Registration number:
Micro Systems (UK) Limited
for the Year Ended 31 December 2022
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 |
|
Notes to the Financial Statements |
Micro Systems (UK) Limited
Company Information
Directors |
Mr G Clark Mrs M Robinson |
Registered office |
|
Solicitors |
|
Auditors |
|
Micro Systems (UK) Limited
Strategic Report for the Year Ended 31 December 2022
The directors present their strategic report for the year ended 31 December 2022.
Principal activity
The principal activity of the group is medical manufacturing and consultancy
Fair review of the business
We specialise in the design, manufacture and validation of micro and ultra precision injection moulds for the medical, pharmaceutical and optical markets. We offer 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.
During 2022 the directors started to see the business recover following the Covid-19 pandemic. This was mainly evidenced in the increased enquiries we received across all parts of the business. Our ability to turn these enquiries into orders during the year resulted in an order intake which exceeded the previous two years and apart from 2019, was our most successful in those terms since 2014. The upturn was gradual through the year and due to the length of many of our projects, much of the turnover relating to these orders will be realised only in the 2023 results. The Directors are happy that we have turned around the losses the business experienced in 2020 and 2021 and the direction of travel will continue upwards in 2023.
Our marketing focus in 2022 resulted in the business securing several new Customers, around half of which have placed new tooling orders. The return of exhibitions after the Covid-19 pause, has allowed us to increase focus and spend in this area and this will continue into 2023, when we anticipate exhibiting in some areas which are new to us as we try to extend our reach into the SE Asia, US and European markets.
Our focus in 2023 will be on expanding our marketing reach, retaining and winning new business across all our key markets including Optical, Micro Moulding and Microfluidics, winning new business from our Singapore operations, reducing costs and improving machining efficiencies using new strategies and technologies.
The board of directors has chosen a number of financial and non-financial key performance indicators (KPI's) to measure the group’s progress. The source of the data is consistent with published financial information in the audited financial statements. The tables below sets out these KPI's.
Impact of Brexit related risks
Brexit continues to have a minimal impact on the business. As an exporter of many years, we have experience in the intricacies of the required customs procedures. Once again, we have retained all our key employees from the EU, having been allowed to remain in the UK under the EU Settlement Scheme. We have again secured new business in the EU which is a testament to our ability to provide the highest level of technical service across multiple continents.
The group's key financial and other performance indicators during the year were as follows:
Financial KPIs' |
Unit |
2022 |
2021 |
|
Percentage growth in revenue to measure the growth of the business |
% |
36.09 |
11.93 |
|
Gross profit margin as a measure of the profitability of sales |
% |
10.18 |
39.61 |
|
Return on sales at operating profit level measuring the overall operational efficiency |
% |
1.63 |
(10.59) |
|
Current Ratio used to measure the company's ability to pay its current liabilities |
1.42 |
1.72 |
||
Return on capital employed |
% |
4.00 |
(19.00) |
Non-financial KPIs % |
Target % |
2022 |
2021 |
On Time delivery |
90% of planned delivery |
91.00 |
95.90 |
Warranty and rectifications |
Less than 2% of sales |
2.20 |
1.45 |
Customer satisfaction survey |
80% for all responses |
89.00 |
92.00 |
Machine utilisation |
90% of available hours |
83.00 |
52.30 |
Micro Systems (UK) Limited
Strategic Report for the Year Ended 31 December 2022
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 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 and authorised by the
......................................... |
Micro Systems (UK) Limited
Directors' Report for the Year Ended 31 December 2022
The directors present their report and the for the year ended 31 December 2022.
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 of the group.
Price risk, credit risk, liquidity risk and cash flow risk
Price risk - is the risk that the company undercharges 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
As order levels are now back to 2019 (pre covid) levels, we have had to ensure that our capacity is capable of handling the upturn in orders. We continue to focus on efficiencies and use of technological developments to improve productivity.
We have ordered and continue to install new equipment in both UK and Singapore to meet the increased demand. We will also be recruiting additional personnel in both locations, as we continue to develop overseas markets and grow the sales further .
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.
Micro Systems (UK) Limited
Directors' Report for the Year Ended 31 December 2022
Directors' liabilities
The Directors have the benefit of the indemnity provisions contained in the Company’s Articles of Association (‘Articles’), and the Company has maintained throughout the year Directors’ and Officers’ liability insurance for the benefit of the Company, the Directors and its Officers. The Company has entered into qualifying third party indemnity arrangements for the benefit of all its Directors in a form and scope which comply with the requirements of the Companies Act 2006 and which were in force throughout the year and remain in force.
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 and authorised by the
......................................... |
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 group and company and of the profit or loss of the group 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 group and company's transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Micro Systems (UK) Limited
Independent Auditor's Report to the Members of Micro Systems (UK) Limited
Opinion
We have audited the financial statements of Micro Systems (UK) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022, which comprise the 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, and 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 group's and the parent company's affairs as at 31 December 2022 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. |
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 auditor responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 director's 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 group's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were 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 included in the annual report, other than the financial statements and our auditor’s report 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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
Micro Systems (UK) Limited
Independent Auditor's Report to the Members of Micro Systems (UK) Limited
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. |
Matters on which we are required to report by exception
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.
