Company registration number 03346595 (England and Wales)
COHERENT (UK) HOLDINGS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
COHERENT (UK) HOLDINGS LIMITED
COMPANY INFORMATION
Directors
Dr C Dorman
Mr W Bashaw II
(Appointed 1 November 2022)
Ms M Raymond
(Appointed 1 November 2022)
Secretary
Mrs L Dowell
Company number
03346595
Registered office
Unit 2
Newnham Drive
Daventry
Northamptonshire
NN11 8YN
Auditor
Mercer & Hole LLP
Silbury Court
420 Silbury Boulevard
Central Milton Keynes
MK9 2AF
Bankers
Barclays Bank Plc
PO Box 54
Leicester
LE1 9AA
Solicitors
CMS Cameron McKenna Nabarro Olswang LLP
1 West Regent Street
Glasgow
G2 1AP
COHERENT (UK) HOLDINGS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 19
COHERENT (UK) HOLDINGS LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
- 1 -
The directors present the strategic report for the period ended 30 September 2022.
Fair review of the business
The company is a wholly owned subsidiary of Coherent Europe B.V.
On July 1, 2022, the company’s ultimate parent company and controlling party, Coherent, Inc. was acquired by II-VI Incorporated (“II-VI”), a Pennsylvania corporation, and Watson Merger Sub Inc., a Delaware corporation and wholly owned subsidiary of II-VI (the “Merger Subsidiary”). Pursuant to the terms of the merger, Coherent Inc was merged with II-IV and incorporated into the Merger Subsidiary (the “Merger”) and on September 8, 2022, was renamed as Coherent Corp. As a consequence of the merger, Coherent Corp. became the company’s ultimate parent company and controlling party. The merger had no impact on the direct ownership structure of Coherent (UK) Holdings Limited.
Additional information about the acquisition and the merger is available Coherent Investor Relations - Investor Relations.
The principal activity of the company is a holding company.
Significant changes to the business in the period under review has been the decrease in revenue. This is due to the termination of the indemnity agreement on 1st July 2022.
The directors are not aware, at the date of this report, of any likely major changes in the company’s activities in the next year.
For the 52 week period ended 30 September 2022, the company’s operating profit was £3,739k (2021: profit of £5,288k) and profit after taxation of £1,823k (2021: £2,308k).
An impairment has been recognised in the investment of Coherent (UK) Ltd of £1,217k (2021: £1,982k).
Coherent Corp. tracks its bookings and revenue by market segment. The directors review the company’s financial performance and position together with Coherent Corp. For this reason the directors believe that further key performance indicators for the company are not necessary or appropriate for an understanding of the development, performance or position of the business.
The performances of the markets which include the activities of the company are included in the Coherent Group's Annual Report which does not form part of this Report.
Principal risks and uncertainties
The company is a holding company. For Coherent (UK) Limited, Coherent Scotland Limited and Coherent Singapore competitive pressure worldwide remains a continuing risk for Coherent Corp. and its worldwide subsidiaries (“Coherent group”) which could result in it losing sales to its key competitors. The group manages this risk with its continued investment in research and development resulting in innovative products and solutions that meet the needs of its customers and that are based on the group's expertise in lasers and optical technologies.
Going concern
The company’s business activities, together with the factors likely to affect the future development, performance and financial position are set out above
The company has considerable financial resources when considering the continuing financial support from the parent company, Coherent Corp. While considering the ability of the ultimate parent company to provide financial support, the directors have reviewed the operating results and financial performance of Coherent Corp. The directors have further relied on forward looking assessments provided by Coherent Corp. and are satisfied that the ultimate parent company is in a position to provide the necessary financial support.
After considering the above, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future, a period of not less than one year from the date of issue. Accordingly, they continue to adopt the going concern basis in preparing the annual report and financial statements.
COHERENT (UK) HOLDINGS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
- 2 -
Section 172 statement
Under section 172 of the 2006 Companies Act the directors have a duty to promote the success of the company for the benefits of its members by the generation of value creation processes that ensure decisions made during the year are linked with the long term strategy of the company.
The directors in conjunction with executive of Coherent Corp. carry out both annual and long term strategic planning to determine priorities for the business. They assess how the market and sales environment might change over time for laser products and services and how the subsidiaries of Coherent (UK) Holdings are positioned to service these markets.
