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CALON CARDIO-TECHNOLOGY LTD |
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REPORT OF THE DIRECTORS AND |
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FINANCIAL STATEMENTS |
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FOR THE YEAR ENDED 31 DECEMBER 2016 |
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REGISTERED NUMBER:
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CALON CARDIO-TECHNOLOGY LTD |
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REPORT OF THE DIRECTORS AND |
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FINANCIAL STATEMENTS |
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FOR THE YEAR ENDED 31 DECEMBER 2016 |
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CALON CARDIO-TECHNOLOGY LTD (REGISTERED NUMBER: 06166938) |
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CONTENTS OF THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2016 |
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Page |
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Company Information | 1 |
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Report of the Directors | 2 |
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Report of the Independent Auditors | 4 |
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Income Statement | 6 |
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Balance Sheet | 7 |
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Notes to the Financial Statements | 8 |
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CALON CARDIO-TECHNOLOGY LTD |
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COMPANY INFORMATION |
FOR THE YEAR ENDED 31 DECEMBER 2016 |
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DIRECTORS: |
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SECRETARY: |
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REGISTERED OFFICE: |
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REGISTERED NUMBER: |
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AUDITORS: |
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Langdon House |
Langdon Road |
SA1 Swansea Waterfront |
Swansea |
SA1 8QY |
CALON CARDIO-TECHNOLOGY LTD (REGISTERED NUMBER: 06166938) |
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REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 DECEMBER 2016 |
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The directors present their report with the financial statements of the company for the year ended 31 December 2016. |
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PRINCIPAL ACTIVITY |
The principal activity of the company in the year under review was primarily that of developing the next |
generation of implantable pumps for the treatment of heart failure. |
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DIRECTORS |
The directors shown below have held office during the whole of the period from 1 January 2016 to the date of |
this report. |
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Other changes in directors holding office are as follows: |
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FINANCIAL REVIEW |
During the year the company received income of £288,075 (2015: £518,267) and incurred expenditure of |
£2,877,304 (2015: £2,003,856) resulting in a financial loss for the year of £2,589,229 (2015: £1,485,589). As |
a result of the transition to FRS 102 the company was required to recognise share options in the period of |
£1,207,800 (2015: Nil) resulting in the significant increase in expenditure. At the year end the company had |
net liabilities of £225,631 (2015: - net assets £357,496). |
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BASIS OF PREPARATION |
The directors have prepared these accounts on a going concern basis, which assumes the company will |
continue to be able to meet its liabilities as they fall due for at least 12 months from the date of approval of |
these financial statements. The company is loss making and has relied on funding from existing funders since |
incorporation in 2007. To date in 2017 the company has received £639,509. It has received commitment to a |
further £200,000 investment by the end of September 2017, it has realistic expectations of receiving a further |
convertible loan within the existing subscription agreement of £325,000 from Finance Wales. Talks are |
nearing conclusion between lawyers in relation to a large investment round of £40,000,000 in the company, of |
which, once agreed, £8,500,000 would be received in the next couple of months. The proposed investment of |
£40,000,000 will take the "MiniVAD" to CE Mark. Taking into account the money already received this year, |
and the realistic expectation of £8,500,000 before the end of 2017, the Directors believe the company |
remains a Going Concern. |
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CALON CARDIO-TECHNOLOGY LTD (REGISTERED NUMBER: 06166938) |
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REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 DECEMBER 2016 |
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STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Report of the Directors and the financial statements in |
accordance with applicable law and regulations. |
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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 United Kingdom Generally |
Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 of the profit or loss of the company for that period. In |
preparing these financial statements, the directors are required to: |
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- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
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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 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 hence for taking reasonable steps for |
the prevention and detection of fraud and other irregularities. |
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STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the |
Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps |
that he ought to have taken as a director in order to make himself aware of any relevant audit information and |
to establish that the company's auditors are aware of that information. |
This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 |
relating to small companies. |
