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Engineered Arts Limited

Annual Report and Financial Statements
Year Ended 31 December 2024

Registration number: 05265468

 

Engineered Arts Limited

Contents

Balance Sheet

1

Notes to the Financial Statements

2 to 17

 

Engineered Arts Limited

Balance Sheet

31 December 2024

Note

2024
£

2023
£

Fixed assets

 

Intangible assets

4

1,514,157

1,727,357

Tangible assets

5

1,023,264

1,078,000

 

2,537,421

2,805,357

Current assets

 

Stocks

7

1,064,713

658,511

Debtors

8

1,271,080

1,022,370

Cash at bank and in hand

 

2,554,485

2,903,140

 

4,890,278

4,584,021

Creditors: Amounts falling due within one year

9

(1,724,496)

(3,258,420)

Net current assets

 

3,165,782

1,325,601

Total assets less current liabilities

 

5,703,203

4,130,958

Creditors: Amounts falling due after more than one year

9

(1,572)

(33,144)

Provisions for liabilities

(285,823)

(292,930)

Net assets

 

5,415,808

3,804,884

Capital and reserves

 

Called up share capital

11

3

3

Share premium reserve

5,076,793

2,333,332

Profit and loss account

339,012

1,471,549

Shareholders' funds

 

5,415,808

3,804,884

These financial statements have been prepared and delivered in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006 and the option not to file the Profit and Loss Account has been taken.

Approved and authorised by the Board on 30 April 2025 and signed on its behalf by:
 

.........................................
W S Jackson
Director

Company Registration Number: 05265468

 

Engineered Arts Limited

Notes to the Financial Statements

Year Ended 31 December 2024

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
E1-3
Church View Business Park
Bickland Water Road
Falmouth
Cornwall
TR11 4FZ

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements have been prepared in accordance with Financial Reporting Standard 102 - 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of Section 1A of FRS102 have been applied other than where additional disclosure is required to show a true and fair view.

The financial statements are prepared in pounds sterling which is the functional currency of the company.

Monetary amounts in these financial statements are rounded to the nearest pound.

Basis of preparation

These financial statements have been prepared using the historical cost convention.

 

Engineered Arts Limited

Notes to the Financial Statements

Year Ended 31 December 2024

Going concern

In preparing and approving these financial statements the Directors have given due consideration to going concern risks.

In reaching this conclusion the Directors, having made all necessary enquiries, have considered the level of cash reserves at the balance sheet date, and post year end. The Directors have also reviewed the company's budget and 12 month forecast, considering possible sensitivities in trading, indicate that the company will be able to operate within the level of its cash reserves for the foreseeable future.

The company continues to invest in development projects in order to drive future sales, and has sufficient cash to fund both this development and cover its other operational expenditures as and when they fall due.

The company has experienced its highest level of sales to date in the year ended 31 December 2024, and has made significant sales post year end and has more large orders in the pipeline.

After due consideration of these factors the Directors are satisfied that the company will be able to operate within their available facilities and continue as a going concern for the foreseeable future - being a period no less than 12 months from the date of approval of these financial statements.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable in respect of:

- The sale of humanoid and semi humanoid robots, including custom commissions and installations;
- The rental of humanoid and semi humanoid robots;
- The provision of software solutions and upgrades.

Turnover is shown net of value added tax, returns, rebates and discounts. Revenue in respect of the sale of units is recognised when the items are dispatched or made available for collection by customers. Revenue in respect of the provision of services is recognised over the term to which it relates.

Revenue in respect of product warranties is recognised over the period to which it relates. Revenue not relating to a period is deferred and recognised within accruals.

Other grants

Grants towards capital expenditure are released to the profit and loss account over the expected useful life of the assets. Grants towards revenue expenditure are released to the profit and loss account as the related expenditure is incurred.

Tax

Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

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

 

Engineered Arts Limited

Notes to the Financial Statements

Year Ended 31 December 2024

Deferred tax is recognised on all timing differences at the balance sheet date unless indicated below. Timing differences are differences between taxable profits and the results as stated in the profit and loss account and other comprehensive income. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Leasehold properties

Straight line over the remaining life of the lease

Plant and machinery

10% straight line

Fixtures, fittings and equipment

10% straight line

Motor vehicles

25% straight line

Office equipment

25% straight line

 

Engineered Arts Limited

Notes to the Financial Statements

Year Ended 31 December 2024

Research and development costs

Expenditure on research activities is recognised as an expense in the period in which it is incurred. In the event that an internally generated intangible asset arises from the company's development activities then it may be recognised only if all of the following conditions are met:

• it is technically feasible to complete the asset so that it is available for use;
• management intends to complete the asset and use or sell it;
• there is an ability to use or sell the asset;
• adequate technical, financial, and other resources to complete the development and to use or sell the product are available;
• it is probable that the asset created will generate future economic benefits; and
• the development cost of the asset can be measured reliably.

