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Registered number: 05469396










ADVANCED FIBREOPTIC ENGINEERING LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2024



 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

COMPANY INFORMATION


Directors
N Martin 
M Johnson 
A Brown 
N Leavy 
M Zanola 




Registered number
05469396



Registered office
Unit 2 & 3 Glebe Court
West Oxfordshire Business Park

Carterton

Oxfordshire

OX18 3FX




Independent auditor
James Cowper Kreston Audit
Chartered Accountants and Statutory Auditor

201 Cumnor Hill

Cumnor

Oxford

Oxfordshire

OX2 9PJ





 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

CONTENTS



Page
Strategic Report
 
1
Directors' Report
 
2 - 3
Independent Auditor's Report
 
4 - 7
Statement of Comprehensive Income
 
8
Balance Sheet
 
9
Statement of Changes in Equity
 
10
Statement of Cash Flows
 
11
Analysis of Net Debt
 
12
Notes to the Financial Statements
 
13 - 26


 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2024

Business review
 
FY24 was difficult year, worldwide, with a significant number of country elections, high interest rates, and several areas of conflict. This led to a business environment that was cautious and unwilling to invest. This had some effect on the company results with a subdued Test & Measurement market giving little on the upside previously forecasted. In addition, market areas such as oil & gas exploration, although fairly small anyway, all but disappeared, although this was also affected by the move to sustainable fuels. The company also experienced a cancellation of a military project, although an agreed cancellation fee resulted in no loss to the business.
Despite the above, sales for FY24 increased to an all time high of £7.3m. Gross margin remained around 50%, as it has for some years, with both materials and direct labour costs being well controlled, even with higher inflation. 
The company is a customer led business, with a concentration on a top 5 or 6 customers. Supporting these businesses gives a constant supply of design and development work, and this has allowed the business to develop a number of market leading techniques, which has not only allowed the business to pick up further, related, work, but which has also given a positive effect on the balance sheet. The largest of these programs is in the aerospace sector, and is looking very promising for volume production in the medium term.
FY25 started with a similar subdued market, although Q1 has a history of being the weakest quarter of the year. However, the number, and quality, of enquiries and new projects has picked up significantly over the first half of FY25, and this is expected to improve sales in the second half of FY25, and into FY26. 
The company exports around 90% of its sales, with nearly all exports to the United States. These sales are all in USD. The business has some natural protection to exchange rates, as nearly all materials are sourced in the Far East, or North America, and purchased in USD. The company also undertakes some forwarding to reduce effects of any sudden rate changes. The gradual weakening of the USD against the GBP has had some negative effect, but the more recent strengthening, with the election of Donald Trump, has been welcome. The company will be looking closely at any Trade Tariffs which may be issued by the new American administration, and will be making adjustments as necessary. The company has already looked at a number of scenarios where a positive outcome could be achieved.


This report was approved by the board and signed on its behalf.



N Martin
Director

Date: 17 March 2025

Page 1

 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

 
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2024

The directors present their report and the financial statements for the year ended 30 June 2024.

Directors

The directors who served during the year were:

N Martin 
M Johnson 
A Brown 
N Leavy 
M Zanola 

Directors' responsibilities statement

The directors are responsible for preparing the Strategic Report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;

make judgments 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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Principal activity

The principal activity of the Company in the year under review was that of the design, development and manufacture of specialist fibreoptic components and assemblies.

Results and dividends

The profit for the year, after taxation, amounted to £855,351 (2023 - £825,433).

During the year there were two dividends declared and paid, totalling £440,000, to Adfen Investments Limited, the Company's parent company (2023 - £375,000).

Page 2

 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024

Disclosure of information to auditor

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Auditor

The auditor, James Cowper Kreston Auditwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 





N Martin
Director

Date: 17 March 2025

Page 3

 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

Opinion


We have audited the financial statements of Advanced Fibreoptic Engineering Limited (the 'Company') for the year ended 30 June 2024, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe 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 30 June 2024 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.


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 United Kingdom, including the Financial Reporting Council'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.


