Company Registration No. 08020542 (England and Wales)
SC Group-Global Limited
Annual report and
group financial statements
for the year ended 31 August 2023
SC Group-Global Limited
Company information
Directors
A S Mitchell
R S N Ames
E M Jones
N L Jones
R Talbot Rice
Secretary
A S Mitchell
Company number
08020542
Registered office
The Airfield
Dunkeswell
Honiton
Devon
England
EX14 4LF
Independent auditor
Saffery LLP
St Catherine's Court
Berkeley Place
Clifton
Bristol
BS8 1BQ
Bankers
The Royal Bank of Scotland plc
Vantage Point
Woodwater Park
Pynes Hill
Exeter
Devon
EX2 5FD
SC Group-Global Limited
Contents
Page
Strategic report
1 - 3
Directors' report
4 - 5
Directors' responsibilities statement
6
Independent auditor's report
7 - 10
Income statement
11
Group statement of comprehensive income
12
Group statement of financial position
13 - 14
Company statement of financial position
15
Group statement of changes in equity
16
Company statement of changes in equity
17
Group statement of cash flows
18
Company statement of cash flows
19
Notes to the financial statements
20 - 46
SC Group-Global Limited
Strategic report
For the year ended 31 August 2023
1

The directors present the strategic report for the year ended 31 August 2023.

Principal activities

The principal activity of the company is an investment holding company for a number of subsidiaries as detailed in note 16 ("the Group"). The principal activities of its subsidiaries are the research and development, design, prototyping, manufacture and sale of high mobility vehicles, trailers and other systems together with the provision of engineering services.

Review of the business

The Group has found the year to be a much-improved trading year even though Global economic and political conditions continue to be challenging.

 

As a result, the results of the group for the year, set on page 11, demonstrate the improvement that the business has achieved and show an operating profit of £2,562,732 (2022 restated profit of £1,678,942) and a profit before taxation of £2,119,253 (2022: restated profit of £1,391,909).

 

Shareholders’ funds of the group, excluding minority interests, increased to £17,897,403 (2022: restated £16,406,059).

 

The results for the year represent a significantly improved position and give the directors’ confidence for the future, even though trading conditions remain challenging. Therefore, the directors do believe that the profitability of the Group will continue to improve over the current position in the forthcoming year.

 

With regard to the individual group business streams:

 

Defence

During the year the UK defence business, was successful with winning a programme to produce an additional fleet of High Mobility Transporter (HMT) vehicles for the UK Ministry of Defence. This programme is to be delivered within a period of 12 months and to support the delivery, the business has engaged with a Tier One defence supplier to assist with the volume manufacture. In addition, due to the ongoing conflict in Ukraine, the business was asked to support and deliver another programme to re-role a number of MoD owned HMT vehicles for operations in Ukraine. This business stream was also asked to undertake an engineering project for a commercial customer to investigate the use of HMT technology within an autonomous environment. A number of these programmes remain ongoing at the year end.

 

Support activities for the UK defence business (Spares, repairs maintenance and overhaul and post design services) stream significantly improved during the year, with a 45.3% increase over the previous year.

 

Non-defence

Due to the increased workload placed on the business by the Defence business stream, there has been limited opportunity to further develop the of non-defence business. The business has continued with engineering activities and chassis manufacture related to electrically powered, scale sized replica vehicles together with other limited engineering services to non-defence customers.

 

Overall revenues increased by 105.0% to £51,340,551 (2022: £25,021,553) in the year due to the contracting of the large opportunity for the UK. Whilst gross margin has decreased in the year to 27.2% (2022: restated gross profit margin of 40.1%), the directors believe that this is primarily due to the mix of work that has passed through the business. Given the current workloads and opportunities, the directors fully expect the business to exceed the levels of revenues and margin in the forthcoming year.

SC Group-Global Limited
Strategic report (continued)
For the year ended 31 August 2023
2

Other UK subsidiaries

Other UK subsidiaries within the Group have also been working hard during the year to mitigate the continuing effects of the Global pandemic and the current conflict in Ukraine, whilst still striving to develop opportunities within their sectors.

 

The fabrication business has struggled with the continuing delays of its main project. However, the business was successful in bidding to support its sister company with the fabrication of chassis for its recently won contract and as a result, the business believes that it has a viable future for the medium term.

 

The Marine engine distribution business has had a successful year. Whilst there have been aspects of its distribution have remained challenging, its main product, the Oxe Diesel Outboard engine is now finally becoming an outboard engine of choice for commercial customers. As a result, the business has posted its highest level of sales since acquisition by the Group.

 

Overseas Subsidiaries

The Australian subsidiary has had another positive year in respect of its sales for the period. The business revenues have continued to improve because of the continued support contract of its Australian and New Zealand customers. Its continuing work streams with Tier 1 defence companies remains challenging, with expected opportunities taking longer than originally anticipated to be realised, as those businesses struggle with their own work priorities. The directors do believe that this frustration will ease in the forthcoming period.

 

Group performance

As a result of the improved performance of the individual business units, the group financial performance has also improved:

 

Revenues have significantly increased by 105.0% to £51,340,551 (2022: £25,021,553) in the year due to the reasons highlighted above. Gross margin however, has decreased in the year to 27.2% (2022 restated gross profit margin of 40.1%), primarily due to the mix of work moving through the group. The directors expect the business performance to continue to improve in the forthcoming year as existing programmes are delivered upon.

 

The Group remains committed to investing heavily in the continued development of new and existing products and has invested some £1,169,327 (2022: restated £1,695,574) on these activities, which the Group has capitalised.

 

The Group continues to invest in marketing activities to continue to promote the business brands within different sectors. Due to the increasing levels of business, distribution costs have increased in the period by 24.1% over the previous year.

 

Administration expenses have increased this year to £11,022,391 (2022: £8,491,724) which represents 21.5% of turnover (2022: 33.9% of turnover).

Principal risks and uncertainties

The Group operates primarily in the engineering sector, its principal customers being Government organisations. As a result, the directors have identified that the results of the business are affected by pandemics, global economic conditions, cuts in government spending and competitor pressures, especially around tender prices.

 

The Group has continued to be exposed to the Coronavirus pandemic for the full financial year, not only in the countries in which it operates but also the countries in which its major customers and suppliers are based. In addition, the geopolitical upheaval as a result of the conflict in Ukraine has introduced a further risk to the supply and delivery of product to our customers. The business has also experienced the crystallisation of risks of delay in customer procurement decisions as a result of these uncertain conditions.

 

Whilst these risks are expected to continue to challenge the business for the foreseeable future, the directors will continue to work to mitigate those risks though adequate contingency planning, monitoring of government guidance and working with its customers, suppliers and key stakeholders.

SC Group-Global Limited
Strategic report (continued)
For the year ended 31 August 2023
3
Key performance indicators

The key performance indicators of the business are turnover and gross margin which are discussed above and can be seen in the profit and loss account on page 11.

