Company Registration No. 07756396 (England and Wales)
BROMPTON TECHNOLOGY LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 AUGUST 2023
6th Floor Kings House
9-10 Haymarket
London
United Kingdom
SW1Y 4BP
BROMPTON TECHNOLOGY LIMITED
CONTENTS
Page
Company information
1
Strategic report
2 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 26
BROMPTON TECHNOLOGY LIMITED
COMPANY INFORMATION
- 1 -
Directors
Mr C Hunt
Mr R J Mead
Mr C Deighton
Mr T Bonsall
Mr L Khale
Mr W H Wagner
Mr P S Ray
(Appointed 9 February 2024)
Secretary
Mr C Hunt
Company number
07756396
Registered office
272 Gunnersbury Avenue
London
W4 5QB
Auditor
TC Group
6th Floor Kings House
9-10 Haymarket
London
SW1Y 4BP
BROMPTON TECHNOLOGY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 AUGUST 2023
- 2 -
The directors present the strategic report for the year ended 31 August 2023.
Principal activity
The principal activity of the company is the design, development and distribution of industry-leading LED video processing products for the entertainment, film, broadcast and related industries.
Fair review of the business
The company had an excellent year with turnover more than doubling as live events returned to pre-pandemic levels and virtual production using LED, which had taken off during COVID, continuing to be in demand.
Principal risks and uncertainties
Brompton’s main customers are primarily export-focused, with key markets being China and the United States, meaning there are risks associated with large-scale geo-political events affecting trade.
High cost of living, inflationary pressures and higher interest rates reducing the appetite for investment may pose a risk to product revenue if there are consequent effects on demand.
The company has implemented enhanced IT security measures to protect against potential data loss and cyber crime.
Brompton uses contract manufacturers in the UK and overseas, and there is a risk to production should global or environmental events impact on its ability to supply key assemblies. There has been significant disruption in the global supply chain for electronics that has extended the lead times of some core components and the directors have initiated longer lead-time ordering, and some redesign of affected materials, to mitigate this threat to supply as much as possible.
Financial and credit risk
Brompton has budgetary and forecasting procedures in place to monitor its working capital and cash requirements. An enhanced internal ERP system is in place to support planning, audit and approval processes for purchases, expenses, and credit management. Customer trade credit limits are regularly assessed by senior management.
Currency risk
The company holds debtor and creditor balances in foreign currencies, and where possible attempts to buy and sell in US dollars to set off balances against each other. Bank reserves of foreign currency are regularly monitored and transferred to pounds at prevailing rates of exchange.
Key performance indicators
The company monitors its performance primarily via comparative earnings before tax and after adjustments for non-recurring expenditure.
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Operating profit/(loss) before interest and tax | | |
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Profit/(loss) before tax for the financial year | | |
BROMPTON TECHNOLOGY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 3 -
Future developments
Brompton has continued to invest in product development and design activities in the present year by further increasing R&D staff numbers and committing to expenditure on related prototypes and certifications.
Mr R J Mead
Director
29 February 2024
BROMPTON TECHNOLOGY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2023
- 4 -
The directors present their annual report and financial statements for the year ended 31 August 2023.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr C Hunt
Mr R J Mead
Mr C Deighton
Mr T Bonsall
Mr L Khale
Mr W H Wagner
Mr N E Archdale
(Resigned 15 June 2023)
Mr P S Ray
(Appointed 9 February 2024)
Results and dividends
The results for the year are set out on page 10.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Statement of directors' responsibilities
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;
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.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of the exposure of the
company to financial, credit and currency risk.
BROMPTON TECHNOLOGY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 5 -
Auditor
TC Group are deemed to be re-appointed under section 487(2) of the Companies Act 2016.
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.
On behalf of the board
Mr R J Mead
Director
29 February 2024
BROMPTON TECHNOLOGY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BROMPTON TECHNOLOGY LIMITED
- 6 -
Opinion
We have audited the financial statements of Brompton Technology Limited (the 'company') for the year ended 31 August 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 August 2023 and of its profit 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.
BROMPTON TECHNOLOGY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BROMPTON TECHNOLOGY LIMITED
- 7 -
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.
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. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Extent to which the audit was considered capable of detecting irregularities, including fraud
The objectives of our audit, in respect to fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and its management.
