Company registration number 07958046 (England and Wales)
AIRSYS (UK) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
AIRSYS (UK) LIMITED
COMPANY INFORMATION
Directors
M Thompson
Y Chen
W Pei
Company number
07958046
Registered office
Kingham Chambers
5 Nelson Street
LIVERPOOL
Merseyside
L1 5DW
Auditor
PHH Accountancy Limited
Second Floor
3 Liverpool Gardens
Worthing
West Sussex
BN11 1TF
Business address
245 Europa Boulevard
Warrington
WA5 7TN
AIRSYS (UK) LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Profit and loss account
7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 22
AIRSYS (UK) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Review of the business
Airsys (UK) Ltd, the Company, is a market leading solutions provider for the Telecoms, Data Centre, Utilities and Building Services sectors, delivering high efficiency precision climate control solutions. The financial and operational strength of the Group puts both the Company and the Group as a whole in a good position for the future in the market.
The turnover was £9.68 million for the year compared to £13.09 million for the year ended 31 December 2022. The cost of sales were £6.61 million in the year compared to £10.32 million in the year to 31 December 2022. The profit after tax was £0.80 million in the year compared to £0.36 million in the year to 31 December 2022.
Principal risks and uncertainties
The company is exposed to financial risk in different areas. The goal is to reduce the financial risk as much as possible. This is continuously being assessed by the Board of Directors.
The company's trade receivables are primarily from Telecoms companies with a generally high credit rating. The directors believe that the exposure to credit risk from the loss of trade receivables is relatively low. Credit evaluations of customers are performed regularly in order to manage potential risk. The maximum risk exposure is represented by the carrying amount of the financial assets in the balance sheet, which is carefully managed by the directors.
Liquidity risk is the risk that the company will not be able to meet its financial obligations as they fall due. The company's approach to managing liquidity risk is to strive to always having sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the company's reputation.
The company is financed and supported by its parent company, Airsys Refrigeration Technology (Beijing) Co., Ltd., who are the primary equipment supplier to the company.
Development and performance
During 2023 research and development was continued into improving technology and efficiency in existing products and new products.
Looking forwards the company has an optimistic outlook, whilst still monitoring local and global economic climate. The current sentiment with customers remains that of uncertainty and strong capital discipline following a sustained period of turbulence from the Covid-19 pandemic, political conflicts, and inflationary pressure.
Airsys has built a dynamic flexible management and support team of specialists who continue to provide an integrated expert service for customers projects.
M Thompson
Director
20 September 2024
AIRSYS (UK) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of provision and installation of industrial cooling technology.
Results and dividends
The results for the year are set out on page 7.
No ordinary 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:
M Thompson
Y Chen
W Pei
Auditor
In accordance with the company's articles, a resolution proposing that PHH Accountancy Limited be reappointed as auditor of the company will be put at a General Meeting.
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
M Thompson
Director
20 September 2024
AIRSYS (UK) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
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.
AIRSYS (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF AIRSYS (UK) LIMITED
- 4 -
Opinion
We have audited the financial statements of Airsys (UK) Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows 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 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.
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.
AIRSYS (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF AIRSYS (UK) LIMITED (CONTINUED)
- 5 -
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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
ICAEW guidance relating to reporting on irregularities, November 2020, based on ISA 700 A39-1 to A39-5
- Enquiry of management, those charged with governance and the entity’s solicitors (or in-house legal team) around actual and potential litigation and claims.
- Enquiry of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations.
- Reviewing minutes of meetings of those charged with governance.
- Reviewing internal audit reports.
- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.
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.
AIRSYS (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF AIRSYS (UK) LIMITED (CONTINUED)
- 6 -
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.
Matthew Pedder BA(Hons) FCA
Senior Statutory Auditor
For and on behalf of PHH Accountancy Limited
20 September 2024
Chartered Accountants
Statutory Auditor
Second Floor
3 Liverpool Gardens
Worthing
West Sussex
BN11 1TF
AIRSYS (UK) LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
9,677,729
13,091,458
Cost of sales
(6,607,319)
(10,316,122)
Gross profit
3,070,410
2,775,336
Administrative expenses
(2,411,635)
(2,529,227)
Other operating income
182,409
144,372
Operating profit
4
841,184
390,481
Interest payable and similar expenses
8
(42,722)
(33,995)
Profit before taxation
798,462
356,486
Tax on profit
9
(42,904)
(27,431)
Profit for the financial year
755,558
329,055
The profit and loss account has been prepared on the basis that all operations are continuing operations.
