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Registration number: 05441254

Embed Limited

Annual Report and Financial Statements

for the Year Ended 31 December 2023

 

Embed Limited
(Registration number: 05441254)

Contents

Company Information

1

Directors' Report

2 to 3

Statement of Directors' Responsibilities

4

Independent Auditor's Report

5 to 8

Profit and Loss Account

9

Statement of Comprehensive Income

9

Balance Sheet

10

Statement of Changes in Equity

11

Notes to the Financial Statements

12 to 24

 

Embed Limited
(Registration number: 05441254)

Company Information

Directors

I Wilson

D Hoyle

H Weinburger

R D Van Hal

M J Cole

Registered office

Viscount Centre 2
University Of Warwick Science Park
Millburn Hill Road
Coventry
CV4 7HS

Bankers

Bank of America
2 King Edward Street
London
EC1A 1HQ

Auditors

Thompson Jenner LLP
Statutory Auditors
1 Colleton Crescent
Exeter
Devon
EX2 4DG

 

Embed Limited
(Registration number: 05441254)

Directors' Report for the Year Ended 31 December 2023

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

Principal activity

The principal activity of the company is that of software consultancy and supply.

Directors of the company

The directors who held office during the year were as follows:

I Wilson

D Hoyle

H Weinburger

R D Van Hal

M J Cole

Going concern

These financial statements are prepared on the going concern basis. The directors have a reasonable expectation that the company will continue in operational existence for the forseeable future despite the loss for the financial year of £1,633,799 and the balance sheet being in a net liability position at the year end of £1,002,261.

The company is supported by a £1.4M loan provided by Littelfuse Netherlands B.V., the company's indirect parent company. This loan is due for repayment in February 2025, but confirmation has been provided by Littelfuse Netherlands B.V. that they will continue to make available sufficient funds to enable the company to meet its financing requirements and continue to fulfil its other obligations until at least 31 December 2025, hence why the going concern basis is considered appropriate.

Littelfuse acquired Embed for their embedded software capabilities. The Embed team are specialist embedded software engineers with a focus on automotive and off-highway vehicles. The most positive way for Littelfuse to take advantage of the investment is to integrate the Embed team with the rest of Littelfuse so that the embedded software expertise can be brought to bear across many projects.

To this end, since Littelfuse acquired Embed in 2022 the organisation has been undergoing a transformation to integrate it into the larger corporate structure. Throughout 2023 Embed has been heavily investing in IT infrastructure, comprising of equipment, software tools and resources. This will enable the Embed team to work seamlessly with the rest of Littelfuse.

Due to this investment Embed are going to be delivering more Littelfuse projects and helping Littelfuse win more complex projects from their large customer base. Embed is now the centre of excellence for embedded software, safety critical software and cyber-secure embedded software.

Previously Embed have been working with many electric vehicle start-ups. This strategy worked very well over Covid as the start-ups were externally financed and needed to get product to market.

 

Embed Limited
(Registration number: 05441254)

Directors' Report for the Year Ended 31 December 2023

More recently several high-profile start-up electric vehicle manufacturers have gone under. The investor landscape has changed and many of the electric vehicle start-ups cannot access the necessary finance. Both of these have adversely impacted Embed’s revenue. In the FY 2023 customers have left Embed with bad debt of £157k and a gap in the project work.

Looking forward Embed have pivoted to focus on supercars and have won a number of large and exciting projects. These will drive revenue at the back of 2024 and throughout 2025 and onwards.
 

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.

Approved and authorised by the Board on 22 October 2024 and signed on its behalf by:
 

.........................................
D Hoyle
Director

 

Embed Limited
(Registration number: 05441254)

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

select suitable accounting policies and apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable United Kingdom 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 and in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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.

 

Embed Limited
(Registration number: 05441254)

Independent Auditor's Report to the Members of Embed Limited

Qualified opinion

We have audited the financial statements of Embed Limited (the 'company') for the year ended 31 December 2023, which comprise the Profit and Loss Account, Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, and Notes to the Financial Statements, including a summary of 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, except for the possible effects of the matter described in the basis for qualified opinion section of our report, 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 loss 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 qualified opinion on financial statements

We were appointed as auditors of the company on 6 February 2024 and thus did not observe the counting of the physical inventories at 31 December 2023. We were unable to obtain satisfactory audit evidence by alternative means in relation to inventory quantities at 31 December 2023. We were therefore unable to determine whether adjustments might have been necessary in respect of the profit for the year reported in the statement of comprehensive income and in the stock figure included in the balance sheet at the year end.

