REGISTERED NUMBER: |
LINKAM SCIENTIFIC INSTRUMENTS LIMITED |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MAY 2024 |
REGISTERED NUMBER: |
LINKAM SCIENTIFIC INSTRUMENTS LIMITED |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MAY 2024 |
LINKAM SCIENTIFIC INSTRUMENTS LIMITED (REGISTERED NUMBER: 01671841) |
CONTENTS OF THE FINANCIAL STATEMENTS |
for the year ended 31 May 2024 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 5 |
Report of the Independent Auditors | 7 |
Statement of Income and Retained Earnings | 11 |
Balance Sheet | 12 |
Cash Flow Statement | 13 |
Notes to the Cash Flow Statement | 14 |
Notes to the Financial Statements | 15 |
LINKAM SCIENTIFIC INSTRUMENTS LIMITED |
COMPANY INFORMATION |
for the year ended 31 May 2024 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Accountants |
Statutory Auditor |
Ashbourne House |
The Guildway |
Old Portsmouth Road |
Guildford |
Surrey |
GU3 1LR |
LINKAM SCIENTIFIC INSTRUMENTS LIMITED (REGISTERED NUMBER: 01671841) |
STRATEGIC REPORT |
for the year ended 31 May 2024 |
The directors present their strategic report for the year ended 31 May 2024. |
REVIEW OF BUSINESS |
The company's core activity remains the design, manufacture, and trading of scientific instruments, predominantly those used in microscopy. That will stay our focus, and we are currently developing several new products to create future growth. |
Operating profit for this period has risen by 5% which has been achieved by focusing on margin and cost savings, with revenue showing a small drop of 1.9%. |
Our distribution partners started to report a general downturn across the sector in September 2023, that has continued for the rest of the reporting period. Distributors in Asia have pointed to the economic uncertainties in China, in Europe to limited research funding and in the US to the upcoming election. The phasing out of post COVID financial stimulation packages and the cost of military aid have played their part, but in general our key distributors in Europe and the USA have performed better than those in Asia. |
The sales order value was skewed by forward orders placed by several key OEM customers in the previous reporting period. Those orders were called off over an 18 month period, so whilst revenue was generated, new orders have skipped a complete Financial Year, with orders in the period falling by 24%. This is a timing matter and removing those key OEM customers shows a drop in sales of under 10% across all of our other sales channels. |
The level of sales opportunities has remained very encouraging across the period, and our distributors have reported that sales of our products have faired much better than a lot of other companies that they represent. Several are now putting more effort into selling our products, due to difficulties selling "larger ticket" equipment in the current environment. |
The drop in inflation has seen material costs start to stabilise, helping us maintain our margin. The supply of the materials and parts, in particular with semiconductors, has also improved. We feel some of the risks that we were facing with supplies have reduced, and so there should be some scope to look at stock reductions over the next financial year. |
The period has seen our R&D and Production Teams focused on internal efficiencies, meaning that for a similar level of revenue we have not had to replace staff members when they left the company, that the amount of sub-contracted machining work has been halved and warranty issues are at an all time low. This leaves us with a very firm foundation for future growth. |
During the financial year investment has continued in the business, most notably on a new 5-Axis CNC machine for our facility in Holland and IT projects to upgrade our operating system and security solutions. A mark of our optimism going forward. |
We have also invested in the future by updating, and gaining product approvals, for several core products, and with the arrival of a new R&D Director we are well placed for future projects and succession planning. |
Despite distributors across the world reporting difficult trading conditions the board is pleased to report a growth in profit, stable revenue and an explanation for the drop in sales orders. Cash flow remained strong throughout the year and we finish the period on a sound financial position. |
LINKAM SCIENTIFIC INSTRUMENTS LIMITED (REGISTERED NUMBER: 01671841) |
STRATEGIC REPORT |
for the year ended 31 May 2024 |
