Registered number:
11594316
ARCEO, LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED
31 DECEMBER 2021
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ARCEO, LTD
CONTENTS
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Directors' Responsibilities Statement
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Independent Auditor's Report
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Statement of Profit or Loss
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Statement of Financial Position
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Statement of Changes in Equity
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Notes to the Financial Statements
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Detailed Profit and Loss Account and Summaries
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ARCEO, LTD
COMPANY INFORMATION
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Blick Rothenberg Audit LLP
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Chartered Accountants
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Statutory Auditor
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ARCEO, LTD
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2021
The directors present their report and the financial statements for the period ended 31 December 2021.
The directors who served during the period were:
Following the year end, K Bryant and M Langdale were appointed directors on 1 June 2022 and D Maleary on 22 August 2022.
Disclosure of information to auditor
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Each of the persons who are
directors at the time when this Directors' Report is approved has confirmed that:
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so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and
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the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
Small companies' exemption note
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In preparing this report, the directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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ARCEO, LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE PERIOD ENDED 31 DECEMBER 2021
The directors are responsible for preparing the Directors' Report and the financial statements, in accordance with applicable law.
Company law requires the directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with International Accounting Standards (IFRS) in conformity with the requirements of the Companies Act 2006.
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 the financial statements, the directors are required to:
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select suitable accounting policies and then apply them consistently;
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make judgments and estimates that are reasonable and prudent;
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state whether applicable International Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
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assess the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
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use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
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 responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.
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ARCEO, LTD
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ARCEO, LTD
We have audited the financial statements of Arceo, Ltd for the period ended 31 December 2021 which comprise
the Statement of Profit or Loss
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the Statement of Financial Position
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the Statement of Cash Flows
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the Statement of Changes in Equity
and the notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Accounting Standards (IFRSs) in conformity with the requirements of the Companies Act 2006.
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 2021 and of its profit for the period then ended;
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have been properly prepared in accordance with UK-adopted IFRSs in conformity with the requirements of the Companies Act 2006; and
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have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
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In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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ARCEO, LTD
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ARCEO, LTD (CONTINUED)
The other information comprises the information included in the Annual Report and Financial Statements, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the Annual Report and Financial Statements. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the audit:
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the information given in the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
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the Directors' Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Directors' Report.
We have nothing to report in respect of the following matters in relation to which 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
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the financial statements are not in agreement with the accounting records and returns; or
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certain disclosures of directors' remuneration specified by law are not made; or
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we have not received all the information and explanations we require for our audit; or
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the directors were not entitled take advantage of the small companies' exemptions in preparing the Directors' Report and from the requirement to prepare a Strategic Report.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
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ARCEO, LTD
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ARCEO, LTD (CONTINUED)
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
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the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
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we identified the laws and regulations applicable to the Company through discussions with directors and other management, and from our commercial knowledge and experience of the insurance sector;
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we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Company, including the Companies Act 2006 and taxation legislation;
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we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management; and
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identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
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making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
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considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
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performed analytical procedures to identify any unusual or unexpected relationships;
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tested a sample of journal entries to identify unusual transactions;
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assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
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investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
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agreeing financial statement disclosures to underlying supporting documentation; and
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enquiring of management as to actual and potential litigation and claims.
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ARCEO, LTD
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ARCEO, LTD (CONTINUED)
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
The Financial Statements of the Company for the year ended 30 September 2020 were not audited.
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 an auditor's report 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.
Jacqueline Oakes
(Senior Statutory Auditor)
for and on behalf of
Blick Rothenberg Audit LLP
Chartered Accountants
Statutory Auditor
16 Great Queen Street
Covent Garden
London
WC2B 5AH
19 December 2022
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ARCEO, LTD
STATEMENT OF PROFIT OR LOSS
FOR THE PERIOD ENDED 31 DECEMBER 2021
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15 months ended
31 December
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There are no items of other comprehensive income for either the period or the prior year other than the profit for the period/year. Accordingly, no statement of other comprehensive income has been presented.
The notes on pages 13 to 25 form part of these financial statements.
