Company registration number 02671978 (England and Wales)
STAR MICRONICS GB LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
STAR MICRONICS GB LIMITED
COMPANY INFORMATION
DIRECTORS
Mr S Totty
Mr F Masuda
COMPANY NUMBER
02671978
REGISTERED OFFICE
Unit 1
Riverlands Business Park
Raynesway
Derby
DE21 7BZ
AUDITOR
JW Hinks LLP
Chartered Accountants
19 Highfield Road
Edgbaston
Birmingham
B15 3BH
STAR MICRONICS GB LIMITED
CONTENTS
PAGE
Strategic report
1
Directors' report
2 - 3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 21
STAR MICRONICS GB LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report and financial statements for the year ended 31 December 2023. The directors, in preparing this strategic report, have complied with s414C of the Companies Act 2006.
REVIEW OF THE BUSINESS
We are pleased to say that 2023 results exceeded our business plan here in the UK by some margin. These results include a substantial number of new customers which further strengthens our market share here in the UK.
Whilst deliveries were exceptional the market has somewhat slowed due to several factors like high interest rates, inflation, energy costs and the ongoing issues following Brexit. Forecasts show that 2024 will have less growth than first thought but that 2025 will show a significant increase of that of 2024.
We look forward to 2024 and beyond with a degree of confidence and continue to be committed to build on our already excellent working relationships with our customers, suppliers and staff alike.
PRINCIPAL RISKS AND UNCERTAINTIES
The company operates in a highly competitive market which is a continuing risk and could result in losing revenue to its key competitors. The company manages this risk by providing value added services to its customers, responding promptly to customer requests and by maintaining strong relationships with its customers.
The company has some exposure to exchange rate fluctuations due to purchasing goods in foreign currencies. The company manages this by the use of forward contracts as and when necessary.
KEY PERFORMANCE INDICATORS
We consider that our key financial performance indicators are those which communicate the operating performance and financial strength of the business as a whole.
Turnover and gross margin of the company for the current and prior year are as follows:
2023 2022
£ £
Turnover 25,975,916 20,260,849
Gross margin 23.62% 25.79%
FUTURE DEVELOPMENTS
We believe that 2024 will continue to provide excellent opportunities for our customers and also ourselves.
Mr S Totty
DIRECTOR
26 March 2024
STAR MICRONICS GB LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The directors present their report with the audited financial statements for the year ended 31 December 2023.
PRINCIPAL ACTIVITIES
The principal activity of the company continued to be that of the distribution of CNC metal cutting machine tools and automatic bar loading and feeding equipment.
RESULTS AND DIVIDENDS
The results for the year are set out on page 8.
Dividends of 695p per share - £903,000 were paid during 2023 (1513p per share - £1,967,000 were paid during 2022).
DIRECTORS
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr S Totty
Mr F Masuda
FUTURE DEVELOPMENTS
Please refer to the Strategic report for details on Future Developments.
AUDITOR
In accordance with the company's articles, a resolution proposing that JW Hinks LLP be reappointed as auditor of the company will be put at a General Meeting.
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.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The company's activities expose it to a number of financial risks including credit risk, cash flow risk and liquidity risk. The use of financial derivatives is governed by the company's policies approved by the board of directors, which provide written principles on the use of financial derivatives to manage these risks. The company does not use derivative financial instruments for speculative purposes.
Cash flow risk
The company's activities expose it primarily to the financial risks of changes in foreign currency exchange rates. The company agrees foreign exchange rates with intercompany entities before entering into transactions.
Credit risk
The company's principal financial assets are bank balances, trade and other receivables.
The company's credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows.
The company has no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers.
Liquidity risk
In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future developments, the company ensures regular review of working capital requirements.
STAR MICRONICS GB LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
GOING CONCERN
The company is a subsidiary of Star Micronics Company Limited, which is incorporated in Japan. The company has significant levels of cash at the balance sheet date and no reliance on debt. The directors have prepared forecasts for twelve months which show the company is expected to be cash generative.