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

Asset class

Amortisation method and rate

Development costs

10% straight line

Development costs are held at cost value and not amortised until they are revenue producing.

Investments

Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.

Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the average cost (AVCO) method.

The cost of finished goods and work in progress 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. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

 

Engineered Arts Limited

Notes to the Financial Statements

Year Ended 31 December 2024

Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the profit and loss account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Defined contribution pension obligation

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.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

Share based payments

The company provides share based payments to certain employees.

Equity settled arrangements are measured at the fair value (excluding the effect on non market based vesting conditions) at the date of the grant. The fair value is expensed on a straight line basis over the vesting period. The amount recognised as an expense is adjusted to reflect the actual number of shares or options that will vest.

Where equity settled arrangements are modified, and are of benefit to the employee, the incremental fair value is recognised over the period from the date of modification to date of vesting. Where a modification is not beneficial to an employee there is no change to the charge for share based payment. Settlements and cancellations are treated as an acceleration of vesting and the unvested amount is recognised immediately in profit and loss.

The company has no cash settled arrangements.

 

Engineered Arts Limited

Notes to the Financial Statements

Year Ended 31 December 2024

Financial instruments

Classification
The company holds the following financial instruments:

• Short term trade and other debtors and creditors; and
• Cash and bank balances.

All financial instruments are classified as basic.

 Recognition and measurement
The company has chosen to apply the recognition and measurement principles in FRS102.

Financial instruments are recognised when the company becomes party to the contractual provisions of the instrument and derecognised when in the case of assets, the contractual rights to cash flows from the assets expire or substantially all the risks and rewards of ownership are transferred to another party, or in the case of liabilities, when the company’s obligations are discharged, expire or are cancelled.


 

 

Engineered Arts Limited

Notes to the Financial Statements

Year Ended 31 December 2024

Critical judgements and estimation uncertainty

In applying the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amounts 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.

In the opinion of the Directors the following areas are where significant estimates or judgements have been made in the financial statements:

Recognition of development expenditure (note 4)
Historically there has been capitalisation of research and development costs. During the year development expenditure of £nil (2023 - £nil) has been recognised as an intangible asset in the financial statements. Management have considered the requirements of Section 18 of FRS102 and are satisfied that the necessary conditions have been met in regards to the works performed. The company continues to invest in further development projects for launch in future periods.

Development costs that are capitalised in accordance with the requirements of FRS 102 are not treated, for dividend purposes, as a realised loss.

Recognition of share based payment arrangements (note 11)
The cost of share-based payments plans are calculated on the basis of the fair value of the equity instrument at grant date. Determining the fair value assumes choosing the most suitable valuation model for these equity instruments, which in this instance has involved the application of the Black - Scholes model. The application of this model requires input of relevant judgments, such as the estimated expected life and the volatility. Expected life assessments include consideration of when, or if, an exit event would occur.

Management have considered a range of scenarios in regards to the valuation and have assessed the impact of the share based payment arrangement as being immaterial to the financial statements.

3

Staff numbers

The average number of persons employed by the company (including directors) during the year, was 43 (2023 - 36).

 

Engineered Arts Limited

Notes to the Financial Statements

Year Ended 31 December 2024

4

Intangible assets

Development costs
 £

Total
£

Cost or valuation

At 1 January 2024

2,522,146

2,522,146

At 31 December 2024

2,522,146

2,522,146

Amortisation

At 1 January 2024

794,789

794,789

Amortisation charge

213,200

213,200

At 31 December 2024

1,007,989

1,007,989

Carrying amount

At 31 December 2024

1,514,157

1,514,157

At 31 December 2023

1,727,357

1,727,357

The aggregate amount of research and development expenditure recognised as an expense during the period is £100,631 (2023 - £51,907), and is included in administration costs.

The amortisation of development costs recognised in the year is £213,200 (2023 - £101,901) and is included in administration costs.
 

