REGISTERED NUMBER: |
Unaudited Financial Statements for the Year Ended 31 March 2023 |
for |
FREEFLOW TECHNOLOGIES LIMITED |
REGISTERED NUMBER: |
Unaudited Financial Statements for the Year Ended 31 March 2023 |
for |
FREEFLOW TECHNOLOGIES LIMITED |
FREEFLOW TECHNOLOGIES LIMITED (REGISTERED NUMBER: SC420118) |
Contents of the Financial Statements |
for the Year Ended 31 March 2023 |
Page |
Company Information | 1 |
Statement of Financial Position | 2 |
Notes to the Financial Statements | 4 |
Chartered Accountants' Report | 12 |
FREEFLOW TECHNOLOGIES LIMITED |
Company Information |
for the Year Ended 31 March 2023 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
ACCOUNTANTS: |
Paxton House |
11 Woodside Crescent |
Charing Cross |
Glasgow |
G3 7UL |
FREEFLOW TECHNOLOGIES LIMITED (REGISTERED NUMBER: SC420118) |
Statement of Financial Position |
31 March 2023 |
31.3.23 | 31.3.22 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 4 |
Tangible assets | 5 |
CURRENT ASSETS |
Stocks |
Debtors | 6 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 7 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
ACCRUALS AND DEFERRED INCOME | 8 |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 9 |
Share premium | 10 |
Other reserves | 10 |
Retained earnings | 10 | ( |
) | ( |
) |
SHAREHOLDERS' FUNDS |
The directors acknowledge their responsibilities for: |
(a) | ensuring that the company keeps accounting records which comply with Sections 386 and 387 of the Companies Act 2006 and |
(b) | preparing financial statements which give a true and fair view of the state of affairs of the company as at the end of each financial year and of its profit or loss for each financial year in accordance with the requirements of Sections 394 and 395 and which otherwise comply with the requirements of the Companies Act 2006 relating to financial statements, so far as applicable to the company. |
FREEFLOW TECHNOLOGIES LIMITED (REGISTERED NUMBER: SC420118) |
Statement of Financial Position - continued |
31 March 2023 |
In accordance with Section 444 of the Companies Act 2006, the Profit and Loss Statement has not been delivered. |
The financial statements were approved by the Board of Directors and authorised for issue on |
FREEFLOW TECHNOLOGIES LIMITED (REGISTERED NUMBER: SC420118) |
Notes to the Financial Statements |
for the Year Ended 31 March 2023 |
1. | STATUTORY INFORMATION |
Freeflow Technologies Limited is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
The company engaged in raising new investment in the current financial year that when combined with other funds will enable the completion of product development and moving towards revenue generation. Given this the accounts have been prepared on a going concern basis. |
Significant judgements and estimates |
The preparation of the financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies. The directors are of the opinion that due to the nature of the business, there are no critical accounting estimates or judgements used in the preparation of these financial statements. |
Turnover |
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. |
Patents |
Costs expensed on patents have been capitalised as it is expected future benefits will flow to the company over the asset's useful economic life. Patents are measured at cost less accumulated amortisation and any accumulated impairment costs. Amortisation is charged so as to allocate the cost of the patents, less their residual values, over their estimated useful life, using the straight line method. The estimated useful life is 10 years and the residual value is expected to be £nil. If there is an indication that there has been a significant change in the amortisation rate or residual value of the patent costs, the amortisation of the asset is revised prospectively to reflect the new expectations. |
FREEFLOW TECHNOLOGIES LIMITED (REGISTERED NUMBER: SC420118) |
Notes to the Financial Statements - continued |
for the Year Ended 31 March 2023 |
2. | ACCOUNTING POLICIES - continued |
Development costs |
The bicycle development costs are recognised as an intangible asset when all of the following criteria are demonstrated; |
a) the technical feasibility of completing the eBike system so that it will be available for use or sale |
b) the intention to complete the eBike system and use or sell it |
c) the ability to use the eBike system or sell it |
d) how the eBike system will generate probable future economic benefits |
e) the availability of adequate technical, financial and other resources to complete the development and to use or sell the eBike system |
f) the ability to measure reliably the expenditure attributable to the eBike system during its development |
Expenditure that does not meet all of the above conditions is expensed as incurred. |
Amortisation begins when the intangible asset is available for use. The company shall choose an amortisation method that reflects the pattern in which it expects to consume the asset's future economic benefits. If the company cannot determine that pattern reliably, it shall use the straight-line method. |
