Keronite Group Limited
Financial Statements
For the year ended 31 December 2021
For Filing with Registrar
Company Registration No. 05564452 (England and Wales)
Keronite Group Limited
Contents
Page
Balance sheet
1
Notes to the financial statements
2 - 8
Keronite Group Limited
Balance Sheet
As at 31 December 2021
Page 1
2021
2020
Notes
£
£
£
£
Fixed assets
Investments
4
481,062
400,000
Current assets
Debtors
6
301,847
312,350
Creditors: amounts falling due within one year
7
(697,997)
(708,500)
Net current liabilities
(396,150)
(396,150)
Net assets
84,912
3,850
Capital and reserves
Called up share capital
8
1,485,751
1,485,751
Share premium account
9,703,612
9,703,612
Capital redemption reserve
5,935,728
5,935,728
Profit and loss reserves
(17,040,179)
(17,121,241)
Total equity
84,912
3,850
The directors of the company have 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 by the board of directors and authorised for issue on 18 May 2022 and are signed on its behalf by:
M Hamblin
Director
Company Registration No. 05564452
Keronite Group Limited
Notes to the Financial Statements
For the year ended 31 December 2021
Page 2
1
Accounting policies
Company information
Keronite Group Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
1 Tudor Rose Court, 53 Hollands Road, Haverhill, Suffolk, CB9 8PJ.
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”) Section 1A and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The company has taken advantage of the exemption under section
399
of the
Companies Act 2006 not to prepare consolidated accounts
, on the basis that the group of which this is the parent qualifies as a small group
. The
financial statements
present information about the company as an individual entity and not about its group
.
Keronite Group Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
1
Accounting policies
(Continued)
Page 3
1.2
Going concern
The group’s strategic direction remains to provide material science-based service solutions to
true
customers directly from its own facilities in both the UK and the US. Strong customer interest
continues to provide evidence that Keronite’s leading technology, its breadth of applications and its
appeal in an environment demanding lightweight materials is applicable to a variety of business
sectors, markets and geographies.
Growth in 2021 and beyond
has
come from continuing to applying material science solutions to
develop robust and scalable manufacturing solutions to solve customer surface treatment problems.
The business has an established opportunity pipeline in key market sectors such as aerospace,
automotive and semi-conductor and has available installed manufacturing capacity due to the major
capital investment program previously completed. The business maintains a significant technical
function based at its dedicated Technical Centre at the UK site and intends to continue to claim
appropriate R&D tax credit support as it furthers its material science capabilities to develop advanced
surface treatment solutions.
The majority shareholder loan facility drawdown is due for repayment on 31 December 202
2
at a
redemption premium of 125%. The group’s cashflow forecast indicates that there would be sufficient
funds to meet this repayment
and the directors are
confident from discussions with the majority shareholder that they
will not elect for repayment without agreement and that any unredeemed loan will be rolled over and
bear interest as specified in the loan note instrument.
The board has considered the level of forecast sales growth for 202
2
and beyond as part of the cash
flow forecast and based on current plans is satisfied that the group can meet its liabilities as they fall
due for the foreseeable future, being a period of not less than 12 months from the date of approval of
these financial statements. All operating activity and capital investment is expected to be funded
without requiring any further shareholder financial support.
The forecast growth in revenue, the ongoing successful conversion of the order book for the twelve
months from the date of signing these accounts and the support of the majority shareholder are the
basis of the board's adoption of the going concern basis of preparation.
1.3
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
The investments are assessed for impairment at each reporting date
and
any
impairment
losses or reversals of impairment losses are recognised immediately in
profit
or
loss
.
A subsidiary is an entity controlled by the company
. Control is
the power to govern the financial and operating policies of
the
entity so as to obtain benefits from its activities.
1.4
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.
Keronite Group Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
1
Accounting policies
(Continued)
Page 4
1.5
Financial instruments
The company only enters into basic financial instrument transactions that result in the
r
ecognition of
financial assets and liabilities like trade and other debtors and creditors, loans from banks and other
third parties, loans to related parties and investments in ordinary shares.
Financial assets that are measured at cost and amortised cost are assessed at the end of each
reporting period for objective evidence of impairment. If objective evidence of impairment is
found, an
impairment loss is recognised in the statement of comprehensive income.
