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Registered number: 04574231
AFFINI TECHNOLOGY LIMITED
UNAUDITED
FINANCIAL STATEMENTS
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE PERIOD ENDED 31 DECEMBER 2022
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AFFINI TECHNOLOGY LIMITED
REGISTERED NUMBER: 04574231
BALANCE SHEET
AS AT 31 DECEMBER 2022
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Debtors: amounts falling due after more than one year
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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AFFINI TECHNOLOGY LIMITED
REGISTERED NUMBER: 04574231
BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2022
The directors consider that the Company is entitled to exemption from audit under section 477 of the Companies Act 2006.
The members have not required the Company to obtain an audit for the period in question in accordance with section 476 of the Companies Act 2006.
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.
The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the statement of income and retained earnings in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 3 to 14 form part of these financial statements.
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AFFINI TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
Affini Technology Limited is a private limited company, limited by shares, incorporated in England, United Kingdom. The address of the registered office is given in the company information of these financial statements. The Company's registration number is 04574231
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The functional currency of the Company is considered to be pounds Sterling because that is the currency of the primary economic environment in which the Company operates. All amounts have been rounded to the nearest thousand.
The following principal accounting policies have been applied:
The company extended its financial year to 31 December 2022; the financial statements reflect trading activities for the 14 months from 1 November 2021 to 31 December 2022. Therefore, the comparative figures are not entirely comparable.
At the time of approving the financial statements, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the forseeable future. Thus, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Revenue, which excludes value added tax, comprises revenue earned from project installation, commissioning and managed service activities. Revenue is recognised in the Statement of Income and retained earnings at the point that a service is provided or products supplied. Revenue for maintenance contracts is recognised on a straight-line basis over the period for which maintenance is contractually agreed by the Company with the customer.
Long-term contracts
Revenue arising from long-term contracts is recognised in the Statement of Income and retained earnings over the term of the related long-term contract so as to match the revenue and profits arising with related costs incurred to date. The amount of long-term contracts, at costs incurred, net of amounts transferred to cost of sales, after deducting foreseeable losses and payments on account not matched with revenue, is included in debtors as amounts recoverable on contracts.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to the Statement of Income and retained earnings on a straight-line basis over the lease term.
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AFFINI TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
Research expenditure is written off as incurred. Development expenditure is also written off, with the exception of development expenditure incurred on major product projects where the Directors are satisfied with the technical, commercial and financial viability of individual projects.
In such cases, the identifiable expenditure is deferred and amortised over a period of five years from the point that commercial production commences. Provision is made for any impairment.
Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to the Statement of Income and retained earnings at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of Income and retained earnings in the same period as the related expenditure.
Finance costs are charged to Statement of Income and retained earnings 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.
Defined contribution pension plan
The Company operates a number of 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 Income and retained earnings when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.
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AFFINI TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
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Current and deferred taxation
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The tax expense for the period comprises current and deferred tax. Tax is recognised in the Statement of Income and retained earnings 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.
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 tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Goodwill
Goodwill arising on the acquisition of subsidiary undertakings and businesses is the excess of the fair value of the consideration given over the fair value of the identifiable assets and liabilities acquired. Goodwill is capitalised and amortised on a straight line basis over 20 years, this reflects the anticipated period over which benefits will flow to the Company from the underlying assets acquired, to which the goodwill relates. Any impairment is written off immediately to the Statement of Income and retained earnings.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
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AFFINI TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
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Tangible fixed assets (continued)
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Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in Statement of Income and retained earnings.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and materials.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the Statement of Income and retained earnings.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short-term 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.
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AFFINI TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of income and retained earnings.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.
Financial assets and liabilities are offset and the net amount reported in the Balance sheet when there is an 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.
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AFFINI TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
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Judgements in applying accounting policies and key sources of estimation uncertainty
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In the application of the Company’s accounting policies, which are described in note 2, the directors are required to make judgements, estimates and assumptions about the carrying amounts 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Critical judgements in applying the Company's accounting policies
The following are the critical judgements, apart from those involving estimations (which are dealt with separately below), that the directors have made in the process of applying the Company’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements.
