Company registration number 04959394 (England and Wales)
ANSALDO NUCLEAR LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
ANSALDO NUCLEAR LIMITED
COMPANY INFORMATION
Directors
Mr D J Brockman
Mr M Hawe
Ms F J Reilly
Mr A Basso
Dr R Adinolfi
Secretary
Mr D J Brockman
Company number
04959394
Registered office
PO Box 2944
Spring Road
Ettingshall
Wolverhampton
WV4 6JX
Auditor
Edwards
34 High Street
Aldridge
Walsall
West Midlands
WS9 8LZ
Solicitors
DLA Piper UK LLP
101 Barbirolli Square
Bridgewater
Manchester
M2 3DL
ANSALDO NUCLEAR LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 23
ANSALDO NUCLEAR LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Fair review of the business
Ansaldo Nuclear Limited ('the company') provides a diversified portfolio of projects involving engineering, manufacturing, commissioning and other services to the nuclear industry covering the decommissioning, defence, and new build markets. The company operates facilities at Wolverhampton and Risley (near Warrington).
Company turnover has increased by 24.8% to £36.2m (2022: £29.0m).
Gross margin has increased to 25.8% (2022: 14.4%).
The company's operating loss was £1.2m (2022: £3.9m).
The company secured significant growth in 2023 from new contracts in each of its key sectors of decommissioning, defence and new build. Our long term relationships continue to provide further growth potential, in particular the company is now well positioned to participate in two key nuclear programs in the UK: fusion and Small Modular Reactors. The company’s operating loss showed an improvement on the prior year but continued to be adversely influenced by onerous legacy customer contracts which are due to be closed out in 2024. The recovery actions taken by management during 2023, coupled with ongoing business improvement plans, are expected to return the company to a profitable position for 2024.
Recapitalisation of the company
During 2023 the company received additional investment from the Ansaldo Energia Group of £12,800,000. This reflects the anticipated role of the company in the long term growth plans of the group.
Ansaldo Energia Group and long term strategy
The company has the full support of the Ansaldo Energia Group for its long term growth plans with Nuclear forming one of the three key lines of development for the overall group as part of its 2024-2028 Industrial Plan, as underlined by the additional investment noted above. The company’s future growth strategy, while continuing to develop existing markets and relationships, is looking at a new greener nuclear industry for the future, positioning as critical partner for the UK nuclear fusion program, where we can propose unique skills and capabilities gained through 20 years of involvement at ITER. Our experience at ITER will provide opportunities with the fusion program at STEP. The strategy also involves the company being at the forefront of the Small Modular Reactor program implementing our innovation and technologies developed in many years of fruitful cooperation with several nuclear vendors.
Principal risks and uncertainties
Key risks and uncertainties facing the company relate principally to possible changes in the marketplace driven by general economic conditions and the global nuclear industry. These risks are managed by regular communication with all relevant market participants and appropriate scenario planning.
Key performance indicators
The company adopts a range of performance measures to monitor the development, performance or position of the business. Its key performance indicators include order intake, turnover, gross margin, EBITDA, net financial position in addition to other non-financial measures including in relation to safety, workforce, quality and project schedule.
Financial risk management objectives and policies
The company's principal financial instruments comprise cash and inter-company facilities. The main purpose of these financial instruments was to raise finance for the company's operations. The company has various other financial instruments such as trade debtors and trade creditors, which arise directly from its operations.
It is, and has been throughout the year under review, the company's policy that no trading in financial instruments shall be undertaken. The main risks arising from the company's financial instruments are liquidity risk, interest rate risk and credit risk. The board reviews and agrees policies for managing each of these risks and they are summarised below.
ANSALDO NUCLEAR LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Liquidity risk
The company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs. This is primarily achieved through the group loan facilities.
Interest rate risk
The company does use bank facilities but primarily finances its operations through intercompany loan facilities. The directors seek to manage the company's exposure to interest rate fluctuations by regular short and medium term cash forecasting to allow effective group treasury decisions to be made.
