Company Registration No. 07055288 (England and Wales)
RICANTO LIMITED
UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
PAGES FOR FILING WITH REGISTRAR
RICANTO LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 8
RICANTO LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2019
31 December 2019
- 1 -
2019
2018
as restated
Notes
£
£
£
£
Fixed assets
Tangible assets
3
640
1,094
Investments
4
6,914
16,729
7,554
17,823
Current assets
Debtors
6
498,994
478,505
Cash at bank and in hand
1,689
4,351
500,683
482,856
Creditors: amounts falling due within one year
7
(547,511)
(531,458)
Net current liabilities
(46,828)
(48,602)
Total assets less current liabilities
(39,274)
(30,779)
Capital and reserves
Called up share capital
8
300
300
Profit and loss reserves
(39,574)
(31,079)
Total equity
(39,274)
(30,779)
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.
true
For the financial year ended 31 December 2019 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
T
he members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476
.
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 31 March 2021 and are signed on its behalf by:
Dr A Clarke
Director
Company Registration No. 07055288
RICANTO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
- 2 -
1
Accounting policies
Company information
Ricanto Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
10 Station Road, Henley on Thames, Oxfordshire, RG9 1AY. The business address is Century House, Wargrave Road, Henley on Thames, Oxfordshire, RG9 2LT.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
At the year end, the Company had net liabilities of £39,274. However, the directors have undertaken a review of the business particularly in light of Covid-19 and taken appropriate action to ensure the Company has access to suitable funding for at least 12 months from the approval of these financial statements and accordingly the accounts have been prepared on a going concern basis.
true
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Fixtures, fittings & equipment
15% reducing balance
Computer equipment
3 years straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.5
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
The investments are assessed for impairment at each reporting date
and
any
impairment
losses or reversals of impairment losses are recognised immediately in profit or loss.
RICANTO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 3 -
A subsidiary is an entity controlled by the company
. Control is
the power to govern the financial and operating policies of
the
entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities
.
1.6
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). 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.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
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.
RICANTO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 4 -
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.
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, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts 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. A
m
ounts 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.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
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.
RICANTO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 5 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
Leases
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 lease
s
asset are consumed.
1.12
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2019
2018
Number
Number
Total
2
2
RICANTO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 6 -
3
Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 January 2019 and 31 December 2019
8,271
Depreciation and impairment
At 1 January 2019
7,177
Depreciation charged in the year
454
At 31 December 2019
7,631
Carrying amount
At 31 December 2019
640
At 31 December 2018
1,094
4
Fixed asset investments
2019
2018
£
£
Other investments other than loans
6,914
16,729
Movements in fixed asset investments
Investments other than loans
£
Cost or valuation
At 1 January 2019
16,729
Valuation changes
(9,815)
At 31 December 2019
6,914
Carrying amount
At 31 December 2019
6,914
At 31 December 2018
16,729
5
Financial instruments
2019
2018
£
£
Carrying amount of financial assets
Instruments measured at fair value through profit or loss
6,914
16,729
RICANTO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 7 -
6
Debtors
2019
2018
Amounts falling due within one year:
£
£
Corporation tax recoverable
2,797
2,797
Other debtors
496,197
475,708
498,994
478,505
7
Creditors: amounts falling due within one year
2019
2018
£
£
Corporation tax
117,663
117,247
Other creditors
429,848
414,211
547,511
531,458
8
Called up share capital
2019
2018
£
£
Ordinary share capital
Issued and fully paid
300 Ordinary shares of £1 each
300
300
9
Related party transactions
US3 Partnership LLP is a related party in which a director is a designated member. At the start of the year, US3 Partnership LLP owed the Company £142,511. During the year, the Company paid expenses of £3,536 (2018: £1,423) on behalf of the LLP. At the year end, US3 Partnership LLP owed the Company £146,047.
Renown Pharma Inc. is a related party by virtue of common directors. At the start of the year, Renown Pharma Inc. owed the the Company £331,838. During the year, the Company paid expenses on behalf of Renown Pharma Inc. of £17,326 (2018: £27,850). At the year end, Renown Pharma Inc. owed the Company £349,164.
Renown Pharma Limited is a related party by virtue of common directors. At the start of the year, the Company owed Renown Pharma Limited £152,499. During the year, the Company paid expenses on behalf of Renown Pharma Limited of £2,407 (2018: £2,023). At the year end, the Company owed Renown Pharma Limited £145,864, after accounting for a foreign exchange gain of £4228 (2018: loss of £8,621).
10
Directors' transactions
At the start of the year, the Company owed the directors £74,986. During the year, the directors introduced funds of £25,712 (2018: £26,807), and made withdrawals of £1,239 (2018: £1,768). At the year end, the Company owed the directors £99,459.
RICANTO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 8 -
11
Prior period adjustment
Changes to the balance sheet
As previously reported
Adjustment at 1 Jan 2018
Adjustment at 31 Dec 2018
As restated at 31 Dec 2018
£
£
£
£
Fixed assets
Investments
-
-
16,729
16,729
Current assets
Debtors due within one year
475,708
(12,662)
15,459
478,505
Investments
-
173,767
(173,767)
-
Creditors due within one year
Taxation
-
(104,586)
(12,661)
(117,247)
Net assets
66,942
56,519
(154,240)
(30,779)
Capital and reserves
Profit and loss
66,642
56,520
(154,241)
(31,079)
Changes to the profit and loss account
As previously reported
Adjustment
As restated
Period ended 31 December 2018
£
£
£
Amounts written off investments
-
(157,038)
(157,038)
Taxation
-
2,797
2,797
Loss for the financial period
(13,966)
(154,241)
(168,207)
During the preparation of the accounts for the year ended 31st December 2019 an error was identified which related to a consultancy agreement dated 17th September 2015 and covered the period from 17 September 2015 through to 31st December 2016. Whilst the Company provided consultancy services under the terms of the agreement, invoices were never actually issued and the Company was never in receipt of payments for these services provided. In total £522,574 of income relating to this period has not been recognised in the accounts and the amount remained unpaid at 31st December 2016.
On 18th July 2017 the Company signed a settlement agreement to accept shares in exchange for the amounts due to the Company. Accordingly the debtor was converted to 176,418 shares in Achieve Life Sciences Inc. in a debt to equity swap worth £617,173, which was subsequently revalued to £173,767 at 31st December 2017. On 24th May 2018 a reverse stock split occurred and 17,642 shares were revalued at 31st December 2018 to £16,729. The amounts are so material to the proper understanding of the accounts for the year ended 31st December 2018 that they have therefore been treated as a prior year adjustment. The net effect on the results for the year ended 31st December 2018 is an additional loss of £154,241.