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 parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
• | the parent 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. |
Responsibilities of directors
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, and for such internal control as the directors determine is 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.
Auditor 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 an auditor’s report 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:
Micro Systems (UK) Limited
Independent Auditor's Report to the Members of Micro Systems (UK) Limited
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the company audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
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 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.
......................................
For and on behalf of
Lowry House
17 Marble Street
M2 3AW
Micro Systems (UK) Limited
Consolidated Profit and Loss Account for the Year Ended 31 December 2022
Note |
Total |
Total |
|
Turnover |
|
|
|
Cost of sales |
( |
( |
|
Gross profit |
|
|
|
Administrative expenses |
( |
( |
|
Other operating income |
|
|
|
Operating profit/(loss) |
|
( |
|
Other interest receivable and similar income |
|
|
|
Interest payable and similar expenses |
( |
( |
|
(69,210) |
(66,340) |
||
Profit/(loss) before tax |
|
( |
|
Tax on profit/(loss) |
|
|
|
Profit/(loss) for the financial year |
|
( |
|
Profit/(loss) attributable to: |
|||
Owners of the company |
|
( |
|
Minority interests |
|
|
|
|
( |
Micro Systems (UK) Limited
Consolidated Statement of Comprehensive Income for the Year Ended 31 December 2022
2022 |
2021 |
|
Profit/(loss) 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 |
|
|
|
( |
Micro Systems (UK) Limited
(Registration number: 04584656)
Consolidated Balance Sheet as at 31 December 2022
Note |
2022 |
2021 |
|
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 |
100,000 |
100,000 |
|
Retained earnings |
2,962,622 |
2,589,585 |
|
Equity attributable to owners of the company |
3,062,622 |
2,689,585 |
|
Minority interests |
5,282 |
4,654 |
|
Shareholders' funds |
3,067,904 |
2,694,239 |
Approved and authorised by the
......................................... |
Micro Systems (UK) Limited
(Registration number: 04584656)
Balance Sheet as at 31 December 2022
Note |
2022 |
2021 |
|
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 |
100,000 |
100,000 |
|
Retained earnings |
2,758,386 |
2,764,906 |
|
Shareholders' funds |
2,858,386 |
2,864,906 |
The company made a profit after tax for the financial year of £63,480 (2021 - loss of £467,106).
Approved and authorised by the
......................................... |
Micro Systems (UK) Limited
Consolidated Statement of Changes in Equity for the Year Ended 31 December 2022
Equity attributable to the parent company
Share capital |
Retained earnings |
Total |
Non- controlling interests |
Total equity |
|
At 1 January 2022 |
|
|
|
|
|
Profit for the year |
- |
|
|
|
|
Other comprehensive income |
- |
|
|
- |
|
Total comprehensive income |
- |
|
|
|
|
Dividends |
- |
( |
( |
- |
( |
At 31 December 2022 |
|
|
|
|
|
Share capital |
Retained earnings |
Total |
Non- controlling interests |
Total equity |
|
At 1 January 2021 |
|
|
|
|
|
(Loss)/profit for the year |
- |
( |
( |
|
( |
Other comprehensive income |
- |
( |
( |
- |
( |
Total comprehensive income |
- |
( |
( |
|
( |
Dividends |
- |
( |
( |
- |
( |
At 31 December 2021 |
|
|
|
|
|
Micro Systems (UK) Limited
Statement of Changes in Equity for the Year Ended 31 December 2022
Share capital |
Retained earnings |
Total |
|
At 1 January 2022 |
|
|
|
Profit for the year |
- |
|
|
Dividends |
- |
( |
( |
At 31 December 2022 |
|
|
|
Share capital |
Retained earnings |
Total |
|
At 1 January 2021 |
|
|
|
Loss for the year |
- |
( |
( |
Dividends |
- |
( |
( |
At 31 December 2021 |
|
|
|
Micro Systems (UK) Limited
Consolidated Statement of Cash Flows for the Year Ended 31 December 2022
Note |
2022 |
2021 |
|
Cash flows from operating activities |
|||
Profit/(loss) for the year |
|
( |
|
Adjustments to cash flows from non-cash items |
|||
Depreciation and amortisation |
|
|
|
Finance income |
( |
( |
|
Finance costs |
|
|
|
Income tax expense |
( |
( |
|
|
|
||
Working capital adjustments |
|||
(Increase)/decrease in stocks |
( |
|
|
(Increase)/decrease in trade debtors |
( |
|
|
Increase/(decrease) in trade creditors |
|
( |
|
(Decrease)/increase in provisions |
( |
|
|
Cash generated from operations |
|
( |
|
Income taxes received |
|
|
|
Net cash flow from operating activities |
|
( |
|
Cash flows from investing activities |
|||
Interest received |
|
|
|
Acquisitions of tangible assets |
( |
( |
|
Proceeds from sale of tangible assets |
|
|
|
Acquisition of investments in joint ventures and associates |
( |
( |
|
Proceeds from disposal 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/(decrease) 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 |
180,483 |
89,827 |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
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 United Kingdom and Republic of Ireland and the Companies Act 2006'.
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.