On behalf of the board

A S Mitchell
Director
21 March 2024
SC Group-Global Limited
Directors' report
For the year ended 31 August 2023
4

The directors present their annual report and financial statements for the year ended 31 August 2023.

Results and dividends

The results for the year are set out on page 11.

No ordinary dividends were paid. The directors do not recommend payment of a dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

A S Mitchell
R S N Ames
E M Jones
N L Jones
R Talbot Rice
Financial instruments

The Group's activities expose it to a number of financial risks including price risk, credit risk, liquidity risk and foreign exchange risk which are managed as follows.

Liquidity risk

In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future developments, the Group uses a mixture of long-term and short-term debt finance.

Foreign exchange risk

The Group is exposed to currency risk on revenue and purchases that are denominated in a currency other than sterling. The Group seeks to reduce foreign currency exchange exposures through a policy of matching and the use of forward currency contracts as considered necessary.

Credit risk

The Group’s principal financial assets are bank balances and cash, trade debtors and other receivables. The credit risk on liquid funds is mitigated because the counterparties are banks with high credit-ratings. Trade debtors and other receivables are managed in respect of credit risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and limits. A significant part of the Group’s operations are with national governments which have low credit risks.

Price risk

The Group is engaged in long term contracts where the prices are often fixed. The Group is therefore exposed to sub-contractor and supplier price risk. The Group manages its exposure to these risks by engaging in ongoing negotiations with sub-contractors and suppliers over prices. The Group looks to fix prices where possible to reduce exposure to price fluctuations on contracts. The Group also continues to improve its systems to ensure that the Group manages the risks associated with contract costs, which will help ensure that the Group's results continue to improve into the future.

Research and development

The Group continues to design and develop the HMT family of vehicles. The Group also continued the development of a number of vehicle platforms, including the Light Weight Recovery Vehicle (LWR) and an autonomous All Terrain Mobile Platform (ATMP) vehicle. In addition, research continues on hybrid electric drive systems for both the land and marine environments.

SC Group-Global Limited
Directors' report (continued)
For the year ended 31 August 2023
5
Disabled persons

The Group gives full consideration to applications for employment from disabled persons where the requirements of the job can be adequately fulfilled by a disabled person.

Employee involvement

Regular meetings are held between local management and employees to allow a free flow of information and ideas.

Future developments

The directors recognise that the year has been difficult and consider that the next year will continue to be challenging due to the continued uncertainty in global economic and political conditions. However, opportunities are beginning to present themselves to the Group and as a result, the directors remain confident about the future.

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 auditor of the company 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 auditor of the company is aware of that information.

On behalf of the board
A S Mitchell
Director
21 March 2024
SC Group-Global Limited
Directors' responsibilities statement
For the year ended 31 August 2023
6

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 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:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s 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.

SC Group-Global Limited
Independent auditor's report
To the members of SC Group-Global Limited
7
Opinion

We have audited the financial statements of SC Group-Global Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 August 2023 which comprise the group income statement, the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows 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).

In our opinion the financial statements:

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's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information 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.

 

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.

 

We have nothing to report in this regard.

SC Group-Global Limited
Independent auditor's report (continued)
To the members of SC Group-Global Limited
8

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

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:

 

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 parent 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 parent 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 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.

SC Group-Global Limited
Independent auditor's report (continued)
To the members of SC Group-Global Limited
9

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.

 

Identifying and assessing risks related to irregularities:

We assessed the susceptibility of the group and parent company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the group and parent company by discussions with directors and by updating our understanding of the sector in which the group and parent company operates.

 

Laws and regulations of direct significance in the context of the group and parent company include The Companies Act 2006 and UK Tax legislation.

 

Audit response to risks identified

We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of group and parent company financial statement disclosures. We reviewed the parent company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the parent company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.

During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.

As group auditors, our assessment of matters relating to non-compliance with laws or regulations and fraud differed at group and component level according to their particular circumstances. Our communications included a request to identify instances of non-compliance with laws and regulations and fraud that could give rise to a material misstatement of the group financial statements in addition to our risk assessment.

 

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

SC Group-Global Limited
Independent auditor's report (continued)
To the members of SC Group-Global Limited
10

Use of our report

This report is made solely to the parent 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 parent company's members those matters we are required to state to them in an auditors 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 parent company and the parent company's members as a body, for our audit work, for this report, or for the opinions we have formed.

 

Neil Davies (Senior Statutory Auditor)
For and on behalf of Saffery LLP
21 March 2024
Chartered Accountants
Statutory Auditors
St Catherine's Court
Berkeley Place
Clifton
Bristol
BS8 1BQ
SC Group-Global Limited
Group income statement
For the year ended 31 August 2023
11
Year
Year
ended
ended
31 August
31 August
2023
2022
as restated
Notes
£
£
Turnover
3
51,340,551
25,021,553
Cost of sales
(37,391,721)
(14,983,989)
Gross profit
13,948,830
10,037,564
Distribution costs
(530,265)
(427,073)
Administrative expenses
(11,022,391)
(8,491,724)
Other operating income
166,558
542,875
Exceptional item
4
-
0
17,303
Operating profit
5
2,562,732
1,678,945
Interest receivable and similar income
9
10,063
-
0
Interest payable and similar expenses
10
(453,542)
(287,036)
Profit before taxation
2,119,253
1,391,909
Tax on profit
11
(495,379)
177,950
Profit for the financial year
30
1,623,874
1,569,859
Profit for the financial year is attributable to:
- Owners of the parent company
1,713,352
1,517,236
- Non-controlling interests
(89,478)
52,623
1,623,874
1,569,859
SC Group-Global Limited
Group statement of comprehensive income
For the year ended 31 August 2023
12
Year
Year
ended
ended
31 August
31 August
2023
2022
as restated
£
£
Profit for the year
1,623,874
1,569,859
Other comprehensive income
Currency translation (loss)/gain taken to retained earnings
(249,520)
213,962
Total comprehensive income for the year
1,374,354
1,783,821
Total comprehensive income for the year is attributable to:
- Owners of the parent company
1,491,344
1,709,808
- Non-controlling interests
(116,990)
74,013
1,374,354
1,783,821
SC Group-Global Limited
Group statement of financial position
As at 31 August 2023
13
2023
2022
as restated
Notes
£
£
£
£
Fixed assets
Goodwill
12
17,358
18,056
Other intangible assets
12
11,165,488
12,154,529
Total intangible assets
11,182,846
12,172,585
Tangible assets
13
2,745,725
2,336,404
13,928,571
14,508,989
Current assets
Stocks
18
6,523,015
6,376,538
Debtors
19
12,116,227
9,378,611
Investments
20
3,798
11,292
Cash at bank and in hand
7,919,781
2,346,927
26,562,821
18,113,368
Creditors: amounts falling due within one year
21
(16,625,272)
(13,726,161)
Net current assets
9,937,549
4,387,207
Total assets less current liabilities
23,866,120
18,896,196
Creditors: amounts falling due after more than one year
22
(802,382)
(1,110,523)
Provisions for liabilities
Provisions
25
3,294,845
199,984
Deferred tax liability
26
1,751,197
942,347
(5,046,042)
(1,142,331)
Net assets
18,017,696
16,643,342
Capital and reserves
Called up share capital
29
950
950
Share premium account
30
21,475
21,475
Profit and loss reserves
30
17,874,978
16,383,634
Equity attributable to owners of the parent company
17,897,403
16,406,059
Non-controlling interests
120,293
237,283
18,017,696
16,643,342
SC Group-Global Limited
Group statement of financial position (continued)
As at 31 August 2023
14
The financial statements were approved by the board of directors and authorised for issue on 21 March 2024 and are signed on its behalf by:
21 March 2024
A S Mitchell
Director
Company Registration No. 08020542 (England and Wales)
SC Group-Global Limited
Company statement of financial position
As at 31 August 2023
31 August 2023
15
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
12
329,736
482,812
Tangible assets
13
12,326
8,844
Investment property
14
2,090,000
2,090,000
Investments
15
10,083
10,083
2,442,145
2,591,739
Current assets
Debtors
19
5,760,298
4,556,759
Cash at bank and in hand
212,100
58,823
5,972,398
4,615,582
Creditors: amounts falling due within one year
21
(1,737,897)
(1,751,179)
Net current assets
4,234,501
2,864,403
Total assets less current liabilities
6,676,646
5,456,142
Provisions for liabilities
Deferred tax liability
26
521,433
138,819
(521,433)
(138,819)
Net assets
6,155,213
5,317,323
Capital and reserves
Called up share capital
29
950
950
Share premium account
30
21,475
21,475
Profit and loss reserves
30
6,132,788
5,294,898
Total equity
6,155,213
5,317,323

