REGISTERED NUMBER: |
Report of the Director and |
Financial Statements for the Year Ended 31 December 2023 |
for |
Circa Sustainable Chemicals Limited |
REGISTERED NUMBER: |
Report of the Director and |
Financial Statements for the Year Ended 31 December 2023 |
for |
Circa Sustainable Chemicals Limited |
Circa Sustainable Chemicals Limited (Registered number: 08944694) |
Contents of the Financial Statements |
for the year ended 31 December 2023 |
Page |
Company Information | 1 |
Report of the Director | 2 |
Income Statement | 3 |
Other Comprehensive Income | 4 |
Balance Sheet | 5 |
Statement of Changes in Equity | 7 |
Notes to the Financial Statements | 8 |
Circa Sustainable Chemicals Limited |
Company Information |
for the year ended 31 December 2023 |
DIRECTOR: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
ACCOUNTANTS: |
Brooke's Mill |
Armitage Bridge |
Huddersfield |
West Yorkshire |
HD4 7NR |
Circa Sustainable Chemicals Limited (Registered number: 08944694) |
Report of the Director |
for the year ended 31 December 2023 |
The director presents his report with the financial statements of the company for the year ended 31 December 2023. |
PRINCIPAL ACTIVITY |
The principal activity of the company in the year under review was that of research and development of bio-renewable chemicals and solvents. |
REVIEW OF BUSINESS |
The company made an operating loss of £260,380 (2022: £233,306) with the increase in the loss mainly attributable to an increase in administrative expenses. The loss for the period was £268,511 (2022: £236,987). |
At 31 December 2023 the company had net liabilities of £1,049,570 (2022: £781,059). |
DIRECTOR |
Changes in directors holding office from 1 January 2023 to the date of this report are as follows: |
FINANCIAL SUPPORT |
Notwithstanding the net liabilities of £1,049,570 as at 31 December 2023 and a loss for the year then ended of £268,511, the financial statements have been prepared on a going concern basis which the directors believe to be appropriate for the following reasons: |
The company meets its day to day working capital requirements from operational cash flows, intercompany loans and trading balances with the group headed by Circa Group AS., the ultimate parent company. |
The directors have performed a going concern assessment which indicates that, taking into account further group financial support if required, the company will have sufficient funds to meet its liabilities as they fall due during the period ending 31 December 2024, the going concern assessment period. This assessment is dependent on its ultimate parent, Circa Group AS., not seeking repayment of the amounts currently due to the group, which at the balance sheet date amounted to £1,119,048. |
Circa Group AS. has indicated that it does not intend to seek repayment of the amounts currently due to the group during the going concern assessment period. As with any company placing reliance on other group 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 it will not do so. |
Consequently, the directors are confident that the Company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis. |
This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies. |
ON BEHALF OF THE BOARD: |
Circa Sustainable Chemicals Limited (Registered number: 08944694) |
Income Statement |
for the year ended 31 December 2023 |
2023 | 2022 |
Notes | £ | £ |
TURNOVER |
Cost of sales |
GROSS (LOSS)/PROFIT | ( |
) |
Administrative expenses |
(541,036 | ) | (379,607 | ) |
Other operating income | 3 |
OPERATING LOSS | ( |
) | ( |
) |
Interest receivable and similar income |
(258,940 | ) | (233,306 | ) |
Interest payable and similar expenses | 5 |
LOSS BEFORE TAXATION | 6 | ( |
) | ( |
) |
Tax on loss | 7 |
LOSS FOR THE FINANCIAL YEAR | ( |
) | ( |
) |
Circa Sustainable Chemicals Limited (Registered number: 08944694) |
Other Comprehensive Income |
for the year ended 31 December 2023 |
2023 | 2022 |
Notes | £ | £ |
LOSS FOR THE YEAR | ( |
) | ( |
) |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
( |
) |
( |
) |
Circa Sustainable Chemicals Limited (Registered number: 08944694) |
Balance Sheet |
31 December 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 8 |
CURRENT ASSETS |
Debtors | 9 |
Cash at bank | 10 |
CREDITORS |
Amounts falling due within one year | 11 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
12 |
NET LIABILITIES | ( |
) | ( |
) |
CAPITAL AND RESERVES |
Called up share capital | 13 |
Retained earnings | 14 | ( |
) | ( |
) |
SHAREHOLDERS' FUNDS | ( |
) | ( |
) |
The director acknowledges his responsibilities for: |
(a) | ensuring that the company keeps accounting records which comply with Sections 386 and 387 of the Companies Act 2006 and |
(b) | preparing financial statements which give a true and fair view of the state of affairs of the company as at the end of each financial year and of its profit or loss for each financial year in accordance with the requirements of Sections 394 and 395 and which otherwise comply with the requirements of the Companies Act 2006 relating to financial statements, so far as applicable to the company. |
Circa Sustainable Chemicals Limited (Registered number: 08944694) |
Balance Sheet - continued |
31 December 2023 |
