REGISTERED NUMBER: |
MAGMA GLOBAL LIMITED |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 |
REGISTERED NUMBER: |
MAGMA GLOBAL LIMITED |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 |
MAGMA GLOBAL LIMITED (REGISTERED NUMBER: 06528820) |
CONTENTS OF THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2021 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 3 |
Report of the Independent Auditors | 5 |
Statement of Comprehensive Income | 7 |
Balance Sheet | 8 |
Statement of Changes in Equity | 9 |
Cash Flow Statement | 10 |
Notes to the Cash Flow Statement | 11 |
Notes to the Financial Statements | 12 |
MAGMA GLOBAL LIMITED |
COMPANY INFORMATION |
FOR THE YEAR ENDED 31 DECEMBER 2021 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Statutory Auditors |
Chartered Accountants |
Fryern House |
125 Winchester Road |
Chandlers Ford |
Hampshire |
SO53 2DR |
BANKERS: |
52 West Street |
Fareham |
PO16 0JX |
SOLICITORS: |
Russell House |
Solent Business Park |
Whiteley |
Fareham |
PO15 7AG |
MAGMA GLOBAL LIMITED (REGISTERED NUMBER: 06528820) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 DECEMBER 2021 |
The directors present their strategic report for the year ended 31 December 2021. |
REVIEW OF BUSINESS |
The principal activity of the Company continued to be that of designing and manufacturing composite risers, jumpers, spools and intervention lines for the subsea Oil & Gas market. |
On 13 October 2021, TechnipFMC plc acquired the remaining 75% of the Company's equity which it did not already own, via its subsidiary Technip-Coflexip Holdings UK Limited. From that date, the Company became a 100% wholly-owned subsidiary company of TechnipFMC plc. |
In the year ended 31 December 2021, the Company's revenues were £10.2m, up 2.9% from £9.9m in the previous year. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), i.e. excluding £3.25m costs relating to the acquisition of the Company's equity by TechnipFMC plc, improved from -£179k in the previous year to +£550k. Cash balances decreased from £12.1m to £6m, following a £6m capital repayment from the share premium account, with a temporary improvement in working capital offsetting the acquisition-related costs. |
During the year, the Company successfully managed the ongoing challenges faced during the Covid-19 pandemic, with manufacturing almost unaffected, so that the overall financial impact of Covid-19 was not significant. The Company continued to invest in its products, facilities and plant & machinery, and in its development and qualification activities, thereby increasing its capabilities to deliver future customer requirements. |
KEY PERFORMANCE INDICATORS |
The Company measures a range of financial data to monitor and manage its activities, including revenue, EBITDA and cash flow. Non-financial metrics are also monitored across the business and there is a strong focus on the safety and wellbeing of employees. |
RISK MANAGEMENT |
The Company's activities expose it to a number of financial and operating risks and uncertainties, which are managed and mitigated as part of the Company's ongoing management processes. The ongoing investment in the Company's longer-term design & manufacturing capabilities has adversely affected its short-term financial performance, as it endeavours to strike the right balance between short-term deliverables and longer-term capacity planning. The principal risk and uncertainty is the speed of adoption of the Company's products in the global Oil and Gas market. |
FUTURE DEVELOPMENTS |
The Company remains well-funded and is now an integral part of TechnipFMC plc's future growth plans. |
RESEARCH & DEVELOPMENT ACTIVITIES |
The Company continues to invest heavily in the development and qualification of its range of new products in the Oil & Gas market. Designs and manufacturing methods continue to be developed and improved to meet the challenges faced by the market. |
ON BEHALF OF THE BOARD: |
MAGMA GLOBAL LIMITED (REGISTERED NUMBER: 06528820) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 DECEMBER 2021 |
The directors present their report with the financial statements of the company for the year ended 31 December 2021. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 December 2021. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 January 2021 to the date of this report. |
Other changes in directors holding office are as follows: |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors 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 then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and 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. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