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 directors are responsible for the other information contained within the Annual ReportOur 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.


Page 4

 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ADVANCED FIBREOPTIC ENGINEERING LIMITED (CONTINUED)


Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.


We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' 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 set out on page 2, 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.


Page 5

 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ADVANCED FIBREOPTIC ENGINEERING LIMITED (CONTINUED)


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. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

The specific procedures for this engagement that we designed and performed to detect material misstatements in respect of irregularities, including fraud, were as follows:
 
Enquiry of management and those charged with governance around actual and potential litigation and claims;
Enquiry of management and those charged with governance to identify any material instances of non-compliance with laws and regulations;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work to address the risk of irregularities due to management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for evidence of bias.


Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's Report.


Page 6

 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ADVANCED FIBREOPTIC ENGINEERING LIMITED (CONTINUED)


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 2006Our 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.





Sue Staunton MA FCA CF (Senior Statutory Auditor)
  
for and on behalf of
James Cowper Kreston Audit
 
Chartered Accountants and Statutory Auditor
  
201 Cumnor Hill
Cumnor
Oxford
Oxfordshire
OX2 9PJ

17 March 2025
Page 7

 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024

2024
2023
Note
£
£

  

Turnover
 4 
7,290,457
6,900,049

Cost of sales
  
(3,707,064)
(3,400,550)

Gross profit
  
3,583,393
3,499,499

Administrative expenses
  
(2,931,406)
(2,953,326)

Other operating income
 5 
418,324
471,924

Operating profit
  
1,070,311
1,018,097

Interest payable and similar expenses
 10 
(10,387)
(10,295)

Profit before tax
  
1,059,924
1,007,802

Tax on profit
 11 
(204,573)
(182,369)

Profit for the financial year
  
855,351
825,433

There was no other comprehensive income for 2024 (2023:£NIL).

The notes on pages 13 to 26 form part of these financial statements.

Page 8

 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
REGISTERED NUMBER: 05469396

BALANCE SHEET
AS AT 30 JUNE 2024

2024
2023
Note
£
£

Fixed assets
  

Intangible assets
 13 
2,471,819
1,806,898

Tangible assets
 14 
472,757
494,030

  
2,944,576
2,300,928

Current assets
  

Stocks
 15 
801,765
1,026,099

Debtors
 16 
1,710,728
1,453,767

Cash at bank and in hand
 17 
349,457
359,792

  
2,861,950
2,839,658

Creditors: amounts falling due within one year
 18 
(821,278)
(618,962)

Net current assets
  
 
 
2,040,672
 
 
2,220,696

Total assets less current liabilities
  
4,985,248
4,521,624

Provisions for liabilities
  

Deferred tax
 19 
(641,387)
(495,265)

Other provisions
 21 
(149,490)
(257,339)

  
 
 
(790,877)
 
 
(752,604)

Net assets
  
4,194,371
3,769,020


Capital and reserves
  

Called up share capital 
  
100,000
100,000

Profit and loss account
  
4,094,371
3,669,020

  
4,194,371
3,769,020


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 



N Martin
Director

Date: 17 March 2025

Page 9

 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024


Called up share capital
Profit and loss account
Total equity

£
£
£

At 1 July 2023
100,000
3,669,020
3,769,020


Comprehensive income for the year

Profit for the year
-
855,351
855,351
Total comprehensive income for the year
-
855,351
855,351


Contributions by and distributions to owners

Dividends: Equity capital
-
(430,000)
(430,000)


Total transactions with owners
-
(430,000)
(430,000)


At 30 June 2024
100,000
4,094,371
4,194,371



STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023


Called up share capital
Profit and loss account
Total equity

£
£
£

At 1 July 2022
100,000
3,218,587
3,318,587


Comprehensive income for the year

Profit for the year
-
825,433
825,433
Total comprehensive income for the year
-
825,433
825,433


Contributions by and distributions to owners

Dividends: Equity capital
-
(375,000)
(375,000)


Total transactions with owners
-
(375,000)
(375,000)