The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
MEDIUM-SIZED COMPANIES EXEMPTION
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr S Totty
DIRECTOR
26 March 2024
STAR MICRONICS GB LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 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 in accordance with FRS 102, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information on the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
STAR MICRONICS GB LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF STAR MICRONICS GB LIMITED
- 5 -
OPINION
We have audited the financial statements of Star Micronics GB Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
CONCLUSIONS RELATING TO GOING CONCERN
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
OTHER INFORMATION
The 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.
We have nothing to report in this regard.
OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year 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
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the 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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
STAR MICRONICS GB LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF STAR MICRONICS GB 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 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.
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 extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements and discussed the policies and procedures regarding compliance.
Specific areas considered were as follows:
Enquiring with management and others to gain an understanding of the organisation itself including operations, financial reporting and known fraud or error.
Evaluating and understanding the internal control system.
Performing analytical procedures as expected or unexpected variances in account balances or classes of transactions appear.
Testing documentation supporting account balances or classes of transactions.
Observing the physical stock count.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected all irregularities including those leading to material misstatements in the financial statements or non-compliance with regulation, even though we have properly planned and performed our audit in accordance with auditing standards.
This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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.
STAR MICRONICS GB LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF STAR MICRONICS GB LIMITED
- 7 -
USE OF OUR REPORT
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
NEAL ASTON ACA ACCA (SENIOR STATUTORY AUDITOR)
CHARTERED ACCOUNTANTS
STATUTORY AUDITOR
19 Highfield Road
Edgbaston
Birmingham
B15 3BH
26 March 2024
STAR MICRONICS GB LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
TURNOVER
3
25,975,916
20,260,849
Cost of sales
(19,840,270)
(15,036,331)
GROSS PROFIT
6,135,646
5,224,518
Administrative expenses
(4,424,229)
(3,780,337)
OPERATING PROFIT
6
1,711,417
1,444,181
Interest receivable and similar income
7
20
PROFIT BEFORE TAXATION
1,711,437
1,444,181
Tax on profit
8
(419,254)
(293,312)
PROFIT FOR THE FINANCIAL YEAR
1,292,183
1,150,869
The Statement of Comprehensive income has been prepared on the basis that all operations are continuing operations.
STAR MICRONICS GB LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
FIXED ASSETS
Tangible assets
10
439,692
491,830
CURRENT ASSETS
Stocks
11
2,506,094
3,086,379
Debtors
12
2,320,801
1,663,666
Cash at bank and in hand
1,953,016
3,331,999
6,779,911
8,082,044
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
13
(3,813,416)
(5,548,850)
NET CURRENT ASSETS
2,966,495
2,533,194
TOTAL ASSETS LESS CURRENT LIABILITIES
3,406,187
3,025,024
PROVISIONS FOR LIABILITIES
Deferred tax liability
14
74,334
82,354
(74,334)
(82,354)
NET ASSETS
3,331,853
2,942,670
CAPITAL AND RESERVES
Called up share capital
16
130,000
130,000
Capital redemption reserve
15,000
15,000
Profit and loss reserves
3,186,853
2,797,670
TOTAL EQUITY
3,331,853
2,942,670
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 26 March 2024 and are signed on its behalf by:
Mr S Totty
DIRECTOR
Company registration number 02671978 (England and Wales)
STAR MICRONICS GB LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
BALANCE AT 1 JANUARY 2022
130,000
15,000
3,613,801
3,758,801
YEAR ENDED 31 DECEMBER 2022:
Profit and total comprehensive income for the year
-
-
1,150,869
1,150,869
Dividends
9
-
-
(1,967,000)
(1,967,000)
BALANCE AT 31 DECEMBER 2022
130,000
15,000
2,797,670
2,942,670
YEAR ENDED 31 DECEMBER 2023:
Profit and total comprehensive income for the year
-
-
1,292,183
1,292,183
Dividends
9
-
-
(903,000)
(903,000)
BALANCE AT 31 DECEMBER 2023
130,000
15,000
3,186,853
3,331,853
STAR MICRONICS GB LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
ACCOUNTING POLICIES
COMPANY INFORMATION
Star Micronics GB Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 1, Riverlands Business Park, Raynesway, Derby, DE21 7BZ.