The financial statements were approved by the director and authorised for issue on |
Circa Sustainable Chemicals Limited (Registered number: 08944694) |
Statement of Changes in Equity |
for the year ended 31 December 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 January 2022 | ( |
) | ( |
) |
Changes in equity |
Total comprehensive income | - | ( |
) | ( |
) |
Balance at 31 December 2022 | ( |
) | ( |
) |
Changes in equity |
Total comprehensive income | - | ( |
) | ( |
) |
Balance at 31 December 2023 | ( |
) | ( |
) |
Circa Sustainable Chemicals Limited (Registered number: 08944694) |
Notes to the Financial Statements |
for the year ended 31 December 2023 |
1. | STATUTORY INFORMATION |
Circa Sustainable Chemicals Limited is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | ACCOUNTING POLICIES |
Basis of preparation |
The Company's ultimate parent undertaking, Circa Group AS, includes the Company in its consolidated financial statements. The consolidated financial statements of Circa Group AS are prepared in accordance with International Financial Reporting Standards and are available to the public and may be obtained from its registered office at Sjoelyst Plass 2 Oslo, 0278 Norway. |
In these financial statements, the Company is considered to be a qualifying entity (for the purposes of this FRS) and has applied the exemptions available under FRS 102 in respect of the following disclosures: |
- Reconciliation of the number of shares outstanding from the beginning to end of the period; |
- Cash Flow Statement and related notes; and |
- Key Management Personnel compensation. |
As the consolidated financial statements of Circa Group AS include the equivalent disclosures, the Company has also taken the exemptions under FRS 102 available in respect of the following disclosures: |
- Certain disclosures required by FRS 102.26 Share Based Payments; and |
- The disclosures required by FRS 102.11 Basic Financial Instruments and FRS 102.12 Other Financial Instruments Issues in respect of financial instruments not falling within the fair value accounting rules of Paragraph 36(4) of Schedule 1. |
Going concern |
Notwithstanding the net liabilities of £1,049,570 as at 31 December 2023 and a loss for the year then ended of £268,511, the financial statements have been prepared on a going concern basis which the directors believe to be appropriate for the following reasons: |
The company meets its day to day working capital requirements from operational cash flows, intercompany loans and trading balances with the group headed by Circa Group AS., the ultimate parent company. |
The directors have performed a going concern assessment which indicates that, taking into account further group financial support if required, the company will have sufficient funds to meet its liabilities as they fall due during the period ending 31 December 2024, the going concern assessment period. This assessment is dependent on its ultimate parent, Circa Group AS., not seeking repayment of the amounts currently due to the group, which at the balance sheet date amounted to £1,119,048. |
Circa Group AS. has indicated that it does not intend to seek repayment of the amounts currently due to the group during the going concern assessment period. As with any company placing reliance on other group 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 it will not do so. |
Consequently, the directors are confident that the Company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis. |
Circa Sustainable Chemicals Limited (Registered number: 08944694) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Critical accounting judgements and key sources of estimation uncertainty |
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses.Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below. |
Research and development expenditure |
Research costs are expensed in the period in which they are incurred. Development costs are capitalised when it is probable that the project will be a success considering its commercial and technical feasibility; the company is able to use or sell the asset; the company has sufficient resources; and intent to complete the development and its costs can be measured reliably. Management has decided that costs relating to the development costs incurred during 2023 will be expensed rather than assessing costs as the above conditions have not yet been met. |
Tangible fixed assets |
Computer equipment assets stated at historical cost less accumulated depreciation and impairment. |
Historical cost includes expenditure that is directly attributable to the acquisition of the items. |
Depreciation is calculated on a straight-line basis to write off the net cost of each item of plant and equipment over their expected useful lives as follows: |
- Computer equipment : 3 years. |
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date. |
Financial instruments: |
Cash and cash equivalents |
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. |
Trade and other receivables |
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30 days. |
Trade and other payables |
These amounts represent liabilities for goods and services provided to the entity prior to the end of the financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition. |
