Company registration number 02664365 (England and Wales)
ZETTASCALE TECHNOLOGY LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
PAGES FOR FILING WITH REGISTRAR
ZETTASCALE TECHNOLOGY LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 8
ZETTASCALE TECHNOLOGY LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 1 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
4
25,276
134,048
Investments
5
3,374,762
1,482,747
3,400,038
1,616,795
Current assets
Debtors
7
1,115,016
1,807,575
Cash at bank and in hand
10,652,068
238,097
11,767,084
2,045,672
Creditors: amounts falling due within one year
8
(3,072,528)
(11,399,366)
Net current assets/(liabilities)
8,694,556
(9,353,694)
Net assets/(liabilities)
12,094,594
(7,736,899)
Capital and reserves
Called up share capital
9
8,316,283
5,779,817
Share premium account
10
29,061,411
11,726,551
Profit and loss reserves
(25,283,100)
(25,243,267)
Total equity
12,094,594
(7,736,899)
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 13 November 2023 and are signed on its behalf by:
A Corsaro
Director
Company Registration No. 02664365
ZETTASCALE TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
1
Accounting policies
Company information
Zettascale Technology Limited is a private company limited by shares incorporated in England and Wales. The registered office is 1st Floor The Honeycomb, The Watermark, Gateshead, Tyne & Wear, England, NE11 9SZ.
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.
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 £.
The financial statements have been prepared on the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
The financial statements of the company are consolidated in the financial statements of ADLINK Technology Inc which are available from its website: www.adlinktech.com.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
Zettascale Technology Limited is ultimately a subsidiary of ADLINK Technology Inc. and the results of Zettascale Technology Limited are included in that company's consolidated financial statements which are available from its registered office.
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.
ZETTASCALE TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 3 -
1.3
Turnover
Turnover represents the amounts invoiced and invoiceable to third parties after deduction of credit notes, trade discounts, sales tax and value added tax. The company derives revenue from software licences, support agreements and other related products and services. Support agreements include telephone support and software maintenance.
The company recognises the revenue allocated to software licences and specified upgrades upon shipment of the software product, when there are no significant vendor obligations remaining, when the fee is fixed and determinable and when collectability is considered probable.
Revenue allocated to support agreements is recognised on a straight-line basis over the term of the agreement. Revenue not recognised in the profit and loss account under this policy is classified as deferred income in the balance sheet.
Revenue allocated to other related products and services is recognised as the products are shipped or services are provided.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and machinery
25% straight line
Fixtures, fittings & equipment
10 - 14% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Fixed asset investments
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
ZETTASCALE TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 4 -
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
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, bank loans and 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.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
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.
ZETTASCALE TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 5 -
1.11
Retirement benefits
The company operates a group personal pension scheme and an executive personal pension scheme which are defined contribution arrangements. The assets of the schemes are invested and managed independently of the finances of the company and contributions for the year are charged to profit or loss.
1.12
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where a more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.13
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
1.14
Auditors' limitation on liability
The company has entered into a liability limitation agreement with Royce Peeling Green Limited, the statutory auditor for the period ended 31 December 2022. The proportionate liability agreement follows the standard terms in Appendix B to the FRC's June 2008 Guidance on Auditor Liability Agreements, and has been approved by the shareholders.
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 periods.
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
16
37
ZETTASCALE TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 6 -
4
Tangible fixed assets
Plant and machinery
Fixtures, fittings & equipment
Total
£
£
£
Cost
At 1 January 2022
284,780
155,303
440,083
Additions
1,162
1,162
Disposals
(32,561)
(150,169)
(182,730)
At 31 December 2022
253,381
5,134
258,515
Depreciation and impairment
At 1 January 2022
231,758
74,277
306,035
Depreciation charged in the year
28,741
4,936
33,677
Eliminated in respect of disposals
(32,059)
(74,414)
(106,473)
At 31 December 2022
228,440
4,799
233,239
Carrying amount
At 31 December 2022
24,941
335
25,276
At 31 December 2021
53,022
81,026
134,048
5
Fixed asset investments
2022
2021
Notes
£
£
Investments in subsidiaries
6
3,374,762
1,482,747
Fixed asset investments not carried at market value
Investments in subsidiaries are accounted for at cost less impairment.
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 January 2022
1,482,747
Capital contribution- Zettascale Technology Sarl
1,892,015
At 31 December 2022
3,374,762
Carrying amount
At 31 December 2022
3,374,762
At 31 December 2021
1,482,747
ZETTASCALE TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 7 -
6
Subsidiaries
Details of the company's subsidiaries at 31 December 2022 are as follows:
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Zettascale Technology BV
Netherlands
Software
Ordinary
100.00
Zettascale Technology Sarl
France
Software
Ordinary
100.00
7
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
239,645
273,663
Corporation tax recoverable
152,635
169,436
Amounts owed by group undertakings
573,997
1,128,511
Other debtors
48,870
119,043
Prepayments and accrued income
99,869
116,922
1,115,016
1,807,575
8
Creditors: amounts falling due within one year
2022
2021
Notes
£
£
Bank loans
9,050,000
Trade creditors
103,657
28,152
Amounts owed to group undertakings
104,907
46,749
Taxation and social security
38,733
53,654
Other creditors
65,270
63,968
Accruals and deferred income
2,759,961
2,156,843
3,072,528
11,399,366
9
Share capital
2022
2021
£
£
Issued and fully paid
831,628,329 ordinary shares of £0.01 each
8,316,283
310,000
115,400 B preference shares of 1p each
-
1,154
5,468,663 deferred shares of £1 each
-
5,468,663
8,316,283
5,779,817
10
Share premium account
This reserve represents the premium arising on the issue of equity shares.
ZETTASCALE TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 8 -
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:
Martin Chatten
Statutory Auditor:
Royce Peeling Green Limited
12
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2022
2021
£
£
Within one year
54,958
29,028
Between two and five years
207,286
262,244
29,028
13
Ultimate controlling party
The parent company is Zettascale Technology Cayman Limited, a company incorporated and registered in the Cayman Islands, whose registered office is PO Box 32052, Portcullis (Cayman) Limited, The Grand Pavilion, Commercial Centre, Oleander Way, 802 West Bay Road, Grand Cayman KYI- 1208, Cayman Islands.
The ultimate parent company is ADLINK Technology Inc., a company incorporated and registered in Taiwan, whose registered office is 9F, No 166 Jian Yi Road, 235 Chungho City, Taipei, Taiwan. ADLINK Technology Inc. prepares consolidated financial statements and copies of these are available to the public on the company’s website as follows: http:// www.adlinktech.com/investor_relations/financial.
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