Credit risk
The company trades with only recognised, creditworthy third parties. It is the company's policy that all customers who wish to trade on credit terms are subject to credit vetting procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the company's exposure to bad debts is not significant.
This report was approved by the board on 8 March 2024 and signed on its behalf by:
Mr A Basso
Director
ANSALDO NUCLEAR LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Results and dividends
The results for the year are set out on page 8.
No interim dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr D J Brockman
Mr M Hawe
Ms F J Reilly
Mr A Basso
Mr N Baldwin
(Resigned 9 February 2023)
Dr R Adinolfi
Qualifying third party indemnity provisions
The company maintained throughout the year, and at the date of approval of the financial statements, liability insurance for its directors and officers. This is a qualifying provision for the purposes of the Companies Act 2006.
Employee involvement
The company maintains a policy of regular consultation and discussion with its employees on a wide range of issues that are likely to affect their interests and ensure that all employees are aware of the financial performance of the company as a whole. The company's policy is to consider, for recruitment, disabled workers for those vacancies that they are able to fill. All necessary assistance with training courses is given. Arrangements are made, wherever possible, for retaining employees who become disabled, to enable them to perform work identified as appropriate to their aptitudes and abilities.
Auditor
In accordance with the company's articles, a resolution proposing that Edwards be reappointed as auditor of the company will be put at a General Meeting.
Other matters covered in the Strategic report
Reference is also made to the following matters covered in the Strategic report in order to avoid duplication: principal activities, future developments, financial risk management objectives and policies, principal risks and uncertainties and key performance indicators.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
This report was approved by the board on
8 March 2024
08 March 2024
and signed on its behalf by:
Mr A Basso
Director
ANSALDO NUCLEAR LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
ANSALDO NUCLEAR LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF ANSALDO NUCLEAR LIMITED
- 5 -
Opinion
We have audited the financial statements of Ansaldo Nuclear Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
ANSALDO NUCLEAR LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF ANSALDO NUCLEAR LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.
We obtained an understanding of the legal and regulatory frameworks within which the Company operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the Companies Act 2006, Taxation legislation and Health & Safety regulations compliance.
We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be in the following areas: timing of recognition of income, the override of controls by management, inappropriate treatment of non-routine transactions and areas of estimation uncertainty, specifically long term contract accounting. Our audit procedures to respond to these risks included enquiries of management about their own identification and assessment of the risks of irregularities, review and discussion of non-routine transactions, sample testing on the posting of journals and income transactions and review of accounting estimates for biases.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
These inherent limitations are particularly significant in the case of misstatement resulting from fraud as this may involve sophisticated schemes designed to avoid detection, including deliberate failure to record transactions, collusion or the provision of intentional misrepresentations.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
ANSALDO NUCLEAR LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF ANSALDO NUCLEAR LIMITED
- 7 -
This report is made solely to the company's member in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's member those matters we are required to state to the member in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's member, for our audit work, for this report, or for the opinions we have formed.
Paul Tonks BSc (Econ) FCA
Senior Statutory Auditor
For and on behalf of Edwards
11 March 2024
Chartered Accountants
Statutory Auditor
34 High Street
Aldridge
Walsall
West Midlands
WS9 8LZ
ANSALDO NUCLEAR LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
36,169,301
28,996,797
Cost of sales
(26,854,334)
(24,836,737)
Gross profit
9,314,967
4,160,060
Administrative expenses
(10,467,215)
(8,096,354)
Operating loss
4
(1,152,248)
(3,936,294)
Interest payable and similar expenses
8
(1,410,614)
(388,159)
Loss before taxation
(2,562,862)
(4,324,453)
Tax on loss
9
Loss for the financial year
(2,562,862)
(4,324,453)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
There is no other comprehensive income / (expense) for the financial years other than those included above. Accordingly, no separate statement of comprehensive income is presented.