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ON BEHALF OF THE BOARD: |
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REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
CALON CARDIO-TECHNOLOGY LTD |
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We have audited the financial statements of Calon Cardio-Technology Ltd for the year ended |
31 December 2016 on pages six to fifteen. The financial reporting framework that has been applied in their |
preparation is 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'. |
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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 a Report of the Auditors 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. |
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Respective responsibilities of directors and auditors |
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Scope of the audit of the financial statements |
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient |
to give reasonable assurance that the financial statements are free from material misstatement, whether |
caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to |
the company's circumstances and have been consistently applied and adequately disclosed; the |
reasonableness of significant accounting estimates made by the directors; and the overall presentation of the |
financial statements. In addition, we read all the financial and non-financial information in the Report of the |
Directors to identify material inconsistencies with the audited financial statements and to identify any |
information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge |
acquired by us in the course of performing the audit. If we become aware of any apparent material |
misstatements or inconsistencies we consider the implications for our report. |
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Opinion on financial statements |
In our opinion the financial statements: |
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give a true and fair view of the state of the company's affairs as at 31 December 2016 and of its loss for the
year then ended; |
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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. |
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Going Concern |
Without qualifying our opinion, we draw your attention to note 1 to the financial statements concerning the |
company's ability to continue as a going concern and that the Company incurred a net loss of £2,589,229 |
during the period ending 31 December 2016. The going concern assumption adopted is reliant on the |
Company receiving significant investment to continue its research and product development which it is |
currently seeking to secure. This would indicate a material uncertainty which may cast significant doubt about |
the Company's ability to continue as a going concern, particularity if the new funding referred to in note 1 were |
to be delayed. The financial statements do not include any adjustments which could result if the company was |
unable to continue as a going concern. |
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Opinion on other matter prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of our audit, the information given in the Report of |
the Directors for the financial year for which the financial statements are prepared is consistent with the |
financial statements, and has been prepared in accordance with applicable legal requirements. In the light of |
the knowledge and understanding of the company and its environment, we have not identified any material |
misstatements in the Report of the Directors. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
CALON CARDIO-TECHNOLOGY LTD |
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Matters on which we are required to report by exception |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to |
report to you if, in our opinion: |
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adequate accounting records have not been kept, or returns adequate for our audit have not been received
from branches not visited by us; or |
- | the 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; or |
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the directors were not entitled to prepare the financial statements in accordance with the small companies
regime and take advantage of the small companies' exemption from the requirement to prepare a Strategic Report or in preparing the Report of the Directors. |
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for and on behalf of
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Langdon House |
Langdon Road |
SA1 Swansea Waterfront |
Swansea |
SA1 8QY |
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CALON CARDIO-TECHNOLOGY LTD (REGISTERED NUMBER: 06166938) |
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INCOME STATEMENT |
FOR THE YEAR ENDED 31 DECEMBER 2016 |
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2016 | 2015 |
Notes | £ | £ |
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TURNOVER |
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Administrative expenses | ( |
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(2,877,304 | ) | (2,003,856 | ) |
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Other operating income |
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OPERATING LOSS | 5 | ( |
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Interest receivable and similar income |
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LOSS BEFORE TAXATION | ( |
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Tax on loss |
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LOSS FOR THE FINANCIAL YEAR | ( |
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CALON CARDIO-TECHNOLOGY LTD (REGISTERED NUMBER: 06166938) |
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BALANCE SHEET |
31 DECEMBER 2016 |
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2016 | 2015 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Patents | 6 |
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Tangible assets | 7 |
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CURRENT ASSETS |
Debtors | 8 |
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Cash at bank and in hand |
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CREDITORS |
Amounts falling due within one year | 9 |
