Picocom Technology Limited - Period Ending 2022-12-31

Picocom Technology Limited

Contents

Company Information	1
Balance Sheet	2 to 3
Notes to the Financial Statements	4 to 11

Picocom Technology Limited

Company Information

Directors

A P J Claydon W P Robbins Y Jiang

Registered office

c/o VWV LLP Narrow Quay House Narrow Quay Bristol BS1 4QA

Registered number

11497275

Auditors

Corrigan Accountants Limited 1st Floor 25 King Street Bristol BS1 4PB

Picocom Technology Limited

(Registration number: 11497275)
Balance Sheet as at 31 December 2022

	Note	2022 £	2021 £
Fixed assets
Intangible assets	5	363,056	912,891
Tangible assets	6	551,760	493,676
		914,816	1,406,567
Current assets
Stocks		541,224	-
Debtors	7	2,092,674	750,154
Cash at bank and in hand		2,441,861	633,159
		5,075,759	1,383,313
Creditors: Amounts falling due within one year	8	(650,223)	(1,334,673)
Net current assets		4,425,536	48,640
Net assets		5,340,352	1,455,207
Capital and reserves
Called up share capital	9	19,614,394	14,614,394
Share application reserve	12	3,500,000	-
Profit and loss account		(17,774,042)	(13,159,187)
Total equity		5,340,352	1,455,207

These financial statements have been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.

These financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime and the option not to file the Profit and Loss Account has been taken.

Picocom Technology Limited

(Registration number: 11497275)
Balance Sheet as at 31 December 2022

Approved and authorised for issue by the Board on 4 July 2023 and signed on its behalf by:
 

.........................................

A P J Claydon
Director

.........................................

Y Jiang
Director

Picocom Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2022

1	Statutory information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
c/o VWV LLP
Narrow Quay House
Narrow Quay
Bristol
BS1 4QA

2	Accounting policies

Summary of significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented.

Statement of compliance

These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section 1A - 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006.

Basis of preparation

These financial statements have been prepared using the historical cost convention.

The financial statements are prepared in pounds sterling which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

Going concern

The company's financial statements have been prepared on a going concern basis on the grounds that current and future sources of funding or support will be more than adequate for the company's needs. The directors have considered a period of twelve months from the date of approval of the financial statements. The company is currently loss making while it invests in product development and so the company is reliant on the ongoing support of the parent company to be able to meet third party liabilities as they fall due. Therefore in considering the company’s funding position the directors have considered the outlook for the wider group.

The forecasts of the group show that the group will maintain adequate funding by raising investment from external investors and by growing sales. There is inherent uncertainty in either of these outcomes and therefore, until such time that there is a binding commitment for further funding, a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern.

Picocom Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2022

The directors believe that the group will be successful with obtaining further funds from investors and from a growth in sales. Therefore, having made enquiries of the parent company and having obtained a verbal commitment of support from the parent company for a period no less than 12 months from the date of approval of the financial statements, the directors believe the parent company support will continue to be forthcoming for the foreseeable future and so the financial statements have been prepared on a going concern basis.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of witholding tax, value added tax, returns, rebates and discounts.

The company recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the company's activities.

Revenue from the sale of goods such as semi-conductive devices is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, which is usually on dispatch.

Revenue from the sale of licences is recognised in full when there are no significant remaining obligations to perform after delivery, usually upon licence key activation date.

Revenue earned from the supply of support services is recognised straight line on a monthly basis over the period specified in the underlying agreement, where these services are provided by an indeterminate number of acts.

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into sterling at the rates prevailing on the reporting period date. Exchange gains and losses are taken to profit and loss and classified within Administrative expenses.

Tax

The tax expense for the period comprises current tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

Tangible fixed assets

Tangible fixed assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible fixed assets includes directly attributable incremental costs incurred in their acquisition and installation.

Picocom Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2022

Depreciation is charged so as to write off the cost of assets as follows:

Furniture, fittings and equipment	Straight line over 4 years
Other tangible assets	Straight line over 3 years

Intangible fixed assets

Intangible assets have a finite useful life and are carried at cost less accumulated amortisation and any accumulated impairment losses.

Amortisation is provided on intangible assets so as to write off the cost, over the period of the licence or economic useful life as follows:

Licences	33% straight line
Computer software	33% straight line

Research and development costs

Research and development costs are written off to profit or loss in the year incurred.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits.