PRINCIPAL RISKS AND UNCERTAINTIES |
The current market conditions have introduced a high level of uncertainty in the sales projections provided by our distribution partners. Whilst that uncertainty is a concern the recent Chief Economists Outlook report paints a positive economic outlook for the rest of 2024 in South Asia, USA, East Asia, Middle East, Central Asia, and China, with Europe at least showing some growth. That in addition to our push for new products, and a level of orders being placed by the aforementioned OEM customers will, we hope, result in improved sales over the coming financial period. |
The principal risk remains supply chain, in particular the ongoing political tension over Taiwan, and potential for that to impact on the semiconductor market. Investment in new semiconductor fabrication plants in both the USA and Europe should see that risk subside over the next few years. |
We are working closely with some of our OEM partners to be as flexible as possible with our delivery dates, as the downturn is meaning that their cashflows are stretched. We are though making sure any risk to our business is managed to safeguard our cash position. |
We continue to have regular conversations with our Chinese distribution partner over any concerns of "tit for tat" trade issues, with China being an important market for us there is concern that sudden changes to import duties could impact on our sales. |
With this being the first full reporting period with Corporation Tax set at 25%, we watch to see if the new UK Government will further tax the business to fund their plans. |
KEY PERFORMANCE INDICATORS |
The directors considers that the key financial performance indicators are those that communicate the financial performance and strength of the Company as a whole and relate to turnover, gross profit and the net asset position. |
As disclosed within the financial statements, the key reported figures are as follows: |
Year Ended | Year Ended |
31.5.24 | 31.5.23 |
£ | £ |
Turnover | 7,928,184 | 8,080,459 |
Gross profit | 3,903,701 | 3,963,816 |
Net assets | 11,547,787 | 9,551,965 |
FINANCIAL RESULTS |
A summary of the results of the year's trading is given on page 11 of the financial statements. |
LINKAM SCIENTIFIC INSTRUMENTS LIMITED (REGISTERED NUMBER: 01671841) |
STRATEGIC REPORT |
for the year ended 31 May 2024 |
FUTURE DEVELOPMENTS |
Our R&D teams are focused on delivering several new products to market, and our new Sales Manager is looking for distribution partners in emerging markets, or in markets where coverage could be improved. |
We will see investment in new IT infrastructure, and a new CRM system for our Sales team, whilst striving to obtain ISO9001 quality approval and continuing to work on our environmental commitments, this in turn will ease the administration requirements when dealing with larger corporations. |
It is likely going to be a challenging period, but one that does also offer opportunity. |
ON BEHALF OF THE BOARD: |
LINKAM SCIENTIFIC INSTRUMENTS LIMITED (REGISTERED NUMBER: 01671841) |
REPORT OF THE DIRECTORS |
for the year ended 31 May 2024 |
The directors present their report with the financial statements of the company for the year ended 31 May 2024. |
PRINCIPAL ACTIVITY |
The principal activity of the company in the year under review was that of manufacturing and development of scientific instruments. These accounts include the results of the company's branch located in Holland. |
DIVIDENDS |
No dividends were distributed during the year. Dividends of £3.6m were paid in the prior year. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 June 2023 to the date of this report. |
POLITICAL DONATIONS AND EXPENDITURE |
During the year the company made charitable donations of £747 (2023: £204) to various UK charities. |
DISCLOSURE IN THE STRATEGIC REPORT |
As permitted by Paragraph 1A of Schedule 7 to the Large and Medium-size Companies and Groups (Accounts and Reports) Regulations 2008 certain matters which are required to be disclosed in the report of the directors' have been omitted as they are included in the Strategic Report on pages 2 to 4. These matters relate to likely future developments. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors 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 then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
LINKAM SCIENTIFIC INSTRUMENTS LIMITED (REGISTERED NUMBER: 01671841) |
REPORT OF THE DIRECTORS |
for the year ended 31 May 2024 |
