Registration number:
Micro Systems (UK) Limited
for the Year Ended 31 December 2016
Statutory Auditors
Lowry House
17 Marble Street
Manchester
M2 3AW
Micro Systems (UK) Limited
Contents
Company Information |
|
Strategic Report |
|
Directors' Report |
|
Statement of Directors' Responsibilities |
|
Independent Auditor's Report |
|
Consolidated Profit and Loss Account |
|
Consolidated Statement of Comprehensive Income |
|
Consolidated Balance Sheet |
|
Balance Sheet |
|
Consolidated Statement of Changes in Equity |
|
Statement of Changes in Equity |
|
Consolidated Statement of Cash Flows |
|
Statement of Cash Flows |
|
Notes to the Financial Statements |
Micro Systems (UK) Limited
Company Information
Chairman |
Mr G Clark |
Chief executive |
Mr G Clark |
Directors |
Mr G Clark Mrs M Robinson |
Registered office |
|
Solicitors |
|
Bankers |
|
Auditors |
|
Page 1 |
Micro Systems (UK) Limited
Strategic Report for the Year Ended 31 December 2016
The directors present their strategic report for the year ended 31 December 2016.
Principal activity
The principal activity of the company is medical manufacturing and consultancy
Fair review of the business
We aim to present a balanced and comprehensive review of the development and performance of our business during the year and its position at the year end. Our review is consistent with the size and complexity of our business and is written in the context of the risks and uncertainties we face.
We specialise in and the design, manufacture and validation of micro and ultra precision injection moulds for the medical, pharmaceutical and optical markets. We also have a dedicated Branch in Vienna South, Austria, which offers full production capability to manufacture micro medical parts with appropriate quality accreditation, ISO13485. In addition to this, we have a mould manufacturing and testing facility in Singapore which complements our UK manufacturing site utilising duplicate machinery, inspection and software.
The directors are pleased with the group's profitability during the year, although turnover has reduced somewhat during the period. Production efficiency and rectification costs have improved although the reduced turnover shows in the machine utilisation figures due to spare capacity available during the year. We have recently secured projects from new Medical Device customers, and we will work on growing the turnover in a controlled manner so as not to affect overall profitability.
As with most UK manufacturing companies, we are still unsure about the impact following the Brexit vote. We have a significant proportion of skilled EU employees working in key positions, an EU manufacturing facility in Vienna, Austria, and more than 50% of sales are for the export market. We are still monitoring the situation closely, but it appears that there is still a lot of negotiations to be carried out between the UK and EU before the situation is clarified. We are confident that we can retain these EU employees due to their high skill level and salary levels.
The board of directors has chosen a number of financial and non-financial key performance indicators (KPI's) to measure the groups progress. The source of the data is consistent with published financial information in the audited financial statements. The table below sets out these KPI's
The company's key financial and other performance indicators during the year were as follows:
Unit |
2016 |
2015 |
|
Percentage growth in revenue to measure the growth of the business |
% |
(30) |
21 |
Return on sales at operating profit level measuring the overall operational efficiency |
% |
12 |
11 |
Gross profit margin as a measure of the profitability of sales |
% |
40 |
37 |
Current Ratio used to measure the company's ability to pay its current liabilities |
2 |
1 |
|
Return on capital employed |
% |
21 |
31 |
Page 2 |
Micro Systems (UK) Limited
Strategic Report for the Year Ended 31 December 2016
Principal risks and uncertainties
There are a number of risks and uncertainties that can impact the performance of the group, some of which are outside the control of the directors. These include the underlying trend of the UK economy and the wider world manufacturing base in the world's developed economies, specifically as an increasing proportion of the group's sales are export based. However, the majority of the group’s customers are international blue chip medical manufacturing companies, operating at the forefront of technology within their particular sector.
The principal risks and uncertainties to the business which the directors can control are as follows:
1. Foreign Exchange Risk
The group sells to customers both in US dollars and the Euro, as well as operating in Austria with the Euro as the currency and in Singapore where the local currency is the Singapore dollar. The group is therefore exposed to the risk of exchange rate losses, through unanticipated fluctuations in the exchange rates of these currencies with sterling. The directors mitigate against this risk by foreign exchange risk hedging in the form of forward buying of the appropriate currency in consultation with its bankers.
2. Adequate Funding
The group operates in a number of different jurisdictions and utilises within its business, expensive computer aided design and plant and machinery for manufacture. It also undertakes a considerable number of projects which are long term in nature, sometimes in excess of a year in duration. It is essential therefore that the group has adequate and appropriate funding in place to finance its working capital and capital expenditure. The directors do this through a combination of retained profits and cash flows in the business, bank borrowing, asset finance and customer deposits, so that they are matched with the expected lives of the expenditure being undertaken.
Approved by the Board on
.........................................
Mr G Clark
Chairman and chief executive
Page 3 |
Micro Systems (UK) Limited
Directors' Report for the Year Ended 31 December 2016
The directors present their report and the for the year ended 31 December 2016.
Directors of the group
The directors who held office during the year were as follows:
Financial instruments
Objectives and policies
The directors have considered the exposure of the group to financial risks. The objective of the group is to minimise the potential adverse effects of the risks it faces on the financial performance the group.
