Registration number:
ARC Aerosystems Limited
for the Year Ended 31 March 2023
ARC Aerosystems Limited
Contents
Company Information |
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Director's Report |
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Accountants' Report |
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Profit and Loss Account |
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Balance Sheet |
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Statement of Changes in Equity |
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Notes to the Unaudited Financial Statements |
ARC Aerosystems Limited
Company Information
Director |
Dr SM Mohseni |
Registered office |
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Accountants |
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ARC Aerosystems Limited
Director's Report for the Year Ended 31 March 2023
The director presents his report and the financial statements for the year ended 31 March 2023.
Director of the company
The director who held office during the year was as follows:
Principal activity
The principal activity of the company is the design and engineering of electronic and hybrid powered air transportation.
During the 2022-2023 financial year ARC Aerosystems has been involved in various research and development projects focussed on designing ARC’s hybrid electric vertical take off and landing technologies. Different feasibility studies on market viability, demand analysis tools, technical viability and modernisation of existing designs as well as development of new solutions were covered. ARC has worked in areas of fully electric and hybrid electric propulsion systems and new configuration of new aircraft types. This includes building and testing various prototypes. ARC has completed concept design cycles of 4 vertical take off and landing aircraft types, and has progressed to TRL 5 with 3 of them.
The balance sheet contains capitalised development costs of £8,225,000. These relate to the intellectual property associated with the aircraft technology that has been internally developed by the company. The director is satisfied that the development costs meet the criteria for capitalisation laid down in FRS 102, as various stages of the development project have been completed resulting in fully functioning prototypes. However, the director does not consider that the intangible asset will be ready for its intended use until the entire project is completed, and therefore the development costs are not yet being amortised.
Small companies provision statement
This report has 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.
Approved and authorised by the
......................................... |
Chartered Accountants' Report to the Director on the Preparation of the Unaudited Statutory Accounts of
ARC Aerosystems Limited
for the Year Ended 31 March 2023
In order to assist you to fulfil your duties under the Companies Act 2006, we have prepared for your approval the accounts of ARC Aerosystems Limited for the year ended 31 March 2023 as set out on pages 4 to 15 from the company's accounting records and from information and explanations you have given us.
As a practising member firm of the Institute of Chartered Accountants in England and Wales (ICAEW), we are subject to its ethical and other professional requirements which are detailed at
http://www.icaew.com/regulation.
This report is made solely to the Board of Directors of ARC Aerosystems Limited, as a body, in accordance with the terms of our instructions. Our work has been undertaken solely to prepare for your approval the accounts of ARC Aerosystems Limited and state those matters that we have agreed to state to the Board of Directors of ARC Aerosystems Limited, as a body, in this report in accordance with ICAEW Technical Release 07/16 AAF. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than ARC Aerosystems Limited and its Board of Directors as a body for our work or for this report.
It is your duty to ensure that ARC Aerosystems Limited has kept adequate accounting records and to prepare statutory accounts that give a true and fair view of the assets, liabilities, financial position and loss of ARC Aerosystems Limited. You consider that ARC Aerosystems Limited is exempt from the statutory audit requirement for the year.
We have not been instructed to carry out an audit or a review of the accounts of ARC Aerosystems Limited. For this reason, we have not verified the accuracy or completeness of the accounting records or information and explanations you have given to us and we do not, therefore, express any opinion on the statutory accounts.
......................................
Chartered Accountants
Newport Pagnell
Buckinghamshire
MK16 8HJ
Date:.............................
ARC Aerosystems Limited
Profit and Loss Account for the Year Ended 31 March 2023
Note |
2023 |
2022 |
|
Turnover |
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- |
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Administrative expenses |
|
|
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Other operating income |
- |
|
|
Operating loss |
( |
( |
|
Other interest receivable and similar income |
|
|
|
Interest payable and similar expenses |
( |
( |
|
(595,558) |
(566,968) |
||
Loss before tax |
( |
( |
|
Taxation |
|
|
|
Loss for the financial year |
( |
( |
The above results were derived from continuing operations.
