Company Registration No. 09080838 (England and Wales)
GAPCAP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
PAGES FOR FILING WITH REGISTRAR
LB GROUP
Number One
Vicarage Lane
Stratford
London
England
E15 4HF
GAPCAP LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 10
GAPCAP LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2021
31 December 2021
- 1 -
2021
2020
Notes
£
£
£
£
Fixed assets
Intangible assets
4
360,697
276,951
Tangible assets
5
1,416
360,697
278,367
Current assets
Debtors
6
5,223,275
4,137,218
Cash at bank and in hand
6,213,802
248,546
11,437,077
4,385,764
Creditors: amounts falling due within one year
7
(10,993,716)
(4,209,645)
Net current assets
443,361
176,119
Total assets less current liabilities
804,058
454,486
Provisions for liabilities
(8,367)
(8,367)
Net assets
795,691
446,119
Capital and reserves
Called up share capital
9
826
826
Share premium account
1,436,790
1,436,790
Profit and loss reserves
(641,925)
(991,497)
Total equity
795,691
446,119
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.
true
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 30 September 2022 and are signed on its behalf by:
Mr L W M Mysyrowicz
Director
Company Registration No. 09080838
GAPCAP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 2 -
1
Accounting policies
Company information
Gapcap Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
1 Vicarage Lane, Stratford, London, England, E15 4HF .
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.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
-
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
-
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
-
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Growth Lending Group Limited. These consolidated financial statements are available from its registered office, 1 Vicarage Lane, Stratford, England, London, England, E15 4HF.
1.2
Going concern
In the year ended 31 December 2021 the company had an operating profit of £505,647 (2020 loss: £175,966) with a negative profit and loss reserves of £641,925 (2020: £991,497), however the financial statements have been prepared on the going concern basis based on positive overall solvency of the company alongside the points below:
During the period the company has utilised sufficient capital to ensure that the business model will continue to operate as a going concern during the current economic environment. Such is the nature of the business that it has not been adversely impacted by either Brexit or the Covid-19 pandemic. It is also confirmed that on a non loan trading basis the entity is solvent to meet all immediate liabilities as they fall due. Furthermore, the company can continue to rely on the ongoing support of its main related party creditors who will not seek repayment of amounts due to the detriment of the going concern of Gapap Limited. It is further confirmed by the directors of the company that the main related creditors have sufficient financial support and strength to provide the ongoing support that is required as above, as the parent company, and other group companies, have confirmed that they will continue to support the company for the foreseeable future and not seek repayment of any monies owed to them.
GAPCAP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 3 -
1.3
Turnover
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the
Company and the revenue can be reliably measured. Revenue is measured as the fair value of the
consideration received or receivable, excluding discounts, rebates, value added tax and other sales
taxes. The following criteria must also be met before revenue is recognised:
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are
provided in accordance with the stage of completion of the contract when all of the following
conditions are satisfied:
-
the amount of revenue can be measured reliably;
-
it is probable that the Company will receive the consideration due under the contract;
-
the stage of completion of the contract at the end of the reporting period can be measured
reliably;
-
and
the costs incurred and the costs to complete the contract can be measured reliably.
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated
.
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date
where
it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the
fair
value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation 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:
Software
20% Straight Line
1.6
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 and fittings
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
.
1.7
Borrowing costs related to fixed assets
All borrowing costs are recognised in the Statement of Comprehensive Income in the year in whic
h
they are incurred.
GAPCAP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 4 -
1.8
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
and intangible 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.
1.9
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.
1.10
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.
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.
Short term debtors are measured at transaction price, less any impairment.
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.
GAPCAP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 5 -
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.
Finance costs
Finance costs are charged to the Statement of Comprehensive Income over the term of the debt
using the effective interest method so that the amount charged is at a constant rate on the carrying
amount. Issue costs are initially
recognised as a reduction in the proceeds of the associated capital
instrument.
1.11
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.
1.12
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.
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.
GAPCAP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 6 -
1.13
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
fixed 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.