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ARCEO, LTD
REGISTERED NUMBER:
11594316
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2021
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Trade and other receivables
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Trade and other liabilities
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Issued capital and reserves
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Capital contribution reserve
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The financial statements on pages 9 to 28 were approved and authorised for issue by the board of directors and were signed on its behalf by:
The notes on pages 13 to 25 form part of these financial statements.
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ARCEO, LTD
FOR THE PERIOD ENDED
31 DECEMBER 2021
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Capital contribution reserves
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Total comprehensive income for the period
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Total contributions by and distributions to owners
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The notes on pages 15 to 28 form part of these financial statements.
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ARCEO, LTD
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 DECEMBER 2021
Cash flows from operating activities
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Share-based payment expense
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Movements in working capital:
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Increase in trade and other receivables
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Increase in trade and other payables
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Cash and cash equivalents at the end of the period
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The notes on pages 15 to 28 form part of these financial statements.
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ARCEO, LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
Arceo, Ltd
(the 'Company') is a private company limited by shares and incorporated in England and Wales. The Company's registered office is at 5 New Street Square, London, EC4A 3TW. The Company's principal activity will be
Cyber Insurance
. During the period the Company provided services to group entities.
These financial statements have been prepared for a 15-month period from 1 October 2020 to 31 December 2021 to align the reporting period with group companies. Therefore, the comparative figures are not entirely comparable.
The financial statements are presented in Sterling (£), which is the functional currency of the Company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs), in conformity with the requirements of the Companies Act 2006.
For all periods up to and including the year ended 30 September 2020, the Company prepared its financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). These financial statements for the period ended 31 December 2021 are the first the Company has prepared in accordance with IFRS. The effect of first time adoption of IFRS is set out in note 14.
Details of the Company's accounting policies, including changes during the period, are included in note 3.
The financial statements have been prepared on the historical cost basis.
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2.2 Changes in accounting policies
i) New standards, interpretations and amendments effective from 1 October 2020
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Amendments to References to the Conceptual Framework in IFRS Standards
The date of the application of the amendments to references to the conceptual framework in IFRS standards is 1 October 2020.
There are no material adjustments required to be made to the Company's financial statements as a result of the amendment.
IAS 1 and 8 - Definition of Material
The date of the application of the amendments to IAS 1 and 8 is 1 October 2020.
There are no material adjustments required to be made to the Company's financial statements as a result of the amendment.
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ARCEO, LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
2.
Basis of preparation (continued)
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2.2 Changes in accounting policies (continued)
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i) New standards, interpretations and amendments effective from 1 October 2020 (continued)
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IFRS 3 - Definition of a Business
The date of the application of the amendments to IFRS 3 is 1 October 2020.
There are no material adjustments required to be made to the Company's financial statements as a result of the amendment.
IFRS 9, IAS 39 and IFRS 7 - Interest Rate Benchmark Reform
The date of the application of the amendments to IFRS 9, IAS 39 and IFRS 7 is 1 October 2020.
There are no material adjustments required to be made to the Company's financial statements as a result of the amendment.
IFRS 16 - Covid-19-Related Rent Concessions beyond 30 June 2021
The date of the application of the amendments to IFRS 16 is 1 October 2020.
There are no material adjustments required to be made to the Company's financial statements as a result of the amendment.
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New standards, interpretations and amendments not yet effective
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The following new standards, interpretations and amendments, which are not yet effective and have not been adopted early in these financial statements, will or may have an effect on the Company's future financial statements:
Effective from 1 January 2022:
IFRS 3 - References to the Conceptual Framework
IAS 16 - Proceeds before intended use
IAS 37 - Onerous Contracts - Cost of Fulfilling a Contract
IFRS 1, IFRS 9, IFRS 16 and IAS 41 - Annual Improvements to IFRS Standards 2018-2020 Cycle
Effective from 1 January 2023:
IFRS 17 - Amendments to IFRS 17
IFRS 4 - Extension of the Temporary Exemption from Applying IFRS 9
IFRS 17 - Initial Application of IFRS 17 and IFRS 9 – Comparative Information
IAS 1 - Classification of Liabilities as Current or Non-current
IAS 12 - Deferred Tax related to Assets and Liabilities arising from a Single Transaction
The Company will be required to apply IFRS 17 on commencement of its principal activity. The other standards, interpretations or amendments are not expected to have a material impact on the Company's financial statements in the current or future reporting periods
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ARCEO, LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
3.