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 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 qualified opinion.


Other matter
The financial statements of the Company for the period ended 31 December 2022 were audited by another auditor who expressed an unmodified opinion on those statements on 6 October 2023.

 

Embed Limited
(Registration number: 05441254)

Independent Auditor's Report to the Members of Embed Limited

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director's 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 original financial statements were 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.

Opinion on other matter prescribed by the Companies Act 2006

Except for the possible effects of the matter described in the basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of the audit:

the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Directors' Report has been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

Except for the matter described in the basis for qualified opinion section of our report, in the light of our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Directors' Report.

We have nothing to report in respect of the following matters where 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 directors' remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.

 

Embed Limited
(Registration number: 05441254)

Independent Auditor's Report to the Members of Embed Limited

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities [set out on page 4], 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 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:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the sector in which the company operates;

we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment, environmental and health and safety legislation;

we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and

identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

 

Embed Limited
(Registration number: 05441254)

Independent Auditor's Report to the Members of Embed Limited

To address the risk of fraud through management bias and override of controls, we:

performed analytical procedures to identify any unusual or unexpected relationships;

tested journal entries to identify unusual transactions;

assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and

investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

agreeing financial statement disclosures to underlying supporting documentation;

enquiring of management as to actual and potential litigation and claims; and

reviewing correspondence with HMRC, relevant regulators, and the charity’s legal advisors.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: 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.

......................................
Mr Jonathan Westley (Senior Statutory Auditor)
For and on behalf of Thompson Jenner LLP, Statutory Auditor

1 Colleton Crescent
Exeter
Devon
EX2 4DG

31 October 2024

 

Embed Limited
(Registration number: 05441254)

Profit and Loss Account for the Year Ended 31 December 2023

Note

2023
£

2022
£

Turnover

3

3,507,955

3,956,758

Cost of sales

 

(3,082,106)

(2,854,400)

Gross profit

 

425,849

1,102,358

Administrative expenses

 

(2,011,953)

(1,218,943)

Operating loss

4

(1,586,104)

(116,585)

Other interest receivable and similar income

5

3,666

-

Interest payable and similar expenses

6

(85,897)

(3,416)

Loss before tax

 

(1,668,335)

(120,001)

Taxation

10

34,536

(9,412)

Loss for the financial year

 

(1,633,799)

(129,413)

The above results were derived from continuing operations.

The company has no recognised gains or losses for the year other than the results above.

Statement of Comprehensive Income for Year Ended 31 December 2023

2023
£

2022
£

Loss for the year

(1,633,799)

(129,413)

Total comprehensive income for the year

(1,633,799)

(129,413)

 

Embed Limited
(Registration number: 05441254)

Balance Sheet as at 31 December 2023

Note

2023
£

2022
£

Fixed assets

 

Tangible assets

12

121,723

126,433

Current assets

 

Stocks

13

147,481

31,658

Debtors

14

1,040,975

1,323,707

Cash at bank and in hand

 

133,517

89,908

 

1,321,973

1,445,273

Creditors: Amounts falling due within one year

15

(1,045,907)

(908,591)

Net current assets

 

276,066

536,682

Total assets less current liabilities

 

397,789

663,115

Creditors: Amounts falling due after more than one year

15

(1,400,050)

-

Provisions for liabilities

16

-

(31,577)

Net (liabilities)/assets

 

(1,002,261)

631,538

Capital and reserves

 

Called up share capital

18

459

459

Share premium reserve

4,165

4,165

Capital contribution reserve

473,635

473,635

Profit and loss account

(1,480,520)

153,279

Total equity

 

(1,002,261)

631,538

Approved and authorised by the Board on 22 October 2024 and signed on its behalf by:
 

.........................................
D Hoyle
Director

 

Embed Limited
(Registration number: 05441254)