ANSALDO NUCLEAR LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
10
41,473
Other intangible assets
10
54,341
5,884
Total intangible assets
54,341
47,357
Tangible assets
11
1,756,495
1,724,083
1,810,836
1,771,440
Current assets
Stocks
12
-
5,307
Debtors
13
21,766,881
26,949,455
Cash at bank and in hand
1,078,163
4,080,622
22,845,044
31,035,384
Creditors: amounts falling due within one year
14
(11,304,539)
(29,692,622)
Net current assets
11,540,505
1,342,762
Total assets less current liabilities
13,351,341
3,114,202
Capital and reserves
Called up share capital
16
12,800,181
180
Profit and loss reserves
551,160
3,114,022
Total equity
13,351,341
3,114,202
The financial statements were approved by the board of directors and authorised for issue on 8 March 2024 and are signed on its behalf by:
Mr A Basso
Director
Company Registration No. 04959394
ANSALDO NUCLEAR LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
180
7,438,475
7,438,655
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
(4,324,453)
(4,324,453)
Transfer
-
-
Balance at 31 December 2022
180
3,114,022
3,114,202
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
(2,562,862)
(2,562,862)
Issue of share capital
16
12,800,001
-
12,800,001
Balance at 31 December 2023
12,800,181
551,160
13,351,341
ANSALDO NUCLEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information
Ansaldo Nuclear Limited ('the company') provides engineering manufacturing and other services to the nuclear industry covering the following markets: decommissioning, defence, and energy. The company operates in Wolverhampton and facilities at Wolverhampton, Risley (near Warrington) and Beckermet (in Cumbria).
Ansaldo Nuclear Limited is a private company limited by shares incorporated in England and Wales. The registered office is PO Box 2944, Spring Road, Ettingshall, Wolverhampton, WV4 6JX.
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 under 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:
Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Ansaldo Energia S.p.A. These consolidated financial statements are available from its registered office.
1.2
Going concern
The company is reliant on the truerevolving credit facility provided by Ansaldo Energia S.p.A, a fellow group undertaking. The directors have received a written commitment of support from Ansaldo Energia S.p.A that it will continue to provide financial support to the company to enable it to meet in full its financial obligations as and when they fall due to enable the company to carry on its operations for a period of at least 12 months from the date of approval of these financial statements.
ANSALDO NUCLEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.3
Turnover and contract profit recognition
Turnover comprises revenue recognised by the company in respect of goods and services supplied during the year, exclusive of Value Added Tax and trade discounts. Revenue is measured at the fair value of the consideration received or receivable.
Revenue generated by time and material contracts is recognised in line with the value of worked performed. Where turnover recognised exceeds the value of invoices raised, the excess is disclosed as amounts recoverable on contracts.
Revenue and profit arising on long term contracts is recognised from the commencement of the contract based on the cost of work completed and by reference to the forecast final turnover and profit outcome. Provision for the total loss, if any, on a contract is made as soon as the loss is identified. Where contracts include profit incentives within the terms, the directors do not recognise the benefit of these incentives until they have received reasonable certainty that it will be received in full and this has been confirmed by the customer.
The recognition of profit and loss on incomplete long term contracts open at the year-end is a key judgement area. The profit or loss recognised on each individual contract is based on project forecasts which are reviewed in detail by the directors and management to ensure that profits taken, and loss provisions recognised, are based on the reliable information available and reflect the likely outcome on a project by project basis.
If on a contract by contract basis sales invoiced to date exceeds the value of work performed, the excess is disclosed as a payment on account within creditors on the balance sheet. If the value of work performed exceeds sales invoiced to date, the excess is disclosed as amounts recoverable on contracts within debtors on the balance sheet. On all other contracts the turnover and profit is recognised wholly on delivery of the report or product. Until such contracts are completed all contract costs incurred are recorded within amounts recoverable on contracts in the balance sheet.
1.4
Research and development expenditure
Research and development expenditure is written off as incurred.
1.5
Intangible fixed assets - goodwill
Goodwill is the difference between amounts paid on the acquisition of a business and the fair value of the identifiable assets and liabilities. It is amortised to the profit and loss account over its estimated economic life which is 20 years. Management have assessed that the estimated life of the business acquired is 20 years for amortisation purposes. Provision is made for any impairment.