Dr C Dorman
Director
13 October 2023
COHERENT (UK) HOLDINGS LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
- 3 -
The directors present their annual report and financial statements for the period ended 30 September 2022.
Principal activities
The principal activity of the company continued to be that of a holding company. The directors are not aware, at the date of this report, of any likely major changes in the company's activities in the next year.
Results and dividends
The results for the period are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
Mr M McPeek
(Resigned 1 November 2022)
Mr B DiMarco
(Resigned 1 July 2022)
Mr D Hunter
(Resigned 1 November 2022)
Dr C Dorman
Mr F Walenski
(Resigned 28 February 2023)
Mr W Bashaw II
(Appointed 1 November 2022)
Ms M Raymond
(Appointed 1 November 2022)
Post reporting date events
In March 2023, the company increased its share capital by £12,129,000, using the same amount from its capital contribution reserve as consideration. The company subsequently reduced its share capital to £40,000 and cancelled its share premium reserve via a capital reduction.
Auditor
The company’s auditor, Mercer & Hole, incorporated on 1 October 2022 to become Mercer & Hole LLP. The directors have consented to treating the incorporation of Mercer & Hole LLP as a continuation of the existing audit arrangement and in accordance with the company's articles, a resolution proposing that Mercer & Hole LLP be reappointed as auditor of the company will be put at a General Meeting.
Energy and carbon report
As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Dr C Dorman
Director
13 October 2023
COHERENT (UK) HOLDINGS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and 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.
COHERENT (UK) HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF COHERENT (UK) HOLDINGS LIMITED
- 5 -
Disclaimer of opinion
We were engaged to audit the financial statements of Coherent (UK) Holdings Limited (the 'company') for the period ended 30 September 2022 which comprise the profit and loss account, the balance sheet, the statement of changes in equity, the statement of cashflows and notes to the financial statements, including 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).
We do not express an opinion on the accompanying financial statements of the company. Because of the significance of the matter described in the basis for disclaimer of opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.
Basis for disclaimer of opinion
We have been unable to audit the consolidated financial statements because the financial statements prepared by the directors do not consolidate the results of the group the company controls. Whilst the company was exempt from the requirement to present such consolidated financial statements in previous years, this is not the case for the current year. As a result, we were unable to determine if any adjustments might have been found necessary should such consolidated financial statements have been prepared.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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.
Opinions on other matters prescribed by the Companies Act 2006
Because of the significance of the matter described in basis for disclaimer of opinion section of our report, we have been unable to form an opinion, whether based on the work undertaken in the course of the audit:
the information given in the strategic report and the directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
Arising from the limitation of our work referred to above:
we have been unable to determine whether there are material misstatements in the strategic report and the directors’ report in the light of the knowledge and understanding of the company and its environment obtained in the course of the audit;
we have not received all the information and explanations we require for our audit; and
we were unable to determine whether adequate accounting records have been kept.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
COHERENT (UK) HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF COHERENT (UK) HOLDINGS LIMITED
- 6 -
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, 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's responsibilities for the audit of the financial statements
Our responsibility is to conduct an audit of the company’s financial statements in accordance with International Standards on Auditing (UK) and to issue an auditor’s report. However, because of the matters described in the basis for disclaimer of opinion section we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on the financial statements.
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.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. These included, but were not limited to, the Companies Act 2006 and tax legislation.
We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements and the financial report (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate entries including journals to overstate revenue or understate expenditure and management bias in accounting estimates.
Audit procedures performed by the engagement team included:
discussions with management, including considerations of known or suspected instances of non- compliance with laws and regulations and fraud;
gaining an understanding of management's controls designed to prevent and detect irregularities; and
identifying and testing journal entries.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non- compliance and cannot be expected to detect non-compliance with all laws and regulations.
COHERENT (UK) HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF COHERENT (UK) HOLDINGS LIMITED
- 7 -
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.