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 on the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Star Micronics Company Limited. These consolidated financial statements are available from its registered office 20-10, Nakayoshida, Suruga-ku, Shizouka, 422-8654, Japan.
Star Micronics GB Limited meets the definition of a qualifying entity under FRS 102 and has therefore taken advantage of the disclosure exemptions available to it whereby a 100% subsidiary need not disclose transactions with other wholly-owned group companies. Details of the Ultimate Parent Company can be found in note 21.
1.2
GOING CONCERN
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
TURNOVER
Turnover is stated net of VAT and trade discounts and is recognised when the significant risks and rewards are considered to have been transferred to the buyer. Turnover from the sale of goods is recognised when the goods are physically delivered to the customer. Turnover from the supply of services represents the value of services provided under contracts to the extent that there is a right to consideration and is recorded at the fair value of the consideration received or receivable. 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.
1.4
TANGIBLE FIXED ASSETS
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
STAR MICRONICS GB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
ACCOUNTING POLICIES
(Continued)
- 12 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Property Improvements
- 6.67% on cost
Plant
- 20% on cost
Fixtures & fittings
- 33% on cost
Tools & equipment
- 20% on cost
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
STOCKS
Stocks are stated at the lower of cost and estimated selling price less costs to sell, which is equivalent to the net realisable value. Cost includes materials, direct labour and an attributable proportion of manufacturing overheads based on normal levels of activity. Cost is calculated using the FIFO (first-in, first-out) method. Provision is made for obsolete, slow-moving or defective items where appropriate.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
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 trade and other receivables 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. Other financial assets classified as fair value through profit or loss are measured at fair value.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
STAR MICRONICS GB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
ACCOUNTING POLICIES
(Continued)
- 13 -
Loans and receivables
Trade debtors, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.
Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
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. The impairment loss is recognised in profit or loss.
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.
Classification of financial liabilities
Basic financial liabilities
Basic financial liabilities are initially measured at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Other financial liabilities classified as fair value through profit or loss are measured at fair value.
Other financial liabilities
Other financial liabilities, are initially measured at fair value, net of transaction costs. They are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.
The effective interest method is a method of calculating the fair value of a financial liability and of allocating interest expense over the relevant period. the effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability to the net carrying amount on initial recognition.
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.
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 fair value of cash or other resources received or receivable, net of direct issue costs.
Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.9
DERIVATIVES
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
STAR MICRONICS GB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
ACCOUNTING POLICIES
(Continued)
- 14 -
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.10
TAXATION
Current tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the Company’s taxable profits and its results as stated in the financial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements.
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.
Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date that are expected to apply to the reversal of the timing difference. Deferred tax relating to non-depreciable property measured using the revaluation model and investment property is measured using the tax rates and allowances that apply to sale of the asset. In other cases, the measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Current tax assets and liabilities are offset only when there is a legally enforceable right to set off the amounts and the Company intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
Deferred tax assets and liabilities are offset only if: a) the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and b) the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
1.11
EMPLOYEE BENEFITS
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
For defined contribution schemes the amount charged to the profit and loss account in respect of pension costs and other retirement benefits is the contributions payable in the year. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in the balance sheet.
1.12
LEASES
Rentals payable under operating leases are charged on a straight-line basis over the term of the lease, even if the payments are not made on such a basis. Benefits received and receivable as an incentive to sign an operating lease are similarly spread on a straight-line basis over the lease term.
1.13
FOREIGN CURRENCY
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.