Price risk, credit risk, liquidity risk and cash flow risk
Price risk - is the risk that the company under charges for the work that it has done. Products and services are priced according to the complexity of the work being undertaken and the number of hours budgeted to complete that job and the materials required. Job specifications and the resulting price are often worked on and agreed on with the client as part of the development of a project and form the basis of a formal agreed price.
Credit risk - is the risk that a customer does not pay for the goods and/or services supplied. The group's policy is that all new customers are subject to credit checks prior to orders being placed. The group also regularly reviews credit limits of existing customers and monitors their payment history. All sales are also subject to a formally agreed and signed sales order process.
Liquidity risk - is the risk that an asset of the group can not be traded quickly enough to prevent a loss and the group will not have sufficient financial resources to meet its liabilities as they fall due. Liquidity is managed by regularly reviewing the group's borrowing facilities to ensure they are adequate in the short term to meet its short term cash flow requirements and in the medium term together with profit retention to enable the group to meet its strategy for growth.
Cash flow risk - is the risk that the group runs out of cash to meet its day to day liabilities. The directors' regularly monitor cash flow projections of the group to ensure it has adequate available funds for its continuing operations. Sales orders are also subject to a deposit to assist financing working capital.
Future developments
The Singapore Manufacturing Operations have now been relocated to a brand new purpose built medical manufacturing hub, approximately 15 minutes drive from the previous facility. This has enabled us to more than double our existing mould manufacturing capacity as stage 1 expansion during 2016. Stage 2, to be completed by end of 2017, will significantly improve our injection moulding operations with additional on site testing and the ability to carry out full production moulding once it is approved to ISO 13485.
Research and development
The company undertakes research and development into advanced manufacturing techniques. The results of this research allow us to demonstrate capability to customers in the areas of ultra precision and micro machining.
Branches outside the United Kingdom
The company has a branch in Brunn am Gebirge, Vienna South, Austria for Production Micro Moulding.
Page 4 |
Micro Systems (UK) Limited
Directors' Report for the Year Ended 31 December 2016
Disclosure of information to the auditor
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.
Approved by the Board on
.........................................
Mr G Clark
Chairman and chief executive
Page 5 |
Micro Systems (UK) Limited
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities for preparing the Annual 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 and apply them consistently; |
• |
make judgements and accounting estimates that are reasonable and prudent; |
• |
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
• |
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 enable them to ensure that the financial statements comply with the Companies Act 2006. They 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.
Page 6 |
Micro Systems (UK) Limited
Independent Auditor's Report to the Members of Micro Systems (UK) Limited
We have audited the financial statements of Micro Systems (UK) Limited for the year ended 31 December 2016, set out on pages 9 to 43. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditor
As explained more fully in the Statement of Directors' Responsibilities (set out on page 6), the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors to the financial statements, in the circumstances set out in note 30 to the financial statements.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on the financial statements
In our opinion the financial statements:
• | give a true and fair view of the state of the group's and the company's affairs as at 31 December 2016 and of the group's 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. |
Opinion on other matter 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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
• |
the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements. |
In the light of our 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 and the Directors' Report.
Page 7 |
Micro Systems (UK) Limited
Independent Auditor's Report to the Members of Micro Systems (UK) Limited
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• | adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches not visited by us; or |
• | the company 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. |
......................................
For and on behalf of
Lowry House
17 Marble Street
M2 3AW
Page 8 |
Micro Systems (UK) Limited
Consolidated Profit and Loss Account for the Year Ended 31 December 2016
Note |
Total |
(As restated) |
|
Turnover |
|
|
|
Cost of sales |
( |
( |
|
Gross profit |
|
|
|
Administrative expenses |
( |
( |
|
Other operating income |
|
|
|
Operating profit |
|
|
|
Other interest receivable and similar income |
|
|
|
Interest payable and similar expenses |
( |
( |
|
(63,647) |
(68,080) |
||
Profit before tax |
|
|
|
Taxation |
( |
( |
|
Profit for the financial year |
|
|
|
Profit/(loss) attributable to: |
|||
Owners of the company |
|
|
|
Minority interests |
( |
|
|
|
|
Page 9 |
Micro Systems (UK) Limited
Consolidated Statement of Comprehensive Income for the Year Ended 31 December 2016
Note |
2016 |
(As restated) |
|
Profit for the year |
|
|
|
Foreign currency translation gains/(losses) |
|
( |
|
Total comprehensive income for the year |
|
|
|
Total comprehensive income attributable to: |
|||
Owners of the company |
|
|
|
Minority interests |
( |
|
|
|
|
Page 10 |
Micro Systems (UK) Limited
(Registration number: 04584656)
Consolidated Balance Sheet as at 31 December 2016
Note |
2016 |
(As restated) |
|
Fixed assets |
|||
Intangible assets |
|
|
|
Tangible assets |
|
|
|
Investments |
|
- |
|
|
|
||
Current assets |
|||
Stocks |
|
|
|
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Total assets less current liabilities |
|
|
|
Creditors: Amounts falling due after more than one year |
( |
( |
|
Provisions for liabilities |
( |
( |
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
|
|
|
Profit and loss account |
|
|
|
Equity attributable to owners of the company |
|
|
|
Minority interests |
|
|
|
Total equity |
|
|
Approved and authorised by the
.........................................