MAGMA GLOBAL LIMITED (REGISTERED NUMBER: 06528820) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 DECEMBER 2021 |
AUDITORS |
Rothmans Audit LLP will be proposed for re-appointment at the forthcoming annual general meeting. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
MAGMA GLOBAL LIMITED |
Opinion |
We have audited the financial statements of Magma Global Limited (the 'company') for the year ended 31 December 2021 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 31 December 2021 and of its loss for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors. |
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, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
MAGMA GLOBAL LIMITED |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page three, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. |
Auditors' responsibilities for the audit of the financial statements |
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
Obtained an understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant frameworks which are directly relevant to specific assertions in the financial statements are those that relate to the reporting framework and in relation to the company's design and manufacturing activities. |
Understanding how the company is complying with those regulations by making enquiries of management and those responsible for legal and compliance procedures, including discussions on risk of litigation and known incidences of non-compliance. We corroborated our enquiries through our review of board minutes and relevant correspondence. |
Discussing among the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. As part of this discussion, we identified potential risk areas as estimates and judgements used by management in accounting for long-term contracts and related balances. The risk was addressed by ensuring audit procedures assessed reasonableness of estimates used by obtaining corroborative evidence, as well as considering what could be non-corroborative. |
Assessing the susceptibility of the company's financial statements to material misstatement, including how fraud might occur, by discussing with management susceptibility to fraud, considering performance targets and how this may influence results, and assessing the internal control environment. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included assessing the appropriateness of presentation of separately disclosed items and testing manual journals. These procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 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 a Report of the Auditors 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. |
for and on behalf of |
Statutory Auditors |
Chartered Accountants |
Fryern House |
125 Winchester Road |
Chandlers Ford |
Hampshire |
SO53 2DR |
MAGMA GLOBAL LIMITED (REGISTERED NUMBER: 06528820) |
STATEMENT OF COMPREHENSIVE |
INCOME |
FOR THE YEAR ENDED 31 DECEMBER 2021 |
2021 | 2020 |
Notes | £ | £ |
TURNOVER | 3 |
Cost of sales |
GROSS PROFIT |
Administrative expenses |
(4,711,885 | ) | (2,435,994 | ) |
Other operating income |
OPERATING LOSS | 5 | ( |
) | ( |
) |
Interest receivable and similar income |
(4,692,687 | ) | (2,362,283 | ) |
Interest payable and similar expenses | 6 |
LOSS BEFORE TAXATION | ( |
) | ( |
) |
Tax on loss | 7 | ( |
) | ( |
) |
LOSS FOR THE FINANCIAL YEAR | ( |
) | ( |
) |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
( |
) |
( |
) |
MAGMA GLOBAL LIMITED (REGISTERED NUMBER: 06528820) |
BALANCE SHEET |
31 DECEMBER 2021 |
2021 | 2020 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 8 |
Tangible assets | 9 |
CURRENT ASSETS |
Stocks | 10 |
Debtors | 11 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 12 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
13 |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 15 |
Share premium | 16 |
Capital redemption reserve | 16 |
Retained earnings | 16 | ( |
) | ( |
) |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
MAGMA GLOBAL LIMITED (REGISTERED NUMBER: 06528820) |
STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31 DECEMBER 2021 |
Called up | Capital |
share | Retained | Share | redemption | Total |
capital | earnings | premium | reserve | equity |
£ | £ | £ | £ | £ |
Balance at 1 January 2020 | ( |
) |
Changes in equity |
Total comprehensive income | - | ( |
) | - | ( |
) |