∙Asset depreciation rates
Judgement is involved in determining the expected life of any tangible fixed assets in order to determine an appropriate depreciation rate.
Key sources of estimation uncertainty
∙Revenue recognition
When the outcome on a contract can be estimated reliably and it is probable that the contract will be profitable, contract revenue and costs are recognised over the period of the contract by reference to the stage of completion based on actual costs incurred to the end of the accounting period compared to forecasted costs to determine the appropriate amount to be recognised in a given period. When it is probable that the total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.
In determining the stage of completion the Company has appropriate systems for cost estimating, forecasting and revenue and costs reporting. The system also requires consistent judgement (forecasting) of the final outcome of the contract. Estimates are an inherent part of this assessment and the actual future outcome may deviate from the estimated outcome. However, historical experience has shown that estimates are, on the whole, sufficiently reliable.
∙Carrying value and recoverability of deferred tax
Judgement is required over the amount of deferred tax asset that the Company should hold. The Directors estimate on a prudent basis, based on forecasts undertaken, the extent to which they believe the business will generate taxable profits in the coming years, and this estimation determines the carrying value of deferred tax in the balance sheet. Further details are shown in note 12.
∙Impairment of goodwill
Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. The carrying amount of goodwill at the balance sheet date was £135,000.
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AFFINI TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
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The average monthly number of employees, including directors, during the period was 31 (2021 - 33).
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AFFINI TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
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The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
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AFFINI TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
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Due after more than one year
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Deferred tax asset (see note 12)
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Prepayments and accrued income
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Amounts recoverable on long-term contracts
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Cash and cash equivalents
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AFFINI TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Obligations under finance lease and hire purchase contracts
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Accruals and deferred income
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Amounts owed to group undertakings are non-interest bearing (2021 - Nil), unsecured and repayable on demand.
The amounts due on asset financing are secured on the assets concerned.
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Creditors: Amounts falling due after more than one year
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Obligations under finance leases and hire purchase contracts
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The amounts due on asset financing are secured on the assets concerned.
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Hire purchase and finance leases
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Minimum lease payments under hire purchase fall due as follows:
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AFFINI TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
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The deferred tax asset is made up as follows:
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Decelerated capital allowances
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Other short-term timing differences
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There is no expiry date for the unused tax losses/credits and timing differences.
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The amount of deferred tax expected to reverse in the next financial year is based upon estimated profit of £100,000 (2021: £100,000)
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Authorised, allotted, called up and fully paid
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9,870 (2021 - 0) Ordinary shares of £0.10 each
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0 (2021 - 9,500) Ordinary A shares of £0.10 each
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0 (2021 - 370) Ordinary B shares of £0.10 each
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The A and B Ordinary shares had varying rights on distribution of income and capital as well as voting rights. In December 2021, the Company passed a written resolution to re-designate all shares to Ordinary shares, as such there are now 9,870 Ordinary shares of £0.10 each in the capital of the Company.
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AFFINI TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
Share premium account
The share premium reserve contains the premium arising on issue of equity shares, net of issue expenses.
Profit and loss account
The profit and loss reserve represents cumulative profits or losses, net of dividends paid and other adjustments.
The Company has entered into an unlimited cross-party bank guarantee between itself and related entities. The resultant guarantee amounts to £1,581,000 at the balance sheet date (2021 - £1,271,000) and is secured against the assets of the Company and its related entities.
The group operates defined contribution schemes. During the year, the Company made contributions to defined contribution schemes of £35,000 (2021 - £25,000). There were amounts payable at the balance sheet date of £10,000 (2021 - £6,000).
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Related party transactions
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During the financial year the Company traded with its group and with its related Companies. The Company has taken advantage of the exemption under Section 33 of FRS 102, not to disclose transactions entered into between two or more members of the group. Transactions that were entered into after the group re-organisation were completed under normal market conditions.
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The immediate and ultimate parent undertaking is Affini Technology Group Limited , a Company registered in England, United Kingdom. The Company's registered office is at Field House, Uttoxeter Old Road, Derby, DE1 1NH.
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