BROMPTON TECHNOLOGY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BROMPTON TECHNOLOGY LIMITED
- 8 -
Our approach was as follows:
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussion with the directors and other management (as required by auditing standards), and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations;
We considered the legal and regulatory frameworks directly applicable to the financial statements reporting framework (FRS 102 and the Companies Act 2006) and the relevant tax compliance regulations in the UK;
We considered the nature of the industry, the control environment and business performance, including the key drivers for management’s remuneration;
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit;
We considered the procedures and controls that the company has established to address risks identified, or that otherwise prevent, deter and detect fraud; and how senior management monitors those programmes and controls.
Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.
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. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/Our-Work/Audit/Audit-and-assurance/Standards-and-guidance/Standards-and-guidance-for-auditors/Auditors-responsibilities-for-audit/Description-of-auditors-responsibilities-for-audit.aspx. This description forms part of our auditor’s report.
BROMPTON TECHNOLOGY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BROMPTON TECHNOLOGY LIMITED
- 9 -
This report is made solely to the company's members, as a body, 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 members those matters we are required to state to them 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 members as a body, for our audit work, for this report, or for the opinions we have formed.
Andrew Wilson ACA FCCA (Senior Statutory Auditor)
For and on behalf of TC Group
Statutory Auditor
1 March 2024
Office: London
BROMPTON TECHNOLOGY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 AUGUST 2023
- 10 -
2023
2022
Notes
£
£
Turnover
3
34,607,309
16,807,498
Cost of sales
(23,785,068)
(11,475,247)
Gross profit
10,822,241
5,332,251
Distribution costs
(923,393)
(447,589)
Administrative expenses
(8,271,586)
(5,163,755)
Operating profit/(loss)
4
1,627,262
(279,093)
Interest payable and similar expenses
7
(21,786)
(4,918)
Profit/(loss) before taxation
1,605,476
(284,011)
Tax on profit/(loss)
8
97,671
507,186
Profit for the financial year
1,703,147
223,175
The profit and loss account has been prepared on the basis that all operations are continuing operations.
BROMPTON TECHNOLOGY LIMITED
BALANCE SHEET
AS AT 31 AUGUST 2023
31 August 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
9
2,438,947
823,988
Tangible assets
10
200,208
202,799
2,639,155
1,026,787
Current assets
Stocks
11
2,936,355
347,730
Debtors
12
4,346,875
2,554,517
Cash at bank and in hand
1,216,830
3,964,415
8,500,060
6,866,662
Creditors: amounts falling due within one year
13
(9,399,434)
(7,819,856)
Net current liabilities
(899,374)
(953,194)
Total assets less current liabilities
1,739,781
73,593
Creditors: amounts falling due after more than one year
14
(240,000)
(330,041)
Net assets/(liabilities)
1,499,781
(256,448)
Capital and reserves
Called up share capital
17
100
100
Share premium account
477,221
477,221
Capital contributions
9
162,482
109,400
Profit and loss reserves
859,978
(843,169)
Total equity
1,499,781
(256,448)
The financial statements were approved by the board of directors and authorised for issue on 29 February 2024 and are signed on its behalf by:
Mr R J Mead
Director
Company Registration No. 07756396
BROMPTON TECHNOLOGY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2023
- 12 -
Notes
Share capital
Share premium account
Capital contributions
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 September 2021
100
477,221
(1,066,344)
(589,023)
Year ended 31 August 2022:
Profit and total comprehensive income for the year
-
-
-
223,175
223,175
Capital contributions
18
-
-
109,400
109,400
Balance at 31 August 2022
100
477,221
109,400
(843,169)
(256,448)
Year ended 31 August 2023:
Profit and total comprehensive income for the year
-
-
-
1,703,147
1,703,147
Capital contributions
18
-
-
53,082
53,082
Balance at 31 August 2023
100
477,221
162,482
859,978
1,499,781
The notes on pages 13 to 26 form part of these financial statements
BROMPTON TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023
- 13 -
1
Accounting policies
Company information
Brompton Technology Limited is a private company limited by shares incorporated in England and Wales. The registered office is 272 Gunnersbury Avenue, London, W4 5QB.
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 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 financial instruments not measured at fair value; 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 Brompton Technology Holdings Limited. These consolidated financial statements 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.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods provided in the normal course of business, and is shown net of VAT.
BROMPTON TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
1
Accounting policies
(Continued)
- 14 -
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Intangible fixed assets other than goodwill
In the research phase of an internal project, it is not possible to demonstrate that the project will generate future economic benefits and therefore all expenditure in the research phase of a project is expensed as and when it is incurred.