The presentational currency is GB pounds sterling (£)
Summary of disclosure exemptions
The parent company, Micro Systems (UK) Ltd, is included in the consolidated financial statements and is considered to be a qualifying entity under FRS 102 paragraphs 1.8 to 1.12. The following exemptions available under FRS 102 in respect of certain disclosures for the parent company financial statements have been applied as follows:
• No separate parent company Statement of Cash Flows with related notes is included; and
• The disclosures required by FRS 102.11 Basic Financial Instruments and FRS102.12 Other Financial Instrument Issues in respect of financial instruments not falling within the fair value accounting rules of Paragraph 36(4) of Schedule 1
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Basis of consolidation
The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December 2021.
No Profit and Loss Account is presented for the company as permitted by section 408 of the Companies Act 2006. The company made a loss after tax for the financial year of £467,106 (2020 - loss of £525,695).
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.
Going concern
The Group made a profit before tax of £70,766 for the year ended 31 December 2022 (2021 – loss before tax £713,744) and has net current assets of £1,898,026 (2021 net current assets - £1,447,606).
As the restrictions applied to the UK economy arising from Covid-19 have been removed and similar restrictions across the world lifted, the Group has seen enquiries, sale orders and sales increase significantly. However, there remains some economic uncertainty, particularly following Russia's invasion of Ukraine in February 2022. This has led to subsequent inflationary increases which the Bank of England is trying to control through raising of the bank interest base rate, increasing the cost of borrowing and attempting to dampen down consumer demand. Despite this, the results for the current year supported by current sales order levels, shows the Group is able to manage it cash flows and continue to operate profitably. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
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, Caribbean, 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, particularly 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 £627,930 (2021 -£569,493).
2. The obsolescence provision for stock of parts for dies, both blank and finished and therefore the net value of stock. The carrying amount is £65,590 (2021 -£51,266).
3. Impairment of Debtors - The Group makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience. The amount excludes Amounts Recoverable on Contracts which is separately disclosed. The carrying amount is £2,914,635 (2021 -£2,282,964).
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 group.
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. Foreseeable losses 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 separable parts. Profits are therefore recognised as they accrue on each separable 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,
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
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 financial 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 exchange rates fluctuated significantly during that period, in which case the exchange rates at the date of the transactions are used. The exchange 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 tax is recognised in respect of all timing differences between taxable profits and profits reported in the consolidated financial statements.
Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.
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.
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:
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
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 |
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.
Intangible assets
Intangible assets are measured at cost less accumulated amortisation and any accumulated impairment losses.
Amortisation is charged so as to allocate the cost of intangibles less their residual values over their estimated useful lives, using the straight-line method. The intangible assets are amortised over the following useful economic lives:
- Capitalised Development costs - 5 years
If there is an indication that there has been a significant change in amortisation rate or residual value of an asset, the amortisation of that asset is revised prospectively to reflect the new expectations.
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 |
Capitalised development costs |
20% 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.
Trade 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.
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Stocks
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.
Trade 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.
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.
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Dividends
Dividend distribution to the group’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.
Financial instruments
Classification
Recognition and measurement
Directors' loans (being repayable on demand), trade debtors and trade creditors are measured at the undiscounted amount of the cash or other consideration expected to be paid or received.
Financial assets that are measured at amortised cost are assessed at the end of each reporting period for objective evidence of impairment.
Impairment
Turnover |
The analysis of the group's turnover for the year from continuing operations is as follows:
2022 |
2021 |
|
Sale of goods |
|
|
The analysis of the group's turnover for the year by class of business is as follows:
2022 |
2021 |
|
Design and manufacture of medical products |
|
|
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
The analysis of the group's turnover for the year by market is as follows:
2022 |
2021 |
|
UK |
|
|
Europe |
|
|
Rest of world |
|
|
|
|
Other operating income |
The analysis of the group's other operating income for the year is as follows:
2022 |
2021 |
|
Government grants |
|
|
Miscellaneous other operating income |
|
|
|
|
The Coronavirus Job Retention Scheme (“CJRS”) is a scheme announced by the UK government on 20 March 2020 to support employers who could not maintain their current workforce because their operations had been affected by coronavirus (“COVID-19”).
Employers can apply for grants to cover the costs of employees who are “furloughed”, ie. placed on leave of absence in connection with the COVID-19 pandemic. Grants recceived this period, under the Job Retention Scheme, is £1,098 (2021: £88,005).
A similar scheme was introduced in Singapore called the Job Support Scheme (“JSS”), the grants received under this scheme for the period is £1,570 (2021: £21,453).
Also included in Government Grants is Nil (2021: £10,417) which relates to interest on the CBILS Loan paid by the UK Government.