AUDITORS |
The auditors, Bessler Hendrie LLP, have indicated their willingness to continue in office. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
LINKAM SCIENTIFIC INSTRUMENTS LIMITED |
Opinion |
We have audited the financial statements of Linkam Scientific Instruments Limited (the 'company') for the year ended 31 May 2024 which comprise the Statement of Income and Retained Earnings, Balance Sheet, Cash Flow Statement and Notes to the Cash Flow Statement, 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 the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 31 May 2024 and of its profit for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' 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 in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors 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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
LINKAM SCIENTIFIC INSTRUMENTS LIMITED |
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 Report of the Directors. |
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. |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page five, 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 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. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
LINKAM SCIENTIFIC INSTRUMENTS LIMITED |
Auditors' 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 a Report of the Auditors 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. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
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, 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 management. In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our approach was as follows: |
- | We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and the sector in which it operates and determined that the significant frameworks, which are directly relevant to specific assertions in the financial statements, are those that relate to the reporting framework (FRS 102 including the Companies Act 2006) and the relevant tax regulations in the UK. This included discussions amongst the members of the audit team and tax specialists. |
- | We understood how the company is complying with those frameworks through enquiry with management. |
- | We assessed the risks related to the control environment and in particular those related to management override of controls given the size of the business. |
Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures involved the following: |
- | Inquire of management regarding their knowledge and actions relating to any non-compliance with laws and regulations that could affect the financial statements. |
- | Reviewing the financial statement disclosures and testing supporting documentation. |
- | Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud. |
- | Reading minutes of meetings of management. |
- | Obtaining and reading correspondence from legal and regulatory bodies including HMRC. |
- | In addressing the risk of fraud through management override of controls, testing the appropriateness of journal adjustments, accounting estimates and judgements made |
- | Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. |
There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
LINKAM SCIENTIFIC INSTRUMENTS LIMITED |
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 a Report of the Auditors 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. |
for and on behalf of |
Chartered Accountants |
Statutory Auditor |
Ashbourne House |
The Guildway |
Old Portsmouth Road |
Guildford |
Surrey |
GU3 1LR |
LINKAM SCIENTIFIC INSTRUMENTS LIMITED (REGISTERED NUMBER: 01671841) |
STATEMENT OF INCOME AND RETAINED EARNINGS |
for the year ended 31 May 2024 |
2024 | 2023 |
Notes | £ | £ |
TURNOVER | 5 |
Cost of sales | ( |
) | ( |
) |
GROSS PROFIT |
Administrative expenses | ( |
) | ( |
) |
OPERATING PROFIT | 8 |
Profit on sale of fixed assets | 10 |
2,445,784 | 3,739,047 |
Interest receivable and similar income | 11 |
2,559,103 | 3,761,771 |
Interest payable and similar expenses | 12 | ( |
) |
PROFIT BEFORE TAXATION |
Tax on profit | 13 | ( |
) | ( |
) |
PROFIT FOR THE FINANCIAL YEAR |
Retained earnings at beginning of year |
Dividends | 14 | ( |
) |
RETAINED EARNINGS AT END OF YEAR |
LINKAM SCIENTIFIC INSTRUMENTS LIMITED (REGISTERED NUMBER: 01671841) |
BALANCE SHEET |
31 May 2024 |
2024 | 2023 |
Notes | £ | £ |
FIXED ASSETS |
Tangible assets | 15 |
CURRENT ASSETS |
Stocks | 16 |