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £837,890 (2022 - £1,241,876 profit).

The financial statements were approved by the board of directors and authorised for issue on 21 March 2024 and are signed on its behalf by:
21 March 2024
A S Mitchell
Director
Company Registration No. 08020542 (England and Wales)
SC Group-Global Limited
Group statement of changes in equity
For the year ended 31 August 2023
16
Share capital
Share premium account
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
£
£
£
£
£
£
As restated for the period ended 31 August 2022:
Balance at 1 September 2021
950
21,475
14,673,826
14,696,251
163,270
14,859,521
Year ended 31 August 2022:
Profit for the year
-
-
1,517,236
1,517,236
52,623
1,569,859
Other comprehensive income:
Currency translation differences
-
-
213,962
213,962
-
213,962
Amounts attributable to non-controlling interests
-
-
(21,390)
(21,390)
21,390
-
Total comprehensive income
-
-
1,709,808
1,709,808
74,013
1,783,821
Balance at 31 August 2022
950
21,475
16,383,634
16,406,059
237,283
16,643,342
Period ended 31 August 2023:
Profit for the period
-
-
1,713,352
1,713,352
(89,478)
1,623,874
Other comprehensive income:
Currency translation differences
-
-
(249,520)
(249,520)
-
(249,520)
Amounts attributable to non-controlling interests
-
-
27,512
27,512
(27,512)
-
Total comprehensive income
-
-
1,491,344
1,491,344
(116,990)
1,374,354
Balance at 31 August 2023
950
21,475
17,874,978
17,897,403
120,293
18,017,696
SC Group-Global Limited
Company statement of changes in equity
For the year ended 31 August 2023
17
Share capital
Share premium account
Profit and loss reserves
Total
£
£
£
£
As restated for the period ended 31 August 2022:
Balance at 1 September 2021
950
21,475
4,053,022
4,075,447
Year ended 31 August 2022:
Profit and total comprehensive income for the year
-
-
1,241,876
1,241,876
Balance at 31 August 2022
950
21,475
5,294,898
5,317,323
Period ended 31 August 2023:
Profit and total comprehensive income
-
-
837,890
837,890
Balance at 31 August 2023
950
21,475
6,132,788
6,155,213
SC Group-Global Limited
Group statement of cash flows
For the year ended 31 August 2023
18
2023
2022
as restated
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
34
8,504,047
2,749,347
Interest paid
(455,948)
(287,036)
Income taxes refunded
495,904
494,113
Net cash inflow from operating activities
8,544,003
2,956,424
Investing activities
Purchase of intangible assets
(1,169,327)
(1,901,667)
Proceeds from disposal of intangibles
212,685
-
Purchase of tangible fixed assets
(625,503)
(239,225)
Proceeds from disposal of tangible fixed assets
18,120
29,034
Interest received
10,253
-
0
Net cash used in investing activities
(1,553,772)
(2,111,858)
Financing activities
Payment of other of borrowings
45,651
-
Repayment of bank loans
(319,294)
(403,053)
Payment of finance leases obligations
(158,793)
(26,025)
Net cash used in financing activities
(432,436)
(429,078)
Net increase in cash and cash equivalents
6,557,795
415,488
Cash and cash equivalents at beginning of year
(2,374,715)
(2,790,203)
Cash and cash equivalents at end of year
4,183,080
(2,374,715)
Relating to:
Cash at bank and in hand
7,919,781
2,346,927
Bank overdrafts included in creditors payable within one year
(3,736,701)
(4,721,642)
SC Group-Global Limited
Company statement of cash flows
For the year ended 31 August 2023
19
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
35
(35,741)
637,813
Interest paid
(6,800)
(6,238)
Income taxes paid
(337,139)
(204,000)
Net cash (outflow)/inflow from operating activities
(379,680)
427,575
Investing activities
Purchase of intangible assets
-
0
(375,000)
Purchase of tangible fixed assets
(6,403)
-
0
Interest received
561,229
180,598
Net cash generated from/(used in) investing activities
554,826
(194,402)
Financing activities
Repayment of bank loans
(21,869)
(175,235)
Net cash used in financing activities
(21,869)
(175,235)
Net increase in cash and cash equivalents
153,277
57,938
Cash and cash equivalents at beginning of year
58,823
885
Cash and cash equivalents at end of year
212,100
58,823
SC Group-Global Limited
Notes to the group financial statements
For the year ended 31 August 2023
20
1
Accounting policies
Company information

SC Group-Global Limited (“the company”) is a private company limited by shares incorporated in England and Wales. The registered office is The Airfield, Dunkeswell, Honiton, Devon, England, EX14 4LF.

 

The group consists of SC Group-Global Limited and all of its subsidiaries.

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.

1.2
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company SC Group-Global Limited together with all entities controlled by the parent company (its subsidiaries) with the exception of Supacat GmbH and Supacat Engineering Services Private Limited. Whilst these subsidiaries are wholly owned they are near dormant and considered immaterial to the group.

 

All financial statements are made up to 31 August 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

The results of subsidiaries acquired or sold are consolidated for the periods from or to the date on which control passed under the acquisition method. Where the acquisition constitutes a group reconstruction the financial statements have been prepared using merger accounting principles as if the group had always been in existence.