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NET CURRENT (LIABILITIES)/ASSETS | ( |
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TOTAL ASSETS LESS CURRENT
LIABILITIES |
( |
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CAPITAL AND RESERVES |
Called up share capital |
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Share premium |
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Fair value reserve | 11 |
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Retained earnings | ( |
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SHAREHOLDERS' FUNDS | ( |
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The financial statements were approved by the Board of Directors on
its behalf by: |
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CALON CARDIO-TECHNOLOGY LTD (REGISTERED NUMBER: 06166938) |
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NOTES TO THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2016 |
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1. | GOING CONCERN |
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The directors have prepared these accounts on a going concern basis, which assumes the company |
will continue to be able to meet its liabilities as they fall due for at least 12 months from the date of |
approval of these financial statements. The company is loss making and has relied on funding from |
existing funders since incorporation in 2007. To date in 2017 the company has received £639,509. It |
has received commitment to a further £200,000 investment by the end of September 2017, it has |
realistic expectations of receiving a further convertible loan within the existing subscription agreement |
of £325,000 from Finance Wales. Talks are nearing conclusion between lawyers in relation to a large |
investment round of £40,000,000 in the company, of which, once agreed, £8,500,000 would be |
received in the next couple of months. The proposed investment of £40,000,000 will take the |
"MiniVAD" to CE Mark. Taking into account the money already received this year, and the realistic |
expectation of £8,500,000 before the end of 2017, the Directors believe the company remains a Going |
Concern. |
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2. | STATUTORY INFORMATION |
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Calon Cardio-Technology Ltd is a
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Wales. The company's registered number and registered office address can be found on the Company |
Information page. |
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3. | ACCOUNTING POLICIES |
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Basis of preparing the financial statements |
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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. |
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Amortisation is charged to the income statement. |
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Assets are reviewed for impairment and any impairment losses are charged to the income statement. |
Any impairment loss recognised is reversed in a subsequent period if and only if the reasons for the |
impairment loss have ceased to apply. |
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Tangible fixed assets |
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Plant and machinery | - |
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Fixtures and fittings | - |
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Computer equipment | - |
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Property, plant and equipment are stated at cost less accumulated depreciation and accumulated |
impairment losses. Such cost includes costs directly attributable to making the asset capable of |
operating as intended. |
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Assets are reviewed for impairment and any impairment losses are charged to the income statement. |
Any impairment loss recognised is reversed in a subsequent period if and only if the reasons for the |
impairment loss have ceased to apply. |
CALON CARDIO-TECHNOLOGY LTD (REGISTERED NUMBER: 06166938) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2016 |
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3. | ACCOUNTING POLICIES - continued |
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Government grants |
Government grants are recognised when it is reasonable to expect that the grants will be received and |
that all related conditions will be met, usually on submission of a valid claim for payment. |
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Government grants in respect of capital expenditure are credited to a deferred income account and are |
released to to the income statement over the expected useful lives of the relevant assets by equal |
annual instalments. |
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Grants of a revenue nature are credited to income so as to match them with the expenditure to which |
they relate. |
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Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, |
except to the extent that it relates to items recognised in other comprehensive income or directly in |
equity. |
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Current or deferred taxation assets and liabilities are not discounted. |
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Current tax is recognised at the amount of tax payable using the tax rates and laws that have been |
enacted or substantively enacted by the balance sheet date. |
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Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at |
the balance sheet date. |
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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. |
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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. |
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Research and development |
Research and development expenditure is written off as incurred, except that development expenditure |
incurred on an individual project is capitalised as an intangible asset when the group can demonstrate |
the technical feasibility of completing the intangible asset so that it will be available for use or sale, its |
intention to complete and its ability to use or sell the asset, how the asset will generate future economic |
