Company registration number 05742022 (England and Wales)
CFMS SERVICES LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2023
PAGES FOR FILING WITH REGISTRAR
Premier House
127 Duckmoor Road
Ashton Gate
Bristol
England
BS3 2BJ
CFMS SERVICES LIMITED
CONTENTS
Page
Company information
1
Independent auditor's report
2 - 5
Balance sheet
6
Notes to the financial statements
7 - 11
CFMS SERVICES LIMITED
COMPANY INFORMATION
- 1 -
Director
S J Paice
Secretary
Lydaco Nominees Limited
Company number
05742022
Registered office
43 Queen Square
Bristol
BS1 4QP
Auditor
TC Group
Premier House
127 Duckmoor Road
Ashton Gate
Bristol
England
BS3 2BJ
CFMS SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CFMS SERVICES LIMITED
- 2 -
Opinion

We have audited the financial statements of CFMS Services Limited (the 'company') for the year ended 31 December 2023 which comprise , the balance sheet 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:

Basis for opinion

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.

Material uncertainty relating to going concern

We draw attention to Note 1.2 in the financial statements, which indicates that the company incurred a net loss of £714,293 during the year ended 31 December 2023. As stated in Note 1.2, these events or conditions, along with other matters relating to customer contracts as set forth in Note 1.2, indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

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. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is 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.

CFMS SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CFMS SERVICES LIMITED
- 3 -

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

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 director's 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:

 

Responsibilities of director

As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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.

CFMS SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CFMS SERVICES LIMITED
- 4 -

Our approach was as follows:

 

 

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.

 

CFMS SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CFMS SERVICES LIMITED
- 5 -

Use of our report

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.

Amanda Kruger FCCA (Senior Statutory Auditor)
For and on behalf of TC Group
Statutory Auditor
29 August 2024
Office: Bristol
CFMS SERVICES LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 6 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
3
399,862
448,326
Current assets
Debtors
4
436,733
834,965
Cash at bank and in hand
215,200
250,389
651,933
1,085,354
Creditors: amounts falling due within one year
5
(464,206)
(231,798)
Net current assets
187,727
853,556
Net assets
587,589
1,301,882
Capital and reserves
Called up share capital
1,000
1,000
Profit and loss reserves
586,589
1,300,882
Total equity
587,589
1,301,882

The notes on pages 7 to 11 form part of these financial statements.

The director of the company has elected not to include a copy of the profit and loss account within the financial statements.true

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 and signed by the director and authorised for issue on 29 August 2024
S J Paice
Director
Company Registration No. 05742022
CFMS SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
1
Accounting policies
Company information

CFMS Services Limited is a private company limited by shares incorporated in England and Wales. The registered office is 43 Queen Square, Bristol, BS1 4QP.

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 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, which assumes that the Company will continue in operational existence for the foreseeable future. However, since Covid, the Company has experienced a significant reduction in revenue due to the general economic downturn. In the year ended 31 December 2023 the Company recorded a loss after tax of (£714,293), we are however forecasting a profit of circa (£400K) for 2024. As at the 31 December 2023 there is cash at bank of £215,200 and net assets of £587,589.

While the financial forecasts prepared by the directors support the ability of the Company to continue as a going concern, there is a material uncertainty around expected customer contracts and the extent to which they will materialise and in what timeframes.

We have since the year-end received £2.4m in grant funding to support the development of our computer infrastructure which we hope will secure longer term income.

Due to these ongoing uncertainties, the board have taken proactive steps to reduce overheads in 2023 and into 2024 and have made enough progress with expected income with our main customers. The company has also been able to continue trading without incurring significant debt and continues to not have any long term liabilities.

The board of directors believe that the business has strong established customer relationships; however, future cash flows are strongly dependent on their continued support. If these contracts do not materialise, although indications are that they will materialise, it may cast significant doubt over the Company’s ability to continue as a going concern and therefore that it may be unable to realise its assets and discharge it’s liabilities in the normal course of business.

 

CFMS SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 8 -
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.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

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:

Fixtures and fittings
20% per annum straight line
IT Equipment
20-25% per annum straight line
Office equipment
25% per annum 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.

1.5
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.

1.6
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.

CFMS SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 9 -
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.

Basic financial liabilities

Basic financial liabilities, including creditors, 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.

1.7
Retirement benefits

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

 

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

1.8
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.

1.9
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.

During the current year, grant income has been reclassified from turnover to other operating income to reflect its true classification. The comparatives have also been adjusted to reflect this.

CFMS SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Total
42
36
3
Tangible fixed assets
Fixtures and fittings
IT Equipment
Office equipment
Total
£
£
£
£
Cost
At 1 January 2023
628,338
2,375,256
199,722
3,203,316
Additions
2,588
121,038
15,700
139,326
At 31 December 2023
630,926
2,496,294
215,422
3,342,642
Depreciation and impairment
At 1 January 2023
577,427
2,014,173
163,390
2,754,990
Depreciation charged in the year
14,710
153,493
19,587
187,790
At 31 December 2023
592,137
2,167,666
182,977
2,942,780
Carrying amount
At 31 December 2023
38,789
328,628
32,445
399,862
At 31 December 2022
50,911
361,083
36,332
448,326
4
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
81,795
328,855
Amounts owed by group undertakings
18,852
37,036
Other debtors
336,086
469,074
436,733
834,965
CFMS SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
5
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
227,215
97,285
Taxation and social security
137,475
74,892
Other creditors
99,516
59,621
464,206
231,798
6
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:

2023
2022
£
£
Within one year
250,502
250,502
Between two and five years
-
0
250,502
250,502
501,004
7
Parent company

The company's immediate parent is CFMS Limited, incorporated in England.

By virtue of their control of CFMS Limited, the ultimate controlling party is Airbus UK Limited, Rolls-Royce plc and GKN Aerospace Services Limited.

 

GKN Aerospace Services Limited became a controlling party from 28 June 2024.

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