SC Group-Global Limited
Notes to the group financial statements (continued)
For the year ended 31 August 2023
1
Accounting policies (continued)
21
1.4
Going concern

At the time of approving these financial statements, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future.

 

As part of making the above assessment, the directors continue to review the business in the current trading environment and in particular the adequacy of its current banking facilities and its access to additional facilities should these be required. The Group has an on-demand bank facility that is renewable on an annual basis and believe that this will continue to be renewed at the current levels in line with previous years. The directors continue to test their assumptions with forecasts being reviewed regularly and ongoing discussions with lenders and banks to explore opportunities to increase facilities if appropriate.

 

The majority of the business of the Group and the Company is in the defence sector. The latest budget has been reviewed, sensitised and a number of differing scenarios produced under different planning assumptions. The Group and Company are reliant on cashflows from a number of UK projects which are under contract and have positively contributed to the underpinning of the revenues for the business for the forthcoming year regardless of which scenario is considered. Although these scenarios, show a reduction of revenues and margins over the period, the plans that remain in place to conserve cash and mitigate the effect drops of this magnitude in the forecast, the scenarios continue to indicate that the business will be able to operate positively and effectively.

 

Following these reviews, the directors have a reasonable expectation that the business has adequate resources to continue in operational existence for the foreseeable future. Therefore, the directors consider it to be appropriate to prepare the accounts on a going concern basis.

1.5
Turnover

Turnover comprises revenue receivable by the company in respect of goods and services supplied during the year, exclusive of value added tax and trade discounts and is recognised on the following basis:

Goods

Turnover from the sale of goods is recognised when the goods are physically delivered to the customer or when substantially all the risks and rewards are transferred, whichever is earlier.

Services

Turnover from the supply of services represents the value of services provided during the year to the extent that there is a right to consideration and is recorded at the fair value of the consideration due. Turnover is recognised when the service is provided.

Long term contract revenue

Where a contract is only partly complete at the balance sheet date, turnover is calculated by reference to the value of work performed to date as a proportion of the total contract value. Where payments are received from customers in advance of services provided, the amounts are recorded as deferred income and included as part of creditors due within one year. Turnover which has not been invoiced is included within amounts recoverable under contracts. Revenues derived from variations on contracts are recognised only when they have been accepted by the customer.

SC Group-Global Limited
Notes to the group financial statements (continued)
For the year ended 31 August 2023
1
Accounting policies (continued)
22
1.6
Intangible fixed assets - Development costs

Funded development expenditure incurred on specific contracts is treated as a contract cost in accordance with the general accounting policy for contract work in progress. Unfunded development costs incurred on certain projects are capitalised and carried forward as intangible assets when their recoverability can be foreseen with reasonable certainty, there is an ability to sell the product being developed, there is a firm commitment to complete the project and there are sufficient resources to do so. These deferred costs, which include labour costs and an element of directly attributable overheads, are amortised on a straight line basis over the anticipated life of the benefits arising from the completed products or projects. The Directors consider that this treatment results in a more appropriate matching of costs and revenue. All other development expenditure is written off in the year of expenditure.

1.7
Intangible fixed assets - goodwill

Goodwill is amortised over its useful life, which has been deemed as five years.

1.8
Intangible fixed assets other than goodwill

Separately acquired trademarks and licences are shown at historic cost. Trademarks, licences and customer-related intangible assets have a finite useful life and are carried at cost less accumulated amortisation and any accumulated impairment losses.

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:

Computer software
20% straight line
Patents and trademarks
10% straight line
Development costs
As described above
1.9
Tangible fixed assets

Tangible assets are stated in the balance sheet 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 less any estimated residual value, other than land and properties under construction over their estimated useful lives, as follows:

Freehold buildings
4% - 25% straight line
Freehold land
depreciation is not charged
Leasehold land and buildings
over the term of the lease
Plant and equipment
20% - 25% straight line
Fixtures and fittings
20% - 33% straight line
Motor vehicles
25% straight line
1.10
Investment property

Investment property is carried at fair value, derived from the current market prices for comparable properties determined annually by the directors. The directors use observable market prices, adjusted if necessary for any difference in the nature, location or condition of the specific asset. Changes in fair value are recognised in profit or loss.

SC Group-Global Limited
Notes to the group financial statements (continued)
For the year ended 31 August 2023
1
Accounting policies (continued)
23
1.11
Fixed asset investments

Investments held as fixed assets are shown at cost less provision for impairment.

1.12
Stocks

Stocks and work in progress are valued at the lower of cost and net realisable value after making due allowance for obsolete and slow-moving stocks. Cost includes all direct costs and an appropriate proportion of fixed and variable production overheads.

1.13
Financial instruments
Classification

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 net assets of the company.

Recognition and measurement

Financial instruments are recognised when the group becomes party to the contractual provisions of the instrument and derecognised when in the case of assets, the contractual rights to cash flows from the assets expire or substantially all the risks and rewards of ownership are transferred to another party, or in the case of liabilities, when the group's obligations are discharged, expire or are cancelled.

 

The group holds the following basic financial instruments:

 

 

The group also holds certain listed investments, which are held at fair value. Fair value is determined by the share price in the market. Such assets are included within debtors due within one year.

 

The company holds the following basic financial instruments:

 

 

Basic instruments are initially measured at transaction price, including transaction costs. Those instruments considered current are subsequently carried at the undiscounted amount of the cash or other consideration expected to be paid or received, after taking account of impairment adjustments.

 

Bank loans are subsequently measured at amortised cost using the effective interest rate method.

1.14
Taxation

Tax expense for the period represents the sum of the current tax currently payable and deferred tax.

Current tax

Tax is recognised in the profit or loss account, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

 

The current corporation 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.

SC Group-Global Limited
Notes to the group financial statements (continued)
For the year ended 31 August 2023
1
Accounting policies (continued)
24
Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more tax. Deferred tax assets and liabilities are not offset.

1.15
Provisions

Provisions are recognised when the group has an obligation at the reporting date as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation. Warranty provisions are based on the best estimate of future costs to be incurred in relations to claims by customers formed from historical data. Provisions for warranties are recognised once the product has been delivered to the customer.

1.16
Retirement benefits

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.

1.17
Share-based payments

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

 

The expense in relation to options over the parent company’s shares granted to employees of a subsidiary is recognised by the company as a capital contribution, and presented as an increase in the company’s investment in that subsidiary.

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

 

Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

1.18
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 and hire purchase agreements 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.

SC Group-Global Limited
Notes to the group financial statements (continued)
For the year ended 31 August 2023
1
Accounting policies (continued)
25

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

1.19
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.

1.20
Foreign exchange

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the initial transaction dates. Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

2
Critical accounting judgements and key sources of estimation uncertainty

In the application of the group’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
Stock and work in progress provisions

Provisions are held against slow moving stock and work in progress. This inherently requires a degree of estimation. The directors have estimated the stock provision based on age, on a line by line basis. Provision against work in progress is made where total costs on projects are expected to exceed total revenues. The total amount provided is disclosed in note 18.