1.6
Intangible fixed assets other than goodwill
Computer software (both that acquired separately and internally generated) is stated at cost less accumulated amortisation and accumulated impairment losses. Software is amortised over its estimated useful life, or between three and five years, on a straight line basis.
Where factors such as technological advancement or changes in market price, indicate that residual value of useful life have changed, the residual value, useful life or amortisation rate are amended prospectively to reflect the new circumstances.
The assets are reviewed for impairment if the above factors indicate that the carrying value may be impaired.
ANSALDO NUCLEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.7
Tangible fixed assets
Tangible fixed assets are stated at cost less 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:
Leasehold land and buildings
over the term of the lease
Plant and machinery
between 5% and 33% on cost
Fixtures and fittings
between 10% and 33% on cost
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives. The useful economic lives are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets.
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.
1.8
Stocks
Stocks are valued at the lower of cost and net realisable value after making due allowance for obsolete and slow-moving Inventories.
1.9
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.
1.10
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, including trade and other receivables, cash and bank balances and amounts owed by group undertakings, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rates of interest.
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment is recognised in profit or loss.
Financial assets are derecognised when (a) the contractual rights to the cash flows from the assets expire or are settled, or (b) substantially all the risk and regards of the ownership of the asset are transferred to another party or (c) control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.
ANSALDO NUCLEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Basic financial liabilities
Basic financial liabilities, including trade and other payables and amounts owed to group undertakings 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.
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price.
Impairment of financial assets
At each balance sheet date non-financial assets not carried at fair value are assessed to determine whether there is an indication that the asset may be impaired. If there is such an indication the recoverable amount of the asset is compared to the carrying amount of the asset (or asset's cash generating unit).
The recoverable amount of the asset is the higher of the fair value less costs to sell and value in use. Value in use is defined as the present value of the future pre-tax and interest cash flows obtainable as a resu.lt of the asset's continued use. The pre-tax and interest cash flows are discounted using a pretax discount rate that represents the current market risk free rate and the risks inherent in the asset.
If the recoverable amount of the asset is estimated to be lower than the carrying amount, the carrying amount is reduced to its recoverable amount.
1.11
Equity instruments
Ordinary shares are classified as equity. Dividends and other distributions to the company's shareholders are recognised as a charge in the financial statements in the period in which the dividend and other distributions are approved by the shareholders. These amounts are recognised in the statement of changes in equity.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
ANSALDO NUCLEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.13
Employee benefits
The company provides a range of benefits to employees, including annual bonus arrangements, paid holiday arrangements.
Short term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the period in which the service is received.
The company operates an annual bonus plan for employees. An expense is recognised in the profit and loss account when the company has a legal or constructive obligation to make payments under the plan as a result of past events and a reliable estimate of the obligation can be made.
Equity-settled arrangements are measured at fair value (excluding the effect on nonmarket based vesting conditions) at the date of the grant. The fair value is expensed on a straight-line basis over the vesting period. The amount recognised as an expense is adjusted to reflect the actual number of shares or options that will vest.
The group has no cash-settled arrangements.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
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 another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.16
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.
ANSALDO NUCLEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Revenue and profit arising on long term contracts
Revenue and profit arising on long term contracts is recognised from the commencement of the contract based on the cost of work completed and by reference to the forecast final turnover and profit outcome. Provision for the total loss, if any, on a contract is made as soon as the loss is identified.
The recognition of profit and loss on incomplete long term contracts open at the year-end is a key judgement area. The profit or loss recognised on each individual contract is based on project forecasts which are reviewed in detail by the directors and management to ensure that profits taken, and loss provisions recognised, are based on the reliable information available and reflect the likely outcome on a project by project basis.
Impairment of tangible, intangible assets and intercompany balances
The company considers the judgements as to whether tangible, intangible and intercompany assets are impaired. Where an indication of impairment is identified the estimation of recoverable value requires estimation of the recoverable value of the cash generating unit (CGU). This requires estimation of the future cash flows from the CGU and also selection of appropriate discount rates in order to calculate the net present value of those cash flows.