STAR MICRONICS GB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
2
JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the company’s accounting policies which are described in note 1, 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 are the critical judgements, apart from those involving estimations (which are dealt with separately below), that the directors have made in the process of applying the company's accounting policies and that have the most significant effect on the amounts recognised in the financial statements.
Revenue recognition
Turnover comprises the invoiced value of goods supplied by the company exclusive of value added taxes. Revenue from the sale of goods is recognised when the significant risks and reward of ownership of the goods have been passed to the buyer, usually on delivery of the goods.
KEY SOURCES OF ESTIMATION UNCERTAINTY
The company's key source of estimation relates to the estimate of stock and debtors provisions. The value of the provisions require management judgement to assess the recoverable value of these assets less costs to achieve cash flows.
3
TURNOVER AND OTHER REVENUE
An analysis of the company's turnover is as follows:
2023
2022
£
£
TURNOVER ANALYSED BY CLASS OF BUSINESS
Machines
23,324,278
17,755,587
Parts
1,404,852
1,440,700
Service and other sales
1,246,786
1,064,562
25,975,916
20,260,849
2023
2022
£
£
TURNOVER ANALYSED BY GEOGRAPHICAL MARKET
United Kingdom
25,593,728
19,843,580
Europe
371,523
410,847
Rest of world
10,665
6,422
25,975,916
20,260,849
2023
2022
£
£
OTHER REVENUE
Interest income
20
-
STAR MICRONICS GB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
4
EMPLOYEES
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Sales and distribution
4
2
Administrative
8
6
Service Engineers
19
23
Total
31
31
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,554,802
2,117,750
Social security costs
348,098
255,550
Pension costs
130,352
105,555
3,033,252
2,478,855
5
DIRECTORS' REMUNERATION
2023
2022
£
£
Remuneration for qualifying services
575,839
327,657
Company pension contributions to defined contribution schemes
20,760
13,080
596,599
340,737
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
575,839
327,657
Company pension contributions to defined contribution schemes
20,760
13,080
STAR MICRONICS GB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
6
OPERATING PROFIT
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
14,750
14,000
Depreciation of owned tangible fixed assets
108,609
89,173
Profit on disposal of tangible fixed assets
(1,652)
-
Cost of stocks recognised as an expense
19,840,270
15,036,331
Operating lease charges
167,282
159,411
7
INTEREST RECEIVABLE AND SIMILAR INCOME
2023
2022
£
£
INTEREST INCOME
Interest on bank deposits
20
8
TAXATION
2023
2022
£
£
CURRENT TAX
UK corporation tax on profits for the current period
425,343
261,202
Adjustments in respect of prior periods
1,931
(7,279)
Total current tax
427,274
253,923
DEFERRED TAX
Origination and reversal of timing differences
(8,020)
39,389
Total tax charge
419,254
293,312
The actual charge 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
1,711,437
1,444,181
Expected tax charge based on a corporation tax rate of 25.00%
427,859
274,394
Tax effect of expenses that are not deductible in determining taxable profit
13,446
10,999
Capital allowances in excess of depreciation
(10,803)
(24,191)
Under/(over) provided in the year
1,931
(7,279)
Marginal rate adjustments
(5,159)
Origination and reversal of timing differences
(8,020)
39,389
Tax expense for the year
419,254
293,312
STAR MICRONICS GB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
9
DIVIDENDS
2023
2022
£
£
Final paid
903,000
1,967,000
10
TANGIBLE FIXED ASSETS
Property Improvements
Plant, fixtures, fittings, tools & equipment
Total
£
£
£
COST
At 1 January 2023
428,690
691,788
1,120,478
Additions
58,842
58,842
Disposals
(15,400)
(15,400)
At 31 December 2023
428,690
735,230
1,163,920
DEPRECIATION AND IMPAIRMENT
At 1 January 2023
180,588
448,059
628,647
Depreciation charged in the year
28,580
80,029
108,609
Eliminated in respect of disposals
(13,028)
(13,028)
At 31 December 2023
209,168
515,060
724,228
CARRYING AMOUNT
At 31 December 2023
219,522
220,170
439,692
At 31 December 2022
248,102
243,728
491,830
11
STOCKS
2023
2022
£
£
Finished goods and goods for resale
2,506,094
3,086,379
There is no material difference between replacement value and the balance sheet value.