Balance at 31 December 2020 | ( |
) |
Changes in equity |
Capital repayment | - | - | (6,000,000 | ) | - | (6,000,000 | ) |
Total comprehensive income | - | ( |
) | - | ( |
) |
Balance at 31 December 2021 | ( |
) |
MAGMA GLOBAL LIMITED (REGISTERED NUMBER: 06528820) |
CASH FLOW STATEMENT |
FOR THE YEAR ENDED 31 DECEMBER 2021 |
2021 | 2020 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | ( |
) |
Interest element of finance lease payments paid |
( |
) |
Taxation refund |
Net cash from operating activities | ( |
) |
Cash flows from investing activities |
Purchase of intangible fixed assets | ( |
) | ( |
) |
Purchase of tangible fixed assets | ( |
) | ( |
) |
Sale of tangible fixed assets |
Interest received |
Net cash from investing activities | ( |
) | ( |
) |
Cash flows from financing activities |
Capital repayments in year | ( |
) |
Capital repayment from share premium | ( |
) |
Net cash from financing activities | ( |
) |
Decrease in cash and cash equivalents | ( |
) | ( |
) |
Cash and cash equivalents at beginning of year |
2 |
13,064,975 |
Cash and cash equivalents at end of year | 2 | 5,959,392 | 12,058,153 |
MAGMA GLOBAL LIMITED (REGISTERED NUMBER: 06528820) |
NOTES TO THE CASH FLOW STATEMENT |
FOR THE YEAR ENDED 31 DECEMBER 2021 |
1. | RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
2021 | 2020 |
£ | £ |
Loss before taxation | ( |
) | ( |
) |
Depreciation charges |
Profit on disposal of fixed assets | ( |
) |
Amortisation charges | 117,342 | 113,591 |
Government grants | ( |
) | ( |
) |
Finance costs | 101 | - |
Finance income | (872 | ) | (17,117 | ) |
(2,736,827 | ) | (220,155 | ) |
(Increase)/decrease in stocks | ( |
) |
Decrease in trade and other debtors |
Increase/(decrease) in trade and other creditors | ( |
) |
Cash generated from operations | ( |
) |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 31 December 2021 |
31/12/21 | 1/1/21 |
£ | £ |
Cash and cash equivalents | 5,959,392 | 12,058,153 |
Year ended 31 December 2020 |
31/12/20 | 1/1/20 |
£ | £ |
Cash and cash equivalents | 12,058,153 | 13,064,975 |
3. | ANALYSIS OF CHANGES IN NET FUNDS |
Other |
non-cash |
At 1/1/21 | Cash flow | changes | At 31/12/21 |
£ | £ | £ | £ |
Net cash |
Cash at bank |
and in hand | 12,058,153 | (6,098,761 | ) | 5,959,392 |
12,058,153 | ( |
) | 5,959,392 |
Debt |
Finance leases | - | 1,585 | (28,513 | ) | (26,928 | ) |
- | 1,585 | (28,513 | ) | (26,928 | ) |
Total | 12,058,153 | (6,097,176 | ) | (28,513 | ) | 5,932,464 |
MAGMA GLOBAL LIMITED (REGISTERED NUMBER: 06528820) |
NOTES TO THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2021 |
1. | COMPANY INFORMATION |
Magma Global Limited was incorporated on 10 March 2008 under the Companies Act 2006, as a private limited company and is registered in England and Wales. The principal activity of the company is designing and manufacturing composite risers, jumpers, spools and intervention lines for the subsea Oil & Gas market. The address of its head office and registered office is Magma House, Trafalgar Wharf, Hamilton Road, Portsmouth, PO6 4PX. |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
The presentation currency is £ sterling. |
Financial Reporting Standard 102 - reduced disclosure exemptions |
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": |
• | the requirement of paragraph 3.17(d); |
• | the requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c); |
• | the requirement of paragraph 33.7. |
Turnover |
Turnover represents the total invoice value, excluding value added tax, of sales made during the year, plus accrued income, less deferred income, and derives from the provision of goods and services falling within the company's ordinary activities. |
In respect of long-term contracts and contracts for on-going services, turnover represents the value of work done in the year. Turnover in respect of long-term contracts and contracts for on-going services is recognised by reference to the stage of completion. |
Intangible fixed assets |
Intangible fixed assets are initially recognised at cost and subsequently carried at cost less accumulated amortisation and accumulated impairment losses. |
Amoritsation is provided to write off the cost of patents in equal annual instalments over their useful life of 10 years. |
Tangible fixed assets |
All fixed assets are initially recognised at cost and subsequently carried at cost less accumulated depreciation and accumulated impairment losses. |
Depreciation is provided at rates calculated to write off the cost less residual value of each assets over its expected useful life, as follows: |