Useful economic lives of tangible and intangible assets
The annual depreciation charge for tangible assets and amortisation charge for intangible assets are sensitive to changes in the estimated useful economic lives of the assets. The estimates of useful economic lives are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets.
ANSALDO NUCLEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
3
Turnover and other revenue
Turnover is attributable to the principal activity of the company and arose entirely within the United Kingdom.
4
Operating loss
2023
2022
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
(8,639)
(11,492)
Depreciation of owned tangible fixed assets
554,238
580,243
Amortisation of intangible assets
51,218
49,363
Operating lease charges
36,980
39,223
Exceptional overhead item - restructuring costs
200,436
55,261
Exceptional overhead items include restructuring costs as analysed above.
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
19,400
15,000
For other services
Taxation compliance services
4,900
3,750
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Directors
5
7
Operations
227
224
Central services
17
15
Total
249
246
ANSALDO NUCLEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Employees
(Continued)
- 18 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
12,870,108
12,160,624
Social security costs
1,358,996
1,411,555
Pension costs
1,370,716
1,190,934
15,599,820
14,763,113
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
301,162
437,899
Company pension contributions to defined contribution schemes
104,342
107,174
405,504
545,073
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 3).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
173,761
262,534
Company pension contributions to defined contribution schemes
30,126
28,967
8
Interest payable and similar expenses
2023
2022
£
£
Other interest
1,410,614
388,159
ANSALDO NUCLEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Loss before taxation
(2,562,862)
(4,324,453)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
(640,716)
(821,646)
Tax effect of expenses that are not deductible in determining taxable profit
1,931
Effect of change in corporation tax rate
(673,100)
Research and development tax credit
(377,807)
(120,454)
Enhanced capital allowances
(1,675)
(18,444)
Prior year adjustment to unrecognised deferred tax asset - losses
468,104
Movement in unrecognised deferred tax asset - losses
887,585
865,389
Movement in unrecognised deferred tax asset - capital allowances
330,569
(68,652)
Movement in unrecognised deferred tax asset - other
5,109
6,188
Unrecognised tax losses utilised
157,619
Taxation charge for the year
-
-
No deferred tax asset has been recognised in respect of trading losses or capital allowances as it is considered unlikely that the asset will be recoverable in the foreseeable future.
The potential deferred tax asset in respect of trading losses at 31 December 2023 is £2,789,624 (2022 - £1,902,039) and in respect of capital allowances is £533,107 (2022 - £202,538). Potential deferred tax for the year ended 31 December 2023 is calculated at 25% (2022 - 19%).
There are no factors to note which may affect future tax charges.
ANSALDO NUCLEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
10
Intangible fixed assets
Goodwill
Software
Total
£
£
£
Cost
At 1 January 2023
829,365
1,275,118
2,104,483
Additions
58,202
58,202
At 31 December 2023
829,365
1,333,320
2,162,685
Amortisation and impairment
At 1 January 2023
787,892
1,269,234
2,057,126
Amortisation charged for the year
41,473
9,745
51,218
At 31 December 2023
829,365
1,278,979
2,108,344
Carrying amount
At 31 December 2023
54,341
54,341
At 31 December 2022
41,473
5,884
47,357
The directors believe that the carrying value of the intangible fixed assets is supported by their value in use.
11
Tangible fixed assets
Leasehold land and buildings
Plant and machinery
Fixtures and fittings
Total
£
£
£
£
Cost
At 1 January 2023
40,959
6,421,170
2,007,934
8,470,063
Additions
466,447
120,203
586,650
Disposals
(50,647)
(50,647)
At 31 December 2023
40,959
6,836,970
2,128,137
9,006,066
Depreciation and impairment
At 1 January 2023
22,528
4,926,885
1,796,567
6,745,980
Depreciation charged in the year
2,048
477,215
74,975
554,238
Eliminated in respect of disposals
(50,647)
(50,647)
At 31 December 2023
24,576
5,353,453
1,871,542
7,249,571
Carrying amount
At 31 December 2023
16,383
1,483,517
256,595
1,756,495
At 31 December 2022
18,431
1,494,285
211,367
1,724,083
ANSALDO NUCLEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
12
Stocks
2023
2022
£
£
Raw materials and consumables
-
5,307
There is no significant difference between the replacement cost of raw materials and consumables and their carrying amounts. Stocks are stated after provisions of £Nil (2022 - £Nil).