Debtors | 17 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 18 | ( |
) | ( |
) |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
PROVISIONS FOR LIABILITIES | 20 | ( |
) | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 21 |
Retained earnings | 22 |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
LINKAM SCIENTIFIC INSTRUMENTS LIMITED (REGISTERED NUMBER: 01671841) |
CASH FLOW STATEMENT |
for the year ended 31 May 2024 |
2024 | 2023 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 |
Interest paid | ( |
) |
Tax paid | ( |
) | ( |
) |
Net cash from operating activities |
Cash flows from investing activities |
Purchase of tangible fixed assets | ( |
) | ( |
) |
Sale of tangible fixed assets |
Interest received |
Net cash from investing activities | ( |
) |
Cash flows from financing activities |
Amount introduced by directors | 535 | - |
Amount withdrawn by directors | - | (964 | ) |
Equity dividends paid | ( |
) |
Net cash from financing activities | ( |
) |
Increase in cash and cash equivalents |
Cash and cash equivalents at beginning of year |
2 |
2,110,507 |
Cash and cash equivalents at end of year | 2 | 4,846,799 | 2,437,882 |
LINKAM SCIENTIFIC INSTRUMENTS LIMITED (REGISTERED NUMBER: 01671841) |
NOTES TO THE CASH FLOW STATEMENT |
for the year ended 31 May 2024 |
1. | RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
2024 | 2023 |
£ | £ |
Profit before taxation |
Depreciation charges |
Profit on disposal of fixed assets | ( |
) | ( |
) |
Movement in warranty provision | (4,385 | ) | (1,599 | ) |
Finance costs | - | 2,232 |
Finance income | (113,319 | ) | (22,724 | ) |
2,658,377 | 2,544,711 |
Increase in stocks | ( |
) | ( |
) |
Decrease/(increase) in trade and other debtors | ( |
) |
(Decrease)/increase in trade and other creditors | ( |
) |
Cash generated from operations |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 31 May 2024 |
31.5.24 | 1.6.23 |
£ | £ |
Cash and cash equivalents | 4,846,799 | 2,437,882 |
Year ended 31 May 2023 |
31.5.23 | 1.6.22 |
£ | £ |
Cash and cash equivalents | 2,437,882 | 2,110,507 |
3. | ANALYSIS OF CHANGES IN NET FUNDS |
At 1.6.23 | Cash flow | At 31.5.24 |
£ | £ | £ |
Net cash |
Cash at bank and in hand | 2,437,882 | 2,408,917 | 4,846,799 |
2,437,882 | 4,846,799 |
Total | 2,437,882 | 2,408,917 | 4,846,799 |
LINKAM SCIENTIFIC INSTRUMENTS LIMITED (REGISTERED NUMBER: 01671841) |
NOTES TO THE FINANCIAL STATEMENTS |
for the year ended 31 May 2024 |
1. | STATUTORY INFORMATION |
Linkam Scientific Instruments Limited is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
The company's principal place of business is Unit 9 Perrywood Industrial Park, Honeycrock Lane, Salfords, Redhill, Surrey, RH1 5DZ. |
2. | STATEMENT OF COMPLIANCE |
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. |
3. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
The financial statements have been prepared under the historical cost convention. Monetary amounts in these financial statements are rounded to the nearest £. |
Turnover |
Turnover represents net invoiced sales of goods, namely scientific instruments, excluding value added tax. |
Turnover from the sale of goods is recognised when all of the following conditions are satisfied: |
- | the company has transferred to the buyer the significant risks and rewards of ownership of the goods, which is upon dispatch; |
- | the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; |
- | the amount of revenue can be measured reliably; |
- | it is probable that the economic benefits associated with the transaction will flow to the company; and |
- | the costs incurred or to be incurred in respect of the transaction will flow to the company. |
Tangible fixed assets |
Tangible fixed assets are stated at their historic cost price less accumulated depreciation. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for use. The assets residual values, useful lives and depreciation methods are reviewed if there is an indication of significant change since the last reporting date. |
The company has a policy to capitalise purchased assets of over £500. Any expenditure below this value will be expensed to the profit and loss account. |
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under finance lease, over the lease term, whichever is the shorter. |
Land and buildings | - 2% on cost (excluding the cost attributable to land) |
Plant and machinery | - 33% on cost, 20% on cost and 10% on cost |
Fixture and fittings | - 20% on cost |