benefits, the availability of resources to complete the asset and the ability to measure reliably the |
expenditure during development. |
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Following initial recognition of the development expenditure as an asset, the cost model is applied |
requiring the asset to be carried at cost less any accumulated amortisation and accumulated |
impairment losses. Amortisation of the asset begins when development is complete and the asset is |
available for use. It is amortised evenly over the period of expected future benefit. During the period of |
development the asset is tested for impairment annually. |
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Research and development tax credits are recognised on receipt. |
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Foreign currencies |
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at |
the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of |
exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at |
the operating result. |
CALON CARDIO-TECHNOLOGY LTD (REGISTERED NUMBER: 06166938) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2016 |
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3. | ACCOUNTING POLICIES - continued |
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Operating leasing commitments |
Rentals paid under operating leases are charged to the profit and loss account on a straight line basis |
over the period of the lease. |
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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. |
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Share based payments |
The cost of equity-settled transactions with employees is measured by reference to the fair value of the |
equity instruments granted at the date at which they are granted and is recognised as an expense over |
the vesting period, which ends on the date on which the relevant employees become fully entitled to |
the award. |
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Where equity-settled arrangements are modified, and are of the benefit to the employee, the |
incremental fair value is recognised over the period from the date of modification to the date of vesting. |
Where a modification is not beneficial to the employee there is no change to the charge for the |
share-based payment. |
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The company has no cash-settled arrangements. |
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Cash at bank and in hand |
Cash at bank and cash in hand includes cash and short term highly liquid investments with a short |
maturity of three months or less from the date of acquisition or opening of the deposit or similar |
account. Bank overdrafts, when applicable, are shown within borrowings in current liabilities. |
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Debtors |
Short term debtors are measured at transaction price, less any impairment. Any losses arising from |
impairment are recognised in the income statement. |
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Creditors |
Short term creditors are measured at transaction price. |
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Provision for liabilities |
Provisions are recognised when the company has a present obligation (legal and constructive) from a |
past event that will probably result in a transfer of funds to a third party and the amount due to settle |
the obligation can be measured or estimated reliably. |
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Operating lease commitments |
Rentals paid under operating leases are charged to the profit and loss account in the period to which |
they relate. |
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Functional and Presentation Currency |
The company's functional and presentation currency is pounds sterling. |
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Transition to FRS 102 |
These financial statements for the year ended 31 December 2016 are the first financial statements that |
comply with FRS 102 Section 1A small entities. Transition adjustments that have arising and |
transitional relief applied are stated in the notes to the financial statements. The transition date was 1 |
January 2015. |
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4. | EMPLOYEES AND DIRECTORS |
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The average number of employees during the year was
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CALON CARDIO-TECHNOLOGY LTD (REGISTERED NUMBER: 06166938) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2016 |
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5. | OPERATING LOSS |
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The operating loss is stated after charging: |
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2016 | 2015 |
£ | £ |
Depreciation - owned assets |
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Patents and licences amortisation |
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6. | INTANGIBLE FIXED ASSETS |
Patents |
and |
licences |
£ |
COST |
At 1 January 2016 |
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Additions |
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At 31 December 2016 |
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AMORTISATION |
At 1 January 2016 |
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Amortisation for year |
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At 31 December 2016 |
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NET BOOK VALUE |
At 31 December 2016 |
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At 31 December 2015 |
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All intangible assets relate to patents. |
CALON CARDIO-TECHNOLOGY LTD (REGISTERED NUMBER: 06166938) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2016 |
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7. | TANGIBLE FIXED ASSETS |
Fixtures |
Plant and | and | Computer |
machinery | fittings | equipment | Totals |
£ | £ | £ | £ |
COST |
At 1 January 2016 |
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Additions |
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At 31 December 2016 |
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DEPRECIATION |
At 1 January 2016 |
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Charge for year |
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At 31 December 2016 |