Statement of Changes in Equity for the Year Ended 31 December 2023

Share capital
£

Share premium
£

Capital contribution reserve
£

Retained earnings
£

Total
£

At 1 January 2023

459

4,165

473,635

153,279

631,538

Loss for the year

-

-

-

(1,633,799)

(1,633,799)

At 31 December 2023

459

4,165

473,635

(1,480,520)

(1,002,261)

Share capital
£

Share premium
£

Capital contribution reserve
£

Retained earnings
£

Total
£

At 11 April 2022

450

-

-

282,692

283,142

Loss for the year

-

-

-

(129,413)

(129,413)

New share capital subscribed

9

4,165

-

-

4,174

Contribution received

-

-

473,635

-

473,635

At 31 December 2022

459

4,165

473,635

153,279

631,538

 

Embed Limited
(Registration number: 05441254)

Notes to the Financial Statements for the Year Ended 31 December 2023

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
Viscount Centre 2
University Of Warwick Science Park
Millburn Hill Road
Coventry
CV4 7HS

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

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 £.

Summary of disclosure exemptions

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 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: Interest income/expense and net gains/losses for financial instruments not measured at fair value; 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.

 

Embed Limited
(Registration number: 05441254)

Notes to the Financial Statements for the Year Ended 31 December 2023

Name of parent of group

These financial statements are consolidated in the financial statements of Littelfuse Inc.

The financial statements of Littelfuse Inc may be obtained from its website www.littelfuse.com.

Disclosure of long or short period

The prior reporting period for the entity had been reduced to 8 months and 20 days in order to bring the reporting period in line with the group reporting date. Comparative amounts presented in the financial statements, including the related notes, are not entirely comparable for this reason.

Going concern

These financial statements are prepared on the going concern basis. The directors have a reasonable expectation that the company will continue in operational existence for the forseeable future despite the loss for the financial year of £1,633,799 and the balance sheet being in a net liability position at the year end of £1,002,261.

The company is supported by a £1.4M loan provided by Littelfuse Netherlands B.V., the company's indirect parent company. This loan is due for repayment in February 2025, but confirmation has been provided by Littelfuse Netherlands B.V. that they will continue to make available sufficient funds to enable the company to meet its financing requirements and continue to fulfil its other obligations until at least 31 December 2025, hence why the going concern basis is considered appropriate.

Littelfuse acquired Embed for their embedded software capabilities. The Embed team are specialist embedded software engineers with a focus on automotive and off-highway vehicles. The most positive way for Littelfuse to take advantage of the investment is to integrate the Embed team with the rest of Littelfuse so that the embedded software expertise can be brought to bear across many projects.

To this end, since Littelfuse acquired Embed in 2022 the organisation has been undergoing a transformation to integrate it into the larger corporate structure. Throughout 2023 Embed has been heavily investing in IT infrastructure, comprising of equipment, software tools and resources. This will enable the Embed team to work seamlessly with the rest of Littelfuse.

Due to this investment Embed are going to be delivering more Littelfuse projects and helping Littelfuse win more complex projects from their large customer base. Embed is now the centre of excellence for embedded software, safety critical software and cyber-secure embedded software.

Previously Embed have been working with many electric vehicle start-ups. This strategy worked very well over Covid as the start-ups were externally financed and needed to get product to market.

More recently several high-profile start-up electric vehicle manufacturers have gone under. The investor landscape has changed and many of the electric vehicle start-ups cannot access the necessary finance. Both of these have adversely impacted Embed’s revenue. In the FY 2023 customers have left Embed with bad debt of £157k and a gap in the project work.

Looking forward Embed have pivoted to focus on supercars and have won a number of large and exciting projects. These will drive revenue at the back of 2024 and throughout 2025 and onwards.

