Alphr Technology Limited - Limited company accounts 20.1

REGISTERED NUMBER: 02967759 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 31 December 2019

for

Alphr Technology Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Statement of Comprehensive Income

8

Balance Sheet

9

Statement of Changes in Equity

10

Notes to the Financial Statements

11

DIRECTORS:

P Stolpe

D C Richardson

REGISTERED OFFICE:

Unit 1b

Focus 4

Fourth Avenue

Letchworth Garden City

Hertfordshire

SG6 2TU

REGISTERED NUMBER:

02967759 (England and Wales)

AUDITORS:

George Hay Partnership LLP

Chartered Accountants

and Statutory Auditor

Unit 1B

Focus 4

Fourth Avenue

Letchworth

Hertfordshire

SG6 2TU

The directors present their strategic report for the year ended 31 December 2019.

REVIEW OF BUSINESS

The results for the year and financial position of the Company are as shown in the annexed financial statements.

Turnover has continued to increase year on year, increasing by 34.78% on 2018. This is mainly due to a market

share increase of our main client in the segment of automotive clusters which has led to a higher order intake

coming out of several plants from this customer. In parallel, overall automotive market has brought more

business to Alphr in many segments, from decorative components to clusters, radios and infotainment systems.

We expect turnover to be similar in the future and we expect to see the positive affect of this on our turnover and

margin in future periods.

Our gross margin in percentage terms has shown a decrease from 32.61% to 24.27% primarily driven by material

costs driven through mix and one off impacts within specific projects that could not be passed onto customers.

These costs are now addressed and forward looking gross margins are expected to strengthen with the benefits

of the increased turnover being expected to be realised. The business monitors currency exchange on an

ongoing basis in order to minimise the potential impacts to business performance.

The business continues to operate primarily within the Automotive sector which has seen an overall reduction in

volume in 2019, due to the high quality of equipment, strong service offering and technical expertise of the

company, the overall market decline has not been seen by the company and we remain in a strong forward

looking position.

Return on capital employed (calculated as operating profit divided by the sum of capital and reserves) decreased

to 31.0% (40.8%: 2018) and is reflective of the overall increased operating costs noted above. The company

however does still remain in a positive position.

In all cases the KPIs above have been calculated on a consistent basis and are based directly on the amounts

shown in the financial statements.

At the end of the year the Company's position in the marketplace remained strong.

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks and uncertainties facing the company are:

" the effects of long term currency exchange rate fluctuations

" a potential downturn of 2-5% in the automotive industry might have an impact in our business. Price

competition aligned to suppliers cost increase is also a risk to our gross profit margins. As is the continuing

uncertainty and low growth projections surrounding the UK economy

" the need to develop the business in different industries other than automotive is an uncertainty

" uncertainty surrounding Brexit and potential effects on trading with EU clients, with EU suppliers and hiring

resources from EU countries.

The pandemic outbreak of COVID-19 in 2020 has had a significant impact on both people and Industry. The

directors are carefully monitoring the situation and following the directives issued by government. The overall

impact of COVID-19 is currently very difficult to predict. It is important to point out, however, Alphr Technology is

part of a wider group of 200 companies which offers good risk diversification. Given the high level of uncertainty

however, it is not possible to, at present, estimate the overall potential impact on Alphr Technology.

FUTURE DEVELOPMENTS

We are currently working on developing customer relationships with the hope of securing ongoing commissions

for new machinery. We continue to strive for good customer service and encourage development in our staff to

provide excellence in the design and engineering of our machinery.

We continue to look to the future, and securing contracts that preserve the prospects of Alphr Technology Ltd

and its key partners.

We expect the same level of turnover and profitability in 2020.

ON BEHALF OF THE BOARD:

D C Richardson - Director

4 May 2020

The directors present their report with the financial statements of the company for the year ended 31 December 2019.

DIVIDENDS

The total distribution of dividends for the year ended 31 December 2019 will be £ 1,000,000 .

Further dividends of £1,800,000 were proposed after the balance sheet date but prior to the accounts being

authorised for issue.

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS

P Stolpe has held office during the whole of the period from 1 January 2019 to the date of this report.

Other changes in directors holding office are as follows:

M O'Brien - resigned 13 March 2019

D C Richardson - appointed 13 March 2019

R M Albea ceased to be a director after 31 December 2019 but prior to the date of this report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial

statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the

directors have elected to prepare the financial statements in accordance with United Kingdom Generally

Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 these

financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

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 also

responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention

and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the

Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps

that he ought to have taken as a director in order to make himself aware of any relevant audit information and to

establish that the company's auditors are aware of that information.

AUDITORS

The auditors, George Hay Partnership LLP, will be proposed for re-appointment at the forthcoming Annual

General Meeting.