Mr G Clark
Chairman and chief executive
Page 11 |
Micro Systems (UK) Limited
(Registration number: 04584656)
Balance Sheet as at 31 December 2016
Note |
2016 |
(As restated) |
|
Fixed assets |
|||
Tangible assets |
|
|
|
Investments |
|
|
|
|
|
||
Current assets |
|||
Stocks |
|
|
|
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Total assets less current liabilities |
|
|
|
Creditors: Amounts falling due after more than one year |
( |
( |
|
Provisions for liabilities |
( |
( |
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
|
|
|
Profit and loss account |
|
|
|
Total equity |
|
|
The company made a profit after tax for the financial year of £748,282 (2015 - profit of £888,003).
Approved and authorised by the
.........................................
Mr G Clark
Chairman and chief executive
Page 12 |
Micro Systems (UK) Limited
Consolidated Statement of Changes in Equity for the Year Ended 31 December 2016
Equity attributable to the parent company
Share capital |
Profit and loss account |
Total |
Non- controlling interests |
Total equity |
|
At 1 January 2016 |
|
|
|
|
|
Profit/(loss) for the year |
- |
|
|
( |
|
Other comprehensive income |
- |
|
|
- |
|
Total comprehensive income |
- |
|
|
( |
|
Dividends |
- |
( |
( |
- |
( |
At 31 December 2016 |
|
|
|
|
|
Share capital |
Profit and loss account |
Total |
Non- controlling interests |
Total equity |
|
At 1 January 2015 |
|
|
|
|
|
Profit for the year |
- |
|
|
|
|
Other comprehensive income |
- |
( |
( |
- |
( |
Total comprehensive income |
- |
|
|
|
|
Dividends |
- |
( |
( |
- |
( |
At 31 December 2015 |
|
|
|
|
|
Page 13 |
Micro Systems (UK) Limited
Statement of Changes in Equity for the Year Ended 31 December 2016
Share capital |
Profit and loss account |
Total |
|
At 1 January 2016 |
|
|
|
Profit for the year |
- |
|
|
Total comprehensive income |
- |
|
|
Dividends |
- |
( |
( |
At 31 December 2016 |
|
|
|
Share capital |
Profit and loss account |
Total |
|
At 1 January 2015 |
|
|
|
Profit for the year |
- |
|
|
Total comprehensive income |
- |
|
|
Dividends |
- |
( |
( |
At 31 December 2015 |
|
|
|
Page 14 |
Micro Systems (UK) Limited
Consolidated Statement of Cash Flows for the Year Ended 31 December 2016
Note |
2016 |
(As restated) |
|
Cash flows from operating activities |
|||
Profit for the year |
|
|
|
Adjustments to cash flows from non-cash items |
|||
Depreciation and amortisation |
|
|
|
(Profit)/loss on disposal of tangible assets |
( |
|
|
Finance income |
( |
( |
|
Finance costs |
|
|
|
Income tax expense |
|
|
|
|
|
||
Working capital adjustments |
|||
Decrease in stocks |
|
|
|
Decrease/(increase) in trade debtors |
|
( |
|
(Decrease)/increase in trade creditors |
( |
|
|
Increase in provisions |
|
- |
|
Cash generated from operations |
|
|
|
Income taxes paid |
( |
( |
|
Net cash flow from operating activities |
|
|
|
Cash flows from investing activities |
|||
Interest received |
|
|
|
Acquisitions of tangible assets |
( |
( |
|
Proceeds from sale of tangible assets |
|
|
|
Advances of loans, classified as investing activities |
( |
- |
|
Acquisition of investments in joint ventures and associates |
( |
- |
|
Net cash flows from investing activities |
( |
( |
|
Cash flows from financing activities |
|||
Interest paid |
( |
( |
|
Repayment of bank borrowing |
( |
( |
|
Repayment of other borrowing |
- |
( |
|
Receipts from finance lease debtors |
|
|
|
Payments to finance lease creditors |
( |
( |
|
Dividends paid |
( |
( |
|
Net cash flows from financing activities |
( |
( |
|
Net increase in cash and cash equivalents |
|
|
|
Cash and cash equivalents at 1 January |
|
|
|
Effect of exchange rate fluctuations on cash held |
|
( |
|
Cash and cash equivalents at 31 December |
1,393,802 |
1,049,109 |
Page 15 |
Micro Systems (UK) Limited
Statement of Cash Flows for the Year Ended 31 December 2016
Note |
2016 |
(As restated) |
|
Cash flows from operating activities |
|||
Profit for the year |
|
|
|
Adjustments to cash flows from non-cash items |
|||
Depreciation and amortisation |
|
|
|
(Profit)/loss on disposal of tangible assets |
( |
|
|
Finance income |
( |
( |
|
Finance costs |
|
|
|
Income tax expense |
|
|
|
|
|
||
Working capital adjustments |
|||
Decrease in stocks |
|
|
|
Decrease/(increase) in trade debtors |
|
( |
|
(Decrease)/increase in trade creditors |
( |
|
|
Increase in provisions |
|
- |
|
Cash generated from operations |
|
|
|
Income taxes paid |
( |
( |
|
Net cash flow from operating activities |
|
|
|
Cash flows from investing activities |
|||
Interest received |
|
|
|
Acquisition of subsidiaries |
( |
- |
|
Acquisitions of tangible assets |
( |
( |
|
Proceeds from sale of tangible assets |
|
|
|
Advances of loans, classified as investing activities |
( |
- |
|
Net cash flows from investing activities |
( |
( |
|
Cash flows from financing activities |
|||
Interest paid |
( |
( |
|
Repayment of bank borrowing |
( |
( |
|
Proceeds from other borrowing draw downs |
- |
|
|
Repayment of other borrowing |
( |
- |
|
Receipts from finance lease debtors |
|
|
|
Payments to finance lease creditors |
( |
( |
|
Dividends paid |
( |
( |
|
Net cash flows from financing activities |
( |
( |
|
Net increase in cash and cash equivalents |
|
|
|
Cash and cash equivalents at 1 January |
|
|
|
Cash and cash equivalents at 31 December |
1,350,192 |
1,008,942 |
Page 16 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2016
General information |
The company is a private company limited by share capital incorporated in England and Wales.
