Company registration number 00138006 (England and Wales)
SEM LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
SEM LIMITED
COMPANY INFORMATION
Directors
T Walther
F Blyth
Company number
00138006
Registered office
One Hundred House
Brunel Way
Dartford
DA1 5TH
Auditor
Friend-James Limited
4th Floor, Park Gate
161-163 Preston Road
Brighton
East Sussex
BN1 6AF
Business address
One Hundred House
Brunel Way
Dartford
DA1 5TH
SEM LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Statement of financial position
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 22
SEM LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

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

Fair review of the business

SEM Limited is operating as an intergroup manufacturing company and focuses on the intercompany business.
During the year 2023 product orders dropped, caused by an overheated market demand including stock building of products in the year before.

This led to a relaxation in the supply chain with continuously improving availability of materials.

 

Principal risks and uncertainties

The pressure in the supply chain relaxed further and material prices started to settle or even drop.

SEM Limited was not affected by the rising energy prices during the year.

 

Important events

The required equipment to start volume production has been installed and pilot production of the new product range has been carried out.

 

Key Performance Indicators

KPIs continue to be the driving factor to further improve and optimise the operational performance and achieving SEM Limited’s business targets.

 

                    2023        2022     Change

                    £’000        £’000     %

 

Turnover     19,528     20,787     (6.1%)

 

Gross profit     3,512     3,169     10.8%

Gross margin 18.0%     15.2%     18.4%

 

Administrative expenses     (2,858)     (2,686)     6.4%

 

Operating profit     716     556     28.8%

 

Profit after tax     251     591     (57.5%)

 

Current assets as % of current liabilities    856.6%     884.2%     (3.1%)

 

Average number of employees 131 137 (4.4%)

 

 

Employee Involvement

With the introduction of a structured performance development process for all staff, SEM Limited continued to raise employees’ competencies and ensure adequate succession planning. SEM Limited was recertified as an Investor in People during the year.

 

SEM LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Future developments

The new range of servo motors for our intergroup customers entered the pilot production phase during the year. The development of further frame sizes is progressing.

Outlook and business strategy

The continuing market volatility requires the company to further develop its resilience and maintain a high level of flexibility and responsiveness within the organisation.

SEM Limited continues developing organisational competences to “defend” its mission to be the intergroup manufacturer of high quality and performance servomotors.

By the consequent application of its policy deployment, SEM Limited continues its contribution to the group’s ongoing future success.

 

On behalf of the board

..............................
..............................
T Walther
F Blyth
Director
Director
.........................
.........................
SEM LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

The Directors present their report and financial statements for the year ended 31 December 2023. Reference should also be made to the Strategic report.

Principal activities

The principal activity of the company continued to be that of the design and manufacture of electric synchronous and asynchronous motors and associated equipment.

Results and dividends

The results for the year are set out on page 8.

The directors do not recommend payment of an ordinary dividend.
Directors

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

T Walther
F Blyth
Research and development

The company's research and development team continue to contribute to group led projects on motor performance.

Business relationships

As SEM Limited continues to operate as an intercompany manufacturing company, the sales made are wholly within the group. There is regular communication as to the volume and type of products required for the intercompany business. Good supplier relationships are fostered by the directors and management and it is ensured that suppliers are paid within their terms.

Auditor

The auditor, Friend-James Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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.

Going concern
No material uncertainties that may cast significant doubt about the ability of the company to continue as a going concern have been identified by the directors.
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
T Walther
F Blyth
Director
Director
1 February 2024
SEM 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, the directors are required to:

 

 

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.

SEM LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SEM LIMITED
- 5 -
Opinion

We have audited the financial statements of SEM Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the 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 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 directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

 

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

 

 

 

 

SEM LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SEM LIMITED
- 6 -

Opinions on other matters prescribed by the Companies Act 2006

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

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:

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.

SEM LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SEM LIMITED
- 7 -

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:

The objectives of our audit, in relation to fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with the directors.

We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant are those that relate to the financial reporting framework (FRS 102 and the Companies Act 2006), relevant UK tax legislation, health and safety requirements, the Data Protection Act and employment law.

We gained an understanding of how SEM Limited is complying with those frameworks and regulations by making enquiries of the directors and reading the parent company policy manuals. Our audit included testing of material journal entries to ensure that they complied with company policies together with the testing of future financial commitments.

We communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

John Warner FCA
Senior Statutory Auditor
For and on behalf of Friend-James Limited
1 February 2024
Chartered Accountants
Statutory Auditor
4th Floor, Park Gate
161-163 Preston Road
Brighton
East Sussex
BN1 6AF
SEM LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
19,528,350
20,786,521
Cost of sales
(16,016,065)
(17,617,865)
Gross profit
3,512,285
3,168,656
Distribution costs
(28,305)
(22,684)
Administrative expenses
(2,858,289)
(2,685,937)
Other operating income
90,202
95,855
Operating profit
4
715,893
555,890
Interest receivable and similar income
7
183,529
35,562
Profit before taxation
899,422
591,452
Tax on profit
8
(648,378)
-
0
Profit for the financial year
251,044
591,452

The income statement has been prepared on the basis that all operations are continuing operations.

SEM LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
17,571,624
18,043,866
Investments
10
376
376
17,572,000
18,044,242
Current assets
Stocks
11
6,235,921
4,396,476
Debtors
12
11,107,605
8,833,667
Cash at bank and in hand
2,037,001
4,806,235
19,380,527
18,036,378
Creditors: amounts falling due within one year
13
(2,262,434)
(2,039,949)
Net current assets
17,118,093
15,996,429
Total assets less current liabilities
34,690,093
34,040,671
Provisions for liabilities
Deferred tax liability
14
398,378
-
0
(398,378)
-
Net assets
34,291,715
34,040,671
Capital and reserves
Called up share capital
16
38,400,000
38,400,000
Profit and loss reserves
(4,108,285)
(4,359,329)
Total equity
34,291,715
34,040,671

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 1 February 2024 and are signed on its behalf by:
T Walther
F Blyth
Director
Director
Company registration number 00138006 (England and Wales)
SEM LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
38,400,000
(4,950,781)
33,449,219
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
591,452
591,452
Balance at 31 December 2022
38,400,000
(4,359,329)
34,040,671
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
251,044
251,044
Balance at 31 December 2023
38,400,000
(4,108,285)
34,291,715
SEM LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
20
(1,616,848)
(5,590,587)
Investing activities
Purchase of tangible fixed assets
(1,335,915)
(325,937)
Interest received
183,529
35,562
Net cash used in investing activities
(1,152,386)
(290,375)
Net decrease in cash and cash equivalents
(2,769,234)
(5,880,962)
Cash and cash equivalents at beginning of year
4,806,235
10,687,197
Cash and cash equivalents at end of year
2,037,001
4,806,235
SEM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information

SEM Limited is a private company limited by shares incorporated in England and Wales. The registered office is One Hundred House, Brunel Way, Dartford, DA1 5TH.

 

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
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 recognised at the fair value of the consideration received or receivable for goods provided in the normal course of business, and is shown net of VAT and other sales related taxes.

1.4
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:

Freehold land and buildings
Buildings 33 years straight line
Plant, machinery &  fixtures
3 - 10 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.

1.5
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

SEM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.6
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

1.7
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

Cost is calculated using the weighted moving average price method for purchased items and 'standard price' for manufactured items.

A stock provision is applied based on the age and coverage of individual stock lines.

1.8
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.

1.9
Financial assets

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.

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.

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.

 

 

SEM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

1.9
Financial liabilities

Basic financial liabilities 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 receipts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Other financial liabilities

Derivatives at group level, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.10
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.

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.

 

 

 

 

 

 

SEM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.10
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 taxation is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes and the effect of losses.  The deferred tax balance has not been discounted.
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.

1.12
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

 

1.13
Foreign exchange

Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the statement of financial position date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All realised gains and losses, along with unrealised losses, are taken to the statement of comprehensive income.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows:

Stock

A stock provision is applied based on the age and coverage of individual stock lines.

SEM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
Turnover derived from company's principal activity performed wholly in the UK
19,528,350
20,786,521
2023
2022
£
£
Turnover analysed by geographical market
Within Europe
19,522,870
20,777,646
Rest of the world
5,480
8,875
19,528,350
20,786,521
2023
2022
£
£
Other revenue
Interest income
183,529
35,562
Sundry income
90,202
95,855
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
(8,359)
22,959
Research and development costs
58,309
76,938
Fees payable to the company's auditor for the audit of the company's financial statements
23,992
20,000
Depreciation of owned tangible fixed assets
1,804,428
1,965,775
Loss on disposal of tangible fixed assets
3,729
2,873
5
Employees

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

2023
2022
Number
Number
Production
106
114
Administration
25
23
Total
131
137
SEM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
5
Employees
(Continued)
- 17 -