Accounting policies
After making enquiries, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence and meet its liabilities as they fall due for the foreseeable future, being a period of at least twelve months from the date these financial statements were approved. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
During the period ending 31 December 2021, the Company generated a profit before tax of £22,828. In line with its strategy the Company will start offering cyber insurance for companies with a revenue between £100m - £5bn in line with the agreements from capacity providers. The Company continues to be supported by its parent company Arceo Labs, Inc via a capital injection of $1m in 2022 as it regards Arceo Ltd as strategically important to its presence and development within the UK cyber insurance market. The Group has approved an additional $4m in funding and is strategically placed to further contribute as necessary.
From a financial perspective the directors continue to assess the Company’s ability to continue as a going concern. In doing so the directors have referred to the latest available forecasts for the Company and funding commitments received from the parent company. The directors have concluded that the Company has adequate financial resources to continue as a going concern for the foreseeable future, which is 12 months from the signing of these financial statements.
Revenue from contracts to provide sales and marketing services to the parent company is recognised in the period in which the services are provided. Revenue is recognised to the extent that is probable the Company will receive the consideration due under the contract and the amount of revenue can be measured reliably. Revenue is measured as the fair value of the consideration received or receivable, excluding value added tax.
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ARCEO, LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
3.
Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentation currency is Sterling (£).
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.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of profit or loss.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the profit and loss account within 'finance income' or 'finance expense'. All other foreign exchange gains and losses are presented in the statement of profit or loss within 'administrative expenses'.
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ARCEO, LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
3.
Accounting policies (continued)
The Company recognises financial instruments when it becomes a party to the contractual arrangements of the instrument. Financial instruments are de-recognised when they are discharged or when the contractual terms expire. The Company's accounting policies in respect of financial instruments transactions are explained below:
Financial assets and financial liabilities are initially measured at fair value.
Financial assets
All recognised financial assets are subsequently measured in their entirety at either fair value or amortised cost, depending on the classification of the financial assets.
Trade and other receivables
Trade and other receivables are initially recognised at fair value. They are subsequently measured at amortised cost, net of impairment.
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.
Trade and other payables
Trade and other payables are initially recognised at fair value less attributable transaction costs. They are subsequently measured at amortised cost.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.
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 the statement of 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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ARCEO, LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
3.
Accounting policies (continued)
The Group, to which this Company belongs, issues equity settled options over the Parent company's equity to employees of the Company. The Company measures the services received from its employees in accordance with the requirements applicable to equity-settled share-based payment transactions, and recognises a corresponding increase in equity as a contribution from the parent. Share options are measured for fair value at the date of the grant. Where an employee transfers employment from one group company to another during the vesting period (for example, a service period), each company measures the services received from the employee, by reference to the grant date fair value of the equity instrument, over the remainder of the vesting period.
The tax expense for the year comprises current and deferred tax. Tax is recognised in the profit and loss account, 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.
Current tax is the amount of income tax payable in respect of taxable profit for the year or prior years.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined using the tax rates expected to apply when the related deferred tax assets is realised or the deferred income tax liability is settled. Deferred income tax assets are only recognised to the extend that it is probable that future taxable profit will be available against which the temporary difference can be utilised.
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The following is an analysis of the Company's revenue for the period from continuing operations:
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15 months ended
31 December
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ARCEO, LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
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15 months ended
31 December
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During the period, the Company obtained the following services from the Company's auditor:
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15 months ended
31 December
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Fees payable to the Company's auditor for the audit of the Company's financial statements
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ARCEO, LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
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Employee benefit expenses
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15 months ended
31 December
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Employee benefit expenses (including directors) comprise:
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Defined contribution pension cost
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Share based payment expenses
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The monthly average number of persons, including the directors, employed by the Company during the period:
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15 months ended
31 December
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ARCEO, LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
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8.1 Income tax recognised in profit or loss
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15 months ended
31 December
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Current tax on profits for the period
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Origination and reversal of timing differences
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The reasons for the difference between the actual tax charge for the period and the standard rate of corporation tax in the United Kingdom applied to profits for the period are as follows:
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15 months ended
31 December
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Profit before income taxes
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Tax using the Company's domestic tax rate of 19% (2020:19%)
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Short term timing difference leading to an increase in taxation
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Changes in tax rates and factors affecting the future tax charges
In the Spring Budget 2021 on 3 March 2021, the Government announced that from 1 April 2023 the corporation tax rate would increase to 25% for companies with profits of over £250,000. A small profits rate will also be introduced for companies with profits of £50,000 or less so that they will continue to pay corporation tax at 19%. From this date companies with profits between £50,000 and £250,000 will pay tax at the main rate reduced by a marginal relief providing a gradual increase in the effective corporation tax rate. This new law was substantively enacted on 24 May 2021.