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,289,198
3,754,070
Amounts recoverable on contracts
4,050,866
4,912,871
Corporation tax
833,969
Amounts owed by group undertakings
15,128,150
16,960,420
Other debtors
298,667
488,125
21,766,881
26,949,455
Trade debtors are stated after provisions for impairment of £Nil (2022 - £Nil).
Amounts owed by group undertakings are unsecured, interest free with no fixed repayment date and include balances of £9,441,424 (2022 - £9,439,697) due from Nuclear Engineering Group Limited, £4,952,772 (2022 - £4,952,814) due from Nuclear Engineering (Holdings) Limited, £80,963 (2022 - £2,501,378) due from Ansaldo Nucleare S.p.A, £934 (2022 - £66,525) due from Ansaldo Energia Switzerland and £652,057 (2022 - £Nil) due from Consorzio Stabile Ansaldo New Clear.
All financial instruments that are financial assets are measured at amortised cost.
ANSALDO NUCLEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
14
Creditors: amounts falling due within one year
2023
2022
£
£
Payments received on account
2,686,727
2,576,746
Trade creditors
3,588,952
6,456,123
Amounts owed to group undertakings
1,044,359
16,557,696
Taxation and social security
794,093
1,280,815
Other creditors
407,092
399,314
Accruals and deferred income
2,783,316
2,421,928
11,304,539
29,692,622
During the prior year, the company ceased utilisation of the group cash pool facility which was replaced by a loan and revolving credit facility both administered by Ansaldo Energia S.p.A, a fellow group undertaking. At 31 December 2023, the balance owed to Ansaldo Energia S.p.A. under these facilities was £1,044,359 (2022 - £16,557,696) the reduction in the year being principally due to repayments using the proceeds from the new shares issued during the year of £12.8 million. The balance attracted interest based on the sum of SONIA plus a margin of 4.39% for daily negative balances.
All financial instruments that are financial liabilities are measured at amortised cost.
15
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
1,370,716
1,190,934
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.
There were outstanding contributions to a defined contribution scheme totalling £108,737 at 31 December 2023 (2022 - £116,189).
16
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each (2022 - 1p each)
12,800,181
18,008
12,800,181
180
On 19 December 2023, 92 Ordinary shares of 1p each were issued at par and were fully paid in cash. On the same date, the company consolidated its existing 18,100 Ordinary shares of 1p each into 181 Ordinary shares of £1 each after which, 12,800,000 Ordinary shares of £1 each were issued at par and were fully paid in cash.
ANSALDO NUCLEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
17
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:
2023
2022
£
£
Within one year
73,295
93,700
Between two and five years
53,289
62,354
126,584
156,054
18
Capital commitments
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of tangible fixed assets
27,394
34,082
19
Related party transactions
The company has taken advantage of the exemption under FRS102 33.1A for the non-disclosure of related party transactions with other group entities. The company and all other group entities are wholly owned subsidiaries.
20
Ultimate controlling party
The immediate parent undertaking is Nuclear Engineering (Holdings) Limited, a company incorporated in England and Wales.
The ultimate parent undertaking is Ansaldo Energia S.p.A., a company incorporated in Italy.
Ansaldo Energia S.p.A. is the parent undertaking of the largest and smallest group of undertakings to consolidate these financial statements at 31 December 2023. The consolidated financial statements of Ansaldo Energia S.p.A. are available from Via Nicola Lorenzi, 8, Genova, Italy.
Ansaldo Energia S.p.A. is 88.6% owned by CDP Equity in the Cassa Depositi e Prestiti Group, an Italian state-owned entity (the ultimate controlling party) and 11.4% owned by Shanghai Electric Hong Kong Co Ltd.
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