Intangible assets are recognised from the development phase of a project if, and only if, certain specific criteria are met to demonstrate that they will generate future economic benefits and that the cost can be reliably measured.
If it is not possible to distinguish between the research and development phase of an internal project the expenditure is treated as if it were all incurred in the research phase only.
Capitalised development costs are subsequently amortised to administrative expenses on a straight-line basis over their expected useful economic lives of 7 years. The expected useful economic life of development costs are estimated using business plans which set out the development plan and time to market for the associated project.
Amortisation begins when the intangible asset is available for use and in the location and condition necessary for it to be useable in the manner intended by management. At the year-end, capitalised development costs are all in respect of projects where the asset is not yet available for use and therefore no amortisation has been charged.
1.5
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:
Fixtures, fittings & equipment
3 years straight line
Computer equipment
3 years 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.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible 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).
BROMPTON TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
1
Accounting policies
(Continued)
- 15 -
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and associated costs which have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash at bank and in hand
Cash at bank and in hand are basic financial assets and include cash in hand and deposits held at call with banks.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ 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 and amounts due from connected companies 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.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. 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 loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
BROMPTON TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
1
Accounting policies
(Continued)
- 16 -
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
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, amounts payable to connected companies and loans, 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.
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
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.
1.11
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.
BROMPTON TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
1
Accounting policies
(Continued)
- 17 -
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.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Share-based payments
The parent company, Brompton Technology Holdings Limited, participates in a share-based payment arrangement in respect of which share options are granted to employees of the company.
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black-Scholes model.
The fair value of equity settled share-based payments granted to the company's employees is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity, and presented as a capital contribution from the parent company.
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.
BROMPTON TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 18 -
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.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Research and development costs
The company invests heavily in research and development.
Development expenditure is recognised as an expense except that costs incurred on development projects are capitalised as intangible assets to the extent that such expenditure is expected to generate future economic benefits.
Significant judgement is applied in determining if development costs meet the criteria to be capitalised as intangible assets.
Amortisation and impairment of intangible assets
Development costs capitalised as intangible assets are subsequently amortised on a straight-line basis over their expected useful economic lives of 7 years. The expected useful economic life of development costs are estimated using business plans which set out the development plan and time to market for the associated project.
Amortisation begins when the intangible asset is available for use and in the location and condition necessary for it to be useable in the manner intended by management.
Furthermore, intangible assets are reviewed for impairment at the end of the financial year if events or changes in circumstances indicate that the carrying value may not be recovered. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset. 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).
Share based payment charges
The charge related to equity-settled transactions with the company's employees is measured by reference to the fair value of the equity instruments at the date they are granted, using an appropriate valuation model selected according to the terms and conditions of the grant.
Judgement is applied in determining the most appropriate valuation model and in determining the inputs to the model. Judgement is also applied in relation to the estimated number of options which are expected to vest, by reference to historic leaver rates.
BROMPTON TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 19 -
3
Turnover
2023
2022
£
£
Turnover analysed by class of business
Distribution of LED processing and support products
34,607,309
16,807,498
2023
2022
£
£
Turnover analysed by geographical market
APAC
22,649,658
8,739,686
The Americas
7,799,037
6,292,759
EMEA
4,158,614
1,775,053
34,607,309
16,807,498
4
Operating profit/(loss)
2023
2022
Operating profit/(loss) for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
279,675
(288,108)
Research and development costs
1,163,922
1,037,325
Fees payable to the company's auditor for the audit of the company's financial statements
10,000
10,000
Depreciation of owned tangible fixed assets
97,664
47,396
Share-based payments
53,082
109,400
Operating lease charges
608,206
401,437
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
52
39
BROMPTON TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
5
Employees
(Continued)
- 20 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,930,200
2,071,717
Social security costs
330,956
235,511
Pension costs
232,859
161,840
3,494,015
2,469,068
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
332,667
308,333
Company pension contributions to defined contribution schemes
33,267
30,725
365,934
339,058
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
181,000
167,500
Company pension contributions to defined contribution schemes
18,100
16,642
7
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
21,786
4,918
BROMPTON TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 21 -
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
(200,000)
(507,186)
Adjustments in respect of prior periods
102,329
Total current tax
(97,671)
(507,186)
The actual credit for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit/(loss) before taxation
1,605,476
(284,011)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 21.50% (2022: 19.00%)
345,177
(53,962)
Tax effect of expenses that are not deductible in determining taxable profit
18,025
10,354
Permanent capital allowances in excess of depreciation
(8,598)
(32,653)
Share based payment charge
11,413
20,786
Under/(over) provided in prior years
102,329
Research and development tax relief
(566,017)
(451,711)
Taxation credit for the year
(97,671)
(507,186)
The company has tax losses of c.£1.9m available for carry forward (2022 - c.£1.9m).