Deferred development costs are reviewed at the end of each accounting period and where the conditions that justified the deferral of expenditure no longer apply, or are considered doubtful, the expenditure, to the extent that is considered to be irrecoverable, shall be written off immediately. |
If there is an indication that there has been a significant change in the amortisation rate or residual value of the development costs, the amortisation of the asset is revised prospectively to reflect the new expectations. |
Intellectual property |
Costs expensed on intellectual property regarding the eBike system have been capitalised as it is expected future benefits will flow to the company over the asset's useful economic life. Intellectual property is measured at cost less accumulated amortisation and any accumulated impairment costs. Amortisation is charged so as to allocate the cost of the intellectual property, less its residual value, over its estimated useful life, using the straight line method. The estimated useful life is 5 years and the residual value is expected to be £nil. If there is an indication that there has been a significant change in the amortisation rate or residual value of the patent costs, the amortisation of the asset is revised prospectively to reflect the new expectations. |
FREEFLOW TECHNOLOGIES LIMITED (REGISTERED NUMBER: SC420118) |
Notes to the Financial Statements - continued |
for the Year Ended 31 March 2023 |
2. | ACCOUNTING POLICIES - continued |
Tangible fixed assets |
Tangible fixed assets are stated at historical cost less accumulated depreciation and any 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 to profit or loss over the estimated useful economic lives, as follows: |
Computer Equipment - 20% Reducing Balance |
Plant & Machinery - 20% Reducing Balance |
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. |
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined, which is the higher of its fair value less costs to sell and its value in use. |
Any impairment loss is recognised immediately as an expense within profit or loss |
Stocks |
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. |
Financial instruments |
Trade and other debtors/creditors |
Trade and other debtors are recognised initially at transaction price less attributable transaction costs. Trade and other creditors are recognised initially at transaction price plus attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any impairment losses in the case of trade debtors. If the arrangement constitutes a financing transaction, for example if payment is deferred beyond normal business terms, then it is measured at the present value of future payments discounted at a market rate of interest for a similar debt instrument. |
Cash and cash equivalents |
Cash and cash equivalents comprise cash balances and call deposits. |
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 within profit or loss. |
For financial assets that are measured at amortised cost, the impairment loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the assets original effective interest rate. If a financial asset has a variable interest rate, the discount rate of measuring any impairment loss is the current effective interest rate determined under the contract. |
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between the assets carrying amount and the best estimate of the amount that the company would receive for the asset if it were to be sold at the balance sheet date. |
FREEFLOW TECHNOLOGIES LIMITED (REGISTERED NUMBER: SC420118) |
Notes to the Financial Statements - continued |
for the Year Ended 31 March 2023 |
2. | ACCOUNTING POLICIES - continued |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Profit and Loss Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Research and development tax credits |
Research and development tax credits paid to the company are accrued into the year that they arise. |
Hire purchase and leasing commitments |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
General provisions |
A provision is recognised when company has a legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the obligation. |
FREEFLOW TECHNOLOGIES LIMITED (REGISTERED NUMBER: SC420118) |
Notes to the Financial Statements - continued |
for the Year Ended 31 March 2023 |
2. | ACCOUNTING POLICIES - continued |
Share-based payments |
The company provides share-based payment arrangements to certain employees and suppliers in the form of share option agreements. |
All of the company's share option agreements are equity-settled arrangements. In accordance with FRS 102 these share option agreements are accounted for in the financial statements. The share options are required to be valued at fair value (excluding the effect of non-market based vesting conditions) at the date they are granted. The fair value is then expensed in each years financial statements on a straight-line basis over the vesting period. The amount recognised as an expense is adjusted each year to reflect the actual number of shares or options that will vest as circumstances change or share options lapse. |