Andrew Lawes MA MSc FCA
Senior Statutory Auditor
For and on behalf of Mercer & Hole LLP
18 October 2023
Chartered Accountants
Statutory Auditor
Silbury Court
420 Silbury Boulevard
Central Milton Keynes
MK9 2AF
COHERENT (UK) HOLDINGS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
- 8 -
Period
Period
ended
ended
30 September
2 October
2022
2021
Notes
£
£
Turnover
3
3,857,186
5,515,235
Administrative expenses
(117,700)
(227,191)
Operating profit
4
3,739,486
5,288,044
Interest receivable and similar income
6
14,458
7,969
Amounts written off investments
7
(1,217,429)
(1,981,735)
Profit before taxation
2,536,515
3,314,278
Tax on profit
8
(713,250)
(1,006,241)
Profit for the financial period
1,823,265
2,308,037
The profit and loss account has been prepared on the basis that all operations are continuing operations.
There are no comprehensive income or expenses other than the profit for the financial period. Accordingly, no statement of comprehensive income is given.
COHERENT (UK) HOLDINGS LIMITED
BALANCE SHEET
AS AT
30 SEPTEMBER 2022
30 September 2022
- 9 -
2022
2021
Notes
£
£
£
£
Fixed assets
Investments
9
51,788,838
53,006,267
Current assets
Debtors
11
2,031,721
2,104,539
Cash at bank and in hand
11,525,450
7,704,483
13,557,171
9,809,022
Creditors: amounts falling due within one year
12
(1,792,796)
(1,085,341)
Net current assets
11,764,375
8,723,681
Total assets less current liabilities
63,553,213
61,729,948
Capital and reserves
Called up share capital
13
36,752,651
36,752,651
Share premium account
13
9,239,467
9,239,467
Capital contribution reserve
13
22,000,000
22,000,000
Profit and loss reserves
13
(4,438,905)
(6,262,170)
Total equity
63,553,213
61,729,948
The financial statements were approved by the board of directors and authorised for issue on 13 October 2023 and are signed on its behalf by:
Dr C Dorman
Director
Company Registration No. 03346595
COHERENT (UK) HOLDINGS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
- 10 -
Share capital
Share premium account
Capital contribution reserve
Profit and loss reserves
Total
£
£
£
£
£
Balance at 4 October 2020
36,752,651
9,239,467
22,000,000
(8,570,207)
59,421,911
Period ended 2 October 2021:
Profit and total comprehensive income for the period
-
-
-
2,308,037
2,308,037
Balance at 2 October 2021
36,752,651
9,239,467
22,000,000
(6,262,170)
61,729,948
Period ended 30 September 2022:
Profit and total comprehensive income for the period
-
-
-
1,823,265
1,823,265
Balance at 30 September 2022
36,752,651
9,239,467
22,000,000
(4,438,905)
63,553,213
COHERENT (UK) HOLDINGS LIMITED
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
- 11 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
18
3,806,509
5,403,156
Income taxes paid
(393,925)
Net cash inflow from operating activities
3,806,509
5,009,231
Investing activities
Interest received
14,458
7,969
Net cash generated from investing activities
14,458
7,969
Net increase in cash and cash equivalents
3,820,967
5,017,200
Cash and cash equivalents at beginning of period
7,704,483
2,687,283
Cash and cash equivalents at end of period
11,525,450
7,704,483
COHERENT (UK) HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
- 12 -
1
Accounting policies
Company information
Coherent (UK) Holdings Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 2, Newnham Drive, Daventry, Northamptonshire, NN11 8YN.
On July 1, 2022, the company’s ultimate parent company and controlling party, Coherent, Inc. was acquired by II-VI Incorporated (“II-VI”), a Pennsylvania corporation, and Watson Merger Sub Inc., a Delaware corporation and wholly owned subsidiary of II-VI (the “Merger Subsidiary”). Pursuant to the terms of the Merger, Coherent Inc was merged with II-IV and incorporated into the Merger Subsidiary (the “Merger”) and on September 8, 2022, was renamed as Coherent Corp. As a consequence of the Merger, Coherent Corp. became the company’s ultimate parent company and controlling party. The merger had no impact on the direct ownership structure of Coherent (UK) Holdings Limited.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
These financial statements present information about the company as an individual entity and not about its group.
1.2
Going concern
The company’s business activities, together with the factors likely to affect the future development, performance and financial position are set outtrue in the strategic report.
The company has considerable financial resources when considering the continuing financial support from the parent company, Coherent Corp. While considering the ability of the ultimate parent company to provide financial support, the directors have reviewed the operating results and financial performance of Coherent Corp. The directors have further relied on forward looking assessments provided by Coherent Corp. and are satisfied that the ultimate parent company is in a position to provide the necessary financial support.