Leasehold property | - Straight line over the life of the lease |
Freehold property | - 22 years straight line |
Plant and machinery | - 4-10 years straight line |
Fixtures, fittings and equipment | - 3-4 years straight line |
The assets' residual values and useful lives are reviewed and adjusted, if appropriate, at the end of each reporting period. The effect of any change is accounted for prospectively. |
Fixed assets are derecognised on disposal or when no future economic benefits are expected. On disposal, the difference between the net disposal proceeds and the carrying amount is recognised in the Statement of Comprehensive Income. |
MAGMA GLOBAL LIMITED (REGISTERED NUMBER: 06528820) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2021 |
2. | ACCOUNTING POLICIES - continued |
Stocks |
Stocks are valued at the lower of cost and net realisable value. Stocks are valued at purchase price using a first in, first out method. |
Net realisable value is the price at which stocks can be sold in the normal course of business after allowing for the costs of realisation and, where appropriate, the cost of conversion from their existing state to a finished condition. Provision is made where necessary for obsolescent, slow moving and defective stock. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet 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 |
Research expenditure is written off to the Statement of Comprehensive Income in the year in which it is incurred. |
Foreign currencies |
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange prevailing at the accounting date. Transactions in foreign currencies are recorded at the date of the transactions. All differences are taken to the Statement of Comprehensive Income. |
Hire purchase and leasing commitments |
Assets obtained under hire purchase contracts and finance leases are capitalised as tangible assets and depreciated over their useful lives. Obligations under such agreement are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the Statement of Comprehensive Income so as to produce constant periodic rates of charge on the net obligations outstanding in each period. |
Rentals payable under operating leases are charged to the statement of Comprehensive Income on a straight line basis over the lease term. |
Pensions |
The pension costs charged in the financial statements represent the contribution payable by the company during the year. |
Financial instruments |
The company only has financial assets and liabilities of the kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and debt instruments are subsequently measured at amortised cost. |
Grants |
Grants relating to expenditure on tangible fixed assets are credited to the Statement of Comprehensive Income at the same rate as the depreciation on the assets to which the grant relates. The deferred element of the grant is included in creditors as deferred income. |
Grants of a revenue nature are credited to the Statement of Comprehensive Income in the period to which they relate in accordance with the terms of the grant. Any deferred element of the grant is included in creditors as deferred income. |
MAGMA GLOBAL LIMITED (REGISTERED NUMBER: 06528820) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2021 |
2. | ACCOUNTING POLICIES - continued |
Significant judgements and estimates |
The preparation of the financial statements requires management to make 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 actual outcomes could differ from those estimates. |
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements. |
Leases |
A lease that does not transfer substantially all of the risks and rewards of ownership is classified as an operating lease and is therefore not included in the statement of financial position. |
Revenue recognition |
Revenue is recognised in relation to the value of work carried out which is based on the project as a whole. Judgements are made on the timing of revenue recognition based on the percentage completion of the work, and the expected outcome of the contract. |
Other key sources of estimation uncertainty |
Tangible fixed assets |
Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. Residual value assessments consider issues such as market conditions, the remaining life of the asset and projected disposal values. |
Stock provision |
Stock is provided against if the management consider it necessary. The stock provision is assessed annually and may vary depending on a number of factors such as usage. |