 

Engineered Arts Limited

Notes to the Financial Statements

Year Ended 31 December 2024

5

Tangible assets

             

Short leasehold
£

Fixtures and fittings
£

Motor vehicles
 £

Plant and machinery
£

Office equipment

Total
£

Cost or valuation

At 1 January 2024

353,830

176,498

26,433

1,511,713

-

2,068,474

Additions

-

8,878

-

114,238

24,097

147,213

Disposals

-

-

-

(13,088)

-

(13,088)

Transfers

-

(41,490)

-

(70,824)

112,314

-

At 31 December 2024

353,830

143,886

26,433

1,542,039

136,411

2,202,599

Depreciation

At 1 January 2024

112,565

105,502

15,166

757,241

-

990,474

Charge for the year

36,547

7,127

11,267

102,338

35,538

192,817

Eliminated on disposal

-

-

-

(3,956)

-

(3,956)

Transfers

-

(36,498)

-

(25,723)

62,221

-

At 31 December 2024

149,112

76,131

26,433

829,900

97,759

1,179,335

Carrying amount

At 31 December 2024

204,718

67,755

-

712,139

38,652

1,023,264

At 31 December 2023

241,265

70,996

11,267

754,472

-

1,078,000

 

Engineered Arts Limited

Notes to the Financial Statements

Year Ended 31 December 2024


Leased assets
Included within the year end net book value of tangible fixed assets is £146,250 (2023 - £151,125) in respect of assets held under finance leases and similar hire purchase contracts.

Depreciation for the year on these assets was £4,875 (2023 - £29,250).

6

Investments

On 11 April 2023, Engineered Arts Limited became the Member responsible for Engineered Arts LLC, a company formed in the United States of America. The LLC has no stock or share capital, therefore the investment value in Engineered Arts Limited is £nil.

7

Stocks

2024
£

2023
£

Work in progress

770,226

496,546

Finished goods and goods for resale

294,487

161,965

1,064,713

658,511

The Company has changed is bases of valuing stock to ensure it includes wage costs incurred in producing work in progress and finished goods. The bases now also includes work in progress of part finished incomplete robots. This new bases of valuation is applied from the year ended 31 December 2023 onwards.

8

Debtors

Note

2024
£

2023
£

Trade debtors

 

616,734

230,132

Amounts due from group undertakings

14

286,952

553,281

Other debtors

 

122,189

59,378

Prepayments

 

245,205

179,579

 

1,271,080

1,022,370

 

Engineered Arts Limited

Notes to the Financial Statements

Year Ended 31 December 2024

9

Creditors

Creditors: amounts falling due within one year

Note

2024
£

2023
 £

Due within one year

 

Loans and borrowings

10

31,294

2,436,702

Trade creditors

 

353,044

33,113

Social security and other taxes

 

110,619

60,010

Other creditors

 

9,286

5,478

Accrued expenses

 

77,070

282,820

Deferred income

 

1,143,183

440,297

 

1,724,496

3,258,420

Creditors: amounts falling due after more than one year

Note

2024
£

2023
£

Due after one year

 

Loans and borrowings

10

-

31,294

Deferred income

 

1,572

1,850

 

1,572

33,144

 

Engineered Arts Limited

Notes to the Financial Statements

Year Ended 31 December 2024

10

Loans and borrowings

2024
£

2023
£

Current loans and borrowings

HP and finance lease liabilities

31,294

62,587

Other borrowings

-

2,374,115

31,294

2,436,702

Other borrowings related to funds received through a Simple Agreement for Future Equity (SAFE) arrangement. This is understood to have met the definition of a liability because the number of shares to be issued will have varied depending on the outstanding amount at that time and the applicable conversion rate.

The balance was categorised as due in less than one year on the basis that there was no set date for the conditions to be met and the loan converted to equity.

The value is now £Nil as the loan value has been converted to equity in the year.

2024
£

2023
£

Loans and borrowings due after one year

HP and finance lease liabilities

-

31,294

The amounts shown as being due under finance lease are secured against the assets to which they relate.

11

Share capital

Allotted, called up and fully paid shares

2024

2023

No.

£

No.

£

Ordinary shares of £0.00 (2023 - £0.00) each

8,979,000

1

9,429

2

Ordinary A shares of £0 (2023 - £0.00) each

-

-

7,713

1

Ordinary B shares of £0.00 (2023 - £0) each

900,000

-

-

-

Series Seed Shares of £0.00 (2023 - £0) each

7,263,000

1

-

-

Series A-2 Shares of £0.00 (2023 - £0) each

971,458

-

-

-

18,113,458

3

17,142

3

 

Engineered Arts Limited

Notes to the Financial Statements

Year Ended 31 December 2024


Rights of share classes

Ordinary shares
The holders of Ordinary shares are entitled to full and equal rights to vote; full and equal entitlement to participate in dividend; full and equal entitlement to A Ordinary shares; participate in a capital distribution including on winding up ranking behind A Ordinary shares; non-redeemable and class right to appoint a director.

Ordinary B shares
The holders of the Ordinary B shares are entitled to vote with ten votes for each share held; full dividend rights; participate in a capital distribution including on winding up ranking behind Series A-2 shares and Series Seed shares but equal to the Ordinary shares; and have no specific rights of redemption.