ON BEHALF OF THE BOARD:

D C Richardson - Director

4 May 2020

Opinion

We have audited the financial statements of Alphr Technology Limited (the 'company') for the year ended

31 December 2019 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of

Changes in Equity and 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 United Kingdom

Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable

in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2019 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

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 Auditors' 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 UK, including the FRC'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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to

report to you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the

Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of

the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material

inconsistencies or apparent material misstatements, we are required to determine whether there is a material

misstatement in the financial statements or a material misstatement of the other information. 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors 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 Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report

to you if, in our opinion:

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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 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.

Auditors' 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 a Report of the Auditors 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.

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 Report

of the Auditors.

Use of our report

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 a Report of the Auditors 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.

Martin Williams ACA (Senior Statutory Auditor)

for and on behalf of George Hay Partnership LLP

Chartered Accountants

and Statutory Auditor

Unit 1B

Focus 4

Fourth Avenue

Letchworth

Hertfordshire

SG6 2TU

4 May 2020

TURNOVER

3

13,119,260

9,733,272

Cost of sales

9,935,427

6,558,906

GROSS PROFIT

3,183,833

3,174,366

Administrative expenses

1,603,220

1,252,356

1,580,613

1,922,010

Other operating income

38,490

27,764

OPERATING PROFIT

5

1,619,103

1,949,774

Interest receivable and similar income

543

1,409

1,619,646

1,951,183

Interest payable and similar expenses

6

618

1,265

PROFIT BEFORE TAXATION

1,619,028

1,949,918

Tax on profit

7

307,208

370,484

PROFIT FOR THE FINANCIAL YEAR

1,311,820

1,579,434

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,311,820

1,579,434

FIXED ASSETS

Tangible assets

9

1,027,500

1,044,954

Investments

10

111,258

111,258

1,138,758

1,156,212

CURRENT ASSETS

Stocks

11

252,702

236,158

Debtors

12

5,944,442

4,046,377

Cash at bank and in hand

574,603

1,500,150

6,771,747

5,782,685

CREDITORS

Amounts falling due within one year

13

2,828,790

2,160,173

NET CURRENT ASSETS

3,942,957

3,622,512

TOTAL ASSETS LESS CURRENT LIABILITIES

5,081,715

4,778,724

CREDITORS

Amounts falling due after more than one year

14

-

(5,996

)

PROVISIONS FOR LIABILITIES

16

(2,287

)

(5,120

)

NET ASSETS

5,079,428

4,767,608

CAPITAL AND RESERVES

Called up share capital

17

100

100

Retained earnings

18

5,079,328

4,767,508

SHAREHOLDERS' FUNDS

5,079,428

4,767,608

The financial statements were approved by the Board of Directors and authorised for issue on 4 May 2020 and were signed on its behalf by:

D C Richardson - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2018

100

4,188,074

4,188,174

Changes in equity

Dividends

-

(1,000,000

)

(1,000,000

)

Total comprehensive income

-

1,579,434

1,579,434

Balance at 31 December 2018

100

4,767,508

4,767,608

Changes in equity

Dividends

-

(1,000,000

)

(1,000,000

)

Total comprehensive income

-

1,311,820

1,311,820

Balance at 31 December 2019

100

5,079,328

5,079,428

1.	STATUTORY INFORMATION

Alphr Technology Limited is a private company, limited by shares, registered in England and Wales. The

company's registered number and registered address can be found on the Company Information page.

The company's place of business is Amor Way, Letchworth Garden City, SG6 1UG and its principal

activity is the design and manufacture of bespoke production equipment.

The accounts have been presented in GBP which is the functional currency of the company.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions in preparing these financial

statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and

Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirement of Section 3 Financial Statement Presentation paragraph 3.17(d);

•

the requirements of Section 11 Financial Instruments paragraphs 11.41(b), 11.41(c), 11.41(e), 11.41(f), 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);

•

the requirement of Section 33 Related Party Disclosures paragraph 33.7.

Preparation of consolidated financial statements

The financial statements contain information about Alphr Technology Limited as an individual company

and do not contain consolidated financial information as the parent of a group. The company is exempt

under Section 400 of the Companies Act 2006 from the requirements to prepare consolidated financial

statements as it and its subsidiary undertaking are included by full consolidation in the consolidated

financial statement of its ultimate parent, Indutrade AB, incorporated in Sweden.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102

'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related

party transactions with wholly owned subsidiaries within the group.

Significant judgements and estimates

Valuation of Work in Progress

Work in progress is calculated based on the level of completion of contracts at the period end. The

completion level is determined by the directors based on available information about each works order,

whilst these are calculated as accurately as possible this does involve a certain level of estimation.

Turnover

Turnover is measured at the fair value of the consideration received or receivable net of VAT and trade

discounts.

The policy adopted for the recognition of turnover in relation to contracts is that when the outcome of a

contract can be estimated reliably, contract costs and turnover are recognised by reference to the stage of

completion at the balance sheet date.