3. | TURNOVER |
The turnover and loss before taxation are attributable to the one principal activity of the company. |
An analysis of turnover by geographical market is given below: |
2021 | 2020 |
£ | £ |
United Kingdom |
Europe |
United States of America |
Rest of the world | 4,402,750 | 3,597,000 |
4. | EMPLOYEES AND DIRECTORS |
2021 | 2020 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
MAGMA GLOBAL LIMITED (REGISTERED NUMBER: 06528820) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2021 |
4. | EMPLOYEES AND DIRECTORS - continued |
The average number of employees during the year was as follows: |
2021 | 2020 |
Production | 32 | 33 |
Engineering | 32 | 33 |
Management, sales and administration | 12 | 11 |
2021 | 2020 |
£ | £ |
Directors' remuneration |
Directors' pension contributions to money purchase schemes |
Information regarding the highest paid director is as follows: |
2021 | 2020 |
£ | £ |
Emoluments etc |
Pension contributions to money purchase schemes |
5. | OPERATING LOSS |
The operating loss is stated after charging/(crediting): |
2021 | 2020 |
£ | £ |
Hire of plant and machinery |
Depreciation - owned assets |
Profit on disposal of fixed assets | ( |
) |
Patents and licences amortisation |
Foreign exchange differences | ( |
) |
Auditors' remuneration |
Costs relating to the acquisition of the company - Staff costs |
Costs relating to the acquisition of the company - Legal fees |
6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2021 | 2020 |
£ | £ |
Hire purchase and finance |
lease charges |
MAGMA GLOBAL LIMITED (REGISTERED NUMBER: 06528820) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2021 |
7. | TAXATION |
Analysis of the tax credit |
The tax credit on the loss for the year was as follows: |
2021 | 2020 |
£ | £ |
Current tax: |
R&D tax credit - prior year | (47,591 | ) | (115,530 | ) |
R&D tax credit - current year | (173,055 | ) | (150,000 | ) |
Tax on loss | ( |
) | ( |
) |
UK corporation tax has been charged at 19% . |
Reconciliation of total tax credit included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
2021 | 2020 |
£ | £ |
Loss before tax | ( |
) | ( |
) |
Loss multiplied by the standard rate of corporation tax in the UK of (2020 - |
( |
) |
( |
) |
Effects of: |
Expenses not deductible for tax purposes |
Adjustments to tax charge in respect of previous periods | ( |
) | ( |
) |
Difference in tax rates on Research and Development claim | - | 82,406 |
Research and Development expenditure credit adjustment | 40,593 | - |
Current year Research and Development net expenditure credit | (173,055 | ) | - |
Movement on unprovided deferred tax asset | 790,928 | 216,428 |
Total tax credit | (220,646 | ) | (265,530 | ) |
The company has trading losses of approximately £35.6 million which have been carried forward (2020: £32.2 million). |
8. | INTANGIBLE FIXED ASSETS |
Patents and |
licences |
£ |
COST |
At 1 January 2021 |
Additions |
At 31 December 2021 |
AMORTISATION |
At 1 January 2021 |
Amortisation for year |
At 31 December 2021 |
NET BOOK VALUE |
At 31 December 2021 |
At 31 December 2020 |
MAGMA GLOBAL LIMITED (REGISTERED NUMBER: 06528820) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2021 |
9. | TANGIBLE FIXED ASSETS |
Fixtures, |
fittings |
Leasehold | Plant and | and |
property | machinery | equipment | Totals |
£ | £ | £ | £ |
COST |
At 1 January 2021 |
Additions |
Disposals | ( |
) | ( |
) |
At 31 December 2021 |
DEPRECIATION |
At 1 January 2021 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) |
At 31 December 2021 |
NET BOOK VALUE |
At 31 December 2021 |
At 31 December 2020 |
The net book value of tangible fixed assets includes £28,513 (2020: £Nil) in respect of assets held under hire purchase contracts. |
10. | STOCKS |
2021 | 2020 |
£ | £ |
Raw materials |
Stock recognised during the year as an expense was £2,086,185 (2020: £2,469,872). |
A provision for impairment has been recognised during the year as an expense totalling £70,786 (2020: £74,400). |
11. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2021 | 2020 |
£ | £ |
Trade debtors |
Other debtors |
Corporation tax |
Prepayments and accrued income |
12. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2021 | 2020 |
£ | £ |
Finance leases (see note 14) |
Trade creditors |
Social security and other taxes |
Other creditors |
Accruals and deferred income |
MAGMA GLOBAL LIMITED (REGISTERED NUMBER: 06528820) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2021 |
13. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
2021 | 2020 |
£ | £ |
Finance leases (see note 14) |
Obligations under finance leases and hire purchase contracts are secured on the assets to which they relate. |
14. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Finance leases |
2021 | 2020 |
£ | £ |
Net obligations repayable: |
Within one year |
Between one and five years |
Non-cancellable |
operating leases |
2021 | 2020 |
£ | £ |
Within one year |
Between one and five years |
Lease payments recognised as an expense during the year were £888,923 (2020: £878,591). |
MAGMA GLOBAL LIMITED (REGISTERED NUMBER: 06528820) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2021 |
15. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal value: | 2021 | 2020 |
£ | £ |
270,315 | Ordinary | 1p | 2,703 | 2,703 |
809,280 | A Ordinary | £1 | 809,280 | 809,280 |
195,118 | B Ordinary | £1 | 195,118 | 195,118 |
3,050,004 | C Ordinary | £1 | 3,050,004 | 3,050,004 |
273,206 | B1 Ordinary | £1 | 273,206 | 273,206 |
143,350 | B2 Ordinary | £1 | 143,350 | 143,350 |
16,686 | D Ordinary | 1p | 167 | 167 |
1,606,629 | E Ordinary | £1 | 1,606,629 | 1,606,629 |
38,526 | E1 Ordinary | 1p | 385 | 385 |
83,102 | B3 Ordinary | £12.65 | 1,051,240 | 1,051,240 |
56,818 | B4 Ordinary | £25.90 | 1,471,586 | 1,471,586 |
8,603,669 | 8,603,669 |
Rights and restrictions attached to shares |
Prescribed particulars attached to all classes of share (other than D, E and E1 Ordinary shares): |
- | Each share has attached full voting rights. |
- | Every dividend shall be distributed pro rata according to the number of shares held. |
- | Participation in a distribution (including on a winding up) applies firstly to the holders of B2 Ordinary shares an amount equal to their respective subscription price per share less any amount previously paid to them as a dividend. Participation in a distribution then applies to B Ordinary, B1 Ordinary, B3 Ordinary and B4 Ordinary in this order, an amount equal to their respective subscription price per share, less any amount previously paid to them as a dividend. In the event of a shortfall such amounts will be paid in proportion to the numbers of the B Ordinary and B3 Ordinary, or the B1 Ordinary and B4 Ordinary shares held. Participation in a distribution then applies to the holders of C Ordinary and A Ordinary shares in this order, an amount equal to their respective subscription price per share, less any amount previously paid to them as a dividend. In the event of a shortfall such amounts will be paid in proportion to the numbers of shares held. Any surplus will be distributed equally amongst the holders of A Ordinary, B Ordinary, B1 Ordinary, B2 Ordinary, B3 Ordinary, B4 Ordinary and Ordinary shares up to the hurdle value. If the surplus assets exceed the hurdle value, any final surplus will be distributed equally amongst the holders of A Ordinary, B Ordinary, B1 Ordinary, B2 Ordinary, B3 Ordinary, B4 Ordinary, D Ordinary and Ordinary shares. |
- | Shares are not redeemable. |
Prescribed particulars attached to D Ordinary shares: |
- | No voting rights. |
- | No right to a dividend. |
MAGMA GLOBAL LIMITED (REGISTERED NUMBER: 06528820) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2021 |
- | Participation in a distribution (including on a winding up) applies firstly to the holders of B2 Ordinary shares an amount equal to their respective subscription price per share less any amount previously paid to them as a dividend. Participation in a distribution then applies to B Ordinary, B1 Ordinary, B3 Ordinary, B4 Ordinary shares in this order, an amount equal to their respective subscription price per share, less any amount previously paid to them as a dividend. In the event of a shortfall such amounts will be paid in proportion to the numbers of B Ordinary and B3 Ordinary, or B1 Ordinary and B4 Ordinary shares held. Participation in a distribution then applies to the holders of C Ordinary and A Ordinary shares in that order, an amount equal to their respective subscription price per share less any amount previously paid as dividend. Any surplus will be distributed equally amongst the holders of A Ordinary, B Ordinary, B1 Ordinary, B2 Ordinary, B3 Ordinary, B4 Ordinary and Ordinary shares up to the hurdle value. If the surplus assets exceed the hurdle value, any final surplus will be distributed equally amongst the holders of A Ordinary, B Ordinary, B1 Ordinary, B2 Ordinary, B3 Ordinary, B4 Ordinary, D Ordinary and Ordinary shares. |
- | Shares are not redeemable. |