The address of its registered office is:
These financial statements were authorised for issue by the
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 were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
Basis of preparation
These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.
GB pounds sterling (£)
Basis of consolidation
The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December 2016.
No Profit and Loss Account is presented for the company as permitted by section 408 of the Companies Act 2006. The company made a profit after tax for the financial year of £748,281 (2015 - profit of £888,003).
Page 17 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2016
A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.
The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.
Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.
Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.
Page 18 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2016
Judgements
Preparation of the financial statements requires management to make significant judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that the actual outcomes could differ from those estimates. The following judgements (apart from those involving estimates) have had the most significant effect on items in the financial statements where these judgements have been made include: |
1. The group trades in the US, Carribean, Europe and the Far East and its trade includes the use of foreign currencies, namely the US $, the Euro € and the Singapore $. Management has to make judgements about future exchange rate fluctuations, particulalry in relation to Sterling (£), and whether or not to hedge against fluctuations by buying forward contracts. |
2. The calculation of tax liabilities involves uncertainties in the application of complex tax laws. Determining tax provisions therefore requires judgement on the treatment of certain transactions. Deferred tax is recognised on tax losses not yet used and on temporary differences where it is probable that there will be a taxable revenue against which these can be offset. Management has made judgements as to the probability of future taxable revenues being generated against which tax losses will be available for offset. |
Key sources of estimation uncertainty
1. The stage of completion of long term contracts and the amounts recoverable on long term contracts. The carrying amount is £153,160 (2015 -£1,245,427).
2. The obsolesence provision for stock of parts for dies, both blank and finished and therefore the net value of stock. The carrying amount is £205,999 (2015 -£100,000).
Revenue recognition
Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the group’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts and after eliminating sales within the company.
The group recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the group's activities.
Contract revenue recognition
For long term contracts, profit is recognised by reference to the stage of completion of each contract where there is reasonable certainty that the contract will be profitable. Where the outcome of the contract cannot be established with reasonable certainty, no profit is recognised. Forseeable lossses are provided for in full at the point which the loss is recognised.
Where amounts invoiced exceed the value of the work done, the excess is accounted for as payments received on account and is included within creditors. Where the value of work done exceeds the amounts invoiced, the excess is accounted for as amounts recoverable on contracts and is included within debtors. Retentions are included within trade debtors.
Where a contract's individual components operate independently of each other, revenue and related costs are recorded as the right to consideration and earned by the performance of the contract's seperable parts. Profits are therefore recognised as they accrue on each seperable component.
Where additional costs are expected to arise on a contract after the balance sheet date these costs are accrued in the current year, and where costs are incurred in advance of the value of the work being recoverable from the customers the costs are included in work in progress,
Page 19 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2016
Government grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the group will comply will all the attached conditions.
Government grants relating to costs are deferred and recognised in the profit and loss account over the period necessary to match them with the costs that they are intended to compensate.
Government grants related to property, plant and equipment are included in non-current liabilities as deferred government grants and are credited to the profit and loss account on a straight line basis over the expected lives of the related assets.
Foreign currency transactions and balances
The individual financial statements of each group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and finacial position are presented in Sterling (£)
Company
Transactions in foreign currencies are recorded at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the closing rates at the balance sheet date. All exchange differences are included in the profit and loss account.
Group
The financial statements of overseas subsidiary undertakings are translated from their functional currency to Sterling (£) at the rate ruling on the balance sheet date. Income and expenses are translated using the average rate for the period, unless exchage rates fluctuated significantly during that period, in which case the exchange rates at the date of the transactions are used. The exhange differences arising on the retranslation of opening net assets are taken directly to other comprehensive income and are not reclassified to profit and loss. All other translation differences are taken to the profit and loss account, with the exception of differences on foreign currency borrowings to the extent they are used to finance or provide a hedge against group equity investments in foreign enterprises, which are taken to other comprehensive income together with the exchange difference on the net investment in these enterprises. Tax charges and credits attributable to exchange differences on those borrowings are also taken to other comprehensive income.
Tax
The tax expense for the period comprises current and deferred 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 income 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 group operates and generates taxable income.
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements and on unused tax losses or tax credits in the group. Deferred income 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 statement of financial position 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.
Page 20 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2016
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 |
Fixtures and fittings |
25% straight line basis |
Leasehold land and buildings |
25% straight line basis |
Plant and machinery |
20% reducing balance basis |
Office equipment |
33.3% straight line basis |
Motor vehicles |
25% reducing balance basis |
Business combinations
Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.
Goodwill
Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date. Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.
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 |
Goodwill |
10% straight line basis |
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.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Page 21 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2016
Debtors
Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.
Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivables.
Inventories
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) 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 inventories 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.
Creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.
Borrowings
Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Profit and Loss Account over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.
Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
Provisions
The group recognises a provision for annual leave accrued by employees as a result of services rendered in the current period, for which employees are entitled to carry forward and use within the next 12 months. The provision is measured at the salary cost payable plus employers national insurance for the period of absence.
Page 22 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2016
Leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.
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.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Dividends
Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group 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.
Revenue |
The analysis of the group's revenue for the year from continuing operations is as follows:
2016 |
2015 |
|
Sale of goods |
|
|
Grants received |
- |
|
|
|
Other operating income |
The analysis of the group's other operating income for the year is as follows:
2016 |
2015 |
|
Miscellaneous other operating income |
|
|
Page 23 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2016
Other gains and losses |
The analysis of the group's other gains and losses for the year is as follows:
2016 |
2015 |
|
Gain (loss) on disposal of property, plant and equipment |
|
( |
Operating profit |
Arrived at after charging/(crediting)
2016 |
2015 |
|
Depreciation expense |
|
|
Amortisation expense |
|
|
Operating lease expense - other |
34,223 |
43,019 |
(Profit)/loss on disposal of property, plant and equipment |
( |
|
Government grants |
The amount of grants recognised in the financial statements was £Nil (2015 - £
Other interest receivable and similar income |
2016 |
2015 |
|
Interest income on bank deposits |
|
|
Other finance income |
|
|
|
|
Interest payable and similar expenses |
2016 |
2015 |
|
Interest on bank overdrafts and borrowings |
|
|
Interest on obligations under finance leases and hire purchase contracts |
|
|
Interest expense on other finance liabilities |
- |
|
Foreign exchange (gains) / losses |
( |
|
|
|
Page 24 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2016
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
2016 |
(As restated) |
|
Wages and salaries |
|
|
Social security costs |
|
|
Pension costs, defined contribution scheme |
|
|
Other employee expense |
|
|
|
|
The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:
2016 |
2015 |
|
Production |
|
|
Administration and support |
|
|
|
|
Directors' remuneration |
The directors' remuneration for the year was as follows:
2016 |
2015 |
|
Remuneration |
|
|
Contributions paid to money purchase schemes |
|
|
150,391 |
365,584 |
During the year the number of directors who were receiving benefits and share incentives was as follows:
2016 |
2015 |
|
Accruing benefits under money purchase pension scheme |
|
|
In respect of the highest paid director:
2016 |
2015 |
|
Remuneration |
|
|
Page 25 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2016
Auditors' remuneration |
2016 |
2015 |
|
Audit of these financial statements |
10,400 |
13,923 |
Audit of the financial statements of subsidiaries of the company pursuant to legislation |
3,488 |
3,140 |
|
|
|
Other fees to auditors |
||
Taxation compliance services |
|
|
All other non-audit services |
|
|
|
|
Taxation |
Tax charged/(credited) in the income statement
2016 |
2015 |
|
Current taxation |
||
UK corporation tax |
|
|
UK corporation tax adjustment to prior periods |
( |
- |
118,167 |
153,968 |
|
Deferred taxation |
||
Arising from origination and reversal of timing differences |
( |
|
Arising from changes in tax rates and laws |
( |
|
Total deferred taxation |
( |
|
Tax expense in the income statement |
|
|
Page 26 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2016
The tax on profit before tax for the year is lower than the standard rate of corporation tax in the UK (2015 - lower than the standard rate of corporation tax in the UK) of
The differences are reconciled below:
2016 |
(As restated) |
|
Profit before tax |
|
|
Corporation tax at standard rate |
|
|
(Decrease)/increase from effect of different UK tax rates on some earnings |
( |
|
Effect of expense not deductible in determining taxable profit (tax loss) |
( |
( |
Decrease in UK and foreign current tax from adjustment for prior periods |
( |
- |
Tax increase/(decrease) from effect of capital allowances and depreciation |
|
( |
Tax increase from other short-term timing differences |
|
|
Tax increase from effect of unrelieved loss on foreign subsidiaries |
|
|
Other tax effects for reconciliation between accounting profit and tax expense (income) |
( |
- |
Total tax charge |
|
|
The main rate of UK corporation tax rate decreased from 20% to 19 % from 1st April 2017.
Deferred tax
Group
Deferred tax assets and liabilities
2016 |
Asset |
Accelerated capital allowances |
|
Other timing differences |
|
|
2015 |
Asset |
Liability |
Accelerated capital allowances |
- |
|
Other timing differences |
|
- |
|
|
Page 27 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2016
Company
Deferred tax assets and liabilities
2016 |
Asset |
Accelerated capital allowances |
|
Other timing differenes |
|
|
2015 |
Asset |
Liability |
Accelerated capital allowances |
- |
|
Other timing differenes |
|
- |
|
|
The main rate of UK corporation tax rate is to be decreased to 17% for Financial Year 2020 taking effect from 1 April 2020 to 31 March 2021.
Intangible assets |
Group
Goodwill |
Total |
|
Cost or valuation |
||
At 1 January 2016 |
|
|
At 31 December 2016 |
|
|
Amortisation |
||
At 1 January 2016 |
|
|
Amortisation charge |
|
|
At 31 December 2016 |
|
|
Carrying amount |
||
At 31 December 2016 |
|
|
At 31 December 2015 |
|
|
Amortisation of goodwill is included in profit for the year in the comprehensive income statement.