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
4,903,431
4,901,038
Social security costs
525,950
518,916
Pension costs
215,982
202,218
5,645,363
5,622,172
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
227,575
179,693
Company pension contributions to defined contribution schemes
17,043
16,068
244,618
195,761
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest receivable from group companies
183,529
35,562

Investment income includes the following:

Interest on financial assets not measured at fair value through profit or loss
183,529
35,562
SEM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
250,000
-
0
Deferred tax
Origination and reversal of timing differences
398,378
-
0
Total tax charge
648,378
-
0

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
899,422
591,452
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
224,856
112,376
Tax effect of expenses that are not deductible in determining taxable profit
2,905
3,187
Tax effect of income not taxable in determining taxable profit
(6,361)
-
0
Tax effect of utilisation of tax losses not previously recognised
(13,059)
(225,292)
Effect of change in corporation tax rate
30,733
-
0
Permanent capital allowances in excess of depreciation
18,607
119,358
Research and development tax credit
(7,681)
(9,629)
Deferred tax provision
398,378
-
0
Taxation charge for the year
648,378
-
SEM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
9
Tangible fixed assets
Freehold land and buildings
Plant, machinery &  fixtures
Total
£
£
£
Cost
At 1 January 2023
20,157,126
15,705,023
35,862,149
Additions
21,669
1,314,246
1,335,915
Disposals
-
0
(154,835)
(154,835)
At 31 December 2023
20,178,795
16,864,434
37,043,229
Depreciation and impairment
At 1 January 2023
5,748,139
12,070,144
17,818,283
Depreciation charged in the year
710,180
1,094,248
1,804,428
Eliminated in respect of disposals
-
0
(151,106)
(151,106)
At 31 December 2023
6,458,319
13,013,286
19,471,605
Carrying amount
At 31 December 2023
13,720,476
3,851,148
17,571,624
At 31 December 2022
14,408,987
3,634,879
18,043,866

The carrying value of land is:

2023
2022
£
£
Freehold
4,900,000
4,900,000
10
Fixed asset investments
2023
2022
£
£
Unlisted investments
376
376
11
Stocks
2023
2022
£
£
Raw materials and consumables
4,974,570
3,404,877
Work in progress
725,879
561,301
Finished goods and goods for resale
535,472
430,298
6,235,921
4,396,476
SEM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Amounts owed by group undertakings
9,629,684
7,491,468
Other debtors
657,882
437,316
Prepayments and accrued income
820,039
904,883
11,107,605
8,833,667
13
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
1,161,342
1,235,690
Amounts owed to group undertakings
193,240
190,334
Corporation tax
250,000
-
0
Other taxation and social security
238,084
198,440
Other creditors
4,601
1,695
Accruals and deferred income
415,167
413,790
2,262,434
2,039,949
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:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
398,378
-
2023
Movements in the year:
£
Liability at 1 January 2023
-
Charge to profit or loss
398,378
Liability at 31 December 2023
398,378

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.

SEM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
15
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
215,982
202,218

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 of 10p each
384,000,000
384,000,000
38,400,000
38,400,000

Ordinary shares are entitled to vote, receive dividends and distributions under all circumstances.

17
Capital commitments

Amounts contracted for but not provided in the financial statements:

2023
2022
£
£
Acquisition of tangible fixed assets
587,726
695,760
18
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Sales
Sales
Purchases
Purchases
2023
2022
2023
2022
£
£
£
£
Entities with control, joint control or significant influence over the company
19,494,964
20,766,267
1,694,428
1,731,730
19
Ultimate controlling party

The immediate parent company is Westec Holding Company Limited, a company registered in England and Wales, which is ultimately owned by Dr Johannes Heidenhain - Stiftung GmbH, a company registered in Germany.

 

Westec Holding Company Limited, registered office 200 London Road, Burgess Hill, West Sussex RH15 9RD, prepares group financial statements.

 

SEM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
20
Cash absorbed by operations
2023
2022
£
£
Profit for the year after tax
251,044
591,452
Adjustments for:
Taxation charged
648,378
-
0
Investment income
(183,529)
(35,562)
Loss on disposal of tangible fixed assets
3,729
2,873
Depreciation and impairment of tangible fixed assets
1,804,428
1,965,775
Movements in working capital:
Increase in stocks
(1,839,445)
(1,516,469)
Increase in debtors
(2,273,938)
(7,059,618)
(Decrease)/increase in creditors
(27,515)
460,962
Cash absorbed by operations
(1,616,848)
(5,590,587)
21
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
4,806,235
(2,769,234)
2,037,001
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