At 30 June 2023
100,000
3,669,020
3,769,020


Page 10

 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024

2024
2023
£
£

Cash flows from operating activities

Profit for the financial year
855,351
825,433

Adjustments for:

Amortisation of intangible assets
122,125
104,589

Depreciation of tangible assets
110,452
101,720

Decrease in stocks
224,334
39,155

(Increase)/decrease in debtors
(256,961)
257,634

Increase/(decrease) in creditors
202,316
(281,500)

Increase in provisions
38,273
156,637

Net cash generated from operating activities

1,295,890
1,203,668


Cash flows from investing activities

Purchase of intangible fixed assets
(787,046)
(784,305)

Purchase of tangible fixed assets
(89,179)
(129,143)

Net cash from investing activities

(876,225)
(913,448)

Cash flows from financing activities

Dividends paid
(430,000)
(375,000)

Net cash used in financing activities
(430,000)
(375,000)

Net (decrease) in cash and cash equivalents
(10,335)
(84,780)

Cash and cash equivalents at beginning of year
359,792
444,572

Cash and cash equivalents at the end of year
349,457
359,792


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
349,457
359,792

349,457
359,792


The notes on pages 13 to 26 form part of these financial statements.

Page 11

 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 30 JUNE 2024




At 1 July 2023
Cash flows
At 30 June 2024
£

£

£

Cash at bank and in hand

359,792

(10,335)

349,457


359,792
(10,335)
349,457

The notes on pages 13 to 26 form part of these financial statements.

Page 12

 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

1.


General information

Advanced Fibreoptic Engineering Limited is a company limited by shares and incorporated in England and Wales. The registered office is Unit 2 & 3 Glebe Court, West Oxfordshire Business Park, Carterton, OX18 3FX. The principal activity of the Company in the year under review was that of the design, development and manufacture of specialist fibreoptic components and assemblies.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland, and the Companies Act 2006. 

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Going concern

At the balance sheet date the Company had net assets of £4,184,371 (2023: £3,769,020) which includes net current assets of £2,030,672 (2023: £2,220,696) having made a profit before tax in the year of £1,059,924 (2023: £1,007,802). The directors believe it is appropriate to prepare the financial statements on a going concern basis.

 
2.3

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is pounds sterling rounded to the nearest pound.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Page 13

 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

2.Accounting policies (continued)

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Company has transferred the significant risks and rewards of ownership to the buyer;
the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

 
2.5

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

 
2.6

Government grants

Grants are accounted for under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.

 
2.7

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.

Page 14

 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

2.Accounting policies (continued)

 
2.8

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

 
2.9

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 
2.10

Development costs

Development costs are capitalised within intangible assets when they can be identified with a specific product or project anticipated to produce future benefits, and are amortised on a straight-line basis over the anticipated life of the benefits arising from the completed product or project which varies from 3-10 years.

  
2.11

Stocks and work in progress

Stocks and work in progress are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow-moving stocks. Cost is based on costs of materials.

Page 15

 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

2.Accounting policies (continued)

 
2.12

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using a combination of the reducing balance and the straight-line method..

Depreciation is provided on the following basis:

Plant & machinery
-
15% reducing balance
Motor vehicles
-
33% straight line
Fixtures & fittings
-
15% reducing balance / 33% straight line
Other Fixed Assets
-
33% straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.13

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.14

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

 
2.15

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.16

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

Page 16

 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

2.Accounting policies (continued)

 
2.17

Financial instruments

The Company enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities such as trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.
The Company also enters into forward foreign exchange contracts which are not basic financial instruments. These are initially recognised at fair value on the date a forward contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value are recognised in profit or loss in finance costs or income as appropriate. The Company does not currently apply hedge accounting for foreign exchange derivatives.