12
DEBTORS
2023
2022
AMOUNTS FALLING DUE WITHIN ONE YEAR:
£
£
Trade debtors
2,211,691
1,480,528
Amounts owed by group undertakings
900
Prepayments and accrued income
108,210
183,138
2,320,801
1,663,666
STAR MICRONICS GB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
13
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023
2022
£
£
Trade creditors
1,135,079
2,375,423
Amounts owed to group undertakings
1,428,949
1,748,842
Corporation tax
134,326
18,667
Other taxation and social security
456,622
971,559
Accruals and deferred income
658,440
434,359
3,813,416
5,548,850
14
DEFERRED TAXATION
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
2023
2022
BALANCES:
£
£
Accelerated capital allowances
74,334
82,354
2023
MOVEMENTS IN THE YEAR:
£
Liability at 1 January 2023
82,354
Credit to profit or loss
(8,020)
Liability at 31 December 2023
74,334
Deferred tax assets and liabilities are offset only where the company has a legally enforceable right to do so and where assets and liabilities relate to income taxes levied by the same taxation authority on the same taxable entity or other entity within the company.
15
RETIREMENT BENEFIT SCHEMES
2023
2022
DEFINED CONTRIBUTION SCHEMES
£
£
Charge to profit or loss in respect of defined contribution schemes
130,352
105,555
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
16
SHARE CAPITAL
2023
2022
2023
2022
ORDINARY SHARE CAPITAL
Number
Number
£
£
ISSUED AND FULLY PAID
Ordinary shares of £1 each
130,000
130,000
130,000
130,000
STAR MICRONICS GB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
16
SHARE CAPITAL
(Continued)
- 20 -
The Company has one class of ordinary shares which carry no right to fixed income.
The Company's other reserves are as follows:
The capital redemption reserve contains the paid up share capital.
The profit and loss represents cumulative profits or losses net of dividends paid and other adjustments.
17
FINANCIAL COMMITMENTS, GUARANTEES AND CONTINGENT LIABILITIES
There were no contingent liabilities at 31 December 2023 (2022: £nil).
18
OPERATING LEASE COMMITMENTS
LESSEE
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
242,128
260,609
Between two and five years
334,767
481,927
576,895
742,536
19
RELATED PARTY TRANSACTIONS
No guarantees have been given or received.
As at 31 December 2023, the company was a wholly owned subsidiary of Star Micronics Company Limited, the consolidated financial statements of which are publicly available. Accordingly, the company has taken advantage of the exemption in FRS 102 s33.
20
DERIVATIVE FINANCIAL INSTRUMENTS
2023
2022
£
£
Derivatives that are not designated and effective as hedging instruments carried at fair value
Forward foreign currency contracts
2,972
1,147
Forward foreign currency contracts are valued using quoted forward exchange rates and yield curves derived from quoted interest rates matching maturities of the contracts.
The Company has entered into contracts to buy goods from suppliers in Japan. The Company has entered into forward foreign currency contracts to hedge the exchange rate risk arising from these anticipated future transactions, which are designated as cash flow hedges. The hedged cash flows are expected to occur and to affect profit or loss within the next financial year.
STAR MICRONICS GB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
21
ULTIMATE PARENT COMPANY
The immediate and ultimate parent company is Star Micronics Company Limited which is incorporated in Japan. The results of the company are included in the consolidated financial statements of Star Micronics Company Limited. This is the only company in the group which produces consolidated financial statements. Copies of the financial statements of Star Micronics Company Limited are available from the Head Office, 20-10, Nakayoshida, Suruga-ku, Shizouka, 422-8654, Japan.
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