Circa Sustainable Chemicals Limited (Registered number: 08944694) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Taxation |
The income tax expense or benefit for the period is the tax payable on that period’s taxable income based on the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable. |
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for: |
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor taxable profits; or |
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing of the reversal can be controlled, and it is probable that the temporary difference will not reverse in the foreseeable future. |
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to be recovered. |
Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable profits available to recover the asset. |
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable entity or different taxable entities which intend to settle simultaneously |
Research and development |
Research costs are charged against income as they are incurred. Certain development costs are capitalised as intangible assets, when it is probable that future economic benefits will flow to the company. Such intangible assets are amortised on a straight-line basis from the point at which the assets are ready for use over the period of the expected benefit and are reviewed for impairment at each balance sheet date. Other development costs are charged against income as incurred since the criteria for their recognition as an asset are not met. |
The criteria for recognising development expenditure as an asset are: |
- Completion of the intangible asset is technically feasible so that it will be available for use or sale; |
- The company intends to complete the intangible asset and use or sell it; |
- The company has the ability to use or sell the intangible asset; |
- The intangible asset will generate probable future economic benefits. Among many other things, this requires that there is a market for the output from the intangible asset or for the intangible asset itself, or, if it is to be used internally, the asset will be used in generating such benefits; |
- That the company has available to it adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and |
- That the company can reliably measure the expenditure attributable to the intangible asset during its development. |
The company did not capitalise any development costs during the year as the directors considered that the criteria set out above were not met in respect of development costs incurred. |
Circa Sustainable Chemicals Limited (Registered number: 08944694) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Foreign currencies |
Foreign currency transactions are translated into Sterling using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. |
Employee benefit costs |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to the income statement in the period to which they relate. |
Government grants |
Government grants are treated in accordance with IAS20 and its related purpose. |
Government grants are recognised as income or as a cost reduction, dependent on the basis for which the government grant has been awarded. Recognition will be on a systematic basis over the period they have been granted for, or on a systematic basis to the costs that they are intended to compensate for. |
Government grants in the form of compensation for losses which have already been incurred, or in the form of direct financial support, which is not directly related to future costs, are recognised as income in the same period as they are awarded. |
Government grants related to assets are presented in the balance sheet as deferred income or as a reduction of the depreciation of the assets the grant relates to. The grant will be recognised on a systematic basis over the periods in which the related expenses are recognised. The presentation method chosen is to deduct the grant in the carrying amount of the asset. |
Current and non-current classification |
Assets and liabilities are presented in the statement of financial position based on current and non-current classification. |
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the consolidated entity’s normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current. |
A liability is classified as current when: it is either expected to be settled in the consolidated entity’s normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current. |
Deferred tax assets and liabilities are always classified as non-current. |
3. | OTHER OPERATING INCOME |
2023 | 2022 |
£ | £ |
Government grants | 5,000 | 48,073 |
Inter-group recharges | 274,608 | 97,737 |
Other income | - | 78 |
Foreign currency gains | 1,048 | 413 |
275,656 | 146,301 |
Circa Sustainable Chemicals Limited (Registered number: 08944694) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
4. | EMPLOYEES AND DIRECTORS |
2023 | 2022 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
2023 | 2022 |
Administrative |
2023 | 2022 |
£ | £ |
Director's remuneration |
The directors are remunerated for their services to other group companies within the group headed by the Company's parent, Circa Group AS. No amounts were received by them directly as directors of Circa Sustainable Chemicals Limited. |
