CONVERGE TECHNOLOGY LIMITED Filleted accounts for Companies House (small and micro)

CONVERGE TECHNOLOGY LTD - Company Information

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COMPANY REGISTRATION NUMBER: 08225307

CONVERGE TECHNOLOGY LIMITED

Filleted Financial Statements

31 December 2018

CONVERGE TECHNOLOGY LIMITED

Statement of Financial Position

31 December 2018

	2018	2017
Note	£	£

Fixed assets

Intangible assets	5	360,000	129,370
Tangible assets	6	169,642	114,484
		---------	---------
		529,642	243,854

Current assets

Stocks		119,259	77,486
Debtors	7	1,492,052	1,366,151
Cash at bank and in hand		700,996	569,446
		------------	------------
		2,312,307	2,013,083

Creditors: amounts falling due within one year	8	1,842,443	1,156,398
		------------	------------
Net current assets		469,864	856,685
		---------	------------
Total assets less current liabilities		999,506	1,100,539

Creditors: amounts falling due after more than one year	9	–	16,551

Provisions	17,059	17,059
	---------	------------
Net assets	982,447	1,066,929
	---------	------------

Capital and reserves

Called up share capital	494,898	494,898
Profit and loss account	487,549	572,031
	---------	------------
Shareholders funds	982,447	1,066,929
	---------	------------

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies' regime and in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

In accordance with section 444 of the Companies Act 2006, the statement of comprehensive income has not been delivered.

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.

CONVERGE TECHNOLOGY LIMITED

Statement of Financial Position (continued)

31 December 2018

These financial statements were approved by the board of directors and authorised for issue on 3 July 2019 , and are signed on behalf of the board by:

Mr J Buttle

Director

Company registration number: 08225307

CONVERGE TECHNOLOGY LIMITED

Notes to the Financial Statements

Year ended 31 December 2018

1. General information

The company is a private company limited by shares, registered in England and Wales. The address of the registered office is GBEC House, 31 Barnett Way, Gloucester, Gloucestershire, GL4 3RT, England.

2. Statement of compliance

These financial statements have been prepared in compliance with Section 1A of FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.

3. Accounting policies

Basis of preparation

The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.

The financial statements are prepared in sterling, which is the functional currency of the entity.

Judgements and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Revenue recognition

Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts and Value Added Tax. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably.

Income tax

The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.

Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.

Goodwill

Goodwill arises on business acquisitions and represents the excess of the cost of the acquisition over the company's interest in the net amount of the identifiable assets, liabilities and contingent liabilities of the acquired business. Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. It is amortised on a straight-line basis over its useful life. Where a reliable estimate of the useful life of goodwill or intangible assets cannot be made, the life is presumed not to exceed ten years.

Amortisation

Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:

	Goodwill	-	20% straight line

If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.

Tangible assets

Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.

Depreciation

Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:

Plant and machinery	-	25% reducing balance
Fixtures and fittings	-	25% reducing balance and 3 years straight line
Motor vehicles	-	25% reducing balance
Computer equipment	-	`25% reducing balance and 3 years straight line`

Impairment of fixed assets

A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets. For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units.

Stocks

Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.

Finance leases and hire purchase contracts

Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.

Provisions

Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.

Financial instruments

A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument. Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Debt instruments are subsequently measured at amortised cost. Where investments in non-convertible preference shares and non-puttable ordinary shares or preference shares are publicly traded or their fair value can otherwise be measured reliably, the investment is subsequently measured at fair value with changes in fair value recognised in profit or loss. All other such investments are subsequently measured at cost less impairment. Other financial instruments, including derivatives, are initially recognised at fair value, unless payment for an asset is deferred beyond normal business terms or financed at a rate of interest that is not a market rate, in which case the asset is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Other financial instruments are subsequently measured at fair value, with any changes recognised in profit or loss, with the exception of hedging instruments in a designated hedging relationship.

Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately. For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets are either assessed individually or grouped on the basis of similar credit risk characteristics. Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.

Defined contribution plans

Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

4. Employee numbers

The average number of persons employed by the company during the year amounted to 48 (2017: 44 ).

5. Intangible assets

	Goodwill
	£
Cost
At 1 January 2018	577,276
Additions	–
Acquisitions through business combinations	360,000
	---------
At 31 December 2018	937,276
	---------
Amortisation
At 1 January 2018	447,906
Charge for the year	129,370
	---------
At 31 December 2018	577,276
	---------
Carrying amount
At 31 December 2018	360,000
	---------
At 31 December 2017	129,370
	---------

6. Tangible assets

	Plant and machinery	Fixtures and fittings	Motor vehicles	Equipment	Total
	£	£	£	£	£
Cost
At 1 January 2018	24,860	43,270	42,625	90,531	201,286
Additions	17,964	39,863	31,817	26,582	116,226
Disposals	–	( 39,808)	–	–	( 39,808)
	--------	--------	--------	---------	---------
At 31 December 2018	42,824	43,325	74,442	117,113	277,704
	--------	--------	--------	---------	---------
Depreciation
At 1 January 2018	9,616	23,565	15,630	37,991	86,802
Charge for the year	4,633	11,713	11,210	26,721	54,277
Disposals	–	( 33,017)	–	–	( 33,017)
	--------	--------	--------	---------	---------
At 31 December 2018	14,249	2,261	26,840	64,712	108,062
	--------	--------	--------	---------	---------
Carrying amount
At 31 December 2018	28,575	41,064	47,602	52,401	169,642
	--------	--------	--------	---------	---------
At 31 December 2017	15,244	19,705	26,995	52,540	114,484
	--------	--------	--------	---------	---------

7. Debtors

	2018	2017
	£	£
Trade debtors	1,422,837	1,266,066
Other debtors	69,215	100,085
	------------	------------
	1,492,052	1,366,151
	------------	------------

8. Creditors: amounts falling due within one year

	2018	2017
	£	£
Trade creditors	582,202	425,069
Amounts owed to group undertakings and undertakings in which the company has a participating interest	449,282	–
Corporation tax	48,088	35,158
Social security and other taxes	188,228	180,702
Other creditors	4,271	–
Other creditors	570,372	515,469
	------------	------------
	1,842,443	1,156,398
	------------	------------

9. Creditors: amounts falling due after more than one year

	2018	2017
	£	£
Other creditors	–	16,551
	----	--------

10. Summary audit opinion

The auditor's report for the year dated 3 July 2019 was unqualified.

The senior statutory auditor was James Harper , for and on behalf of Harper Sheldon Limited .

11. Related party transactions

During the year the company had the following transactions with connected parties: Dividends of £440,000 (2017: £220,000) were paid to GBE Converge Group Limited, which controls 100% of the company as at the balance sheet date. Sales of £587,585 (2017 £408,431) were made to GB Electronics Limited, a company under common control. Debtors of £144,988 (2017 £46,908) were outstanding at the balance sheet date. Purchases of £229,852 (2017 £141,380) were made from GB Electronics Limited, a company under common control. Creditors of £60,588 (2017 £5,984) were outstanding at the balance sheet date. No further transactions were made that require disclosure under FRS102.