Company Registration No. 08066586 (England and Wales)
LAWBIT LIMITED
Unaudited financial statements
For the year ended 31 May 2018
Pages for filing with registrar
LAWBIT LIMITED
CONTENTS
Page
Statement of financial position
1
Statement of changes in equity
2
Notes to the financial statements
3 - 8
LAWBIT LIMITED
STATEMENT OF FINANCIAL POSITION
As at 31 May 2018
- 1 -
2018
2017
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
3
3,489
810
Investments
4
1
-
3,490
810
Current assets
Trade and other receivables
5
554,383
215,969
Cash and cash equivalents
288,319
31,893
842,702
247,862
Current liabilities
6
(904,354)
(269,952)
Net current liabilities
(61,652)
(22,090)
Total assets less current liabilities
(58,162)
(21,280)
Equity
Called up share capital
7
29,142
26,128
Share premium account
1,766,119
1,196,706
Retained earnings
(1,853,423)
(1,244,114)
Total equity
(58,162)
(21,280)
The directors of the company have elected not to include a copy of the income statement within the financial statements.
true
For the financial year ended 31 May 2018 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 28 February 2019 and are signed on its behalf by:
Mr C Rich
Director
Company Registration No. 08066586
LAWBIT LIMITED
STATEMENT OF CHANGES IN EQUITY
For the year ended 31 May 2018
- 2 -
Share capital
Share premium account
Retained earnings
Total
Notes
£
£
£
£
Balance at 1 June 2016
22,844
769,802
(908,519)
(115,873)
Year ended 31 May 2017:
Loss and total comprehensive income for the year
-
-
(335,595)
(335,595)
Issue of share capital
7
3,284
426,904
-
430,188
Balance at 31 May 2017
26,128
1,196,706
(1,244,114)
(21,280)
Year ended 31 May 2018:
Loss and total comprehensive income for the year
-
-
(609,310)
(609,310)
Issue of share capital
7
3,014
569,414
-
572,428
Balance at 31 May 2018
29,142
1,766,120
(1,853,424)
(58,162)
LAWBIT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 May 2018
- 3 -
1
Accounting policies
Company information
LawBit Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Connect House
,
133-137 Alexandra Road
,
Wimbledon
,
London
,
SW19 7JY
.
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
Despite the company having net current liabilities and net total liabilities at the balance sheet date, a
t the time of approving the financial statements
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Revenue
Revenue is recognised at the fair value of the consideration received or receivable for goods and 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
Property, plant and equipment
Property, plant and equipment
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
Website development
25% 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
Non-current 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.
LAWBIT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 May 2018
1
Accounting policies
(Continued)
- 4 -
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 non-current 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.
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 statement of financial position 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 trade and other receivables 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.
LAWBIT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 May 2018
1
Accounting policies
(Continued)
- 5 -
Basic financial liabilities
Basic financial liabilities, including trade and other payables, 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 payables
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 payables 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 income statement 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 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
.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or non-current assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to income 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 asset are consumed.
LAWBIT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 May 2018
- 6 -
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was 9 (2017 - 3
).
The company began employing staff in the previous financial year and had three employees at 31 May 2017, increasing to ten employees by 31 May 2018.
3
Property, plant and equipment
Plant and machinery etc
£
Cost
At 1 June 2017
36,552
Additions
5,012
At 31 May 2018
41,564
Depreciation and impairment
At 1 June 2017
36,552
Depreciation charged in the year
1,523
At 31 May 2018
38,075
Carrying amount
At 31 May 2018
3,489
At 31 May 2017
810
4
Fixed asset investments
2018
2017
£
£
Investments
1
-
LAWBIT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 May 2018
4
Fixed asset investments
(Continued)
- 7 -
Movements in non-current investments
Shares in participating interests
£
Cost or valuation
At 1 June 2017
-
Additions
1
At 31 May 2018
1
Carrying amount
At 31 May 2018
1
At 31 May 2017
-
5
Trade and other receivables
2018
2017
Amounts falling due within one year:
£
£
Corporation tax recoverable
33,440
-
Amounts due from related parties
53,386
20,709
Other receivables
467,557
195,260
554,383
215,969
6
Current liabilities
2018
2017
Notes
£
£
Non-bank borrowing
120,159
100,000
Payments received in advance of a share issue
355,000
-
Trade payables
10,629
431
Amounts owed to Lawbit Isle of Man Limited
221,228
-
Corporation tax
57,554
-
Other taxation and social security
19,081
55,634
Other payables
59,440
41,469
Accruals and deferred income
61,263
72,418
904,354
269,952
The amounts owed to Lawbit Isle of Man Limited have been loaned to the company from its joint venture investment in the Isle of Man where they were received from the Department for Enterprise (a Department of the Isle of Man Government) as part of an arrangement which included the issue of warrants to the Department for Enterprise as detailed in note 7.
LAWBIT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 May 2018
- 8 -
7
Called up share capital
2018
2017
£
£
Ordinary share capital
Issued and fully paid
2,914,191 Ordinary Shares of 1p each
29,142
26,128
29,142
26,128
During the year the company issued warrants which entitle the holder to subscribe for up to 178,588 A shares in the company at an agreed subscription price. The Ordinary shares and A shares confer differing rights as to income and capital distribution in accordance with the Articles of Association, while the A shareholders can opt to convert their shares to Ordinary shares should particular events occur.
8
Related party transactions
Transactions with related parties
During the year Lawbit Limited recharged consultants costs of £364,871 (2017: £196,120) and general overheads of £243,247 (2017: £130,746) to a company which shares common directors, while the company also paid for certain administration costs on behalf of Lawbit Limited. At the balance sheet date Lawbit Limited owed £51,527 to the related company (2017: £2,167
due from related company).
During the year Lawbit Limited received management services from a company which shares common directors and was charged £67,333 (2017: £69,154) for these management services. At the balance sheet date Lawbit Limited was owed £53,386 (2017: £18,542
) from this related company.
During the year the company received a loan from a company in which it owns 50% of the issued share capital. The loan is non-interest bearing and not subject to any specific terms. The amount due to the related company at 31 May 2018 was £250,000
.
Transactions with directors
The company provided a loan to the directors during the period. At 31 May 2018 a total of £302,461 was due to the company (2017: £193,482
). The loan is interest free and repayable on demand.
It is expected that the loan will be repaid in full in the year to 31 May 2019 by a combination of cash settlement and the assignment of the loan as settlement of future costs for management services.