Operating profit/(loss) |
Arrived at after charging/(crediting)
2022 |
2021 |
|
Depreciation expense |
|
|
Amortisation expense |
|
|
Operating lease expense - other |
|
|
Other interest receivable and similar income |
2022 |
2021 |
|
Interest income on bank deposits |
|
|
Other finance income |
|
|
|
|
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Interest payable and similar expenses |
2022 |
2021 |
|
Interest on bank overdrafts and borrowings |
|
|
Interest on obligations under finance leases and hire purchase contracts |
|
|
Interest expense on other finance liabilities |
|
- |
Foreign exchange losses |
( |
( |
|
|
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
2022 |
2021 |
|
Wages and salaries |
|
|
Social security costs |
|
|
Other short-term employee benefits |
- |
|
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:
2022 |
2021 |
|
Production |
|
|
Administration and support |
|
|
|
|
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Directors' remuneration |
The directors' remuneration for the year was as follows:
2022 |
2021 |
|
Remuneration |
|
|
Contributions paid to money purchase schemes |
|
|
390,679 |
320,135 |
During the year the number of directors who were receiving benefits and share incentives was as follows:
2022 |
2021 |
|
Accruing benefits under money purchase pension scheme |
|
|
In respect of the highest paid director:
2022 |
2021 |
|
Remuneration |
|
|
Auditors' remuneration |
2022 |
2021 |
|
Audit of these financial statements |
18,324 |
18,838 |
Audit of the financial statements of subsidiaries of the company pursuant to legislation |
7,194 |
4,666 |
|
|
|
Other fees to auditors |
||
Taxation compliance services |
|
|
All other non-audit services |
|
|
|
|
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Taxation |
Tax charged/(credited) in the income statement
2022 |
2021 |
|
Deferred taxation |
||
Arising from origination and reversal of timing differences |
( |
( |
Arising from changes in tax rates and laws |
- |
|
Total deferred taxation |
( |
( |
The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2021 - the same as the standard rate of corporation tax in the UK) of
The differences are reconciled below:
2022 |
2021 |
|
Profit/(loss) before tax |
|
( |
Corporation tax at standard rate |
( |
( |
Effect of expense not deductible in determining taxable profit (tax loss) |
|
|
Effect of tax losses |
( |
( |
Tax (decrease)/increase from effect of capital allowances and depreciation |
( |
|
Other tax effects for reconciliation between accounting profit and tax expense (income) |
( |
|
Total tax credit |
( |
( |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Deferred tax
Group
Deferred tax assets and liabilities
2022 |
Asset |
Liability |
Accelerated capital allowances |
|
- |
Tax losses |
( |
- |
( |
- |
2021 |
Asset |
Liability |
Accelerated capital allowances |
- |
|
Tax losses |
- |
( |
- |
|
There are £Nil of unused tax losses (2021 - £179,183) for which no deferred tax asset is recognised in the balance sheet.
Company
Deferred tax assets and liabilities
2022 |
Asset |
Liability |
Accelerated capital allowances |
|
- |
Tax losses |
( |
- |
( |
- |
2021 |
Asset |
Liability |
Accelerated capital allowances |
- |
|
Tax losses |
- |
( |
- |
|
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Intangible assets |
Group
Goodwill |
Other intangible assets |
Total |
|
Cost or valuation |
|||
At 1 January 2022 |
|
|
|
At 31 December 2022 |
|
|
|
Amortisation |
|||
At 1 January 2022 |
|
|
|
Amortisation charge |
|
|
|
At 31 December 2022 |
|
|
|
Carrying amount |
|||
At 31 December 2022 |
- |
|
|
At 31 December 2021 |
|
|
|
Pledged as security
Amortisation of goodwill and capitalised development costs 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 £
Individually material intangible assets
|
|
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Company
Other intangible assets |
Total |
|
Cost or valuation |
||
At 1 January 2022 |
|
|
At 31 December 2022 |
|
|
Amortisation |
||
At 1 January 2022 |
|
|
Amortisation charge |
|
|
At 31 December 2022 |
|
|
Carrying amount |
||
At 31 December 2022 |
|
|
At 31 December 2021 |
|
|
Pledged as security
Amortisation of capitalised development costs 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 £
Individually material intangible assets
|
|
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Tangible assets |
Group
Land and buildings |
Furniture, fittings and equipment |
Motor vehicles |
Other tangible assets |
Total |
|
Cost or valuation |
|||||
At 1 January 2022 |
|
|
|
|
|
Additions |
|
|
|
|
|
Disposals |
( |
( |
- |
( |
( |
At 31 December 2022 |
|
|
|
|
|
Depreciation |
|||||
At 1 January 2022 |
|
|
|
|
|
Charge for the year |
|
|
|
|
|
Eliminated on disposal |
( |
( |
- |
( |
( |
At 31 December 2022 |
|
|
|
|
|
Carrying amount |
|||||
At 31 December 2022 |
|
|
|
|
|
At 31 December 2021 |
|
|
|
|
|
Included within the net book value of land and buildings above is £201,810 (2021 - £207,791) in respect of short leasehold land and buildings.
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
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:
2022 |
2021 |
|
Plant and machinery |
1,071,653 |
1,028,562 |
Motor vehicles |
69,857 |
35,813 |
1,141,510 |
1,064,375 |
Restriction on title and pledged as security
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Company
Land and buildings |
Furniture, fittings and equipment |
Motor vehicles |
Other tangible assets |
Total |
|
Cost or valuation |
|||||
At 1 January 2022 |
|
|
|
|
|
Additions |
|
|
|
|
|
Disposals |
( |
( |
- |
( |
( |
At 31 December 2022 |
|
|
|
|
|
Depreciation |
|||||
At 1 January 2022 |
|
|
|
|
|
Charge for the year |
|
|
|
|
|
Eliminated on disposal |
( |
( |
- |
( |
( |
At 31 December 2022 |
|
|
|
|
|
Carrying amount |
|||||
At 31 December 2022 |
|
|
|
|
|
At 31 December 2021 |
|
|
|
|
|
Included within the net book value of land and buildings above is £34,599 (2021 - £203,775) in respect of short leasehold land and buildings.
