to the allocation of proceeds.
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Judgments in applying accounting policies and key sources of estimation uncertainty
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The company make judgements and estimates in relation to the value of Investments. The company follows the guidance issued by the British Venture Capitalist Association when determining the fair value. Specifically in relation to using the price of a recent investment to estimate and calibrate the fair value. Adequate consideration is also given to the current circumstances of the company including but not limited to, changes in market or the key performance indicators of the investee company.
The values assigned to the investments are based upon available information and do not necessarily represent amounts which will ultimately be realised. Due to the inherent uncertainty of the valuation, the estimated fair value may differ significantly from the values that would have been determined had the investments been liquidated.
The carrying value of Investments as at the period end is £23,507,094 (2022: £17,440,917).
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The average monthly number of employees, including directors, during the year was 7 (2022 - 6).
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MARTLET CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
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Charge for the year on owned assets
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MARTLET CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
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MARTLET CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
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Prepayments and accrued income
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MARTLET CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
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Creditors: Amounts falling due within one year
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Accruals and deferred income
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Other Loans include:
Acquisition convertible loan notes:
In the period ended 30 September 2022, the entity issued convertible loan notes to the amount of £2,133,519. The principal amount of the loan is repayable over 8 equal quarterly instalments with the final instalment taking place on 31 May 2024. At any stage over the term of the loan notes, the Noteholder may, with 5 days business notice, elect to convert the outstanding loan notes balance at that date into preferred shares of the Company at a rate of £0,83 per preferred share. The liability element is included in other loans. The loan notes are unsecured.
Convertible loan notes:
In the period ended 30 September 2022, the entity issued convertible loan notes to the amount of £6,378,106 with a coupon rate of 5%. In the year ended 30 September 2023, a further £90,000 were issued. The principal amount of the loan is repayable at the end of the loan term of 7 years, unless the Company elects to convert any portion or all of the principal amount into preferred shares. Interest shall accrue and be payable at the coupon rate each year, on the principal amount to the extent that it has not yet been converted into preferred shares. At the sole discretion of the Company, the outstanding balances of the loan notes may be converted into preferred shares at a price per share equivalent to the price paid for the preferred shares by each Noteholder at the same dates that the loan notes were issued The liability element is included in other loans.The loan notes are subordinate to the acquisition loan notes and are unsecured.
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Acquisition convertible loan notes
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MARTLET CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
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Creditors: Amounts falling due after more than one year
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Acquisition convertible loan notes
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Charged to profit or loss
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The provision for deferred taxation is made up as follows:
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Accelerated capital allowances
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MARTLET CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
11.Share capital (continued)
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Allotted, called up and fully paid
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2,103,000 (2022 - 2,278,000) Ordinary shares of £0.0100 each
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17,480,180 (2022 - 17,249,400) Preferred shares of £0.0100 each
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175,000 (2022 - 0) Deferred shares of £0.0100 each
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1,497,000 (2022 - 0) Growth shares of £0.0001 each
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Preferred shares
During the year, the Company issued a further 230,769 Preferred shares of £0.01 each (2022: 17,249,400), with an aggregate nominal value of £2,308. These shares were issued at a premium of £0.90 per share with an aggregate premium of £207,692.
Deferred shares
During the year, the Company re-designated 175,000 Ordinary shares of £0.01 each to 175,000 Deferred shares of £0.01 each, with an aggregate nominal value of £1,750.
Growth shares
During the year, the Company issued 1,497,000 £0.0001 Growth shares (2022: Nil) with an aggregate nominal value of £150. The shares were issued at par value.
Share premium account
The share premium account includes the premium on issue of equity shares, net of any issue costs.
Convertible debt option reserve
The convertible debt option reserve represents the equity component of convertible debt instruments.
Profit and loss account
The profit and loss account represents the accumulated profits and losses of the company, less any dividends payable. This reserve comprises both realised and unrealised profits & losses.
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MARTLET CAPITAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
The comparative figures of the Statement of Comprehensive Income have been restated to reflect a change in the revenue accounting policy.
Unrealised fair value gains and losses, relating to the revaluation of investments, have been disclosed as part of fair value movements in the Profit and Loss in the current year,
Prior year unrealised fair value gains and losses amounting to £4,819,132, previously recognised as revenue, have been reclassified from revenue to fair value movements in the Profit and Loss.
The prior year adjustment has not had an impact on the opening retained earnings balance or prior year tax position of the Company.
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Statement of Comprehensive Income
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Increase in fair value movements
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Net changes in Comprehensive Income
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Post balance sheet events
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A formal restructuring exercise was agreed by the board on the 13th May 2024 in which EMV Capital Limited acquired Martlet Capital Limited's operational business and was also appointed its Investment Manager. In terms of the arrangement, EMV Capital Limited will manage Martlet Capital Limited's portfolio of investments amounting to c.£23.3 million across the 53 companies within the deep technology and life science sectors. In addition, EMV Capital Limited also acquired Martlet Capital Limited's venture capital business excluding its investment portfolio. When the arrangement becomes effective, it will eliminate all administration expenses in Marltet Capital Limited except for management fees from EMV Capital Limited estimated to be c.£66,667 per month.
The auditor's report on the financial statements for the year ended 30 September 2023 was unqualified.
The audit report was signed on 27 May 2024 by Fran Reid FCA (Senior Statutory Auditor) on behalf of CLA Evelyn Partners Limited.
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