Vaulation of intangible assets

The company makes significant investments on an annual basis in research and development, which is a key element to enable it to compete in its marketplace. The business continues to adopt a policy of capitalising these costs as part of its Intangible fixed assets, where it believes that the development costs incurred will lead to future economic benefit. The amount capitalised in the year is disclosed in note 12.

SC Group-Global Limited
Notes to the group financial statements (continued)
For the year ended 31 August 2023
2
Critical accounting judgements and key sources of estimation uncertainty (continued)
26
Key sources of estimation uncertainty

The directors have considered the judgements and estimation uncertainties included in these financial statements and the accounting policies applied. These may have a significant effect on the amounts recognised in the financial statements. 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 if the revision affects that period only, or in the period of revision and future periods if the revision affects both current and future periods. The following are considered to be key areas of estimation by the directors.

Recognition of profit on long term contracts

Profit on long term contracts is taken as work is carried out if the final outcome can be assessed with reasonable certainty. This requires an accurate assessment of the stage of completion of each contract, as well as the estimated costs to complete each contract. Judgement, influenced by historical performance, is required when estimating the expected costs to complete the project. The amount recognised in the year is disclosed in note 3.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sale of goods
10,664,770
5,943,501
Revenue recognised on engineering contracts
27,948,708
5,861,313
Other engineering services
4,029,942
2,324,703
Servicing and repairs
5,714,724
7,088,967
Support contracts
2,982,407
3,803,069
51,340,551
25,021,553
2023
2022
£
£
Turnover analysed by geographical market
UK
38,190,902
13,639,229
Europe
1,721,500
1,561,958
Rest of world
11,428,149
9,820,366
51,340,551
25,021,553
2023
2022
£
£
Other revenue
Interest income
10,063
-
Grants received
-
3,750
SC Group-Global Limited
Notes to the group financial statements (continued)
For the year ended 31 August 2023
27
4
Exceptional item
2023
2022
£
£
Expenditure
Restructuring costs/(credits)
-
(17,303)
-
(17,303)

During the prior year, the company undertook a restructuring programme which has resulted in exceptional redundancy costs amounting to £42,697. There were also exceptional legal costs incurred in 2021, in which an exceptional credit of £60,000 was received in 2022.

5
Operating profit
2023
2022
£
£
Operating profit for the period is stated after charging/(crediting):
Exchange losses
346,094
16,823
Research and development costs
129,357
-
Depreciation of owned tangible fixed assets
497,881
919,295
Profit on disposal of tangible fixed assets
(18,120)
(9,825)
Amortisation of intangible assets
1,610,710
1,389,722
Operating lease charges
863,894
848,018
6
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
7,000
3,300
Audit of the financial statements of the company's subsidiaries
48,100
52,700
55,100
56,000
For other services
Taxation compliance services
12,100
11,000
SC Group-Global Limited
Notes to the group financial statements (continued)
For the year ended 31 August 2023
28
7
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Production
131
91
-
-
Administration and support
36
40
5
5
Sales, marketing and distribution
22
33
-
-
Total
189
164
5
5

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
as restated
£
£
£
£
Wages and salaries
10,302,108
6,450,473
977,792
592,457
Social security costs
843,331
630,302
112,842
79,192
Pension costs
843,405
597,720
117,255
72,386
11,988,844
7,678,495
1,207,889
744,035
8
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
977,792
614,847
Company pension contributions to defined contribution schemes
117,255
72,386
1,095,047
687,233

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 3).

Remuneration disclosed above includes the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
280,303
217,908
Company pension contributions to defined contribution schemes
32,752
24,699
SC Group-Global Limited
Notes to the group financial statements (continued)
For the year ended 31 August 2023
8
Directors' remuneration (continued)
29

The directors are considered to be the key management personnel of the group.

9
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
8,993
-
0
Other interest income
1,070
-
Total income
10,063
-
0
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
8,993
-
10
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
419,122
279,209
Other finance costs:
Interest on finance leases and hire purchase contracts
13,512
7,827
Other interest
20,908
-
Total finance costs
453,542
287,036
11
Taxation
2023
2022
as restated
£
£
Current tax
UK corporation tax on profits for the current period
-
0
(265,262)
Group tax relief
-
0
(92,000)
Total UK current tax
-
0
(357,262)
Foreign current tax on profits for the current period
624
115,965
Total current tax
624
(241,297)
SC Group-Global Limited
Notes to the group financial statements (continued)
For the year ended 31 August 2023
11
Taxation
2023
2022
as restated (continued)
30
Deferred tax
Origination and reversal of timing differences
1,027,244
(58,403)
Adjustment in respect of prior periods
(532,489)
121,750
Total deferred tax
494,755
63,347
Total tax charge/(credit)
495,379
(177,950)

The actual charge/(credit) for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
2,119,253
1,391,909
Expected tax charge based on the standard rate of corporation tax in the UK of 21.52% (2022: 19.00%)
455,957
264,463
Tax effect of expenses that are not deductible in determining taxable profit
140,939
(82,564)
Tax effect of income not taxable in determining taxable profit
(45)
-
0
Unutilised tax losses carried forward
(22,571)
261,886
Adjustments in respect of prior years
248,943
(371,634)
Permanent capital allowances in excess of depreciation
(15,066)
-
0
Research and development tax credit
-
0
(21,154)
Other non-reversing timing differences
(96,455)
-
0
Other permanent differences
5,941
-
0
Effect of overseas tax rates
(91,053)
38,532
Deferred tax adjustments in respect of prior years
(532,489)
3,372
Foreign exchange differences
(32,364)
-
0
Effect of change in local deferred tax rate
147,025
(23,171)
Other tax effects for reconciliation between accounting profit and tax expense
-
0
(8,301)
Movement in deferred tax not recognised
286,617
(22,988)
Transition adjustments
-
(216,391)
Taxation charge/(credit)
495,379
(177,950)

The Group recognised a tax credit in the prior year of £357,086 arising from a claim made under the Research and Development scheme in the UK. This has been classified as arising from prior years as the claim related wholly to the 2022 financial year. This amount was fully receipted after the balance sheet date and as such is included as a tax receivable within note 19 of the financial statements. Deferred tax has been provided for at the substantively enacted rate of 25% (2022: 25%).