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NET BOOK VALUE |
At 31 December 2016 |
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At 31 December 2015 |
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8. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2016 | 2015 |
£ | £ |
Other debtors |
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9. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2016 | 2015 |
£ | £ |
Trade creditors |
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Taxation and social security |
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Other creditors |
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Included in other creditors are contributions of £1,880 (2014: £3,250) due to the defined contribution |
pension scheme operated by the company. |
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10. | LEASING AGREEMENTS |
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Minimum lease payments under non-cancellable operating leases fall due as follows: |
2016 | 2015 |
£ | £ |
Within one year |
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Between one and five years |
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CALON CARDIO-TECHNOLOGY LTD (REGISTERED NUMBER: 06166938) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2016 |
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11. | RESERVES |
Fair |
value |
reserve |
£ |
Share option issue | 1,207,800 |
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At 31 December 2016 |
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Fair value reserves represents the fair value of share based payment transactions under taken in the |
year. |
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12. | CAPITAL COMMITMENTS |
2016 | 2015 |
£ | £ |
Contracted but not provided for in the |
financial statements |
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13. | ULTIMATE CONTROLLING PARTY |
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The directors consider there to be no ultimate controlling party. |
CALON CARDIO-TECHNOLOGY LTD (REGISTERED NUMBER: 06166938) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2016 |
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14. | SHARE-BASED PAYMENT TRANSACTIONS |
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The company established a Share Option Scheme in 2009. Currently there are 38,000 share options |
outstanding granted under this scheme with an exercise price of £0.05 per ordinary share. There are |
no performance conditions and options can only be exercised within 10 years of grant in accordance |
with the Option Scheme. |
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The company established new EMI and Unapproved Share Option Schemes in 2013. During the year |
the scheme was cancelled, and all options issued under that scheme were returned. At the previous |
year end there were 187,250 share options outstanding granted under the scheme with an exercise |
price of £4.50 per ordinary share. There were no performance conditions and options could only be |
exercised within 10 years of grant in accordance with the Option Schemes. |
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During the year the company established a new EMI and Unapproved Share Option scheme. 220,000 |
share options were issued under the new scheme with an exercise price of £0.01 per ordinary share. |
There were no performance conditions and options could only be exercised within 10 years of grant in |
accordance with the Option Scheme. |
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Between the two schemes options are held by 17 individuals or companies, of which 13 are current |
directors or companies that the directors are connected and employees of the company. |
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At 31 December 2016 the company had warrants in issue of: |
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A Ordinary | @ | £3.63 | - | 30,600 |
A Ordinary | @ | £4.50 | - | 8,800 |
A Ordinary | @ | £4.70 | - | 3,435 |
A Ordinary | @ | £5.00 | - | 11,592 |
A Ordinary | @ | £5.25 | - | 7,696 |
A Ordinary | @ | £0.01 | - | 17,267 | Equity Sweeteners |
B Preference | @ | £3.63 | - | 20,600 |
B Preference | @ | £4.50 | - | 12,235 |
B Preference | @ | £5.00 | - | 12,250 |
B Preference | @ | £0.01 | - | 14,909 | Equity Sweeteners |
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15. | SHARE CAPITAL |
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Included in share capital and share premium is an amount of £3,300 and £1,646,691 respectively in |
relation to B loan notes from Finance Wales which is secured by a charge over the company's assets. |
The loan holders have the right to serve a Conversion Notice on the Company at any time to convert |
all of the outstanding B loan notes into fully paid B Preferred Ordinary shares at £5 per share on the |
conversion date. The loan notes are interest free and are to be repaid or converted by 31 January |
2018. |
CALON CARDIO-TECHNOLOGY LTD (REGISTERED NUMBER: 06166938) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2016 |
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16. | TRANSITION TO FRS 102 |
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The following adjustments have arising from the transition to FRS 102: |
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Holiday pay accrual |
On transition to FRS 102 a holiday pay accrual was recognised in the comparative year, decreasing |
retained earnings and increasing other creditors by £2,523. |
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Loan notes |
On transition to FRS 102 £1,225,000 of B loan notes have been reclassified as equity from creditors. |
£725,000 was reclassified at the date of transition and a further £500,000 in the comparative year. |
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Transitional relief |
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On transition to FRS 102 from previous UK GAAP, the company have taken advantage of transitional |
relief as follows: |
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Share based payment transactions |
The company have elected not to apply Section 26 Share based payment to equity instruments |
granted before the date of transition to FRS 102. FRS 20 has been applied to instruments granted prior |
to the date of transition. |