Trade debtors

Trade debtors are recognised initially at the transaction price. They are subsequently measured less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

The cost of finished goods comprises direct material costs. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

Trade creditors

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost and using the effective interest method if the balance is due in more than one year.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Picocom Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2022

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments.

Any subscription funds received in advance of a share issue are credited to the share application reserve until such time when the shares are issued, when the funds are transferred to share capital and, if applicable, the share premium reserve.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

Employee benefits

The costs of short-term employee benefits, including the cost of any unused holiday entitlement, are recognised in the period in which the employees' services are received.

3	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.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.

Picocom Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2022

Useful economical lives of intangible and tangible fixed assets and review of assets for impairment (see notes 5 and 6)
The annual amortisation and depreciation charges for intangible and tangible fixed assets respectively are sensitive to any changes in the estimated useful life and residual values of those assets. The useful economic lives and residual value is assessed on an annual basis and are amended only when evidence shows a change in the estimated economic lives or residual life. Factors used to assess an asset’s economic life and residual value might include advances in technology, condition of the asset, future investment (if further funds are needed to complete the development of an asset, for example), and / or changes in customer demand.

In addition to the above, note 2 explains that fixed assets are reviewed annually for impairment. An impairment review may include an assessment of the expected sales and profits related to the relevant assets. This forecast of future performance is therefore inherently uncertain.

4	Staff numbers

The average number of persons employed by the company (including directors) during the year, was 26 (2021 - 16).

5	Intangible fixed assets

	Software  £	Licences £	Total £
Cost
At 1 January 2022	509,076	2,627,043	3,136,119
Additions	20,668	173,962	194,630
At 31 December 2022	529,744	2,801,005	3,330,749
Amortisation
At 1 January 2022	427,758	1,795,470	2,223,228
Amortisation charge	91,653	652,812	744,465
At 31 December 2022	519,411	2,448,282	2,967,693
Carrying amount
At 31 December 2022	10,333	352,723	363,056
At 31 December 2021	81,318	831,573	912,891

Picocom Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2022

6	Tangible fixed assets

	Furniture, fittings and equipment  £	Other tangible assets £	Total £
Cost
At 1 January 2022	67,300	469,291	536,591
Additions	127,187	145,528	272,715
At 31 December 2022	194,487	614,819	809,306
Depreciation
At 1 January 2022	14,665	28,250	42,915
Charge for the year	30,884	183,747	214,631
At 31 December 2022	45,549	211,997	257,546
Carrying amount
At 31 December 2022	148,938	402,822	551,760
At 31 December 2021	52,635	441,041	493,676

7	Debtors: amounts falling due within one year

	2022 £	2021 £
Trade debtors	229,963	370,470
Amounts owed by group undertakings	-	10,000
Other debtors	90,221	143,575
Prepayments	756,387	226,109
Corporation tax	1,016,103	-
	2,092,674	750,154

Picocom Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2022

8

Creditors

	2022 £	2021 £
Trade creditors	203,154	861,283
Social security and other taxes	130,870	77,540
Accruals and deferred income	316,199	395,850
	650,223	1,334,673

9	Share capital

Allotted, called up and fully paid shares

	2022		2021
	No.	£	No.	£
Ordinary shares of £1 each	19,614,394	19,614,394	14,614,394	14,614,394

During the year 5,000,000 Ordinary shares were issued at par for a total aggregate consideration of £5,000,000.

10	Obligations under leases

Operating leases

The total of future minimum lease payments is as follows:

	2022 £	2021 £
	233,905	106,967

11	Parent undertaking and ultimate controlling party

The company's immediate parent company and ultimate controlling party is Picocom (Hangzhou) Co Limited, incorporated in China.

12	Post balance sheet events

After the year-end, the company issued 3,500,000 Ordinary shares for £1 per share. The consideration of £3.5m was received during the year ended 31 December 2022 therefore this cash is included within the balance sheet with the corresponding credit in the share application reserve.

Picocom Technology Limited

Notes to the Financial Statements for the Year Ended 31 December 2022

13	Audit report

The Independent Auditor's Report was unqualified and modified to include the following statement:

Material uncertainty related to going concern
We draw attention to note 2 in the financial statements, which discloses that the company is reliant on the willingness and ability of the parent company to continue to provide the financial support which this company requires. As stated in note 2, these events or conditions, along with other matters as set forth in note 2, indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

The name of the Senior Statutory Auditor who signed the audit report on 4 July 2023 was Stuart Crisp BSc FCA. The auditor was Corrigan Accountants Limited.