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
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:
2022 |
2021 |
|
Plant and machinery |
1,071,653 |
1,028,562 |
Motor vehicles |
69,857 |
35,813 |
1,141,510 |
1,064,375 |
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 |
|
2022 |
2021 |
|||
Subsidiary undertakings |
||||
|
2 Tukang Innovation Grove
|
|
|
|
Singapore |
* indicates direct investment of the company
Subsidiary undertakings
Micro Systems Engineering Solutions Pte Ltd The principal activity of Micro Systems Engineering Solutions Pte Ltd is |
Company
2022 |
2021 |
|
Investments in subsidiaries |
|
|
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Subsidiaries |
£ |
Cost or valuation |
|
At 1 January 2022 |
|
Provision |
|
Carrying amount |
|
At 31 December 2022 |
|
At 31 December 2021 |
|
Loan to Micro Systems Engineering Solutions Pte Ltd
The loan was subject to a capital holiday in the first year in 2017 with interest payable at 8% and then repayable at £13,851 per month over years 2 to 5 plus interest at 5%. However, no repayments have been made since February 2019 due to cash flow issues in Micro Systems Engineering Solutions Pte Ltd and it currently remains at £601,853 (2021: £601,853).
Interest has been calculated for the period based on the agreed terms at £Nil (2021: £3,467). As the loan agreement has expired no interest is currently being charged.
The loan is unsecured.
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 |
|
2022 |
2021 |
|||
Subsidiary undertakings |
||||
|
2 Tukang Innovation Grove
Singapore |
|
|
|
Subsidiary undertakings |
Micro Systems Engineering Solutions Pte Ltd The principal activity of Micro Systems Engineering Solutions Pte Ltd is |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Stocks |
Group |
Company |
|||
2022 |
2021 |
2022 |
2021 |
|
Work in progress |
|
|
|
|
Other inventories |
|
|
|
|
|
|
|
|
Group
Impairment of inventories
The amount of impairment loss included in profit or loss is £65,950 (2021 - £51,266). The amount of impairment loss included in other comprehensive income is £Nil (2021 - £Nil). The amount of reversal of impairment recognised in profit or loss is £Nil (2021 - £Nil). The amount of reversal of impairment recognised in other comprehensive income is £Nil (2021 - £Nil).
The carrying amount of stocks pledged as security for liabilities amounted to £
Company
Impairment of inventories
The amount of impairment loss included in profit or loss is £65,950 (2021 - £51,266). The amount of impairment loss included in other comprehensive income is £Nil (2021 - £Nil). The amount of reversal of impairment recognised in profit or loss is £Nil (2021 - £Nil). The amount of reversal of impairment recognised in other comprehensive income is £Nil (2021 - £Nil).
The carrying amount of stocks pledged as security for liabilities amounted to £
Debtors |
Group |
Company |
||||
Note |
2022 |
2021 |
2022 |
2021 |
|
Trade debtors |
|
|
|
|
|
Amounts owed by related parties |
|
|
|
|
|
Other debtors |
|
|
|
|
|
Prepayments |
|
|
|
|
|
Accrued income |
|
|
|
|
|
Gross amount due from customers for contract work |
|
|
|
|
|
Corporation tax asset |
- |
|
- |
|
|
|
|
|
|
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Details of non-current trade and other debtors
Group
£Nil (2021 - £100,000) of Loan to Optimold Ltd is classified as non current. Repayments for the loan were set over 5 years from March 2019 with interest at 5% per annum.
The loan is unsecured.
Company
£Nil (2021 - £100,000) of Loan to Optimold Ltd is classified as non current. Repayments for the loan were set over 5 years from March 2019 with interest at 5% per annum.
The loan is unsecured.
Group
The carrying amount of trade debtors pledged as security for liabilities amounted to £3,542,565 (2021 - £2,852,457).
All of the parent company's receivables are pledged as security for the parent company's loan and bank overdraft facilities with National Westminster Bank under a mortgage debenture dated 16th November 2010..
Company
The carrying amount of trade debtors pledged as security for liabilities amounted to £3,355,960 (2021 - £2,652,162).
All of the company's receivables are pledged as security for the company's loan and bank overdraft facilities with National Westminster Bank under a mortgage debenture dated 16th November 2010..