After considering the above, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future, a period of not less than one year from the date of issue. Accordingly, they continue to adopt the going concern basis in preparing the annual report and financial statements.
1.3
Turnover
Turnover represents indemnity fees receivable from group companies. Revenues are recognised in line with the period represented by such indemnity provisions.
1.4
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
COHERENT (UK) HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
1
Accounting policies
(Continued)
- 13 -
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
1.6
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
COHERENT (UK) HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
1
Accounting policies
(Continued)
- 14 -
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors and loans from fellow group companies are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
COHERENT (UK) HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
1
Accounting policies
(Continued)
- 15 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.10
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following is the critical judgement that the directors have made in the process of applying the company's accounting policies and that has the most significant effect on the amounts recognised in the financial statements.
Investments
Investments are stated at cost less any provision for impairment. The directors' assessment of the recoverable amounts takes into account factors such as future trading performances which are key sources of estimation uncertainty.
3
Turnover and other revenue
Turnover represents indemnity fees receivable from group companies.
2022
2021
£
£
Other revenue
Interest income
14,458
7,969
COHERENT (UK) HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
- 16 -
4
Operating profit
2022
2021
Operating profit for the period is stated after charging:
£
£
Exchange losses
36,142
126,255
Fees payable to the company's auditor for the audit of the company's financial statements
9,000
5,400
5
Employees
The average monthly number of persons (including directors) employed by the company during the period was:
2022
2021
Number
Number
Directors
5
5
The directors who are the company's only employees did not receive any remuneration for their services to this company in the period or preceding period.
6
Interest receivable and similar income
2022
2021
£
£
Interest income
Interest receivable from group companies
14,458
7,969
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
14,458
7,969
7
Amounts written off investments
2022
2021
£
£
Gain on disposal of fixed asset investments
197,084
Impairment of investment in subsidiary undertaking
(1,217,429)
(1,981,735)
(1,217,429)
(1,981,735)
8
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
713,250
1,006,241
COHERENT (UK) HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
8
Taxation
(Continued)
- 17 -
The actual charge for the period can be reconciled to the expected charge for the period based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Profit before taxation
2,536,515
3,314,278
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
481,938
629,713
Tax effect of expenses that are not deductible in determining taxable profit
231,312
376,528
Taxation charge for the period
713,250
1,006,241
9
Fixed asset investments
2022
2021
Notes
£
£
Investments in subsidiaries
10
51,788,838
53,006,267
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 3 October 2021 & 30 September 2022
61,387,150
Impairment
At 3 October 2021
8,380,883
Impairment losses
1,217,429
At 30 September 2022
9,598,312
Carrying amount
At 30 September 2022
51,788,838
At 2 October 2021
53,006,267
An impairment charge of £1,217,429 (2021: £1,981,735) has been recognised against the carrying value of the investment in Coherent (UK) Limited based on an assessment of the fair value of the investment by the directors.
10
Subsidiaries
The investment in subsidiary companies are shown below.
COHERENT (UK) HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
10
Subsidiaries
(Continued)
- 18 -
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Coherent (UK) Limited
Unit 2 Newnham Drive, Daventry, Northamptonshire, NN11 8YN
£1 ordinary
100.00
Coherent Singapore Pte Limited
1 Kallang Sector #07-01-06 Singapore, 349276
£1 ordinary
100.00
Coherent Scotland Limited*
Todd Campus, West of Scotland Science Park, Glasgow, G20 0XA
£1 ordinary
100.00
*indirectly owned through Coherent (UK) Limited
11
Debtors
2022
2021
Amounts falling due within one year:
£
£
Amounts owed by group undertakings
2,031,721
2,103,639
Other debtors
900
2,031,721
2,104,539
12
Creditors: amounts falling due within one year
2022
2021
£
£
Amounts owed to group undertakings
4,088
2,233
Corporation tax
1,788,708
1,075,458
Accruals and deferred income
7,650
1,792,796
1,085,341
13
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
36,752,651
36,752,651
36,752,651
36,752,651
The company's other reserves are as follows:
The share premium reserve contains the premium arising on issue of equity shares, net of issue expenses.