Motor Vehicles | - 25% on cost |
On disposal, the difference between net proceeds and the carrying amount of the item disposed of is recognised in the profit and loss account. |
LINKAM SCIENTIFIC INSTRUMENTS LIMITED (REGISTERED NUMBER: 01671841) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 May 2024 |
3. | ACCOUNTING POLICIES - continued |
Stocks |
Stocks and work in progress are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. Cost is measured on a first in first out basis. |
Cost includes all direct expenditure and an appropriate proportion of fixed and variable overheads. |
Financial instruments |
Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. |
All financial assets and liabilities are initially measured at transaction price and subsequently measured at amortised cost. The company has no financial assets nor liabilities which are measured at fair value through profit or loss. |
Trade and other debtors are recognised and carried forward at invoiced amounts less provision for any doubtful debts. Bad debts are written off when identified. |
Cash and cash equivalents comprise of cash at bank and in hand, and are included in the balance sheet at cost. |
Short term creditors are measured at the transaction price. Other financial liabilities are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the company's taxable profits and its results as stated in the financial statements. |
Deferred tax is measured at the average tax rates that are expected to apply in the periods in which timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantially enacted by the balance sheet date. Deferred tax is measured on a non-discounted basis. |
Research and development |
Expenditure on research and development is written off in the year in which it is incurred. |
Foreign currencies |
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the average rates of exchange during the year. Exchange differences are taken into account in arriving at the operating result. |
Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
LINKAM SCIENTIFIC INSTRUMENTS LIMITED (REGISTERED NUMBER: 01671841) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 May 2024 |
3. | ACCOUNTING POLICIES - continued |
Leasing commitments |
Rentals payable under operating leases are charged against income on a straight line basis over the lease term, even if the payments are not made on such a basis. Benefits received and receivable as an incentive to sign an operating lease are similarly spread on a straight line basis over the lease term. |
Holiday pay |
The company recognises an accrual for holiday entitlement earned by employees as a result of services rendered in the current period, and which employees are entitled to carry forward and use within the subsequent financial year. The provision is measured at the salary cost payable for the period of absence including employers national insurance costs. |
Provisions for liabilities |
Provisions are recognised in the financial statements for all expected future cash outflows arising in respect of warranty provisions. |
A provision is made for the estimated liability on all products which are the subject of warranty agreements. The amount recognised is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, based on the estimated risks and uncertainties surrounding the obligation. |
4. | SIGNIFICANT JUDGEMENTS AND ESTIMATES |
The preparation of the financial statements requires management to make judgements, estimates and assumptions in the application of accounting policies that affect reported amounts of assets, liabilities and profit and loss. In preparing these financial statements, management have made the following key judgements and estimates which are significant to the financial statements. |
Impairment of fixed assets |
Management assess the impairment of non-current assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. |
Assessment of useful lives of property, plant and equipment |
The estimated useful life of assets reflect management's estimate of the period that the company intends to derive future economic benefit from the use of the company's property, plant and equipment. These are assessed annually by management with reference to the expected level of usage, historical experience and expected level of technological developments that could affect the useful economic lives of these assets. |
5. | TURNOVER |
The turnover and profit before taxation are attributable to the one principal activity of the company. |