There were no observable market value available for the fair value of the share options issued prior to the 2021 financial year. Fair value at the grant date had therefore been established by the directors based on entity-specific prior years financial information, taking into account other commercial factors at the date of the grant and from discussion with the relevant tax clearance offices. Those share options issued during the 2021 financial year based the fair value on that of the value applied to shares issued during a fund raising excerise that took place within the financial year. |
The share options issued prior to 2021 had one of the share agreements vest fully on grant date and the remaining vested over the next five years. There were seven new share option agreements issued in 2021, all bar one, will vest over three years. The share option agreement not vesting over three years will vest over four. |
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 the 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 the income statement. |
The company has no cash-settled arrangements. |
Government grants |
Government grants are recognised at fair value when there is reasonable assurance that the company will comply with the conditions attaching to them and that the grants will be received. |
Grants related to the purchase of assets are treated as deferred income and a proportion is allocated to the profit and loss account each year over the useful lives of the related assets. |
Grants related to revenue expenses are treated as other income in the profit and loss account. |
3. | EMPLOYEES AND DIRECTORS |
The average number of employees during the year was |
FREEFLOW TECHNOLOGIES LIMITED (REGISTERED NUMBER: SC420118) |
Notes to the Financial Statements - continued |
for the Year Ended 31 March 2023 |
4. | INTANGIBLE FIXED ASSETS |
Development | Intellectual |
Patents | costs | property | Totals |
£ | £ | £ | £ |
COST |
At 1 April 2022 |
Additions |
At 31 March 2023 |
AMORTISATION |
At 1 April 2022 |
Amortisation for year |
At 31 March 2023 |
NET BOOK VALUE |
At 31 March 2023 |
At 31 March 2022 |
5. | TANGIBLE FIXED ASSETS |
Plant and | Computer |
machinery | equipment | Totals |
£ | £ | £ |
COST |
At 1 April 2022 |
Additions |
At 31 March 2023 |
DEPRECIATION |
At 1 April 2022 |
Charge for year |
At 31 March 2023 |
NET BOOK VALUE |
At 31 March 2023 |
At 31 March 2022 |
6. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
31.3.23 | 31.3.22 |
£ | £ |
Trade debtors |
Other debtors |
Tax |
VAT |
Prepayments |
FREEFLOW TECHNOLOGIES LIMITED (REGISTERED NUMBER: SC420118) |
Notes to the Financial Statements - continued |
for the Year Ended 31 March 2023 |
7. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
31.3.23 | 31.3.22 |
£ | £ |
Other loans |
Trade creditors |
Social security and other taxes |
Other creditors |
Credit card account | 396 | - |
Accruals and deferred income |
8. | ACCRUALS AND DEFERRED INCOME |
31.3.23 | 31.3.22 |
£ | £ |
Deferred government grants | 142,663 | 142,770 |
9. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 31.3.23 | 31.3.22 |
value: | £ | £ |
Ordinary | 0.000001 | 4 | 4 |
A Ordinary | 0.000001 | 1 | 1 |
5 | 5 |
10. | RESERVES |
Retained | Share | Other |
earnings | premium | reserves | Totals |
£ | £ | £ | £ |
At 1 April 2022 | ( |
) | 6,364,407 |
Deficit for the year | ( |
) | ( |
) |
Cash share issue | - | 68,027 | - | 68,027 |
Equity based payment reserve | - | - | 136,847 | 136,847 |
At 31 March 2023 | ( |
) | 6,312,368 |
Other reserves relate to accumulating provisions in connection with share options granted by the company. The movement in the year represents the fair value of the share based payments that relate to this financial year, When share options are exercised amounts are released to share capital and share premium reserves. There were no share options exercised during the year. |
11. | RELATED PARTY DISCLOSURES |
Directors' remuneration in the year totalled £269,333 (2022: £214,413). Share based payments totalling £136,847 (2022: £127,826) related to directors' share options that vested in the year. As at 31st March 2023 no share options have been exercised. |
FREEFLOW TECHNOLOGIES LIMITED (REGISTERED NUMBER: SC420118) |
Notes to the Financial Statements - continued |
for the Year Ended 31 March 2023 |
12. | SHARE-BASED PAYMENT TRANSACTIONS |
The company operates two share-based payment schemes for both employees and non-employees. |
A) Service Agreement Options- Unapproved |