SC Group-Global Limited
Notes to the group financial statements (continued)
For the year ended 31 August 2023
31
12
Intangible fixed assets
Group
Goodwill
Computer software
Patents and trademarks
Development costs
Total
£
£
£
£
£
Cost
At 1 September 2022 as restated
90,317
-
0
828,378
18,984,687
19,903,382
Additions
-
0
-
0
-
0
1,169,327
1,169,327
Disposals
-
0
-
0
(78,323)
(212,685)
(291,008)
Transfers
-
0
14,733
(14,733)
-
0
-
0
Exchange adjustments
-
0
-
0
252
(499,275)
(499,023)
At 31 August 2023
90,317
14,733
735,574
19,442,054
20,282,678
Amortisation and impairment
At 1 September 2022 as restated
72,261
-
0
693,237
6,965,299
7,730,797
Amortisation charged for the year
698
-
0
104,863
1,505,149
1,610,710
Disposals
-
0
-
0
(78,323)
-
0
(78,323)
Transfers
-
0
12,913
(12,913)
-
0
-
0
Exchange adjustments
-
0
-
0
101
(163,453)
(163,352)
At 31 August 2023
72,959
12,913
706,965
8,306,995
9,099,832
Carrying amount
At 31 August 2023
17,358
1,820
28,609
11,135,059
11,182,846
At 31 August 2022 as restated
18,056
-
0
135,141
12,019,388
12,172,585
Company
Patents and trademarks
Development costs
Total
£
£
£
Cost
At 1 September 2022
25,700
2,221,555
2,247,255
Transfers
1,555
(1,555)
-
0
At 31 August 2023
27,255
2,220,000
2,247,255
Amortisation and impairment
At 1 September 2022
3,819
1,760,624
1,764,443
Amortisation charged for the year
15,576
137,500
153,076
Transfers
1,404
(1,404)
-
0
At 31 August 2023
20,799
1,896,720
1,917,519
Carrying amount
At 31 August 2023
6,456
323,280
329,736
At 31 August 2022
21,881
460,931
482,812
SC Group-Global Limited
Notes to the group financial statements (continued)
For the year ended 31 August 2023
12
Intangible fixed assets (continued)
32

Individually material intangible assets

 

High Mobility Transporters (HMT)

The carrying amount of this asset is £2,683,997 (2022 restated: £3,013,256). There were additions in the year of £593,795 (2022 - £195,261).

 

The amortisation of the original HMT 400 project commenced in the year ended 31 August 2003, upon commencement of commercial production of the HMT 400 vehicle. Similarly, the amortisation of the original HMT 600 vehicle development costs commenced in the year ended 31 August 2007 upon its successful commencement of commercial production. Subsequent product enhancement expenditure is written off over ten years from the date of capitalisation.

 

Additional development costs have been capitalised in relation to HMT projects in Australia which are expected to generate future economic benefit. The carrying amount of these development costs is £1,639,483 (2022: £2,178,727).

 

Light Reconnaissance Vehicle

The carrying amount of this asset is £1,790,282 (2022 - £2,143,078). Development of the assets commenced in the year ended 31 August 2015 and 31 August 2014 respectively. Whilst not yet in commercial production, the directors consider the project to be substantially complete and amortisation began in the prior period, writing off the development costs over a 10 year period. A total amortisation charge of £365,903 (2022: £270,596) has been recognised.

 

Lightweight Recovery Vehicle

The carrying amount of this asset is £1,864,486 (2022: £1,982,438). Development of these assets commenced in the year ended 31 August 2017. Amortisation commenced in the year when the asset was brought into use. A total amortisation charge of £98,551(2022: £220,271) has been recognised.

 

Land 400

The carrying amount of this asset is £338,198 (2022 - £447,839). Development costs have been capitalised for a project which is expected to generate future economic benefit to the group in relation to partnering with a prime contractor on the Australian Land 400 programme. This is being amortised over a period of 7 years.

 

RHM external rack redevelopment

The carrying amount of this asset is £772,054 (2022 - £1,068,355). This is being amortised over a period of 7 years All remaining intangible assets are written off over the period that they are expected to produce commercial benefit.

SC Group-Global Limited
Notes to the group financial statements (continued)
For the year ended 31 August 2023
33
13
Tangible fixed assets
Group
Freehold buildings
Freehold land
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 September 2022
1,967,693
814,374
1,450,424
3,133,623
1,532,321
8,898,435
Additions
-
0
1,695
299,739
324,069
-
0
625,503
Disposals
-
0
-
0
(5,244)
(128,456)
-
0
(133,700)
Exchange adjustments
-
0
-
0
53,710
164,381
60,914
279,005
At 31 August 2023
1,967,693
816,069
1,798,629
3,493,617
1,593,235
9,669,243
Depreciation and impairment
At 1 September 2022
979,220
470,131
1,270,064
2,793,628
1,048,988
6,562,031
Depreciation charged in the year
33,131
90,335
89,814
84,601
200,000
497,881
Eliminated in respect of disposals
-
0
-
0
(5,244)
(128,456)
-
0
(133,700)
Exchange adjustments
-
0
(8,089)
(9,251)
13,858
788
(2,694)
At 31 August 2023
1,012,351
552,377
1,345,383
2,763,631
1,249,776
6,923,518
Carrying amount
At 31 August 2023
955,342
263,692
453,246
729,986
343,459
2,745,725
At 31 August 2022
988,473
344,243
180,360
339,995
483,333
2,336,404
SC Group-Global Limited
Notes to the group financial statements (continued)
For the year ended 31 August 2023
13
Tangible fixed assets (continued)
34
Company
Fixtures and fittings
£
Cost
At 1 September 2022
48,890
Additions
6,403
Disposals
(38,787)
At 31 August 2023
16,506
Depreciation and impairment
At 1 September 2022
40,046
Depreciation charged in the year
2,921
Eliminated in respect of disposals
(38,787)
At 31 August 2023
4,180
Carrying amount
At 31 August 2023
12,326
At 31 August 2022
8,844

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Group
Company
2023
2022
2023
2022
£
£
£
£
Plant and equipment
51,954
30,703
-
0
-
0
Fixtures and fittings
135,569
187,004
-
0
-
0
187,523
217,707
-
-
14
Investment property
Group
Company
2023
2023
£
£
Fair value
At 1 September 2022 and 31 August 2023
-
2,090,000

Investment property comprises of one property. The fair value of the investment property has been arrived at on the basis of a valuation carried out at 5 May 2022 by JLL Chartered Surveyors, who are not connected with the company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.

SC Group-Global Limited
Notes to the group financial statements (continued)
For the year ended 31 August 2023
35
15
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
16
-
0
-
0
10,083
10,083
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 September 2022 and 31 August 2023
10,083
Carrying amount
At 31 August 2023
10,083
At 31 August 2022
10,083
16
Subsidiaries

Details of the company's subsidiaries at 31 August 2023 are as follows:

Name of undertaking
Address
Class of
% Held
shares held
Direct
Indirect
Supacat Limited
England
Ordinary shares
100.00
-
Supacat PTY Limited
Austrailia
Ordinary shares
90.00
-
SC Innovation-Global Limited
England
Ordinary shares
100.00
-
Blackhill Engineering Services Limited
England
Ordinary shares
100.00
-
Proteum Limited
England
Ordinary shares
100.00
-
Supacat Engineering Services Private Limited
India
Ordinary shares
100.00
-
Supacat GMBH
Germany
Ordinary shares
100.00
-
SC Marine Limited
England
Ordinary shares
100.00
-
SC Eco PTY Limited
Austrailia
Ordinary shares
-
90.00
SC Group-Global Limited
Notes to the group financial statements (continued)
For the year ended 31 August 2023
16
Subsidiaries (continued)
36

The principal activities of the Group are that of the research and development, design, prototyping, manufacture and sale of high mobility vehicles, trailers and other systems. Supacat Limited and Supacat PTY Limited primarily operate in the military sector, SC Marine Limited and Proteum Limited within the maritime sector and SC Innovation-Global Limited and Blackhill Engineering Services Limited provide engineering and training services supporting the group's activities. Supacat Engineering Services Private Limited, Supacat GmbH and SC Eco PTY Limited are near dormant subsidiaries in India, Germany and Australia respectively.