An analysis of turnover by geographical market is given below: |
2024 | 2023 |
£ | £ |
United Kingdom |
Europe |
United States of America |
Asia |
Rest of world | 447,533 | 307,907 |
LINKAM SCIENTIFIC INSTRUMENTS LIMITED (REGISTERED NUMBER: 01671841) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 May 2024 |
6. | EMPLOYEES AND DIRECTORS |
2024 | 2023 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
2024 | 2023 |
Production and R&D | 43 | 44 |
Sales and administration | 14 | 13 |
7. | DIRECTORS' EMOLUMENTS |
Year Ended |
Year Ended |
31.5.24 | 31.5.23 |
£ | £ |
Emoluments etc. | 264,063 | 279,407 |
Pension contributions to money purchase schemes | 20,643 | 15,080 |
Information regarding the highest paid director is as follows: |
Year Ended |
Year Ended |
31.5.24 | 31.5.23 |
£ | £ |
Emoluments etc. | 149,462 | 148,420 |
Pension contributions to money purchase schemes | - | - |
The number of directors to whom retirement benefits were accruing was as follows: |
Defined contribution schemes | 2 | 2 |
LINKAM SCIENTIFIC INSTRUMENTS LIMITED (REGISTERED NUMBER: 01671841) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 May 2024 |
8. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
2024 | 2023 |
£ | £ |
Depreciation - owned assets |
(Profit)/loss on disposal of fixed assets | ( |
) |
Foreign exchange differences |
Overseas taxes | 6,313 | 6,843 |
Auditor's remuneration (note 9) |
9. | AUDITORS' REMUNERATION |
Year Ended | Year Ended |
31.5.24 | 31.5.23 |
£ | £ |
Fees payable to the company's auditor for the audit of the company's annual accounts |
23,750 |
22,250 |
Tax compliance services | 7,000 | 6,700 |
Advisory services | 5,900 | 10,400 |
Other non-audit services | 5,788 | 6,075 |
42,438 | 45,425 |
10. | EXCEPTIONAL ITEMS |
2024 | 2023 |
£ | £ |
Profit on sale of fixed assets |
The exceptional items relate to the sale of the three former operating units that ceased to be used once the company had moved into its new premises at Perrywood Industrial Park. |
11. | INTEREST RECEIVABLE AND SIMILAR INCOME |
2024 | 2023 |
£ | £ |
Deposit account interest |
Other interest received |
12. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2024 | 2023 |
£ | £ |
Interest payable |
LINKAM SCIENTIFIC INSTRUMENTS LIMITED (REGISTERED NUMBER: 01671841) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 May 2024 |
13. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
2024 | 2023 |
£ | £ |
Current tax: |
UK corporation tax |
Relating to prior year |
Total current tax |
Deferred tax |
Tax on profit |
UK corporation tax has been charged at 25% (2023 - 20%). |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
2024 | 2023 |
£ | £ |
Profit before tax |
Profit multiplied by the standard rate of corporation tax in the UK of (2023 - |
Effects of: |
Expenses not deductible for tax purposes |
Adjustments to tax charge in respect of previous periods |
Research and development tax credit | ( |
) | (145,200 | ) |
Exceptional items | - | (204,954 | ) |
Capital allowances - super deduction | - | (12,396 | ) |
Double taxation relief | ( |
) | (5,393 | ) |
Change in applicable tax rate | - | 23,392 |
Rounding | 639 |
Total tax charge | 563,281 | 426,535 |
From 1 April 2023 the UK main Corporation Tax rate was 25% (previous rate 19%) with small profits Corporation Tax rate of 19%. This has resulted in a rate of Corporation Tax for the company of 25% for the period ended 31 May 2024. Deferred tax has been recognised at the UK main Corporation Tax rate of 25%. |
During the period commencing 1 June 2024, the net reversal of deferred tax assets and liabilities is expected to increase the corporation tax charge for the year by circa £35,494. This is due to the expected unwinding of deferred tax assets and liabilities in 2024/25 in respect of short term timing differences and capital allowances through depreciation. |
The prior year comparatives have been reclassified in the tax reconciliation in order to provide more relevant information. |
LINKAM SCIENTIFIC INSTRUMENTS LIMITED (REGISTERED NUMBER: 01671841) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 May 2024 |
14. | DIVIDENDS |
2024 | 2023 |
£ | £ |
Ordinary shares of £1 each |
Ordinary B Shares | - |
15. | TANGIBLE FIXED ASSETS |
Fixtures |
Freehold | Plant and | and | Motor |
property | machinery | fittings | vehicles | Totals |
£ | £ | £ | £ | £ |
COST |
At 1 June 2023 |
Additions |
Disposals | ( |
) | ( |
) | ( |
) | ( |
) |
At 31 May 2024 |
