Company registration number 02545823 (England and Wales)
TRAILIGHT LTD.
UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
PAGES FOR FILING WITH REGISTRAR
TRAILIGHT LTD.
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 8
TRAILIGHT LTD.
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 1 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
3
-
-
Tangible assets
4
74,450
89,942
74,450
89,942
Current assets
Debtors
5
612,548
1,026,337
Cash at bank and in hand
176,091
95,229
788,639
1,121,566
Creditors: amounts falling due within one year
6
(8,382,008)
(7,808,354)
Net current liabilities
(7,593,369)
(6,686,788)
Total assets less current liabilities
(7,518,919)
(6,596,846)
Capital and reserves
Called up share capital
7
410
410
Profit and loss reserves
(7,519,329)
(6,597,256)
Total equity
(7,518,919)
(6,596,846)
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true
For the financial year ended 31 December 2023 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 15 July 2024 and are signed on its behalf by:
D R McNair Scott
Director
Company Registration No. 02545823
TRAILIGHT LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
1
Accounting policies
Company information
Trailight Ltd. is a private company limited by shares incorporated in England and Wales. The registered office is Merchant House, Piccadilly, York, England, YO1 9WB.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The 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.
1.2
Going concern
The financial statements have been prepared on a going concern basis not withstanding net current liabilities of £7,593,369 (2022: £6,686,788). The directors believe this to be appropriate because the company has access to continued funding from its parent company. The company is reliant on its parent company for ongoing support. The directors have received appropriate undertakings from the parent company that it will, for at least twelve months from the date of the approval of these financial statements, continue to make available such funds as are needed by the company and in particular will not seek repayment of the amounts currently made available. This should enable the company to continue in operational existence for the foreseeable future by meeting their liabilities as the fall due for payment. As with any company placing reliance on other individuals or entities for financial support, the directors acknowledge that there can be no certainty that this support will continue, although at the date of approval of these financial statements, they have no reason to believe that they will not do so.
On this basis the directors believe that it remains appropriate to prepare the financial statements on a going concern basis. The financial statements do not include any adjustments that would result from the going concern basis of preparation being appropriate.
1.3
Turnover
Revenue represents the amounts derived from the provision of goods and services, stated net of Value Added Tax. The methodology applied to income recognition is dependent upon the goods or services being supplied.
In respect of income relating to annual service contracts and/or hosted services which are invoiced in advance, it is the Company's policy to spread the income of each contract equally over the contract's life. The full value of each sale being credited to deferred income when invoiced to be released to the profit and loss account in equal instalments over the contract period.
Revenues from the delivery of infrastructure are recognised on installation with associated training and consultancy fees recognised when specified contractual milestones are met or on project completion. In the event that these services are invoiced in advance they will be credited to deferred income and released to the profit and loss account once delivered.
Income from the sale of perpetual licences is recognisable in full at the date of sale.
1.4
Intangible fixed assets other than goodwill
Intangible fixed assets are stated at cost less amortisation. Amortisation is provided at rates calculated to write off the cost of fixed assets, less their estimated residual value, over their expected useful lives on the following bases:
TRAILIGHT LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 3 -
Development Cost
10% Straight Line
The carrying value of the Company's intangible assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated based upon the value in use. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses are recognised in the profit and loss account.
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:
Land and buildings Leasehold
Leasehold improvements
10% Straight line
Fixtures, fittings & equipment
15% Reducing Balance
Computer equipment
15% Reducing Balance
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). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Cash at bank and in hand
Cash and cash equivalents are basic financial assets and include deposits held at call with banks.
TRAILIGHT LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 4 -
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.10
Taxation
The tax expense represents the sum of the tax currently payable.
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.
TRAILIGHT LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 5 -
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.14
Expenditure on pure and applied research is charged to the profit and loss account in the period in which it is incurred.
Development costs are also charged to the profit and loss accounts in the period of expenditure unless individual projects satisfy the following criteria:-
- The project is clearly defined and creates a new product;
- The project involves conversion of an existing product into a new coding language;
- The expenditure is separately identifiable and material in cost terms;
- There have been fundamentally no sales in current period; and
- There is a likelihood of future sales exceeding costs.
Once capitalised development assets will be written down over a 10 year term on a straight line basis reflecting structured, scalable and flexible code structures used in new .net software development.
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
46
46
TRAILIGHT LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
3
Intangible fixed assets
Other
£
Cost
At 1 January 2023 and 31 December 2023
1,799,535
Amortisation and impairment
At 1 January 2023 and 31 December 2023
1,799,535
Carrying amount
At 31 December 2023
At 31 December 2022
On 30 November 2015 an impairment test was undertaken by comparing the carrying values of capitalised development with recoverable amount. The recoverable amount is based on value-in use calculations. These calculations use pre-tax cash flow projections covering a ten year period based on financial budgets and forecasts as approved by the directors with no terminal value. Ten years were selected as this represents the estimated lifetime of the software platforms.
The key assumptions used for value-in-use calculations are those regarding revenue growth rates and discount rates over the forecast period. Growth rates are based on past experience, the anticipated impact of the company's significant investment in research and development and expectations of future changes in the market. The value in use calculations use information from approved budgets in the first three years, followed by applying specific growth rates for which the key assumptions in respect of annual revenue growth rates range between 0% and 7% from year 4 onwards.
The discount rate used was 12%, based on an assessment of the Group's cost of capital and on comparison with other listed technology companies.
After review of the value-in-use of Trailight Ltd, the directors considers that the recent history of losses and net cash outflows forecast in the immediate future meant that a provision was recognised at 30 November 2015 representing the full carrying value of development costs capitalised by the company being £1,692,018.
TRAILIGHT LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
4
Tangible fixed assets
Land and buildings
Plant and machinery etc
Total
£
£
£
Cost
At 1 January 2023
92,091
76,463
168,554
Additions
1,409
1,409
At 31 December 2023
92,091
77,872
169,963
Depreciation and impairment
At 1 January 2023
52,115
26,497
78,612
Depreciation charged in the year
9,209
7,692
16,901
At 31 December 2023
61,324
34,189
95,513
Carrying amount
At 31 December 2023
30,767
43,683
74,450
At 31 December 2022
39,976
49,966
89,942
5
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
261,897
541,842
Corporation tax recoverable
187,735
235,868
Other debtors
162,916
248,627
612,548
1,026,337
6
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
113,990
71,222
Amounts owed to group undertakings
6,867,018
6,557,009
Taxation and social security
150,508
163,844
Other creditors
1,250,492
1,016,279
8,382,008
7,808,354
TRAILIGHT LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
7
Called up share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of 1p each
40,000
40,000
400
400
Ordinary B shares of 1p each
1,000
1,000
10
10
41,000
41,000
410
410
The shares have attached to them full voting, dividend and capital distribution (including on winding up) rights.
8
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2023
2022
£
£
166,250
218,750
9
Parent company
The ultimate parent company is Track Record Holdings Limited, a company registered in England and Wales.