Cash and cash equivalents |
Group |
Company |
|||
2022 |
2021 |
2022 |
2021 |
|
Cash at bank |
|
|
|
|
Bank overdrafts |
( |
( |
( |
( |
Cash and cash equivalents in statement of cash flows |
180,483 |
89,827 |
153,458 |
75,349 |
Creditors |
Group |
Company |
||||
Note |
2022 |
2021 |
2022 |
2021 |
|
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 |
|
|
|
|
|
Accruals |
|
|
|
|
|
Corporation tax liability |
753 |
- |
753 |
- |
|
Gross amount due to customers for contract work |
|
|
|
|
|
|
|
|
|
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Group |
Company |
||||
Note |
2022 |
2021 |
2022 |
2021 |
|
Due after one year |
|||||
Loans and borrowings |
|
|
|
|
Deferred tax and other provisions |
Group
Onerous contracts |
Deferred tax |
Other provisions |
Total |
|
At 1 January 2022 |
|
|
|
|
Increase (decrease) in existing provisions |
( |
( |
( |
( |
At 31 December 2022 |
|
( |
|
( |
|
Deferred tax is provided in respect of capital allowances rate in excess of depreciation on the purchase of new fixed assets. The reversal of the deferred tax asset is considered likely in the forthcoming year as the group remains profitable and continues to invest in new and enhanced plant and machinery.
Provisions for onerous contracts represent foreseeable losses on sales contracts which are loss making, for which there is a present obligation under the contract.
Other provisions represent provisions for costs not yet invoiced by reference to the stage of completion of sales contracts at the end of the reporting period.
The main uncertainties concerning investment in new plant and machinery is the world economy and whether we are to enter another recession. We are monitoring the situation closely, but there are considerable uncertainties.
Company
Onerous contracts |
Deferred tax |
Other provisions |
Total |
|
At 1 January 2022 |
|
|
|
|
Increase (decrease) in existing provisions |
( |
( |
( |
( |
At 31 December 2022 |
|
( |
|
( |
|
Deferred tax is provided in respect of capital allowances rate in excess of depreciation on the purchase of new fixed assets. The reversal of the deferred tax asset is considered likely in the forthcoming year as the group remains profitable and continues to invest in new and enhanced plant and machinery.
Provisions for onerous contracts represent foreseeable losses on contracts which are loss making, for which there is a present obligation under the contract.
Other provisions represent provisions for costs not yet invoiced by reference to the stage of completion of sales contracts at the end of the reporting period.
The main uncertainties concerning investment in new plant and machinery is the world economy and whether we are to enter another recession. We are monitoring the situation closely, but there are considerable uncertainties.
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
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
2022 |
2021 |
|||
No. |
£ |
No. |
£ |
|
|
|
100,000 |
|
100,000 |
Rights, preferences and restrictions
Ordinary shares have the following rights, preferences and restrictions: |
Reserves |
Group
Ordinary shares
Represent incorporation shares and a bonus share issue.
Profit and loss account
Represents profits after tax and dividends.
The changes to each component of equity resulting from items of other comprehensive income for the current year were as follows:
Retained earnings |
Total |
|
Foreign currency translation gains/losses |
|
|
|
The changes to each component of equity resulting from items of other comprehensive income for the prior year were as follows:
Retained earnings |
Total |
|
Foreign currency translation gains/losses |
( |
( |
|
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Company
Ordinary Shares
Represent incorporation shares and a bonus share issue.
Profit and loss account
Represents profits after tax and dividends.
Minority interests |
The minority interests relate to:
Micro Systems Engineering Solutions Pte Ltd of which 10% (2021 - 10%) of the voting rights are held outside of the group.
Loans and borrowings |
Group |
Company |
|||
2022 |
2021 |
2022 |
2021 |
|
Non-current loans and borrowings |
||||
Bank borrowings |
|
|
|
|
Finance lease liabilities |
|
|
|
|
|
|
|
|
Group |
Company |
|||
2022 |
2021 |
2022 |
2021 |
|
Current loans and borrowings |
||||
Bank borrowings |
|
|
|
|
Bank overdrafts |
|
|
|
|
Finance lease liabilities |
|
|
|
|
Other borrowings |
|
|
- |
- |
|
|
|
|
Group
Bank borrowings
The loan is secured by a fixed and floating charge dated 16 November 2010 over the undertaking and all property and assets present and future, including goodwill, uncalled capital, buildings, fixtures, and fixed plant & machinery. |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
The Coronavirus Business Interruption Loan Scheme (CBILS) is a government initiative to support small and medium-sized businesses who have been impacted by Coronavirus. The government provides lenders like NatWest, with a guarantee for 80% of qualifying loans.
|
Other borrowings
Hire Purchase & Finance Lease Creditors is denominated in Sterling with a nominal interest rate of various%, and the final instalment is due on 31 October 2027. The carrying amount at year end is £714,437 (2021 - £551,512).
The hire purchase contracts and finance leases are secured on the assets being financed.
Monthly repayments of varying amounts covering 13 (2021: 10) separate agreements.
Included in the loans and borrowings are the following amounts due after more than five years:
2022 |
2021 |
|
After more than five years by instalments |
|
- |
Borrowings due after five years
Hire purchase agreements for motor vehicles with final balloon rentals
Company
Bank borrowings
The loan is secured by a fixed and floating charge dated 16 November 2010 over the undertaking and all property and assets present and future, including goodwill, uncalled capital, buildings, fixtures, and fixed plant & machinery. |
The Coronavirus Business Interruption Loan Scheme (CBILS) is a government initiative to support small and medium-sized businesses who have been impacted by Coronavirus. The government provides lenders like NatWest, with a guarantee for 80% of qualifying loans.
|
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Other borrowings
Hire Purchase and Finance Lease Creditors is denominated in Sterling with a nominal interest rate of various%, and the final instalment is due on 31 October 2027. The carrying amount at year end is £714,437 (2021 - £551,512).
