Company Registration No. 04669286 (England and Wales)
Magmatic Limited
Unaudited financial statements
for the period ended 30 June 2023
Pages for filing with the registrar
Magmatic Limited
Contents
Page
Statement of financial position
1 - 2
Notes to the financial statements
3 - 10
Magmatic Limited
Statement of financial position
As at 30 June 2023
30 June 2023
1
30 June 2023
31 December 2021
Notes
£
£
£
£
Fixed assets
Intangible assets
4
94,328
Tangible assets
5
124,646
Investments
6
659
219,633
Current assets
Stocks
-
289,978
Debtors
7
10,249
791,633
Cash at bank and in hand
334,188
18,008
344,437
1,099,619
Creditors: amounts falling due within one year
8
(218,549)
(624,201)
Net current assets
125,888
475,418
Total assets less current liabilities
125,888
695,051
Creditors: amounts falling due after more than one year
9
(2,096,604)
(4,325,956)
Net liabilities
(1,970,716)
(3,630,905)
Capital and reserves
Called up share capital
1,315
1,315
Share premium account
2,703,582
2,703,582
Capital redemption reserve
35
35
Profit and loss reserves
(4,675,648)
(6,335,837)
Total equity
(1,970,716)
(3,630,905)
The directors of the company have elected not to include a copy of the income statement within the financial statements.true
For the financial period ended 30 June 2023 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
The members have not required the company to obtain an audit of its financial statements for the period in question in accordance with section 476.
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
Magmatic Limited
Statement of financial position (continued)
As at 30 June 2023
30 June 2023
2
The financial statements were approved by the board of directors and authorised for issue on 21 February 2024 and are signed on its behalf by:
Richard Dewhurst
Director
Company Registration No. 04669286
Magmatic Limited
Notes to the financial statements
For the period ended 30 June 2023
3
1
Accounting policies
Company information
Magmatic Limited is a private company limited by shares incorporated in England and Wales. The registered office is c/o Saffery LLP, St Catherine's Court, Berkeley Place, Clifton, Bristol, BS8 1BQ.
1.1
Reporting period
The accounts are prepared for the 18 months ending 30 June 2023. The accounting period has been extended to incorporate the sale of operations within the period. As a result, amounts presented in the financial statements, including related notes, are not entirely comparable.
1.2
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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 £1.
1.3
Going concern
The accounts have been prepared on a basis other than going concern as a result of the sale of operations within the period.true
1.4
Turnover
Turnover represents net invoiced sales of goods, excluding value added tax.
Turnover is recognised on delivery to the customer in the UK and on the point of despatch to customers for international sales.
1.5
Intangible fixed assets other than goodwill
Other intangible assets
Other intangible assets that are recognised by the company are stated at cost less accumulated amortisation and less accumulated impairment losses.
Amortisation 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:
Licence agreement
5 years
Development costs
5 years
Patents and IP
10 years
The basis for choosing these useful lives is based on estimated useful economic life of the asset.
Magmatic Limited
Notes to the financial statements (continued)
For the period ended 30 June 2023
1
Accounting policies (continued)
4
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
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:
Leasehold land and buildings
5 years straight line
Plant and equipment
10 years straight line
Fixtures and fittings
5 years straight line
Computers
3 years straight line
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.
1.7
Fixed asset investments
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
1.8
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Recoverable amount is the higher of fair value less costs to sell and value in use.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Magmatic Limited
Notes to the financial statements (continued)
For the period ended 30 June 2023
1
Accounting policies (continued)
5
1.9
Stocks
Stocks comprising of raw materials, work in progress and finished goods are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.
The calculation of the cost value is on FIFO basis and includes the production costs, duty, freight and supplier's commissions.
1.10
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.
1.11
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 statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Magmatic Limited
Notes to the financial statements (continued)
For the period ended 30 June 2023
1
Accounting policies (continued)
6
1.12
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.13
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.14
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.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.16
Share-based payments
There were no awards made during 2023. Two previous awards were cancelled on 31 January 2023.
No amounts have been recognised in the financial statements in respect of these options based on materiality.
1.17
Leases
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 leases asset are consumed.
