Company registration number 05757219 (England and Wales)
KINECTRICS UK LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
PAGES FOR FILING WITH REGISTRAR
KINECTRICS UK LIMITED
CONTENTS
Page
Balance sheet
1
Statement of changes in equity
2
Notes to the financial statements
3 - 9
KINECTRICS UK LIMITED
BALANCE SHEET
AS AT
31 MARCH 2023
31 March 2023
page 1
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
4
7,923
10,189
Tangible assets
5
472,404
384,776
480,327
394,965
Current assets
Debtors
6
1,092,314
873,696
Cash at bank and in hand
1,710,360
392,568
2,802,674
1,266,264
Creditors: amounts falling due within one year
7
(4,758,857)
(2,279,767)
Net current liabilities
(1,956,183)
(1,013,503)
Total assets less current liabilities
(1,475,856)
(618,538)
Creditors: amounts falling due after more than one year
8
(1,529)
Net liabilities
(1,475,856)
(620,067)
Capital and reserves
Called up share capital
110
110
Share premium account
10,751
10,751
Revaluation reserve
28,815
Capital redemption reserve
960,256
960,256
Profit and loss reserves
(2,446,973)
(1,619,999)
Total equity
(1,475,856)
(620,067)
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 4 October 2023 and are signed on its behalf by:
D R Harris
Director
Company registration number 05757219 (England and Wales)
KINECTRICS UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
page 2
Share capital
Share premium account
Revaluation reserve
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
£
£
Balance at 1 April 2021
110
10,751
28,815
960,256
(892,694)
107,238
Year ended 31 March 2022:
Loss and total comprehensive income
-
-
-
-
(727,305)
(727,305)
Balance at 31 March 2022
110
10,751
28,815
960,256
(1,619,999)
(620,067)
Year ended 31 March 2023:
Loss and total comprehensive income
-
-
-
-
(855,789)
(855,789)
Transfers
-
-
(28,815)
-
28,815
-
Balance at 31 March 2023
110
10,751
960,256
(2,446,973)
(1,475,856)
KINECTRICS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
page 3
1
Accounting policies
Company information
Kinectrics UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is 17 Frederick Sanger Road, Surrey Research Park, Guildford, Surrey, GU2 7YD.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
1.2
Going concern
Atruet 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 foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Kinectrics International Inc have signed a letter of support confirming that it will continue to support the company for 12 months following the date of approval of these financial statements.
1.3
Turnover
Turnover represents amounts receivable for research and development of new materials, measurement devices, consultancy and software developments for the power energy, materials and waste resource management industries and the offshore marine sector, net of VAT.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
1.4
Intangible fixed assets other than goodwill
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
Patents & licences
6.66% straight line
1.5
Tangible fixed assets
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.
KINECTRICS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
page 4
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.
Depreciation is provided on the following basis:
Leasehold improvements
50% straight line
Computer Equipment
25% straight line
Motor vehicles
20% reducing balance
Labatory Equipment
15% reducing balance
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted retrospectively 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 profit or loss.
1.6
Cash and cash equivalents
Cash consists of cash in hand and deposits. There are no cash equivalents.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally 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.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, loans from fellow group companies are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
KINECTRICS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
page 5
1.8
Taxation
Tax is recognised in profit or loss 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.
1.9
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.11
Leases
Leased assets: the company as lessee
Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element if the rental payment is charged to profit or loss so as to produce constant periodic rate of charge on the net obligation outstanding in each period.
Operating leases: the company as a lessee
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.
1.12
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
KINECTRICS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
page 6
1.13
Foreign exchange
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the dates of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
1.14
Finance costs are charged to profit or loss 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,
1.15
Research and development costs
Research and development expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
1.16
The ordinary share capital of the company is presented as equity.
2
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.
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
23
16
KINECTRICS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
page 7
4
Intangible fixed assets
Patents
£
Cost
At 1 April 2022 and 31 March 2023
34,029
Amortisation and impairment
At 1 April 2022
23,840
Amortisation charged for the year
2,266
At 31 March 2023
26,106
Carrying amount
At 31 March 2023
7,923
At 31 March 2022
10,189
5
Tangible fixed assets
Leasehold improvements
Laboratory equipment
Computer Equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 April 2022
18,780
768,352
114,779
901,911
Additions
116,537
26,653
55,001
198,191
At 31 March 2023
18,780
884,889
141,432
55,001
1,100,102
Depreciation and impairment
At 1 April 2022
9,648
432,529
74,958
517,135
Depreciation charged in the year
4,969
67,854
34,990
2,750
110,563
At 31 March 2023
14,617
500,383
109,948
2,750
627,698
Carrying amount
At 31 March 2023
4,163
384,506
31,484
52,251
472,404
At 31 March 2022
9,132
335,823
39,821
384,776
6
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
405,092
517,326
Corporation tax recoverable
57,000
56,993
Amounts owed by group undertakings
431,371
229,120
Prepayments and accrued income
198,851
70,257
1,092,314
873,696
KINECTRICS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
page 8
7
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
41,409
70,128
Amounts owed to group undertakings
4,380,981
1,688,683
Taxation and social security
74,676
94,327
Other creditors
261,791
426,629
4,758,857
2,279,767
8
Creditors: amounts falling due after more than one year
2023
2022
£
£
Net obligations under finance leases and hire purchase contracts
1,529
9
Reserves
The company's capital and reserves are as follows:
Called up share capital
Called up share capital represents the nominal value of the shares issues.
Share premium account
The share premium account includes the premium on issue of equity shares, net of any issue costs.
Revaluation reserve
This reserve records the value of asserts revaluations recognised in other comprehensive income.
Contribution reserve
On 19 November 2020, the company's sole shareholder, Kinectrics International Inc ("KII") has offered the company a contribution amount of £960,265, where KII has converted the loan the company owed to KII and it's parent, Kinectrics Inc ("KI"), amounting £181,935 and £778,330 respectively. Subsequently, KII and KI have released the company from the loan repayment obligation.
Profit and loss account
The profit and loss account represents cumulative profits or losses and other adjustments.
10
Pension commitments
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amount to £77,719 (2022 - £71,505).
KINECTRICS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
page 9
11
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
Senior Statutory Auditor:
Darren Harding ACA FCCA DChA
For and on behalf of Richard Place Dobson Services Limited Chartered Accountants
12
Controlling party
The smallest group in which the financial statements of the company are consolidated is Kinectrics Inc, a company registered in Canada. The registered address is 800 Kipling Avenue, Toronto, Ontario, ON M8Z 5G5, Canada. The ultimate controlling party is D R Harris.
13
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2023
2022
£
£
222,914
300,715
14
Events after the reporting date
On 24 April 2023 the company acquired the entire share capital of Engineering Analysis Services Limited, a company incorporated in the United Kingdom.
15
Related party transactions
The company has taken advantage of the exemption under Financial Reporting Standard 102 paragraph 33.1A not to disclose transactions with other group companies.