The hire purchase contracts and finance leases are secured on the assets being financed.
Monthly repayments of varying amounts covering 13 (2021: 10) separate agreements.
Included in the loans and borrowings are the following amounts due after more than five years:
2022 |
2021 |
|
After more than five years by instalments |
|
- |
- |
- |
Borrowings due after five years
Hire purchase agreements for motor vehicles with final balloon rentals
Obligations under leases and hire purchase contracts |
Group
Finance leases
The total of future minimum lease payments is as follows:
2022 |
2021 |
|
Not later than one year |
|
|
Later than one year and not later than five years |
|
|
Later than five years |
|
- |
|
|
Operating leases
The total of future minimum lease payments is as follows:
2022 |
2021 |
|
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 £
As a direct result of the Covid-19 pandemic, the lease payments recognised in the profit and loss account reduced by £Nil (2021 - £5,080).
Company
Finance leases
The total of future minimum lease payments is as follows:
2022 |
2021 |
|
Not later than one year |
|
|
Later than one year and not later than five years |
|
|
Later than five years |
|
- |
|
|
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Operating leases
The total of future minimum lease payments is as follows:
2022 |
2021 |
|
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 £
As a direct result of the Covid-19 pandemic, the lease payments recognised in profit and loss increased\(reduced) by £Nil (2021 - £5,080).
Dividends |
Interim dividends paid
2022 |
2021 |
|||
Interim dividend of £ |
|
|
||
Analysis of changes in net debt |
Group
At 1 January 2022 |
Financing cash flows |
New finance leases |
At 31 December 2022 |
|
Cash and cash equivalents |
||||
Cash |
166,696 |
153,157 |
- |
319,853 |
Overdrafts |
(76,869) |
(62,501) |
- |
(139,370) |
89,827 |
90,656 |
- |
180,483 |
|
Borrowings |
||||
Long term borrowings |
(435,417) |
214,584 |
- |
(220,833) |
Short term borrowings |
(175,000) |
- |
- |
(175,000) |
Lease liabilities |
(551,512) |
268,974 |
(431,899) |
(714,437) |
(1,161,929) |
483,558 |
(431,899) |
(1,110,270) |
|
|
||||
( |
|
( |
( |
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Company
At 1 January 2022 |
Financing cash flows |
New finance leases |
At 31 December 2022 |
|
Cash and cash equivalents |
||||
Cash |
152,218 |
140,610 |
- |
292,828 |
Overdrafts |
(76,869) |
(62,501) |
- |
(139,370) |
75,349 |
78,109 |
- |
153,458 |
|
Borrowings |
||||
Long term borrowings |
(435,417) |
214,584 |
- |
(220,833) |
Short term borrowings |
(175,000) |
- |
- |
(175,000) |
Lease liabilities |
(551,512) |
268,974 |
(431,899) |
(714,437) |
(1,161,929) |
483,558 |
(431,899) |
(1,110,270) |
|
( |
|
( |
( |
|
|
Related party transactions |
Group
Key management compensation
2022 |
2021 |
|
Salaries and other short term employee benefits |
|
|
Post-employment benefits |
|
|
|
|
Transactions with directors |
2022 |
At 1 January 2022 |
At 31 December 2022 |
Mr G Clark |
||
Director's Loan Account |
|
|
Mrs M Robinson |
||
Director's Loan Account |
|
|
2021 |
At 1 January 2021 |
At 31 December 2021 |
Mr G Clark |
||
Director's Loan Account |
|
|
Mrs M Robinson |
||
Director's Loan Account |
|
|
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Dividends paid to directors
2022 |
2021 |
|||
Mr G Clark |
||||
Interim dividend |
35,000 |
50,000 |
||
Mrs M Robinson |
||||
Interim dividend |
35,000 |
50,000 |
||
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 17 to the financial statements.
Summary of transactions with all subsidiaries
Micro Systems Engineering Solutions Pte Ltd has a loan from Micro Systems (UK) Ltd as detailed in note 15 to the financial statements.
Income and receivables from related parties
2022 |
Entities with joint control or significant influence |
Sale of goods |
|
Receipt of services |
|
Sale of property or other assets |
|
Settlement of liabilities |
|
|
|
Amounts receivable from related party |
|
|
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
2021 |
Entities with joint control or significant influence |
Sale of goods |
|
Receipt of services |
|
Sale of property or other assets |
|
Leases |
|
Settlement of liabilities |
|
|
|
Amounts receivable from related party |
|
|
Expenditure with and payables to related parties
2022 |
Entities with joint control or significant influence |
Subsidiary |
Purchase of goods |
|
|
Rendering of services |
|
- |
Transfers of research and development |
- |
|
|
|
|
Amounts payable to related party |
- |
|
|
2021 |
Entities with joint control or significant influence |
Subsidiary |
Purchase of goods |
|
|
Rendering of services |
|
- |
Transfers of research and development |
- |
|
|
|
|
Amounts payable to related party |
|
|
|
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Loans to related parties
2022 |
Entities with joint control or significant influence |
Subsidiary |
Total |
At start of period |
|
|
|
Repaid |
( |
- |
( |
Interest transactions |
|
- |
|
At end of period |
|
|
|
|
2021 |
Entities with joint control or significant influence |
Subsidiary |
Total |
At start of period |
|
|
|
Repaid |
( |
- |
( |
Interest transactions |
|
- |
|
At end of period |
|
|
|
|
Terms of loans to related parties
The loan is unsecured.