Magmatic Limited
Notes to the financial statements (continued)
For the period ended 30 June 2023
1
Accounting policies (continued)
7
1.18
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
1.19
In the prior year the company had a number of funding facilities available. The overall bank facility (invoice finance, trade credit and overdraft) was 'on-demand' which means it could be withdrawn at any time.
Invoice finance facility – the company used the invoice discounting facility to manage its day to day working capital requirements. At the period-end £nil (2021: £65,000) was drawn on the invoice finance facility. This facility was cancelled in the period.
Trade credit – providing letters of credit to guarantee supplier payments thus facilitating a supplier credit period. There were no letters of credit in place at the period end.
Overdraft – the company sometimes used this facility to manage day to day working capital requirements. At the period-end £nil (2021: £333,164) was drawn on the overdraft. This facility was cancelled in the period.
Shareholder loans – the company's previous shareholders provided funding in previous years to expand the business and to support the development of new products. The shareholder loans of £2,071,604 (2021: £4,300,956) are due in 2023.
During 2021 the loan notes were amended so that, the loan notes had the interest payments deferred until March 2023 and the capital repayments on the 2017 loan notes were delayed until January and March 2023.
The loan note holders have agreed that no further interest will accrue from 31 January 2023 and agreed to wait for further capital repayments until the company is in a position to make them.
2
Critical accounting judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Employees
The average monthly number of persons (including directors) employed by the company during the period was:
2023
2021
Number
Number
Total
9
13
Magmatic Limited
Notes to the financial statements (continued)
For the period ended 30 June 2023
8
4
Intangible fixed assets
Other
Patents and IP
Total
£
£
£
Cost
At 1 January 2022
237,426
408,527
645,953
Disposals
(237,426)
(408,527)
(645,953)
At 30 June 2023
Amortisation and impairment
At 1 January 2022
237,426
314,199
551,625
Amortisation charged for the period
30,432
30,432
Disposals
(237,426)
(344,631)
(582,057)
At 30 June 2023
Carrying amount
At 30 June 2023
At 31 December 2021
94,328
94,328
5
Tangible fixed assets
Land and buildings
Plant and machinery etc
Total
£
£
£
Cost
At 1 January 2022
53,870
1,147,819
1,201,689
Disposals
(53,870)
(1,147,819)
(1,201,689)
At 30 June 2023
Depreciation and impairment
At 1 January 2022
53,870
1,023,173
1,077,043
Depreciation charged in the period
23,225
23,225
Eliminated in respect of disposals
(53,870)
(1,046,398)
(1,100,268)
At 30 June 2023
Carrying amount
At 30 June 2023
At 31 December 2021
124,646
124,646
Magmatic Limited
Notes to the financial statements (continued)
For the period ended 30 June 2023
9
6
Fixed asset investments
2023
2021
£
£
Shares in group undertakings and participating interests
659
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 January 2022 & 30 June 2023
659
Impairment
At 1 January 2022
-
Disposals
659
At 30 June 2023
659
Carrying amount
At 30 June 2023
-
At 31 December 2021
659
7
Debtors
2023
2021
Amounts falling due within one year:
£
£
Trade debtors
269,806
Amounts owed by group undertakings
401,928
Other debtors
10,249
119,899
10,249
791,633
8
Creditors: amounts falling due within one year
2023
2021
£
£
Bank loans and overdrafts
118,766
Trade creditors
37,589
201,204
Amounts owed to group undertakings
102,677
Taxation and social security
18,452
Other creditors
180,960
183,102
218,549
624,201
Magmatic Limited
Notes to the financial statements (continued)
For the period ended 30 June 2023
10
9
Creditors: amounts falling due after more than one year
2023
2021
£
£
Convertible loans
2,071,604
4,300,956
Other creditors
25,000
25,000
2,096,604
4,325,956
10
Share-based payment transactions
There were no awards made during 2023. Two previous awards were cancelled on 31 January 2023.
No amounts have been recognised in the financial statements in respect of these options based on materiality.
11
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2023
2021
£
£
50,375
During the period £58,816 was recognised as an expense in the profit and loss account in respect of operating leases (2021: £53,105).