The aggregate amount of research and development expenditure recognised as an expense during the period is £
Page 28 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2016
Tangible assets |
Group
Land and buildings |
Furniture, fittings and equipment |
Motor vehicles |
Other property, plant and equipment |
Total |
|
Cost or valuation |
|||||
At 1 January 2016 |
|
|
|
|
|
Additions |
|
|
|
|
|
Disposals |
- |
- |
- |
( |
( |
At 31 December 2016 |
|
|
|
|
|
Depreciation |
|||||
At 1 January 2016 |
|
|
|
|
|
Charge for the year |
|
|
|
|
|
Eliminated on disposal |
- |
- |
- |
( |
( |
At 31 December 2016 |
|
|
|
|
|
Carrying amount |
|||||
At 31 December 2016 |
|
|
|
|
|
At 31 December 2015 |
|
|
|
|
|
Included within the net book value of land and buildings above is £Nil (2015 - £Nil) in respect of freehold land and buildings, £Nil (2015 - £Nil) in respect of long leasehold land and buildings and £391,373 (2015 - £40,958) in respect of short leasehold land and buildings.
Page 29 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2016
Assets held under finance leases and hire purchase contracts
The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:
2016 |
2015 |
|
Plant and machinery |
1,260,105 |
1,573,216 |
Motor vehicles |
180,968 |
202,249 |
1,441,073 |
1,775,465 |
Restriction on title and pledged as security
Page 30 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2016
Company
Land and buildings |
Furniture, fittings and equipment |
Motor vehicles |
Other property, plant and equipment |
Total |
|
Cost or valuation |
|||||
At 1 January 2016 |
|
|
|
|
|
Additions |
- |
|
|
|
|
Disposals |
- |
- |
- |
( |
( |
At 31 December 2016 |
|
|
|
|
|
Depreciation |
|||||
At 1 January 2016 |
|
|
|
|
|
Charge for the year |
|
|
|
|
|
Eliminated on disposal |
- |
- |
- |
( |
( |
At 31 December 2016 |
|
|
|
|
|
Carrying amount |
|||||
At 31 December 2016 |
|
|
|
|
|
At 31 December 2015 |
|
|
|
|
|
Included within the net book value of land and buildings above is £Nil (2015 - £Nil) in respect of long leasehold land and buildings and £32,255 (2015 - £42,874) in respect of short leasehold land and buildings.
Page 31 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2016
Assets held under finance leases and hire purchase contracts
The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:
2016 |
2015 |
|
Plant and machinery |
1,260,105 |
1,573,216 |
Motor vehicles |
123,204 |
140,792 |
1,383,309 |
1,714,008 |
Restriction on title and pledged as security
Investments |
Group
Details of undertakings
Details of the investments (including principal place of business of unincorporated entities) in which the group holds 20% or more of the nominal value of any class of share capital are as follows:
Undertaking |
Registered office |
Holding |
Proportion of voting rights and shares held |
|
2016 |
2015 |
Subsidiary undertakings |
||||
|
2 Tukang Innovation Grove
|
Ordinary |
|
|
Singapore |
Associates |
||||
|
29 Buroh Street
|
Ordinary |
|
|
Singapore |
* indicates direct investment of the company
Page 32 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2016
Subsidiary undertakings
The principal activity of Micro Systems Engineering Solutions Pte Ltd is |
Associate undertakings
The principal activity of Micro Optika Systems Pte Ltd is |
Company
2016 |
2015 |
|
Investments in subsidiaries |
|
|
Subsidiaries |
£ |
Cost or valuation |
|
At 1 January 2016 |
|
Additions |
|
At 31 December 2016 |
|
Provision |
|
Carrying amount |
|
At 31 December 2016 |
|
At 31 December 2015 |
|
Details of undertakings
Details of the investments (including principal place of business of unincorporated entities) in which the company holds 20% or more of the nominal value of any class of share capital are as follows:
Undertaking |
Registered office |
Holding |
Proportion of voting rights and shares held |
|
2016 |
2015 |
|||
Subsidiary undertakings |
||||
|
2 Tukang Innovation Grove
|
Ordinary |
|
|
Singapore |
The principal activity of Micro Systems Engineering Solutions Pte Ltd is |
Page 33 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2016
Stocks |
Group |
Company |
|||
2016 |
2015 |
2016 |
2015 |
|
Work in progress |
|
|
|
|
Other inventories |
|
|
|
|
|
|
|
|
Group
The cost of stocks recognised as an expense in the year amounted to £
Impairment of inventories
The amount of impairment loss included in profit or loss is £205,999 (2015 - £348,492). The amount of impairment loss included in other comprehensive income is £Nil (2015 - £Nil). The amount of reversal of impairment recognised in profit or loss is £Nil (2015 - £Nil). The amount of reversal of impairment recognised in other comprehensive income is £Nil (2015 - £Nil).
The carrying amount of stocks pledged as security for liabilities amounted to £
Company
The cost of stocks recognised as an expense in the year amounted to £
Impairment of inventories
The amount of impairment loss included in profit or loss is £205,999 (2015 - £348,492). The amount of impairment loss included in other comprehensive income is £Nil (2015 - £Nil). The amount of reversal of impairment recognised in profit or loss is £Nil (2015 - £Nil). The amount of reversal of impairment recognised in other comprehensive income is £Nil (2015 - £Nil).