ARC Aerosystems Limited
(Registration number: 10651273)
Balance Sheet as at 31 March 2023
Note |
2023 |
2022 |
|
Fixed assets |
|||
Intangible assets |
|
|
|
Tangible assets |
|
|
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Investments |
|
- |
|
|
|
||
Current assets |
|||
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
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Net current (liabilities)/assets |
( |
|
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Total assets less current liabilities |
|
|
|
Creditors: Amounts falling due after more than one year |
( |
( |
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Provisions for liabilities |
( |
( |
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
365 |
365 |
|
Share premium reserve |
1,719,484 |
1,719,484 |
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Revaluation reserve |
7,128,235 |
4,745,158 |
|
Other reserves |
408,167 |
408,167 |
|
Retained earnings |
(7,849,591) |
(6,169,294) |
|
Shareholders' funds |
1,406,660 |
703,880 |
For the financial year ending 31 March 2023 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
Director's responsibilities:
• |
|
• |
The director acknowledges his responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts. |
ARC Aerosystems Limited
(Registration number: 10651273)
Balance Sheet as at 31 March 2023
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.
Approved and authorised by the
......................................... |
ARC Aerosystems Limited
Statement of Changes in Equity for the Year Ended 31 March 2023
Share capital |
Share premium |
Revaluation reserve |
Non-distributable reserve |
Retained earnings |
Total |
|
At 1 April 2022 |
|
|
|
|
( |
|
Loss for the year |
- |
- |
- |
- |
( |
( |
Other comprehensive income |
- |
- |
|
- |
- |
|
Total comprehensive income |
- |
- |
|
- |
( |
|
At 31 March 2023 |
|
|
|
|
( |
|
Share capital |
Share premium |
Revaluation reserve |
Non-distributable reserve |
Retained earnings |
Total |
|
At 1 April 2021 |
|
|
|
- |
( |
|
Loss for the year |
- |
- |
- |
- |
( |
( |
Other comprehensive income |
- |
- |
|
|
- |
|
Total comprehensive income |
- |
- |
|
|
( |
( |
Purchase of own share capital |
(2) |
- |
- |
- |
- |
(2) |
Other share premium reserve movements |
- |
( |
- |
- |
- |
( |
At 31 March 2022 |
|
|
|
|
( |
|
ARC Aerosystems Limited
Notes to the Unaudited Financial Statements for the Year Ended 31 March 2023
General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
Accounting policies |
Summary of significant accounting policies and key accounting estimates
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, unless otherwise stated.
Statement of compliance
These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section 1A smaller entities - 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland' and the Companies Act 2006 (as applicable to companies subject to the small companies' regime).
Basis of preparation
These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.
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 sales/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.
Tax
The tax expense for the period comprises current and deferred 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.
ARC Aerosystems Limited
Notes to the Unaudited Financial Statements for the Year Ended 31 March 2023
Deferred tax is provided in respect of temporary timing differences and is calculated on the basis of tax rates and laws that are expected to be in force when the timing difference is reversed (and that have been enacted by the reporting date).
Tangible assets
Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
Asset class |
Depreciation method and rate |
Plant and machinery |
25% straight line |
Motor vehicles |
25% straight line |
Business combinations
Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.
Intangible assets
Separately acquired trademarks and licences are shown at historical cost.
Trademarks, licences (including software) and customer-related intangible assets acquired in a business combination are recognised at fair value at the acquisition date.
Trademarks, licences and customer-related intangible assets have a finite useful life and are carried at cost less accumulated amortisation and any accumulated impairment losses.
ARC Aerosystems Limited
Notes to the Unaudited Financial Statements for the Year Ended 31 March 2023
Development costs
Expenditure on research is expensed as incurred.
Development costs are expensed as incurred unless all of the following can be demonstrated about the project:
- Completion of the intangible asset is technically feasible so that it will be available for future use or sale
- The entity has an intention to complete the development and use or sell the intangible asset
- The entity has the ability to use or sell the intangible asset
- The intangible asset will generate probable future economic benefits that will flow to the entity, either through sale or use
- The entity has adequate technical and financial resources to complete the development and to use or sell the intangible asset
- The entity is able to measure reliably the costs attributable to the development of the intangible asset
If all of these criterion are met then development costs are recognised as an intangible asset.
Amortisation
Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:
Asset class |
Amortisation method and rate |
Patents and trademarks |
20% straight line |
Development costs |
Not currently being amortised as project is still ongoing and asset is not ready for the use intended by management |
Investments
Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.
Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
ARC Aerosystems Limited
Notes to the Unaudited Financial Statements for the Year Ended 31 March 2023
Trade debtors
Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.
Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, 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.
Trade creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.
Borrowings
Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.
Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
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. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
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.
ARC Aerosystems Limited
Notes to the Unaudited Financial Statements for the Year Ended 31 March 2023
Staff numbers |
The average number of persons employed by the company during the year, including the director, was
Intangible assets |
Trademarks, patents and licenses |
Other intangible assets |
Total |
|
Cost or valuation |
|||
At 1 April 2022 |
|
|
|
Revaluations |
- |
|
|
Additions internally developed |
- |
|
|
Additions acquired separately |
|
- |
|
At 31 March 2023 |
|
|
|
Amortisation |
|||
At 1 April 2022 |
|
- |
|
Amortisation charge |
|
- |
|
At 31 March 2023 |
|
- |
|
Carrying amount |
|||
At 31 March 2023 |
|
|
|
At 31 March 2022 |
|
|
|
Intangible assets carried at revalued amounts
The fair value of the company's development costs was revalued on
During the year ended 31 March 2023 the company undertook considerable research and development activities relating to an electric powered aeroplane with vertical takeoff capability. The directors consider that this project was complete at 31 March 2023 to the point where the company had a commercially viable product. The revaluation reflects the director’s assessment of this project at the balance sheet date.
Had this class of asset been measured on a historical cost basis, their carrying amount would have been £
ARC Aerosystems Limited
Notes to the Unaudited Financial Statements for the Year Ended 31 March 2023
Tangible assets |
Land and buildings |
Furniture, fittings and equipment |
Motor vehicles |
Total |
|
Cost or valuation |
||||
At 1 April 2022 |
|
|
|
|
Additions |
|
|
|
|
At 31 March 2023 |
|
|
|
|
Depreciation |
||||
At 1 April 2022 |
- |
|
|
|
Charge for the year |
- |
|
|
|
At 31 March 2023 |
- |
|
|
|
Carrying amount |
||||
At 31 March 2023 |
|
|
|
|
At 31 March 2022 |
|
|
|
|
Included within the net book value of land and buildings above is £307,326 (2022 - £72,720) in respect of freehold land and buildings.
Investments |
2023 |
2022 |
|
Investments in subsidiaries |
|
- |
Subsidiaries |
£ |
Cost or valuation |
|
At 1 April 2022 |
- |
Additions |
|
At 31 March 2023 |
|
Carrying amount |
|
At 31 March 2023 |
|
At 31 March 2022 |
- |
ARC Aerosystems Limited
Notes to the Unaudited Financial Statements for the Year Ended 31 March 2023
Debtors |
2023 |
2022 |
|
Trade debtors |
|
- |
Prepayments |
32,972 |
- |
Corporation tax control |
175,041 |
315,407 |
VAT |
74,519 |
3,519 |
Other debtors |
533,781 |
13,410 |
Total current trade and other debtors |
|
|
Creditors |
Creditors: amounts falling due within one year
Note |
2023 |
2022 |
|
Due within one year |
|||
Trade creditors |
|
- |
|
Wages and salaries |
3,939 |
10,385 |
|
Other creditors |
6,643 |
7,670 |
|
Accruals |
2,549,253 |
1,256,784 |
|
PAYE and NIC |
53,900 |
12,676 |
|
Director's current account |
16,000 |
19,000 |
|
|
|
||
Due after one year |
|||
Loans and borrowings |
|
|
Creditors: amounts falling due after more than one year
Note |
2023 |
2022 |
|
Due after one year |
|||
Loans and borrowings |
|
|
ARC Aerosystems Limited
Notes to the Unaudited Financial Statements for the Year Ended 31 March 2023
Loans and borrowings |
2023 |
2022 |
|
Non-current loans and borrowings |
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Other borrowings |
|
|
Related party transactions |
Expenditure with and payables to related parties
2023 |
Subsidiary |
Associates |
Rendering of services |
|
|
Amounts payable to related party |
- |
|
|
2022 |
Associates |
Rendering of services |
|
Amounts payable to related party |
|
|