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ARCEO, LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
8.
Tax expense (continued)
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8.1 Income tax recognised in profit or loss (continued)
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8.2 Current tax assets and liabilities
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15 months ended
31 December
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8.3 Deferred tax balances
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The following is the analysis of deferred tax assets/(liabilities) presented in the statement of financial position:
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15 months ended
31 December
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Trade and other receivables
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Receivables from related parties
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Total current trade and other receivables
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ARCEO, LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
The fair value of trade and other receivables approximates their book value, no amounts are past due.
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ARCEO, LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
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Total current trade and other payables
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The fair value of trade and other payables approximates their book value. No amounts are past due.
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Ordinary shares
shares of £
1
each
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Ordinary shares shares of £
1
each
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At 1 October and 31 December
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Ordinary shares have full voting, dividend and capital distribution rights.
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ARCEO, LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
Capital contribution reserve
Capital contribution reserves' have arisen from the share-based payment charge. The shares over which the options were issued are that of the parent company.
Share capital
Represents the nominal value of shares that have been issued.
Retained earnings
The profit and loss account includes all current and prior period retained profits and losses.
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Financial instruments - fair values and risk management
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13.1 Accounting classifications and fair values
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The following table shows the carrying amounts and fair values of financial assets and financial liabilities. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.
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Financial assets not measured at fair value
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Trade and other receivables
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Financial liabilities not measured at fair value
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ARCEO, LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
13.
Financial instruments - fair values and risk management (continued)
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13.1 Accounting classifications and fair values (continued)
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Financial assets not measured at fair value
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Trade and other receivables
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13.2 Financial risk management objectives
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The Company's activities exposes it to a variety of financial, market, credit and liquidity risks. The Company's overall risk management programme focuses on the unpredictability of the marketplace and seeks to minimise potential adverse effects on the Company's financial performance.
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £3,500 (2020: £NIL). Contributions totalling £1,313 (2020: £NIL) were payable to the fund at the reporting date and are included in creditors.
On 1 April 2021 employees transferred to the Company from its parent, Arceo Labs Inc. Whilst employed with Arceo Labs Inc the employees were issued with share options. A charge of £2,411 has been recognised in respect of the period of employment with the Company.
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ARCEO, LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
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Related party transactions
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Details of transactions between the Company and its related parties are disclosed below.
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16.1 Trading transactions
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During the period, the Company entered into the following trading transactions with related parties:
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The following balances were outstanding at the end of the reporting period:
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Amounts owed by related parties
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At the period end accrued income of £68,116 relating to recharged costs, was due from Arceo Labs, Inc.
No expense has been recognised in the current or prior years for bad or doubtful debts in respect of the amounts owed by related parties. No guarantees have been given or received.
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Key management personnel compensation for the period was £218,505 (2020 - £nil).
The ultimate parent undertaking and controlling party is Arceo Labs, Inc, an entity registered in USA. Group financial statements are not available to the public.
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ARCEO, LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
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Effect of the first time adoption of IFRS
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These financial statements, for the period ended 31 December 2021, are the first the Company has prepared in accordance with IFRS. For periods up to and including the year ended 30 September 2020, the Company prepared its financial statements in accordance with UK GAAP.
Accordingly, the Company has prepared financial statements that comply with IFRS applicable as at 31 December 2021, together with the comparative period data for the year ended 30 September 2020. In preparing the financial statements, the Company's opening statement of financial position was prepared as at 1 October 2019, the Company's date of transition to IFRS.
No adjustments were required to restate to the financial statements, including the statement of financial position as at 1 October 2019 and the financial statements as of, and for, the year ended 30 September 2020.
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