The profit and loss reserve represents cumulative profits and losses, net of dividends paid and other adjustments.
The capital contribution reserve represents funding from the parent undertaking.
COHERENT (UK) HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
- 19 -
14
Contingent liabilities
At the previous year end the company had indemnified certain fellow group undertakings against any losses incurred in accordance with cross guarantees given by them to Coherent Holdings GmbH in connection with bank borrowings of that company. At the prior year-end, amounts outstanding under such borrowings amounted to £325m. Based on conditions existing at the prior year-end, no provision in respect of such indemnities had been recorded in the financial statements. No cross guarantees existed at the end of the current financial year.
15
Events after the reporting date
In March 2023, the company increased its share capital by £12,129,000, using the same amount from its capital contribution reserve as consideration. The company subsequently reduced its share capital to £40,000 and cancelled its share premium reserve via a capital reduction.
16
Related party transactions
The company has taken advantage of the exemption not to disclose transactions with other wholly owned group companies.
17
Ultimate controlling party
The company is a wholly owned subsidiary of Coherent Europe BV which is incorporated in the Netherlands. The company's ultimate parent company and controlling party is Coherent Corp. which is incorporated in the United States of America.
18
Cash generated from operations
2022
2021
£
£
Profit for the period after tax
1,823,265
2,308,037
Adjustments for:
Taxation charged
713,250
1,006,241
Investment income
(14,458)
(7,969)
Other gains and losses
1,217,429
1,981,735
Movements in working capital:
Decrease in debtors
72,818
114,529
(Decrease)/increase in creditors
(5,795)
583
Cash generated from operations
3,806,509
5,403,156
19
Analysis of changes in net funds
3 October 2021
Cash flows
30 September 2022
£
£
£
Cash at bank and in hand
7,704,483
3,820,967
11,525,450
2022-09-302021-10-03falseCCH SoftwareCCH Accounts Production 2023.200Mr M McPeekMr B DiMarcoMr D HunterDr C DormanMr F WalenskiMr W Bashaw IIMs M RaymondMrs L Dowell1823265033465952021-10-032022-09-3003346595bus:Director42021-10-032022-09-3003346595bus:Director62021-10-032022-09-3003346595bus:Director72021-10-032022-09-3003346595bus:CompanySecretary12021-10-032022-09-3003346595bus:Director12021-10-032022-09-3003346595bus:Director22021-10-032022-09-3003346595bus:Director32021-10-032022-09-3003346595bus:Director52021-10-032022-09-3003346595bus:RegisteredOffice2021-10-032022-09-3003346595bus:Agent12021-10-032022-09-30033465952022-09-30033465952020-10-042021-10-0203346595core:RetainedEarningsAccumulatedLosses2020-10-042021-10-0203346595core:RetainedEarningsAccumulatedLosses2021-10-032022-09-30033465952021-10-0203346595core:CurrentFinancialInstrumentscore:WithinOneYear2022-09-3003346595core:CurrentFinancialInstrumentscore:WithinOneYear2021-10-0203346595core:CurrentFinancialInstruments2022-09-3003346595core:CurrentFinancialInstruments2021-10-0203346595core:ShareCapital2022-09-3003346595core:ShareCapital2021-10-0203346595core:SharePremium2022-09-3003346595core:SharePremium2021-10-0203346595core:OtherMiscellaneousReserve2022-09-3003346595core:OtherMiscellaneousReserve2021-10-0203346595core:RetainedEarningsAccumulatedLosses2022-09-3003346595core:RetainedEarningsAccumulatedLosses2021-10-0203346595core:ShareCapital2020-10-0303346595core:SharePremium2020-10-0303346595core:OtherMiscellaneousReserve2020-10-0303346595core:RetainedEarningsAccumulatedLosses2020-10-03033465952020-10-03033465952021-10-0203346595core:UKTax2021-10-032022-09-3003346595core:UKTax2020-10-042021-10-0203346595core:Non-currentFinancialInstruments2022-09-3003346595core:Non-currentFinancialInstruments2021-10-0203346595bus:PrivateLimitedCompanyLtd2021-10-032022-09-3003346595bus:FRS1022021-10-032022-09-3003346595bus:Audited2021-10-032022-09-3003346595bus:FullAccounts2021-10-032022-09-30xbrli:purexbrli:sharesiso4217:GBP