 

Embed Limited
(Registration number: 05441254)

Notes to the Financial Statements for the Year Ended 31 December 2023

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. There we no key sources of estimation uncertainty to note.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

Foreign currency transactions and balances

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.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the company. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

 

Embed Limited
(Registration number: 05441254)

Notes to the Financial Statements for the Year Ended 31 December 2023

Tangible 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). 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.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Leasehold land and buildings

Straight line over the life of the lease

Fixtures, fittings & equipment

7 years straight line

Plant and machinery

3 or 7 years straight line

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

 

Embed Limited
(Registration number: 05441254)

Notes to the Financial Statements for the Year Ended 31 December 2023

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

3

Turnover

The analysis of the company's Turnover for the year by market is as follows:

2023
£

2022
£

UK

2,541,371

2,933,759

Europe

560,132

11,195

Rest of world

406,452

1,011,804

3,507,955

3,956,758

 

Embed Limited
(Registration number: 05441254)

Notes to the Financial Statements for the Year Ended 31 December 2023

4

Operating loss

Arrived at after charging/(crediting)

2023
£

2022
£

Depreciation expense

33,369

23,025

Foreign exchange losses/(gains)

19,067

(46,070)

Operating lease expense - property

52,864

35,288

Operating lease expense - other

934

-

Loss on disposal of property, plant and equipment

46,166

-

5

Other interest receivable and similar income

2023
£

2022
£

Interest income on bank deposits

32

-

Other finance income

3,634

-

3,666

-

6

Interest payable and similar expenses

2023
£

2022
£

Interest on bank overdrafts and borrowings

18

3,416

Interest expense on other finance liabilities

85,879

-

85,897

3,416

7

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2023
£

2022
£

Wages and salaries

2,784,272

1,694,236

Social security costs

293,728

186,236

Pension costs, defined contribution scheme

274,456

90,401

3,352,456

1,970,873

 

Embed Limited
(Registration number: 05441254)

Notes to the Financial Statements for the Year Ended 31 December 2023

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

2023
No.

2022
No.

Engineers

32

30

Administration

11

10

Sales

3

2

46

42

8

Directors' remuneration

The directors' remuneration for the year was as follows:

2023
£

2022
£

Remuneration

325,447

176,787

9

Auditors' remuneration

2023
£

2022
£

Audit of the financial statements

10,500

10,500


 

10

Taxation

Tax charged/(credited) in the profit and loss account

2023
£

2022
£

Current taxation

UK corporation tax adjustment to prior periods

(2,959)

-

Deferred taxation

Arising from origination and reversal of timing differences

(31,577)

9,412

Tax (receipt)/expense in the income statement

(34,536)

9,412

 

Embed Limited
(Registration number: 05441254)

Notes to the Financial Statements for the Year Ended 31 December 2023

The tax on profit before tax for the year is higher than the standard rate of corporation tax in the UK (2022 - higher than the standard rate of corporation tax in the UK) of 25% (2022 - 19%).

The differences are reconciled below:

2023
£

2022
£

Loss before tax

(1,668,335)

(120,001)

Corporation tax at standard rate

(417,084)

(22,800)

Effect of expense not deductible in determining taxable profit (tax loss)

20,826

3,560

Tax (decrease)/increase from effect of capital allowances and depreciation

(31,577)

9,412

Tax increase from effect of unrelieved tax losses carried forward

393,299

19,240

Total tax (credit)/charge

(34,536)

9,412

Deferred tax

There are £1,622,254 of unused tax losses (2022 - £52,726) for which no deferred tax asset is recognised in the balance sheet.

 

Embed Limited
(Registration number: 05441254)

Notes to the Financial Statements for the Year Ended 31 December 2023

11

Intangible assets

Goodwill
 £

Total
£

Cost or valuation

At 1 January 2023

5,000

5,000

At 31 December 2023

5,000

5,000

Amortisation

At 1 January 2023

5,000

5,000

At 31 December 2023

5,000

5,000

Carrying amount

At 31 December 2023

-

-

At 31 December 2022

-

-

12

Tangible assets

Land and buildings
£

Furniture, fittings and equipment
 £

Plant and machinery
£

Total
£

Cost or valuation

At 1 January 2023

154,992

74,623

272,238

501,853

Additions

-

5,042

69,783

74,825

Disposals

(118,357)

-

(70,073)

(188,430)

At 31 December 2023

36,635

79,665

271,948

388,248

Depreciation

At 1 January 2023

123,844

65,004

186,572

375,420

Charge for the year

8,014

1,640

23,715

33,369

Eliminated on disposal

(118,357)

-

(23,907)

(142,264)

At 31 December 2023

13,501

66,644

186,380

266,525

Carrying amount

At 31 December 2023

23,134

13,021

85,568

121,723

At 31 December 2022

31,148

9,619

85,666

126,433

Included within the net book value of land and buildings above is £23,134 (2022 - £31,148) in respect of short leasehold land and buildings.
 