Where the outcome cannot be measured reliably, contract costs are recognised as an expense in the

period in which they are incurred and contract turnover is recognised to the extent of costs incurred that it

is probable will be recoverable.

When it is probable that contract costs will exceed the total contract turnover, the expected loss is

recognised as an expense immediately, with a corresponding provision.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Plant and machinery

-

33% on reducing balance, 25% on reducing balance and 10% on reducing balance

Tangible fixed assets are stated at cost (or deemed cost) or valuation less accumulated depreciation and

accumulated impairment losses. Cost includes costs directly attributable to making the asset capable of

operating as intended.

Long leasehold buildings are stated at cost, no depreciation is being charged on the basis that this figure

would be immaterial.

Investments in subsidiaries

Investment in subsidiary undertakings are recognised at cost less impairment.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete

and slow moving items.

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as

reported in the statement of comprehensive income because of items of income or expense that are

taxable or deductible in other years and 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 end of

the reporting period.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the

balance sheet date.

Deferred tax assets are recognised to the extent that it is probable that they will be recovered against

future taxable profits.

Deferred tax is calculated 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 differences.

Current or deferred tax for the year is recognised in profit or loss, except when they relate to items that are

recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax

is also recognised in other comprehensive income or directly in equity respectively.

Foreign currencies

The financial statements are presented in Sterling (GBP), which is also the functional currency of the

company.

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the

Balance sheet date Transactions in foreign currencies are translated into sterling at the rate of exchange

ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating

result.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of

the lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's

pension scheme are charged to profit or loss in the period to which they relate.

Financial instruments

Debtors

Short term debtors are measured at transaction price (which is usually the invoice price), less any

impairment losses for bad and doubtful debts.

Creditors

Short term trade creditors are measured at the transaction price. Other financial liabilities, including bank

loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at

amortised cost using the effective interest method unless the effect of discounting would be immaterial, in

which case these are stated at cost.

3.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

2019

2018

£

£

United Kingdom

2,365,403

2,518,045

Europe

6,319,547

4,925,027

Rest of the World

4,434,310

2,290,200

13,119,260

9,733,272

4.	EMPLOYEES AND DIRECTORS

2019

2018

£

£

Wages and salaries

2,919,125

2,634,751

Social security costs

341,840

257,253

Other pension costs

159,960

48,414

3,420,925

2,940,418

The average number of employees during the year was as follows:

2019

2018

Management and Administration

9

7

Sales and Production

60

54

69

61

2019

2018

£

£

Directors' remuneration

140,304

146,578

Directors' pension contributions to money purchase schemes

8,990

2,305

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

1

1

5.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2019

2018

£

£

Hire of plant and machinery

9,744

3,881

Depreciation - owned assets

25,225

31,480

Auditors remuneration

6,900

6,900

Auditors' remuneration for non audit work

1,575

1,575

Foreign exchange differences

(38,490

)

(24,764

)

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

2019

2018

£

£

Hire purchase

618

1,265

7.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2019

2018

£

£

Current tax:

UK corporation tax

310,041

373,660

Deferred tax

(2,833

)

(3,176

)

Tax on profit

307,208

370,484

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference

is explained below:

2019

2018

£

£

Profit before tax

1,619,028

1,949,918

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2018 - 19%)

307,615

370,484

Effects of:

Expenses not deductible for tax purposes

334

-

Income not taxable for tax purposes

-

26

Depreciation in excess of capital allowances

2,092

3,150

enhanced deduction

Deferred Tax on accelerated capital allowances

(2,833

)

(3,176

)

Total tax charge

307,208

370,484

.

During the year the main rate of corporation tax was 19%. The Chancellor of the Exchequer announced

that there would be tax rate changes which will have an effect on the company's future tax position.

Deferred tax relates to timing differences resulting from accelerated capital allowances, this has been

calculated at the rates at which it is expected to unwind.

8.

DIVIDENDS

2019

2018

£

£

Interim

1,000,000

1,000,000

9.	TANGIBLE FIXED ASSETS

Improvements

Long

to

Plant and

leasehold

property

machinery

Totals

£

£

£

£

COST

At 1 January 2019

950,000

-

451,583

1,401,583

Additions

-

6,500

1,271

7,771

At 31 December 2019

950,000

6,500

452,854

1,409,354

DEPRECIATION

At 1 January 2019

-

-

356,629

356,629

Charge for year

-

-

25,225

25,225

At 31 December 2019

-

-

381,854

381,854

NET BOOK VALUE

At 31 December 2019

950,000

6,500

71,000

1,027,500

At 31 December 2018

950,000

-

94,954

1,044,954

10.	FIXED ASSET INVESTMENTS

Shares in

group

undertakings

£

COST

At 1 January 2019

and 31 December 2019

111,258

NET BOOK VALUE

At 31 December 2019

111,258

At 31 December 2018

111,258