 

As Supacat Engineering Services Private Limited, Supacat GmbH and SC Eco PTY Limited are near dormant subsidiaries, these subsidiaries have been excluded from the consolidation of the Group accounts, as deemed non-significant and immaterial to the Group.

 

The registered office of each subsidiary is the same as that of the company, with the exceptions of Supacat PTY Limited and SC Eco PTY Limited which is HWT Tower Level 19, 40 City Road, Southbank VIC3006, Australia, Supacat Engineering Service Private Limited which is 406, Fourth Floor, Madhava Building, Bandra Kurla Complex Bandra, East Mumbai, Mumbai City - 400051, India and Supacat GMBH which is Schifferstrasse 210, D-47059 Duisburg, Germany.

 

SC Marine Limited was dissolved on 29 August 2023.

17
Financial instruments
Group
Company
2023
2022
2023
2022
£
£
£
£
Carrying amount of financial assets
Instruments measured at fair value through profit or loss
3,798
11,292
-
-
18
Stocks
Group
Company
2023
2022
2023
2022
as restated
£
£
£
£
Raw materials and consumables
5,468,457
4,849,542
-
-
Work in progress
1,054,558
1,526,996
-
-
6,523,015
6,376,538
-
-
SC Group-Global Limited
Notes to the group financial statements (continued)
For the year ended 31 August 2023
37
19
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
6,690,897
4,675,819
-
0
-
0
Gross amounts owed by contract customers
2,248,748
2,084,097
-
0
-
0
Corporation tax recoverable
-
0
357,085
-
0
-
0
Amounts owed by group undertakings
133,780
-
5,726,951
4,487,964
Other debtors
785,153
263,863
2,425
36,721
Prepayments and accrued income
1,139,736
1,087,228
30,922
32,074
10,998,314
8,468,092
5,760,298
4,556,759
Amounts falling due after more than one year:
Deferred tax asset (note 26)
1,117,913
910,519
-
0
-
0
Total debtors
12,116,227
9,378,611
5,760,298
4,556,759

Amounts owed by Group undertakings are due more than one year, the remaining balance on consolidation relates to amounts owed by unconsolidated Group undertakings of the Group as at the year end.

20
Current asset investments
Group
Company
2023
2022
2023
2022
£
£
£
£
Listed investments
3,798
11,292
-
-

Group

Financial assets measured at fair value

Shares held in listed entities

The Group holds shares of a supplier who is listed on a stock exchange. The share price at the year end has been used to determine the fair value of the investment.

 

The fair value at the year end is £Nil (2022 - £Nil) and the change in value included in profit or loss is £Nil (2022 - £Nil).

SC Group-Global Limited
Notes to the group financial statements (continued)
For the year ended 31 August 2023
38
21
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
23
4,255,783
5,218,980
171,064
192,933
Obligations under finance leases
24
72,633
57,268
-
0
-
0
Other borrowings
23
45,651
-
0
-
0
-
0
Trade creditors
5,388,832
2,499,834
31,329
85,900
Amounts owed to group undertakings
-
0
-
0
1,367,365
1,260,341
Other taxation and social security
1,048,360
1,134,109
7,703
300
Other creditors
511,269
803,704
2,438
207,525
Accruals and deferred income
5,302,744
4,012,266
157,998
4,180
16,625,272
13,726,161
1,737,897
1,751,179
22
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
23
580,660
948,200
-
0
-
0
Obligations under finance leases
24
221,722
162,323
-
0
-
0
802,382
1,110,523
-
-
23
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
1,099,742
1,445,538
171,064
192,933
Bank overdrafts
3,736,701
4,721,642
-
0
-
0
Other loans
45,651
-
0
-
0
-
0
4,882,094
6,167,180
171,064
192,933
Payable within one year
4,301,434
5,218,980
171,064
192,933
Payable after one year
580,660
948,200
-
0
-
0

The bank loans are secured on all the assets of the Group by way of a cross guarantee.

 

The hire purchase agreements are secured on the assets to which they relate.

SC Group-Global Limited
Notes to the group financial statements (continued)
For the year ended 31 August 2023
23
Loans and overdrafts (continued)
39

The UK Group has an on demand overdraft facility of a net £1.5m covering the UK Group companies. This is repayable on demand and attracts interest at 2.75% above base rate.

 

The Group have other loan facilities that attract interest at rates ranging between 4.35% and 9.5% that are repayable over the next 6 years. The loans are due to be repaid within 4 years.

 

The company has a loan with an interest rate of 2.75%.

 

The Australian subsidiary undertaking has an overdraft of AUD$2.75m and trade funding facility of AUD$2m available.

24
Finance lease obligations
Group
Company
2023
2022
2023
2022
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
72,633
57,268
-
0
-
0
In two to five years
221,722
162,323
-
0
-
0
294,355
219,591
-
-

Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

25
Provisions for liabilities
Group
Company
2023
2022
2023
2022
£
£
£
£
Warranty provisions
1,494,845
199,984
-
-
Other provisions
1,800,000
-
-
-
3,294,845
199,984
-
-
Movements on provisions:
Warranty provisions
Other provisions
Total
Group
£
£
£
At 1 September 2022
199,984
-
199,984
Additional provisions in the year
1,294,861
1,800,000
3,094,861
At 31 August 2023
1,494,845
1,800,000
3,294,845
SC Group-Global Limited
Notes to the group financial statements (continued)
For the year ended 31 August 2023
25
Provisions for liabilities (continued)
40

A subsidiary within the Group provides for warranty costs up to agreed contractual amounts. This warranty provision is then utilised and released to the profit and loss account over the warranty period.

26
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Group
£
£
£
£
Accelerated capital allowances
1,751,197
942,347
1,117,913
910,519
Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Company
£
£
£
£
Accelerated capital allowances
521,433
-
-
-
Investment property
-
138,819
-
-
521,433
138,819
-
-
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 September 2022
31,828
138,819
Charge to profit or loss
601,456
382,614
Liability at 31 August 2023
633,284
521,433

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

27
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
843,405
597,720

The group operates a defined contribution pension scheme. Contributions totaling £120,999 (2022 - £32,462) were payable to the scheme at the end of the year and are included in creditors.