1.6
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.7
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or
fixed assets
.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.8
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are
as follows.
The company determines whether there are indicators of impairment of
the investment in subsidiaries on an annual basis
. Factors taken into
consideration in reaching such a decision include
review of the performance in the current year and net present value using discounted cash flow forecasts
.
Keronite Group Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
Page 5
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Total
5
4
4
Fixed asset investments
2021
2020
£
£
Shares in group undertakings and participating interests
481,062
400,000
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 January 2021 & 31 December 2021
481,062
Impairment
At 1 January 2021
81,062
Impairment losses reversed
(81,062)
At 31 December 2021
-
Carrying amount
At 31 December 2021
481,062
At 31 December 2020
400,000
The impairment loss from 2019 has been reversed as the subsidiary the impairment related to is now profit making, with net assets higher than the investment value.
Keronite Group Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
Page 6
5
Subsidiaries
Details of the company's subsidiaries at 31 December 2021 are as follows:
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Keronite International Limited
United Kingdom
Commercialisation of keronite process
Ordinary
100.00
Keronite Inc
United States of America
Sales of services of the keronite process through its prduction facility in the US
Ordinary
100.00
The aggregate capital and reserves and the result for the year of the subsidiaries noted above was as follows:
Name of undertaking
Capital and Reserves
Profit/(Loss)
£
£
Keronite International Limited
676,857
226,255
Keronite Inc
586,547
426,399
6
Debtors
2021
2020
Amounts falling due within one year:
£
£
Amounts owed by group undertakings
300,000
311,407
Other debtors
1,847
943
301,847
312,350
Keronite Group Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
Page 7
7
Creditors: amounts falling due within one year
2021
2020
£
£
Other borrowings
675,000
675,000
Amounts owed to group undertakings
10,497
Accruals and deferred income
12,500
33,500
697,997
708,500
Amounts owed to group undertakings are repayable on demand.
Amounts owed to the shareholder include an unsecured loan of £300,000 (20
20
- £
300,000
) which is an
interest free loan and
originally
repayable on 31 December 202
1, but extended to 31 December 2022.
The total amount also includes loan redemption
premium of £375,000
.
8
Called up share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £10 each
21,167
21,167
211,670
211,670
E Ordinary shares of 1p each
110
110
1
1
21,277
21,277
211,671
211,671
2021
2020
2021
2020
Preference share capital
Number
Number
£
£
Issued and fully paid
B preferred shares of £10 each
84,667
84,667
846,670
846,670
C preferred shares of £10 each
42,741
42,741
427,410
427,410
127,408
127,408
1,274,080
1,274,080
Preference shares classified as equity
1,274,080
1,274,080
Total equity share capital
1,485,751
1,485,751
All preferred shares rank pari passu with the ordinary shares except on distribution of capital.
Keronite Group Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2021
Page 8
9
Equity reserve
Reserves
The company's capital and reserves are as follows:
Called up share capital
Called up share capital represents the nominal value of the shares issues.
Share premium account
This includes any premiums received on issue of share capital. Any transactions associated with the issuing of shares are deducted from share premium.
Capital redemption reserve
This represents the nominal value of shares that have been cancelled.
Profit and loss account
This includes all current and prior periods retained profits and losses.
10
Audit report information
As the income statement has been omitted from the filing copy of the financial statements
,
the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006
:
The auditor's report was unqualified.
The senior statutory auditor was Matthew Meadows and the auditor was Moore Kingston Smith LLP.
11
Related party transactions
The company has taken advantage of the exemption available in Section 33.1A of FRS 102 whereby it has not disclosed transactions with any wholly owned subsidiary undertaking of the group.
During the year, the company paid directors' and consulting fees of £57,222 (2020 - £40,000) to its shareholder, Azini Capital Partners LLP. Included in accruals, an amount of £Nil (2020 - £25,000) was due to its shareholder at 31 December 2021.
12
Parent company
The significant shareholder in Keronite Group Limited is Azini1LP, a Scottish Limited Partnership. The General Partner of Azini1LP is Azini 1 GP Limited, a Scottish Limited Company and the Fund Manager of Azini1LP is Azini Capital Partners LLP, an English Limited Liability Partnership.