The carrying amount of stocks pledged as security for liabilities amounted to £
Debtors |
Group |
Company |
||||
Note |
2016 |
2015 |
2016 |
2015 |
|
Trade debtors |
|
|
|
|
|
Amounts owed by related parties |
|
|
|
|
|
Other debtors |
|
|
|
|
|
Prepayments |
|
|
|
|
|
Accrued income |
|
|
|
- |
|
Gross amount due from customers for contract work |
|
|
|
|
|
|
|
|
|
||
Less non-current portion |
( |
( |
( |
( |
|
Total current trade and other debtors |
|
|
|
|
Page 34 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2016
Details of non-current trade and other debtors
Group
£400,000 (2015 - £120,000) of Loan to Optimold Ltd is classified as non current. The loan is subject to a capital holiday in the first year which is 2017 with interest payable at 8% and then repayable at £8,333 per month over years 2 to 5 plus interest at 5%.
Company
£400,000 (2015 - £120,000) of Loan to Optimold Ltd is classified as non current. The loan is subject to a capital holiday in the first year which is 2017 with interest payable at 8% and then repayable at £8,333 per month over years 2 to 5 plus interest at 5%.
The loan is unsecured.
£664,857 (2015 - £Nil) of Loan to Micro Systems Engineering Solutions Pte Ltd is classified as non current. The loan is subject to a capital holiday in the first year which is 2017 with interest payable at 8% and then repayable at £13,851 per month over years 2 to 5 plus interest at 5%.
The loan is unsecured.
Cash and cash equivalents |
Group |
Company |
|||
2016 |
2015 |
2016 |
2015 |
|
Cash on hand |
|
|
- |
- |
Cash at bank |
|
|
|
|
|
|
|
|
Creditors |
Group |
Company |
||||
Note |
2016 |
2015 |
2016 |
2015 |
|
Due within one year |
|||||
Loans and borrowings |
|
|
|
|
|
Trade creditors |
|
|
|
|
|
Amounts due to related parties |
- |
- |
|
|
|
Social security and other taxes |
|
|
|
|
|
Outstanding defined contribution pension costs |
|
|
|
|
|
Other payables |
|
|
- |
|
|
Accrued expenses |
|
|
|
|
|
Income tax liability |
125,076 |
153,968 |
125,076 |
153,968 |
|
Gross amount due to customers for contract work |
|
|
|
|
|
|
|
|
|
||
Due after one year |
|||||
Loans and borrowings |
|
|
|
|
|
Other non-current financial liabilities |
|
- |
- |
- |
|
1,522,311 |
982,958 |
838,397 |
982,958 |
Page 35 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2016
Pension and other schemes |
Defined contribution pension scheme
The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £
Contributions totalling £
Share capital |
Allotted, called up and fully paid shares
2016 |
2015 |
|||
No. |
£ |
No. |
£ |
|
|
|
100,000 |
|
100,000 |
Rights, preferences and restrictions
Ordinary have the following rights, preferences and restrictions: |
Minority interests |
The minority interests relate to:
Micro Systems Engineering Solutions Pte Ltd of which 2% (2015 - 2%) of the voting rights are held outside of the group.
Loans and borrowings |
Group |
Company |
|||
2016 |
2015 |
2016 |
2015 |
|
Non-current loans and borrowings |
||||
Finance lease liabilities |
|
|
|
|
Group |
Company |
|||
2016 |
2015 |
2016 |
2015 |
|
Current loans and borrowings |
||||
Bank borrowings |
- |
|
- |
|
Finance lease liabilities |
|
|
|
|
Other borrowings |
|
|
|
|
|
|
|
|
Page 36 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2016
Group
Bank borrowings
The EFG loan is secured by a debenture from National Westminster Bank dated 16th November 2010 over the undertaking all property and assets, present and future, including goodwill, uncalled capital, buildings, fixtures, fixed plant and machinery. |
Other borrowings
Hire Purchase & Finance Lease Creditors with a carrying amount of £1,413,685 (2015 - £1,441,994) is denominated in Sterling and one in Singapore $ with a nominal interest rate of various. The final instalment is due on 4 June 2020.
The hire purchase contracts and finance leases are secured on the assets being financed.
Monthly repayments of varying amounts covering 17 separate agreements.
Company
Bank borrowings
The EFG loan is secured by a debenture from National Westminster Bank dated 16 November 2010 over the undertaking all property and assets, including goodwill, uncalled capital, buildings, fixtures, plant and machinery. |
Other borrowings
Hire Purchase and Finance Lease Creditors with a carrying amount of £1,390,712 (2015 - £1,416,669) is denominated in Sterling with a nominal interest rate of various. The final instalment is due on 4 June 2020.
The hire purchase contracts and finance leases are secured on the assets being financed.
Monthly repayments of varying amounts covering 16 separate agreements.
Obligations under leases and hire purchase contracts |
Group
Finance leases
The total of future minimum lease payments is as follows:
2016 |
2015 |
|
Not later than one year |
|
|
Later than one year and not later than five years |
|
|
|
|
Page 37 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2016
Operating leases
The total of future minimum lease payments is as follows:
2016 |
2015 |
|
Not later than one year |
|
|
Later than one year and not later than five years |
|
|
|
|
The amount of non-cancellable operating lease payments recognised as an expense during the year was £
Company
Finance leases
The total of future minimum lease payments is as follows:
2016 |
2015 |
|
Not later than one year |
|
|
Later than one year and not later than five years |
|
|
|
|
Operating leases
The total of future minimum lease payments is as follows:
2016 |
2015 |
|
Not later than one year |
|
|
Later than one year and not later than five years |
|
|
|
|
The amount of non-cancellable operating lease payments recognised as an expense during the year was £
Dividends |
2016 |
2015 |
|
£ |
£ |
|
Interim dividend of £ |
220,000 |
380,000 |
The directors are proposing a final dividend of £Nil (2015 - £Nil) per share totalling £Nil (2015 - £Nil). This dividend has not been accrued in the Balance Sheet.