BROMPTON TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 22 -
9
Intangible fixed assets
Development costs
£
Cost
At 1 September 2022
823,988
Additions
1,614,959
At 31 August 2023
2,438,947
Amortisation and impairment
At 1 September 2022 and 31 August 2023
Carrying amount
At 31 August 2023
2,438,947
At 31 August 2022
823,988
10
Tangible fixed assets
Fixtures, fittings & equipment
Computer equipment
Total
£
£
£
Cost
At 1 September 2022
8,594
282,098
290,692
Additions
228
94,845
95,073
At 31 August 2023
8,822
376,943
385,765
Depreciation and impairment
At 1 September 2022
239
87,654
87,893
Depreciation charged in the year
2,928
94,736
97,664
At 31 August 2023
3,167
182,390
185,557
Carrying amount
At 31 August 2023
5,655
194,553
200,208
At 31 August 2022
8,355
194,444
202,799
BROMPTON TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 23 -
11
Stocks
2023
2022
£
£
Finished goods and goods for resale
2,936,355
347,730
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,622,132
1,371,276
Corporation tax recoverable
600,142
502,471
Other debtors
834,922
424,752
Prepayments and accrued income
289,679
256,018
4,346,875
2,554,517
13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
15
90,000
90,000
Trade creditors
214,866
169,372
Amounts owed to group undertakings
3,810,558
4,121,792
Amounts owed to connected companies
4,818,446
2,852,961
Taxation and social security
72,325
49,206
Other creditors
219,332
335,319
Accruals and deferred income
173,907
201,206
9,399,434
7,819,856
14
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans
15
240,000
330,041
BROMPTON TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 24 -
15
Loans and overdrafts
2023
2022
£
£
Bank loans
330,000
420,041
Payable within one year
90,000
90,000
Payable after one year
240,000
330,041
In February 2021, Barclays Bank UK PLC provided Brompton Technology Limited with a loan of £450,000 under the Coronavirus Business Interruption Loan Scheme (CBILS), for general business purposes.
The loan is repayable over 6 years in monthly instalments which started in March 2022. Interest is charged at a margin of 2.28% over base rate.
The bank loan is secured by way of a fixed and floating charge over the assets of the company.
The company's indebtedness to the bank in respect of the CBILS loan is also subject to a cross-company guarantee from a connected company.
16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
232,859
161,840
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.
17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
BROMPTON TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 25 -
18
Capital contributions
The parent company, Brompton Technology Holdings Limited, participates in a share-based payment arrangement in respect of which share options are granted to employees of the company.
The fair value of options granted is determined using the Black-Scholes option pricing model.
The company recognised a capital contribution of £53,082 (2022: £109,400) from its parent company, Brompton Technology Holdings Limited, relating to options granted to employees of the company.
19
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
394,162
114,945
Between two and five years
1,019,578
142,526
In over five years
Total commitments
1,413,740
257,471
20
Financial commitments, guarantees and contingent liabilities
On 13 July 2022, the directors of the parent company, Brompton Technology Holdings Limited, created and authorised the issue of Loan Notes amounting to £5,099,796.
The Loan Notes are secured by way of a fixed and floating charge over the assets of the company and its parent company, Brompton Technology Holdings Limited.
21
Related party transactions
During the year, the company purchased goods and services from, and paid royalties to, a connected company amounting to £33,374,382 (2022- £16,436,378).
At the year end, the company owed £4,818,446 (2022 - £2,852,961) to this connected company.
BROMPTON TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 26 -
22
Ultimate controlling party
The ultimate parent company and ultimate controlling party is Brompton Technology Holdings Limited, a company registered in England and Wales.
The smallest and largest group of which the company is a member and for which consolidated accounts are prepared is Brompton Technology Holdings Limited, a company registered in England and Wales.
Copies of the consolidated accounts of Brompton Technology Holdings Limited can be obtained from the company's registered office.
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