SC Group-Global Limited
Notes to the group financial statements (continued)
For the year ended 31 August 2023
41
28
Share-based payment transactions
Group
Number of share options
Weighted average exercise price
2023
2022
2023
2022
Number
Number
£
£
Outstanding at 1 September 2022
-
-
-
-
Granted
30
-
4,045.00
-
Outstanding at 31 August 2023
30
-
4,045.00
-
Exercisable at 31 August 2023
-
-
-
-

 

The options outstanding at 31 August 2023 had an exercise price of £4,045 per share, are equity settled and have a remaining contractual life of 9 years 4 months.

29
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
950
950
950
950

All Ordinary shares have equal voting and participation rights in the company.

30
Reserves
Share premium

This represents the excess of the proceeds over the par value of shares includes less any directly attributable transaction costs.

Equity reserve

This represents the accumulated profits of the group net of any distributions to shareholders.

Capital redemption reserve

This reserve reflects the nominal value of shares repurchased by the Group.

SC Group-Global Limited
Notes to the group financial statements (continued)
For the year ended 31 August 2023
42
31
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
851,569
1,071,231
-
-
Between two and five years
1,830,793
806,127
-
-
2,682,362
1,877,358
-
-
32
Related party transactions
Transactions with related parties

Group

 

Summary of transactions with all subsidiaries

One of the group entities is 90% owned by SC Group-Global Limited. During the year, sales were made to the entity by wholly owned members of the group totalling £826,288 (2022: £1,107,922) and the wholly owned members of the group purchased services from the entity totalling £180,387 (2022: £87,616). At the balance sheet date, the amount due from the entity that is not wholly owned was £2,770,474 (2022: £2,112,640) which is fully eliminated on consolidation.

 

Company

The company has taken advantage of the exemption in FRS 102 from disclosing transactions with wholly owned members of the group.

 

Summary of transactions with all subsidiaries

The company charged royalties, management fees and interest of £426,678 (2022: £744,290) to its non wholly owned subsidiary during the year. The balance due at the year end to the company totalled £2,326,719 (2022: £1,684,398).

33
Controlling party

The company is controlled by the directors who own 100% of the called up share capital. There is no single controlling party.

SC Group-Global Limited
Notes to the group financial statements (continued)
For the year ended 31 August 2023
43
34
Cash generated from group operations
2023
2022
as restated
£
£
Profit for the year after tax
1,623,874
1,569,859
Adjustments for:
Taxation charged/(credited)
495,379
(177,950)
Finance costs
455,948
287,036
Investment income
(10,063)
-
0
Gain on disposal of tangible fixed assets
(18,120)
(9,825)
Loss on investments
7,304
-
Amortisation and impairment of intangible assets
1,610,710
1,390,345
Depreciation and impairment of tangible fixed assets
497,881
537,890
Foreign exchange gains on cash equivalents
253,500
(371,884)
Increase in provisions
2,896,607
200,180
Movements in working capital:
Increase in stocks
(146,477)
(1,019,335)
Increase in debtors
(2,741,594)
(2,234,278)
Increase in creditors
3,579,098
2,577,309
Cash generated from operations
8,504,047
2,749,347
35
Cash (absorbed by)/generated from operations - company
2023
2022
£
£
Profit for the year after tax
837,890
1,241,876
Adjustments for:
Taxation charged
719,753
342,819
Finance costs
6,800
6,238
Investment income
(561,229)
(180,598)
Fair value gain on investment properties
-
0
(555,277)
Amortisation and impairment of intangible assets
153,076
115,781
Depreciation and impairment of tangible fixed assets
2,921
-
Movements in working capital:
Increase in debtors
(1,203,539)
(1,615,851)
Increase in creditors
8,587
1,282,825
Cash (absorbed by)/generated from operations
(35,741)
637,813
SC Group-Global Limited
Notes to the group financial statements (continued)
For the year ended 31 August 2023
44
36
Analysis of changes in net funds/(debt) - group
1 September 2022
Cash flows
Other non-cash changes
Market value movements
Exchange rate movements
31 August 2023
£
£
£
£
£
£
Cash at bank and in hand
2,346,927
5,826,354
-
-
(253,500)
7,919,781
Bank overdrafts
(4,721,642)
984,941
-
-
-
(3,736,701)
(2,374,715)
6,811,295
-
-
(253,500)
4,183,080
Borrowings excluding overdrafts
(1,445,538)
326,647
-
(26,502)
-
(1,145,393)
Obligations under finance leases
(219,591)
158,793
(233,557)
-
-
(294,355)
(4,039,844)
7,296,735
(233,557)
(26,502)
(253,500)
2,743,332
SC Group-Global Limited
Notes to the group financial statements (continued)
For the year ended 31 August 2023
45
37
Analysis of changes in net funds/(debt) - company
1 September 2022
Cash flows
31 August 2023
£
£
£
Cash at bank and in hand
58,823
153,277
212,100
Borrowings excluding overdrafts
(192,933)
21,869
(171,064)
(134,110)
175,146
41,036
38
Prior period adjustment
Reconciliation of changes in equity - group
1 September
31 August
2021
2022
Notes
£
£
Adjustments to prior year
Effect of capitalising costs previously expensed
1
-
1,138,897
Effect of stock adjustment
2
-
109,053
Total adjustments
-
1,247,950
Equity as previously reported
12,505,568
15,395,392
Equity as adjusted before transition adjustments
12,505,568
16,643,342
Reconciliation of changes in profit for the previous financial period
2022
Notes
£
Adjustments to prior year
Effect of capitalising costs previously expensed
1
1,138,897
Effect of stock adjustment
2
109,053
Total adjustments
1,247,950
Profit as previously reported
321,909
Profit as adjusted before transition adjustments
1,569,859
Reconciliation of changes in equity - company
The prior period adjustments do not give rise to any effect upon equity.
SC Group-Global Limited
Notes to the group financial statements (continued)
For the year ended 31 August 2023
38
Prior period adjustment (continued)
46
Reconciliation of changes in profit for the previous financial period
2022
£
Adjustments to prior year
Total adjustments
-
Profit as previously reported
1,241,876
Profit as adjusted before transition adjustments
1,241,876
Notes to reconciliation
Capitalisation of costs previously expensed

Costs identified in the prior year that were expensed to the profit and loss account, were identified as relating to the development costs, from which economic benefits have flowed to the company from these assets. The development costs category within intangible assets has therefore increased by £1,138,897, and cost of sales has decreased by £1,138,897 in the prior year, to capitalise costs incurred by the company that were previously expensed to the profit and loss account.

Stock adjustment

It was identified that the value of stock was materially understated as at the prior year end within one of the subsidiary companies of the group. The raw materials category within stock has therefore increased by £109,053 and cost of sales has decreased by £109,053 in the prior year, to increase the value of stock as at 31 August 2022.

Reclassification of other operating income

Other operating income identified in the prior year was incorrectly included within administrative expenses in the profit and loss account. The other operating income category has therefore increased by £521,740 and administrative expenses has also increased by £521,740 in the prior year.

2023-08-312022-09-01falseCCH SoftwareCCH Accounts Production 2023.300R S N AmesE M JonesN L JonesR Talbot RiceMr R Talbot RiceA S 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