Page 38 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2016
Commitments |
Group
Capital commitments
The total amount contracted for but not provided in the financial statements was £Nil (2015 - £Nil).
Company
Capital commitments
The total amount contracted for but not provided in the financial statements was £Nil (2015 - £Nil).
Related party transactions |
Group
Summary of transactions with entities with joint control or significant interest
Optimold Ltd has a loan from Micro Systems (UK) Ltd as detailed in note 8 to the financial statements. A further £280,000 was advanced during this accounting period.
Normal trade terms of 30 days from end of the month of the date of the invoice. Micro Systems (UK) Ltd has assisted Optimold Ltd by extending its credit terms as Optimold Ltd's cash flow has required.
Summary of transactions with subsidiaries
Payment 30 days from month end of the date of the invoice.
Income and receivables from related parties
2016 |
Entities with joint control or significant influence |
Sale of goods |
|
Amounts receivable from related party |
|
2015 |
Entities with joint control or significant influence |
Sale of goods |
|
Amounts receivable from related party |
|
Page 39 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2016
Expenditure with and payables to related parties
2016 |
Entities with joint control or significant influence |
Subsidiary |
Purchase of goods |
|
|
Rendering of services |
- |
|
Transfers of research and development |
- |
|
Transfers under finance arrangements (including loans and equity contributions) |
- |
|
|
|
|
Amounts payable to related party |
|
|
2015 |
Entities with joint control or significant influence |
Subsidiary |
Purchase of goods |
|
|
Rendering of services |
- |
|
Transfers of research and development |
- |
|
Settlement of liabilities |
- |
|
|
|
|
Amounts payable to related party |
|
|
Loans to related parties
2016 |
Entities with joint control or significant influence |
Subsidiary |
At start of period |
|
- |
Advanced |
|
|
Interest transactions |
- |
|
At end of period |
|
|
2015 |
Entities with joint control or significant influence |
At start of period |
|
Page 40 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2016
Terms of loans to related parties
The loan is unsecured.
The loan is unsecured.
Company
Summary of transactions with entities with joint control or significant interest
Optimold Ltd has a loan from Micro Systems (UK) Ltd as detailed in note 8 to the financial statements. A further £280,000 was advanced during this accounting period.
Normal trade terms of 30 days from end of month of the date of the invoice. Micro Systems (UK) Ltd has assisted Optimold Ltd in its financing by extending its credit terms as Optimold Ltd's cash flow has required.
Summary of transactions with subsidiaries
Payment 30 days from month end of invoice.
Income and receivables from related parties
2016 |
Entities with joint control or significant influence |
Sale of goods |
|
Amounts receivable from related party |
|
2015 |
Entities with joint control or significant influence |
Sale of goods |
|
Amounts receivable from related party |
|
Page 41 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2016
Expenditure with and payables to related parties
2016 |
Entities with joint control or significant influence |
Subsidiary |
Purchase of goods |
|
|
Rendering of services |
- |
|
Transfers of research and development |
- |
|
Transfers under finance arrangements (including loans and equity contributions) |
- |
|
|
|
|
Amounts payable to related party |
|
|
2015 |
Entities with joint control or significant influence |
Subsidiary |
Purchase of goods |
|
|
Rendering of services |
- |
|
Transfers of research and development |
- |
|
Settlement of liabilities |
- |
|
|
|
|
Amounts payable to related party |
|
|
Loans to related parties
2016 |
Entities with joint control or significant influence |
Subsidiary |
At start of period |
|
- |
Advanced |
|
|
Interest transactions |
- |
|
At end of period |
|
|
2015 |
Entities with joint control or significant influence |
At start of period |
|
Page 42 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2016
Terms of loans to related parties
The loan is unsecured.
The loan is unsecured.
Financial instruments |
Group
Categorisation of financial instruments
2016 |
2015 |
|
Financial liabilities measured at amortised cost |
|
|
|
|
Financial assets pledged as collateral
The carrying amount of the financial assets pledged as collateral is £Nil (2015 - £Nil).
Company
Categorisation of financial instruments
2016 |
2015 |
|
Financial liabilities measured at amortised cost |
|
|
|
|
The total amount of impairment loss during the year is £- (2015 - £-)
Financial instruments at fair value through profit or loss that are not held as part of a trading portfolio and not derivatives
The amount of change during the period in the fair value of the financial instrument that is attributable to changes in the credit risk of that instrument is £Nil (2015 - £Nil).
The amount of change cumulatively in the fair value of the financial instrument that is attributable to changes in the credit risk of that instrument is £Nil (2015 - £Nil).
APB Ethical Standards relevant circumstances |
In common with many other businesses of our size and nature, we use our auditors to prepare and submit payroll returns to the tax authorities and assist with the preparation of forms P11D and the year end financial statements.
Page 43 |