AIRSYS (UK) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
£
£
Profit for the year
755,558
329,055
Other comprehensive income
-
-
Total comprehensive income for the year
755,558
329,055
AIRSYS (UK) LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
22,533
12,450
Current assets
Stocks
11
1,798,831
1,443,840
Debtors
12
1,880,643
1,756,757
Cash at bank and in hand
1,661,063
995,914
5,340,537
4,196,511
Creditors: amounts falling due within one year
13
(4,027,242)
(3,628,691)
Net current assets
1,313,295
567,820
Total assets less current liabilities
1,335,828
580,270
Creditors: amounts falling due after more than one year
14
(1,161,910)
(1,161,910)
Net assets/(liabilities)
173,918
(581,640)
Capital and reserves
Called up share capital
18
1,500,001
1,500,001
Profit and loss reserves
(1,326,083)
(2,081,641)
Total equity
173,918
(581,640)
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 20 September 2024 and are signed on its behalf by:
M Thompson
Director
Company registration number 07958046 (England and Wales)
AIRSYS (UK) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
1,500,001
(2,410,696)
(910,695)
Year ended 31 December 2022:
Profit and total comprehensive income
-
329,055
329,055
Balance at 31 December 2022
1,500,001
(2,081,641)
(581,640)
Year ended 31 December 2023:
Profit and total comprehensive income
-
755,558
755,558
Balance at 31 December 2023
1,500,001
(1,326,083)
173,918
AIRSYS (UK) LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
22
804,847
1,292,548
Interest paid
(42,722)
(33,995)
Income taxes paid
(79,972)
(36,786)
Net cash inflow from operating activities
682,153
1,221,767
Investing activities
Purchase of tangible fixed assets
(20,504)
Proceeds from disposal of tangible fixed assets
3,500
Net cash used in investing activities
(17,004)
-
Financing activities
Repayment of borrowings
(976,688)
Net cash used in financing activities
-
(976,688)
Net increase in cash and cash equivalents
665,149
245,079
Cash and cash equivalents at beginning of year
995,914
750,835
Cash and cash equivalents at end of year
1,661,063
995,914
AIRSYS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
Airsys (UK) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Kingham Chambers, 5 Nelson Street, LIVERPOOL, Merseyside, L1 5DW.
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, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.
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.
The company is dependent on the continued support of Airsys Refrigeration Engineering Technology (Beijing) Co Ltd, a fellow group company, in it's ability to continue as a going concern. Airsys Refrigeration Engineering Technology (Beijing) Co Ltd has provided the company with a long term loan with no formal repayment terms, meaning the company is able to meet its day to day working capital requirements. Airsys Refrigeration Engineering Technology (Beijing) Co Ltd has also guaranteed to provide product, technical and financial support as required by Airsys (UK) Ltd for the foreseeable future. On this basis the directors consider that it is appropriate for the financial statements to be prepared on a going concern basis.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and equipment
9.5% straight line basis per annum with a 5% residual value
Fixtures, fittings and Computer equipment
19% straight line basis per annum with a 5% residual value
Motor vehicles
19% straight line basis per annum with a 5% residual value
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.
AIRSYS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
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.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
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.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
AIRSYS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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.
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, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
AIRSYS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
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.
AIRSYS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
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.
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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
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.
1.14
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.
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.