Prescribed particulars attached to E Ordinary and E1 Ordinary shares: |
- | Holders of E Ordinary and E1 Ordinary are entitled to 25% of the votes of the total issued share capital. |
- | Every dividend shall be distributed pro rata according to the number of shares held. |
- |
Participation in a distribution (including on a winding up) applies firstly to the holders of B2 Ordinary shares an amount equal to their respective subscription price per share less any amount previously paid to them as a dividend. Participation in a distribution then applies to B Ordinary, B1 Ordinary, B3 Ordinary, B4 Ordinary shares in this order, an amount equal to their respective subscription price per share, less any amount previously paid to them as a dividend. In the event of a shortfall such amounts will be paid in proportion to the numbers of B Ordinary and B3 Ordinary, or B1 Ordinary and B4 Ordinary shares held. Participation in a distribution then applies to C Ordinary and A Ordinary in that order, an amount equal to their respective subscription price per share less any amount previously paid as dividend. Any surplus will be distributed equally amongst the holders of A Ordinary, B Ordinary, B1 Ordinary, B2 Ordinary, B3 Ordinary, B4 Ordinary and Ordinary shares up to the hurdle value. If the surplus assets exceed the hurdle value, any final surplus will be distributed equally amongst the holders of A Ordinary, B Ordinary, B1 Ordinary, B2 Ordinary, B3 Ordinary, B4 Ordinary, D Ordinary and Ordinary shares. |
- | Shares are not redeemable. |
- |
In respect of any E Ordinary shares that are subject to an option under the option agreement, from completion of such option they shall have no voting, no dividend or distribution rights. |
16. | RESERVES |
Capital |
Retained | Share | redemption |
earnings | premium | reserve | Totals |
£ | £ | £ | £ |
At 1 January 2021 | ( |
) | 14,821,849 |
Deficit for the year | ( |
) | ( |
) |
Capital repayment | - | (6,000,000 | ) | - | (6,000,000 | ) |
At 31 December 2021 | ( |
) | 4,349,707 |
Retained earnings includes all current and prior period retained profits and losses. |
The share premium account includes any premiums received on issue of share capital, net of any transaction costs associated with the issuing of the shares. |
The capital redemption reserve includes amounts transferred following the redemption or purchase of the company's own shares. |
MAGMA GLOBAL LIMITED (REGISTERED NUMBER: 06528820) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2021 |
17. | PENSION COMMITMENTS |
The company operates a defined contribution scheme in respect of the directors and employees. The scheme and its assets are held by independent managers. The pension charge represents contributions due from the company and amounted to £194,848 (2020: £189,627). |
18. | CAPITAL COMMITMENTS |
2021 | 2020 |
£ | £ |
Contracted but not provided for in the |
financial statements |
19. | RELATED PARTY DISCLOSURES |
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
During the year sales of £54,025 (2020: £84,780) were made to M-Flow Technologies Limited a company of which the directors Mr M G Bryant, Mr M P W Jones and Mr J Jonhede are also directors. The balance due to Magma Global Limited at the year end was £Nil (2020: £Nil). |
During the year sales of £4,481 and purchases of £804,883 (2020 sales: £5,271 and 2020 purchases: £918,541) were made to and from Victrex Manufacturing Limited a company of which Mr M Court is also a director. The balance due from Victrex Manufacturing Limited at the year end was £Nil (2020: £4,481) and the balance due to Victrex Manufacturing Limited at the year end was £219,041 (2020: £72,894). |
During the year sales of £6,936 and purchases of £90,028 (2020 sales: £Nil and 2020 purchases: £Nil) were made to and from Enoflex Limited a company of which Mr M Court, Mr M G Bryant, Mr J Jonhede, Mr C Tavner & Mr D J V Steenbergen are also directors. The balance due to Enoflex Limited at the year end was £83,092 (2020: £Nil). |
20. | ULTIMATE CONTROLLING PARTY |
Up until 13 October 2021, the directors considered there to be no single controlling party. |
From 13 October 2021, the immediate parent company is Technip-Coflexip UK Holdings Limited. The ultimate parent company from this date is Technip FMC PLC. |
The largest group in which the results of the company are consolidated is that headed by Technip FMC PLC. Copies of the publicly available consolidated financial statements can be obtained from the Registrar of Companies. |