 

Embed Limited
(Registration number: 05441254)

Notes to the Financial Statements for the Year Ended 31 December 2023

13

Stocks

2023
£

2022
£

Finished goods and goods for resale

170,120

31,658

Stock provision

(22,639)

-

147,481

31,658

14

Debtors

Note

2023
£

2022
£

Trade debtors

 

245,665

438,415

Amounts owed by related parties

345,672

128,674

Other debtors

 

3,817

-

Prepayments and accrued income

 

409,311

689,880

Corporation tax asset

10

36,510

66,738

Total current trade and other debtors

 

1,040,975

1,323,707

15

Creditors

Note

2023
£

2022
£

Due within one year

 

Trade creditors

 

211,951

379,059

Amounts due to related parties

259,118

34,085

Social security and other taxes

 

72,139

102,622

Outstanding defined contribution pension costs

 

20,986

31,277

Other creditors

 

10,657

48,258

Accruals and deferred income

 

471,056

313,290

 

1,045,907

908,591

Due after one year

 

Loans and borrowings

19

1,400,050

-

16

Provisions for liabilities

Deferred tax
£

Total
£

At 1 January 2023

31,577

31,577

Increase (decrease) in existing provisions

(31,577)

(31,577)

At 31 December 2023

-

-

 

Embed Limited
(Registration number: 05441254)

Notes to the Financial Statements for the Year Ended 31 December 2023

17

Pension and other schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £274,456 (2022 - £90,401).

Contributions totalling £20,986 (2022 - £31,277) were payable to the scheme at the end of the year and are included in creditors.

18

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

A Ordinary shares of £0.01 each

45,000

450

45,000

450

C Ordinary shares of £0.01 each

888

9

888

9

 

45,888

459

45,888

459

The A shares have full voting rights but the C shares have no voting rights. Both classes of shares have dividend and capital distribution rights but they do not confer any rights of redemption.

19

Loans and borrowings

2023
£

2022
£

Non-current loans and borrowings

Other borrowings

1,400,050

-

On 21 February 2023 Littelfuse Netherlands B.V. provided the company with a loan facility in the principal amount of GBP 1.0M. The principal amount was extended further on 17 November 2023 to GBP 1.4M. The principal amount, including any accrued interest will be due and payable on the second anniversary. The principal amount bears interest at a rate of 10.073%.

 

Embed Limited
(Registration number: 05441254)

Notes to the Financial Statements for the Year Ended 31 December 2023

20

Obligations under leases and hire purchase contracts

Operating leases

The total of future minimum lease payments is as follows:

2023
£

2022
£

Not later than one year

54,715

54,715

Later than one year and not later than five years

31,920

86,635

86,635

141,350

The amount of non-cancellable operating lease payments recognised as an expense during the year was £52,864 (2022 - £35,288).

21

Share-based payments

The movements in the number of share options during the year were as follows:

2023
Number

2022
Number

Outstanding, start of period

-

1,151

Exercised during the period

-

(888)

Expired during the period

-

(263)

Outstanding, end of period

-

-

Exercisable, end of period

-

-

The movements in the weighted average exercise price of share options during the year were as follows:

2023
£

2022
£

Outstanding, start of period

-

4.70

Exercised during the period

-

4.70

Expired during the period

-

4.70

Exercisable, end of period

-

-

During the period, nil (2022 - 888) share options were exercised and nil (2022 - 263) share options lapsed.

 

Embed Limited
(Registration number: 05441254)

Notes to the Financial Statements for the Year Ended 31 December 2023

22

Parent and ultimate parent undertaking

The company's immediate parent is IXYS UK Westcode Ltd, incorporated in England & Wales. The ultimate parent and controlling party is Littelfuse Inc, a company incorporated in the United States.

Littelfuse Inc is the largest and smallest group for which group financial statements are prepared. These group financial statements are available to the public and may be obtained from www.littelfuse.com.