Certain key members of staff, directors and suppliers were granted share options in the company as part of the Service Agreement share scheme. The options are granted with a fixed exercise price and may be exercised at any time following each vesting date.These options expire ten years after the date of grant. Employees are not entitled to dividends until the options have been exercised. Employees are required to remain in employment within the company until exercise, otherwise the awards lapse.The company can at their discretion choose to permit employees who have ceased employment with the company to retain ownership of the option agreements. On exercise of the options by employee, director and supplier the company issues new shares. |
B) Service Agreement Options- EMI |
Certain key members of staff and directors were granted share options in the company as part of the Service Agreement share scheme. The options are granted with a fixed exercise price and may be exercised at any time following each vesting date.These options expire ten years after the date of grant. Employees are not entitled to dividends until the options have been exercised. Employees are required to remain in employment within the company until exercise, otherwise the awards lapse. On exercise of the options by employee, director and supplier the company issues new shares. |
A reconciliation of share option movements over the year to 31 March 2023 is shown below: |
2023 | 2022 |
Weighted | Weighted |
average | average |
exercise | exercise |
price | price |
No. | £ | No. | £ |
Outstanding at 1st April | 496,909 | £1.77 | 519,674 | £1.77 |
Granted | 0 | £0.00 | 0 | £0.00 |
Legacy grants | 0 | £0.00 | 0 | £0.00 |
Forfeited | 0 | £0.00 | 22,765 | £1.77 |
Exercised | 0 | £0.00 | 0 | £0.00 |
Expired | 0 | £0.00 | 0 | £0.00 |
Outstanding at 31st March | 496,909 | £1.77 | 496,909 | £1.77 |
Exercisable at 31st March | 462,522 | £1.77 | 359,799 | £1.77 |
In accordance with FRS 102 the fair value of the share options at the grant date has been established and this is being expensed on a straight-line basis dependent on the vesting period disclosed within the share option agreement. In 2020 one share option agreement fully vested at grant date and the remaining were vesting over the next five years. In 2021 there were seven share option agreements issued. Six of these vested over three years and one vested over four years. The total charge for this year is £136,847 (2022: £127,826). |
None of the share options have been exercised thus far. |
Chartered Accountants' Report to the Board of Directors |
on the Unaudited Financial Statements of |
Freeflow Technologies Limited |
The following reproduces the text of the report prepared for the directors in respect of the company's annual unaudited financial statements. In accordance with the Companies Act 2006, the company is only required to file a Statement of Financial Position. Readers are cautioned that the Income Statement and certain other primary statements and the Report of the Directors are not required to be filed with the Registrar of Companies. |
In order to assist you to fulfil your duties under the Companies Act 2006, we have prepared for your approval the financial statements of Freeflow Technologies Limited for the year ended 31 March 2023 which comprise the Profit and Loss Statement, Statement of Financial Position, Statement of Changes in Equity and the related notes from the company's accounting records and from information and explanations you have given us. |
As a practising member firm of ICAS, we are subject to its ethical and other professional requirements which are detailed at http://www.icas.com/accountspreparationguidance. |
This report is made solely to the Board of Directors of Freeflow Technologies Limited, as a body, in accordance with our terms of engagement. Our work has been undertaken solely to prepare for your approval the financial statements of Freeflow Technologies Limited and state those matters that we have agreed to state to the Board of Directors of Freeflow Technologies Limited, as a body, in this report in accordance with the requirements of ICAS as detailed at http://www.icas.com/accountspreparationguidance. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and its Board of Directors, as a body, for our work or for this report. |
It is your duty to ensure that Freeflow Technologies Limited has kept adequate accounting records and to prepare statutory financial statements that give a true and fair view of the assets, liabilities, financial position and loss of Freeflow Technologies Limited. You consider that Freeflow Technologies Limited is exempt from the statutory audit requirement for the year. |
We have not been instructed to carry out an audit or a review of the financial statements of Freeflow Technologies Limited. For this reason, we have not verified the accuracy or completeness of the accounting records or information and explanations you have given to us and we do not, therefore, express any opinion on the statutory financial statements. |
Paxton House |
11 Woodside Crescent |
Charing Cross |
Glasgow |
G3 7UL |