Interest has been calculated for the period based on the agreed terms at £5,283 (2021: £13,158).
The loan is unsecured.
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Company
Key management compensation
2022 |
2021 |
|
Salaries and other short term employee benefits |
|
|
Post-employment benefits |
|
|
|
|
Transactions with directors |
2022 |
At 1 January 2022 |
At 31 December 2022 |
Mr G Clark |
||
Director's loan |
|
|
Mrs M Robinson |
||
Director's loan |
|
|
2021 |
At 1 January 2021 |
Advances to director |
Repayments by director |
At 31 December 2021 |
Mr G Clark |
||||
Director's loan |
|
- |
- |
|
Mrs M Robinson |
||||
Director's loan |
|
- |
- |
|
Dividends paid to directors
2022 |
2021 |
|||
Mr G Clark |
||||
Interim dividends |
35,000 |
50,000 |
||
Mrs M Robinson |
||||
Interim dividend |
35,000 |
50,000 |
||
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
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 17 to the financial statements.
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
Micro Systems Engineering Solutions Pte Ltd has a loan from Micro Systems (UK) Ltd as detailed in note 15 to the financial statements.
Payment of purchase invoices are due 30 days from month end of invoice.
Income and receivables from related parties
2022 |
Entities with joint control or significant influence |
Sale of goods |
|
Receipt of services |
|
Sale of property or other assets |
|
Settlement of liabilities |
|
|
|
Amounts receivable from related party |
|
|
2021 |
Entities with joint control or significant influence |
Sale of goods |
|
Receipt of services |
|
Sale of property or other assets |
|
Leases |
|
Settlement of liabilities |
|
|
|
Amounts receivable from related party |
|
|
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Expenditure with and payables to related parties
2022 |
Entities with joint control or significant influence |
Subsidiary |
Purchase of goods |
|
|
Rendering of services |
|
- |
Transfers of research and development |
- |
|
|
|
|
Amounts payable to related party |
- |
|
|
2021 |
Entities with joint control or significant influence |
Subsidiary |
Purchase of goods |
|
|
Rendering of services |
|
- |
Transfers of research and development |
- |
|
|
|
|
Amounts payable to related party |
|
|
|
Loans to related parties
2022 |
Entities with joint control or significant influence |
Subsidiary |
Total |
At start of period |
|
|
|
Repaid |
( |
- |
( |
Interest transactions |
|
- |
|
At end of period |
|
|
|
|
2021 |
Entities with joint control or significant influence |
Subsidiary |
Total |
At start of period |
|
|
|
Repaid |
( |
- |
( |
Interest transactions |
|
- |
|
At end of period |
|
|
|
|
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Terms of loans to related parties
The loan is unsecured.
Interest has been calculated for the period based on the agreed terms at £5,283 (2021: £13,158).
The loan is unsecured.
Financial instruments |
Group
Categorisation of financial instruments
2022 |
2021 |
|
Financial liabilities measured at amortised cost |
1,110,270 |
1,161,929 |
Items of income, expense, gains or losses
2022 |
Income |
Expense |
Net gains |
Net losses |
Financial assets measured at amortised cost |
9,063 |
- |
- |
- |
Financial liabilities measured at amortised cost |
- |
34,757 |
- |
- |
9,063 |
34,757 |
- |
- |
2021 |
Income |
Expense |
Net gains |
Net losses |
Financial assets measured at amortised cost |
16,562 |
- |
- |
- |
Financial liabilities measured at amortised cost |
- |
66,318 |
- |
- |
16,562 |
66,318 |
- |
- |
The total interest income for financial assets not measured at fair value through profit or loss is £9,063 (2021 - £16,562). The total interest expense for financial liabilities not measured at fair value through profit or loss is £34,757 (2021 - £66,318).
The total amount of impairment loss during the year is £
Micro Systems (UK) Limited
Notes to the Financial Statements for the Year Ended 31 December 2022
Company
Categorisation of financial instruments
2022 |
2021 |
|
Financial liabilities measured at amortised cost |
1,110,270 |
1,161,929 |
Items of income, expense, gains or losses
2022 |
Income |
Expense |
Net gains |
Net losses |
Financial assets measured at amortised cost |
9,063 |
- |
- |
- |
Financial liabilities measured at amortised cost |
- |
26,389 |
- |
- |
9,063 |
26,389 |
- |
- |
2021 |
Income |
Expense |
Net gains |
Net losses |
Financial assets measured at amortised cost |
20,030 |
- |
- |
- |
Financial liabilities measured at amortised cost |
- |
66,318 |
- |
- |
20,030 |
66,318 |
- |
- |
The total interest income for financial assets not measured at fair value through profit or loss is £90,630 (2021 - £20,030). The total interest expense for financial liabilities not measured at fair value through profit or loss is £26,389 (2021 - £66,318).
The total amount of impairment loss during the year is £
Parent and ultimate parent undertaking |
The ultimate controlling party is