1.14
Share-based payments
Where share options are awarded to employees, the fair value of the options at the date of grant is
charged to the Statement of Comprehensive Income over the vesting period. Non-market vesting
conditions are taken into account by adjusting the number of equity instruments expected to vest at
each Balance Sheet date so that, ultimately, the cumulative amount recognised over the vesting
period is based on the number of options that eventually vest. Market vesting conditions are factored
into the fair value of the options granted. The cumulative expense is not adjusted for failure to
achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors
beyond the control of either party (such as a target based on an index) or factors which are within the
control of one or other of the parties (such as the Company keeping the scheme open or the
employee maintaining any contributions required by the scheme).
1.15
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.
1.16
Foreign exchange
Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange
rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the
transaction and non-
m
onetary 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 Comprehensive Income except when deferred in other
comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are
presented in the Statement of Comprehensive Income within 'finance income or costs'. All other
foreign exchange gains and losses are presented in the Statement of Comprehensive Income within
'other operating income'.
GAPCAP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 7 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are
as follows.
Research and Development
The company capitalises a proportion of the research and development annual expense. This is based on management's judgement that these relate to expenses incurred to produce or substantially improve systems, rather than pure and applied research costs.
Impairment of debtors
The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, managements considered factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience.
Impairment of group loans
The Company makes an estimate of the recoverable value of group loans. When assessing the impairment of group loans management considers whether there is objective evidence of impairment including:
-
economic or legal reasons relating to the debtors financial difficult; and
-
observable data indicating that there has been a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those asset.
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Total
2
4
During the year, the wages were recharged from another group company which resulted in wages costs but reduced employees.
GAPCAP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 8 -
4
Intangible fixed assets
Other
£
Cost
At 1 January 2021
633,914
Additions
205,765
At 31 December 2021
839,679
Amortisation and impairment
At 1 January 2021
356,963
Amortisation charged for the year
122,019
At 31 December 2021
478,982
Carrying amount
At 31 December 2021
360,697
At 31 December 2020
276,951
5
Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 January 2021 and 31 December 2021
28,037
Depreciation and impairment
At 1 January 2021
26,621
Depreciation charged in the year
1,416
At 31 December 2021
28,037
Carrying amount
At 31 December 2021
At 31 December 2020
1,416
6
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
653,640
1,905,906
Corporation tax recoverable
121,305
174,712
Amounts owed by group undertakings
4,377,519
1,939,154
Other debtors
70,811
117,446
5,223,275
4,137,218
GAPCAP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED
31 DECEMBER 2021
31 December 2021
6
Debtors
(Continued)
- 9 -
Amounts owed by group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.
7
Creditors: amounts falling due within one year
2021
2020
£
£
Trade creditors
53,628
1,182
Amounts owed to group undertakings
661,297
1,303,809
Taxation and social security
87,160
55,165
Other creditors
10,191,631
2,849,489
10,993,716
4,209,645
Amounts owed to group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.
Included in other creditors are secured loan notes of £6,606,084 provided by a consortium of lenders. The loan notes attract an interest rate of 10% per annum.
8
Security & charges
During the
prior
period, fixed and floating charges were raised on the Company by Cairn Private Credit. Interest of 5.5% over a LIBOR base of 1.5% was charged to the Company on any debts held by the Company in relation to Cairn Private Credit, either directly or indirectly during the period.
9
Called up share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of 0.1p each
825,886
825,886
826
826
Included in share capital is 250 Ordinary A Shares at 0.1p each. These shares have no rights in the company with respect to voting, pre-emption, dividends and distributions.
10
Audit report information
As the income statement has been omitted from the filing copy of the financial statements
,
the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006
:
The auditor's report was unqualified.
Senior Statutory Auditor:
Richard Lane
Statutory Auditor:
LB Group (Stratford)
GAPCAP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 10 -
11
Related party transactions
The company has taken advantage of exemptions, under the terms of Financial Reporting Standards 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclosure related party transactions with wholly owned subsidiaries within the group.
12
Ultimate controlling party
The immediate parent company is King's Cross Capital Limited by way of its 100% holding of the issued
share capital of Gapcap Limited.
The ultimate parent company is Growth Lending Group Limited by way of its 100% holding of the issued
share capital of King's Cross Capital Limited.
Growth Lending Group Limited is the smallest and largest group of undertakings to consolidate these financial statements. The consolidated accounts are available from the registered office, 1 Vicarage Lane, Stratford, England, London, England, E15 4HF.
The ultimate controlling party is Mr Mysyrowicz by way of his 100% holding of the issued share capital of Growth Lending Group Limited.