 
2.18

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The Company makes estimates and assumptions concering the future judgments in applying the Company's accounting policies. The resulting accounting estimates will, by definition, seldom equal actual results. The following estimates and assumption have significant risk of causing a material adjustment to the carrying value of assets and liabilities within the next financial year.
Intangible fixed assets
Development expenditure is capitalised as an intangible fixed asset if the Company can demonstrate that the Compnay intends to complete the asset to use or sell and it is technically feasible to do so, the Company is able to use the asset, the asset will generate future probably economic benefits, the Company has adequate technical, financial or other resources to complete the development and to use or sell the asset and the Company can reliably measure the expenditure attributable to the intangible asset during its development. The Company uses judgement to make these assessments and actual results may vary.
Intangible fixed assets are amortised over the period the Company expects to use the assets. the actual lives of the assets are assessed annually and may vary depnding on a number of factors. Residual value assessments consider issues such as the remaining life of the asset and any impairments.

Page 17

 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

4.


Turnover

An analysis of turnover by class of business is as follows:


2024
2023
£
£

Test and measurement
5,573,960
5,269,901

Aerospace, military and intelligence
1,273,826
1,098,140

Other revenue
442,671
532,008

7,290,457
6,900,049


Analysis of turnover by country of destination:

2024
2023
£
£

United Kingdom
1,384,895
1,215,121

Rest of Europe
196,731
192,922

Rest of the World
5,708,831
5,492,006

7,290,457
6,900,049



5.


Other operating income

2024
2023
£
£

Other operating income
169,496
125,546

Government grants receivable
248,828
346,378

418,324
471,924



6.


Operating profit

The operating profit is stated after charging:

2024
2023
£
£

Research & development charged as an expense
210,790
555,523

Exchange differences
39,068
95,498

Other operating lease rentals
301,256
237,308

Page 18

 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

7.


Auditor's remuneration

During the year, the Company obtained the following services from the Company's auditor:


2024
2023
£
£

Audit of the Company's financial statements
12,875
12,260

Preparation of the financial statements
1,900
1,800

Taxation compliance services
2,350
2,250


8.


Employees

2024
2023
£
£

Wages and salaries
2,410,886
2,272,544

Social security costs
113,040
88,204

Cost of defined contribution scheme
215,324
128,413

2,739,250
2,489,161


The average monthly number of employees, including the directors, during the year was as follows:


        2024
        2023
            No.
            No.







Staff
51
57


9.


Directors' remuneration

2024
2023
£
£

Directors' emoluments
742,312
671,540

Company contributions to defined contribution pension schemes
20,460
18,528

762,772
690,068


During the year retirement benefits were accruing to 3 directors (2023 - 3) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £269,016 (2023 - £249,974).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £NIL (2023 - £NIL).

Key management personnel received remuneration of £815,071 (2023 - £746,077).

Page 19

 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

10.


Interest payable and similar expenses

2024
2023
£
£


Bank interest payable
10,387
10,295

10,387
10,295


11.


Taxation


2024
2023
£
£

Corporation tax


Current tax on profits for the year
58,451
25,732

58,451
25,732


Total current tax
58,451
25,732

Deferred tax


Origination and reversal of timing differences
146,122
156,637

Total deferred tax
146,122
156,637


Taxation on profit on ordinary activities
204,573
182,369
Page 20

 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
 
11.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is the same as (2023 - lower than) the standard rate of corporation tax in the UK of 25% (2023 - 19%). The differences are explained below:

2024
2023
£
£


Profit on ordinary activities before tax
1,059,924
1,007,802


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 19%)
264,981
206,558

Effects of:


Expenses not deductible for tax purposes
1,113
166

Capital allowances for year in excess of depreciation
-
(73,544)

Remeasurement of deferred tax changes in tax rates
-
28,220

Fixed asset differences
-
(4,762)

Adjustments to tax charge in respect of prior periods
(27,544)
-

RDEC
(33,029)
25,731

Group relief claimed
(948)
-

Total tax charge for the year
204,573
182,369



There are no factors affecting future tax charges. 


12.


Dividends

2024
2023
£
£


Ordinary dividend
430,000
375,000

Page 21

 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

13.