DEPRECIATION |
At 1 June 2023 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) | ( |
) | ( |
) |
At 31 May 2024 |
NET BOOK VALUE |
At 31 May 2024 |
At 31 May 2023 |
Included in cost of land and buildings is freehold land of £1,340,000 (2023: £1,340,000) which is not depreciated. |
16. | STOCKS |
2024 | 2023 |
£ | £ |
Raw materials |
Work-in-progress |
Finished goods |
The replacement cost of stock is not considered to be materially different from the carrying amount stated in the accounts. |
Impairment losses of £145,813 (2023: £120,349) were recognised in respect of slow moving and obsolete items in costs of sale during the year. |
LINKAM SCIENTIFIC INSTRUMENTS LIMITED (REGISTERED NUMBER: 01671841) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 May 2024 |
17. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2024 | 2023 |
£ | £ |
Trade debtors |
Other debtors |
VAT |
Prepayments and accrued income |
18. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2024 | 2023 |
£ | £ |
Payments on account |
Trade creditors |
Tax |
Social security and other taxes |
Other creditors |
Directors' current accounts |
Accruals and deferred income |
19. | LEASING AGREEMENTS |
Minimum lease payments under non-cancellable operating leases fall due as follows: |
2024 | 2023 |
£ | £ |
Within one year |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
Lease payments of £561 (2023: £57,333) have been recognised as an expense during the year. |
20. | PROVISIONS FOR LIABILITIES |
2024 | 2023 |
£ | £ |
Deferred tax | 428,374 | 375,300 |
Provisions | 7,471 | 11,856 |
LINKAM SCIENTIFIC INSTRUMENTS LIMITED (REGISTERED NUMBER: 01671841) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 May 2024 |
20. | PROVISIONS FOR LIABILITIES - continued |
Deferred | Warranty |
tax | provision |
£ | £ |
Balance at 1 June 2023 |
Provided during year |
Utilised during year | ( |
) |
Accelerated capital allowances | 53,370 | - |
Short term timing differences | (296 | ) | - |
Balance at 31 May 2024 |
The deferred tax balance at 31 May 2024 is represented by the following accelerated capital allowances and other short term timing differences reversing within one year, recognised at the main Corporation tax rate of 25% (2023: 25%): |
- | Liability relating to accelerated capital allowances of £432,370 (2023: £379,000) |
- | Asset relating to short term timing differences of £3,996 (2023: £3,700) |
Warranty provisions relate to the provision for future costs expected to be incurred on repairing equipment that has been sold and damaged within the warranty period. The provision is expected to be utilised within 12 months of the warranty period. |
21. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2024 | 2023 |
value: | £ | £ |
A Ordinary share capital | £1 | 5,100 | 5,100 |
B Ordinary share capital | £1 | 4,900 | 4,900 |
10,000 | 10,000 |
Each share is entitled to one vote in any circumstances and each share is also entitled pari passu to dividend payments or any other distribution, including a distribution arising on wind up of the company. |
22. | RESERVES |
Retained |
earnings |
£ |
At 1 June 2023 |
Profit for the year |
At 31 May 2024 |
Retained earnings includes all current period and prior period profits and losses which are distributable. |
LINKAM SCIENTIFIC INSTRUMENTS LIMITED (REGISTERED NUMBER: 01671841) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 31 May 2024 |
23. | PENSION COMMITMENTS |
The company makes payments into a pension fund on behalf of employees. The assets of the schemes are held separately from those of the company in independently administered funds. The pension cost charge of £152,086 (2023: £136,332) represents contributions payable by the company to the fund. There were outstanding contributions at the year end of £15,983 (2023: £14,850) included in the balance sheet. |
24. | OTHER FINANCIAL COMMITMENTS |
At the year end the company had outstanding purchase order commitments of circa £585k (2023: £394k) with suppliers, which have been entered in to in order to manage the flow of stock in the months ahead. |
25. | RELATED PARTY DISCLOSURES |
At 31 May 2024, included within other creditors is £1,663 (2023: £1,128) owed to the director by the company. No interest was charged in the year and the balance is repayable on demand. |
During the year, a total of key management personnel compensation of £623,765 (2023: £645,018) was paid. |
26. | ULTIMATE CONTROLLING PARTY |
The ultimate controlling party is |