3
Turnover
2023
2022
£
£
Turnover analysed by class of business
Supply and installation
9,587,485
13,091,458
Other income
90,244
-
9,677,729
13,091,458
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
9,677,729
13,091,458
AIRSYS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
22,016
Depreciation of owned tangible fixed assets
9,656
10,048
Profit on disposal of tangible fixed assets
(2,735)
-
Operating lease charges
196,736
194,512
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
11,050
10,650
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Employees
23
25
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,219,671
1,262,310
Social security costs
140,975
145,505
Pension costs
68,553
70,653
1,429,199
1,478,468
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
158,500
154,000
Company pension contributions to defined contribution schemes
16,250
15,900
174,750
169,900
AIRSYS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on invoice finance arrangements
42,722
33,995
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
42,904
27,431
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
798,462
356,486
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
199,616
67,732
Tax effect of expenses that are not deductible in determining taxable profit
684
Unutilised tax losses carried forward
(155,559)
(42,210)
Permanent capital allowances in excess of depreciation
(1,837)
1,909
Taxation charge for the year
42,904
27,431
AIRSYS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
10
Tangible fixed assets
Plant and equipment
Fixtures, fittings and Computer equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2023
4,400
10,549
58,717
73,666
Additions
20,504
20,504
Disposals
(15,301)
(15,301)
At 31 December 2023
4,400
10,549
63,920
78,869
Depreciation and impairment
At 1 January 2023
2,090
10,022
49,104
61,216
Depreciation charged in the year
418
9,238
9,656
Eliminated in respect of disposals
(14,536)
(14,536)
At 31 December 2023
2,508
10,022
43,806
56,336
Carrying amount
At 31 December 2023
1,892
527
20,114
22,533
At 31 December 2022
2,310
527
9,613
12,450
11
Stocks
2023
2022
£
£
Work in progress
356,393
603,409
Finished goods and goods for resale
1,442,438
840,431
1,798,831
1,443,840
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,462,038
1,141,868
Corporation tax recoverable
256,446
219,378
Other debtors
162,159
395,511
1,880,643
1,756,757
AIRSYS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
13
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
581,285
514,402
Taxation and social security
162,040
93,416
Other creditors
3,099,863
2,824,397
Accruals and deferred income
184,054
196,476
4,027,242
3,628,691
14
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Other borrowings
15
1,161,910
1,161,910
15
Loans and overdrafts
2023
2022
£
£
Loans from group undertakings
1,161,910
1,161,910
Payable after one year
1,161,910
1,161,910
16
Deferred taxation
The company has a deferred tax asset in respect of trading losses carried forward that outweigh the deferred tax liability on timing differences in respect of capital allowances. The company has not recognised the deferred tax asset on the basis that it is uncertain on the timing of utilising the deferred tax asset.
17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
68,553
70,653
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.
18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,500,001
1,500,001
1,500,001
1,500,001
AIRSYS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
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
49,489
61,576
Between two and five years
82,417
131,906
131,906
193,482
20
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sales
Sales
Purchases
Purchases
2023
2022
2023
2022
£
£
£
£
Entities with control, joint control or significant influence over the company
619,880
266,583
1,984,332
2,492,170
2023
2022
Amounts due to related parties
£
£
Entities with control, joint control or significant influence over the company
4,158,403
3,465,183
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due from related parties
£
£
Other related parties
243,101
349,642
21
Ultimate controlling party
Up to 30 June 2024 the company's immediate parent company was Airsys Refrigeration Engineering Technology (Beijing) Co., Ltd, a company incorporated and registered in China. The parent of the largest group in which the company's financial statements are consolidated is Airsys Refrigeration Engineering Technology (Beijing) Co., Ltd. The address of Airsys Refrigeration Engineering Technology (Beijing) Co., Ltd being; 10th floor, Hongkun Shengtong Building, No.19, Pingguoyuan Xixiaojie,Shijingshan, Beijing, China.
On 1 July 2024 a group restructuring exercise took place resulting in the company's immediate parent company becoming Airsys Holding Inc registered at 7820 Reidville Road, Greer, South Carolina USA.
AIRSYS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
22
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
755,558
329,055
Adjustments for:
Taxation charged
42,904
27,431
Finance costs
42,722
33,995
Gain on disposal of tangible fixed assets
(2,735)
-
Depreciation and impairment of tangible fixed assets
9,656
10,048
Movements in working capital:
(Increase)/decrease in stocks
(354,991)
103,161
Increase in debtors
(86,818)
(556,518)
Increase in creditors
398,551
1,345,376
Cash generated from operations
804,847
1,292,548
23
Analysis of changes in net funds/(debt)
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
995,914
665,149
1,661,063
Borrowings excluding overdrafts
(1,161,910)
-
(1,161,910)
(165,996)
665,149
499,153
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