Intangible assets




Development

£



Cost


At 1 July 2023
2,182,298


Additions - internal
787,046



At 30 June 2024

2,969,344



Amortisation


At 1 July 2023
375,400


Charge for the year on owned assets
122,125



At 30 June 2024

497,525



Net book value



At 30 June 2024
2,471,819



At 30 June 2023
1,806,898



Page 22

 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

14.


Tangible fixed assets





Plant & machinery
Motor vehicles
Fixtures & fittings
Other fixed assets
Total

£
£
£
£
£



Cost or valuation


At 1 July 2023
831,324
29,435
777,561
79,851
1,718,171


Additions
36,088
-
53,091
-
89,179


Disposals
-
-
(1,229)
-
(1,229)



At 30 June 2024

867,412
29,435
829,423
79,851
1,806,121



Depreciation


At 1 July 2023
599,162
5,092
540,036
79,851
1,224,141


Charge for the year on owned assets
60,237
3,652
46,563
-
110,452


Disposals
-
-
(1,229)
-
(1,229)



At 30 June 2024

659,399
8,744
585,370
79,851
1,333,364



Net book value



At 30 June 2024
208,013
20,691
244,053
-
472,757



At 30 June 2023
232,162
24,343
237,525
-
494,030

Page 23

 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

15.


Stocks

2024
2023
£
£

Raw materials and consumables
727,640
893,351

Work in progress (goods to be sold)
74,125
132,748

801,765
1,026,099


The carrying value of stocks is stated net of impairment losses totalling £nil (2023 - £526,368). Impairment losses totalling £nil (2023 - £36,942) were recognised in profit and loss.


16.


Debtors

2024
2023
£
£



Trade debtors
1,368,708
1,110,072

Amounts owed by group undertakings
10,000
-

Other debtors
150,140
211,070

Prepayments and accrued income
181,880
132,625

1,710,728
1,453,767



17.


Cash and cash equivalents

2024
2023
£
£

Cash at bank and in hand
349,457
359,792



18.


Creditors: Amounts falling due within one year

2024
2023
£
£

Trade creditors
567,185
363,897

Other taxation and social security
73,496
58,951

Other creditors
22,520
4,229

Accruals and deferred income
158,077
191,885

821,278
618,962


Page 24

 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

19.


Deferred taxation




2024


£






At beginning of year
(495,265)


Charged to profit or loss
(146,122)



At end of year
(641,387)

The provision for deferred taxation is made up as follows:

2024
2023
£
£


Accelerated capital allowances
(652,731)
(338,628)

Short term timing differences
11,344
(156,637)

(641,387)
(495,265)


20.


Financial instruments

As at 30 June 2024, the Company was committed to the sale of foreign currency amounting to £369,800 (2023: £392,833).


21.


Provisions




Provisions

£





At 1 July 2023
257,339


Utilised in year
(107,849)



At 30 June 2024
149,490

The provision relates to an estimate of the costs for restoration, repair and redecoration of the Company's leased premises at the termination of the leases in accordance with the terms of the lease agreements. 


22.


Share capital

2024
2023
£
£
Allotted, called up and fully paid



100,000 (2023 - 100,000) Ordinary shares of £1.00 each
100,000
100,000


Page 25

 
ADVANCED FIBREOPTIC ENGINEERING LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

23.


Pension commitments

The Company operates a defined contribution scheme at a cost during the year to the Company of £215,324 (2023: £128,413) with an amount outstanding at the year end of £18,710 (2022: £228).


24.


Commitments under operating leases

At 30 June 2024 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2024
2023
£
£


Not later than 1 year
290,820
298,319

Later than 1 year and not later than 5 years
1,017,908
1,118,696

1,308,728
1,417,015


25.


Related party transactions

During the year, the Company paid dividends of £440,000 (2023: £375,000) to its parent company, Adfen Investments Limited. 


26.


Controlling party

The ultimate parent undertaking is Adfen Investments Limited.  The registered office is Units 2 & 3 Glebe Court, West Oxfordshire Business Park, Carterton, OX18 3FX. The Directors consider there is no one ultimate controlling party.


Page 26