Series A-2 shares
The holders of Series A-2 shares are entitled to full and equal rights to vote; full dividend rights; participate in a capital distribution including on winding up in priority to the Series Seed shares, Ordinary B and Ordinary shares capped at the greater of (i) amount paid for the Series A-2 shares or (ii) the amount that would have been received if the Series A-2 shares, Series Seed shares, Ordinary shares and Ordinary B shares constituted one and the same class; and have no specific rights of redemption.

Series Seed shares
The holders of Series Seed shares are entitled to full and equal rights to vote; full dividend rights; participate in a capital distribution including on winding up in priority to the Ordinary B and Ordinary shares capped at the greater of (i) amount paid for the Series Seed shares or (ii) the amount that would have been received if the Series Seed shares, Ordinary shares and Ordinary B shares constituted one and the same class; and have no specific rights of redemption.

12

Share based payments

The company held a share based payment arrangement, in which certain employees held options. At the start of the year, 1218 share options were held between 10 employees.

During the year an EMI flip transaction occurred whereby individuals were offered replacement options in Engineered Arts Holding Company Inc, a company incorporated in the United States of America.

All share options were transferred; there was no impact to the profit and loss account in the year.

13

Financial commitments, guarantees and contingencies

Amounts not provided for in the balance sheet

The total amount of financial commitments not included in the balance sheet is £50,346 (2023 - £Nil).

The company is a lessee of the property from which it operates. The total financial commitment pertaining these operating lease rentals not included in the balance sheet is £965,700 (2023 - £790,171).

 

Engineered Arts Limited

Notes to the Financial Statements

Year Ended 31 December 2024

14

Related party transactions

Transactions with directors

2024

At 1 January 2024
£

Repayments by director
£

At 31 December 2024
£

W S Jackson

Interest free directors loan repayable on demand

26

-

26

N Desmarais

Interest free directors loan repayable on demand

5,835

(5,835)

-

2023

At 1 January 2023
£

Repayments by director
£

Other payments made to company by director
£

At 31 December 2023
£

W S Jackson

Interest free directors loan repayable on demand

(40,789)

40,815

-

26

N Desmarais

Interest free directors loan repayable on demand

5,835

-

-

5,835

T D Rasburn

Interest free directors loan repayable on demand

(42,245)

42,245

-

-

Summary of transactions with subsidiaries

Sales to Engineered Arts LLC totalling £2,448 are included in trade debtors as at the year end.

 

Engineered Arts Limited

Notes to the Financial Statements

Year Ended 31 December 2024

15

Parent and ultimate parent undertaking

The company's immediate parent is Engineered Arts Holding Company Inc, incorporated in United States of America.

 

The holding company is not required to file statutory accounts in line with local laws.

 

Engineered Arts Limited

Notes to the Financial Statements

Year Ended 31 December 2024

16

Audit report

The Independent Auditors' Report was qualified. With respect to the opening stock at 1 January 2024 of £658,511 we were unable to vouch the full value of stock. At the year ended 31 December 2023 we attended the year end stock take. We tested the completeness and existence of raw materials stock held as at year-end, via performing a sheet to floor and floor to sheet sample test of the raw materials stock listing. However, the stock listing did not include all batches of stock of part finished incomplete robots. In prior years this had been deemed to be part of the development of products, however now that the business is consistently selling more products these form part of goods for commercial sale.The company now values part complete robots (e.g. arms and legs) as more than a sum of their individual components due to the staff time costs involved in producing these items. Consequently, our sample sizes did not cover the full spectrum of products held.

We were unable to satisfy ourselves by alternative means concerning the exact inventory quantities held at 31 December 2023. We do note that we were shown some examples of stock existence at year end, including work in progress data across time and have seen evidence of sales occurring post year end. The audit report qualification is required solely because we cannot satisfy ourselves that we can reliably test the exact value of stock at the year end. We were provided with valuations of completed robots, however, we could not prove that partially complete robots were at a specific percentage of completion as at the year ended 31 December 2023. Consequently, we could not accurately determine the valuation of stock at the prior year end. We also note that the company in the year to 31 December 2024 now includes machinery overheads within stock where relevant for the production of parts. This was not included in the stock valuation in the prior year.

By consequence, we were unable to determine whether any adjustment to this amount at 31 December 2023 was necessary, or whether there was any consequential effect on the cost of sales for the year ended 31 December 2024. In addition, were any adjustment to the inventory balance to be required, the directors’ report would also need to be amended.

We do wish to highlight there have been improvements in the stock system in the year to 31 December 2024 which meant we could test components, part finished robots, employee time and machinery overheads attributed to stock. The qualification is not applicable to the year-end stock balance at the end of the current financial year, 31 December 2024.

The name of the Senior Statutory Auditor who signed the audit report was Thomas Roach BSc FCA, who signed for and on behalf of PKF Francis Clark on 30 April 2025.