In the year, 1 director (2022: 1) was remunerated by other group companies. As this director's services to the company are insignificant any allocation of remuneration - which was borne by non-UK resident entities - is wholly insignificant and therefore no amount has been attributed. |
5. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2023 | 2022 |
£ | £ |
Loan |
6. | LOSS BEFORE TAXATION |
The loss before taxation is stated after charging/(crediting): |
2023 | 2022 |
£ | £ |
Depreciation - owned assets |
Foreign exchange differences | ( |
) | ( |
) |
Research and development costs | - | 325,166 |
Grants receivable | (5,000 | ) | (48,073 | ) |
7. | TAXATION |
Analysis of tax expense |
No liability to UK corporation tax arose for the year ended 31 December 2023 nor for the year ended 31 December 2022. |
Circa Sustainable Chemicals Limited (Registered number: 08944694) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
7. | TAXATION - continued |
Factors affecting the tax expense |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
2023 | 2022 |
£ | £ |
Loss before income tax | ( |
) | ( |
) |
Loss multiplied by the standard rate of corporation tax in the UK of |
( |
) |
( |
) |
Effects of: |
Trading losses carried forward |
Depreciation in excess of capital allowances | ( |
) |
R & D tax credit adjustments | ( |
) |
Tax expense |
The Company will recognise a deferred tax asset only if it can demonstrate convincing evidence that sufficient taxable profit will be available against which the unused tax losses can be utilised. |
The losses available for carry forward at 31 December 2023 amount to £1,001,082 (2022: £727,870). |
Change in Corporation Tax rate |
The Finance Bill 2021 includes legislation to increase the main rate of corporation tax from 19% to 25% from 1 April 2023. Accordingly, unrecognised deferred tax assets and liabilities have been calculated at the tax rate of 25% (2022: 25%). |
8. | TANGIBLE FIXED ASSETS |
Computer |
equipment |
£ |
COST |
At 1 January 2023 |
and 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
Circa Sustainable Chemicals Limited (Registered number: 08944694) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
9. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£ | £ |
Trade debtors |
Amounts owed by group undertakings |
Other debtors |
10. | CASH AT BANK |
All of the company's cash and cash equivalents at 31 December 2023 are at floating interest rates and are denominated in UK Sterling (£). The Directors consider that the carrying value of cash and cash equivalents approximates to their fair value. |
11. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£ | £ |
Trade creditors |
Amounts owed to group undertakings |
Social security and other taxes |
Pension contributions due |
Accruals and deferred income |
Included within amounts owed to group undertakings is a total balance of £55,796 (2022: £39,558) due to Circa Group Pty Limited. This balance is unsecured, interest free and is repayable on demand and therefore has been classified within creditors due within one year. |
12. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
2023 | 2022 |
£ | £ |
Amounts owed to group undertakings |
Included in the amounts owed to group undertakings is a loan amount (including accrued interest) of £1,063,252 (2022: £853,681) due to Circa Group AS. The loan is repayable in April 2025 and has therefore been classified within creditors due after more than one year. The loan is unsecured. Interest is charged at the group's variable funding rate which is currently 1%. |
13. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Ordinary | £1 |
Circa Sustainable Chemicals Limited (Registered number: 08944694) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2023 |
14. | RESERVES |
Retained |
earnings |
£ |
At 1 January 2023 | ( |
) |
Deficit for the year | ( |
) |
At 31 December 2023 | ( |
) |
15. | CONTINGENT LIABILITIES |
There are no contingent liabilities for the period ended 31 December 2023 (2022: £nil). |
16. | CAPITAL COMMITMENTS |
There are no capital commitments at 31 December 2023 (2022: £nil). |
17. | RELATED PARTY DISCLOSURES |
During the period the company charged intergroup management fees of £274,608 (2022: £97,737) to its ultimate parent company, Circa Group AS. At 31 December 2023, £46,021 was outstanding from Circa Group AS (2022: £24,419). |
The company has an intergroup balance of £55,796 due to its immediate parent company, Circa Group Limited (2022: £39,558 due to this company). This balance is unsecured, interest free and has no fixed terms for repayment. |
The company has an intergroup loan of £1,063,252 (2022: £853,681) due to its ultimate parent company, Circa Group AS. The loan incurs interest at a rate of 1%, is unsecured and has is repayable in April 2025. |
18. | ULTIMATE PARENT COMPANY |
The ultimate parent company is Circa Group AS which is incorporated in Norway. |
The results of the company are consolidated in the group accounts of the ultimate parent company's financial statements. Copies of the ultimate parent company's financial statements may be obtained from the Secretary of Circa Group AS, Sjoelyst Plass 2 Oslo, 0278 Oslo, Norway. |