Company registration number 02349996 (England and Wales)
GYRUS MEDICAL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
GYRUS MEDICAL LIMITED
COMPANY INFORMATION
Directors
Brad Brown
(Appointed 21 April 2023)
David Smith
(Appointed 21 April 2023)
Secretary
Mr Darran Sherwood
Company number
02349996
Registered office
Castleton Court
Fortran Road
Cardiff
United Kingdom
CF3 0LT
Auditor
Azets Audit Services
Charter Court
Phoenix Way Enterprise Park
Swansea
United Kingdom
SA7 9FS
GYRUS MEDICAL LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 6
Independent auditor's report
7 - 9
Profit and loss account
10
Statement of comprehensive income
11
Balance sheet
12
Statement of changes in equity
13
Notes to the financial statements
14 - 26
GYRUS MEDICAL LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the period ended 31 December 2023.
Review of the business and key performance indicators
During the accounting period, the company was acquired by ATL Technology UK Holdings Limited, a company registered in England and Wales with company number 14795385, and in doing so became part of the group headed by ATL Technology, LLC a Delaware limited liability company whose registered office is in Springville Utah.
The company has implemented a change of accounting period in 2023, and has prepared accounts for the nine months to 31st December 2023 to align with the ATL Technology group. The company's key financial indicators for the nine month accounting period were as follows:
Turnover has decreased in the nine month period to £22.415m, which would have been equivalent to c£29.5m on a full year basis, which is an annualised 10.6% reduction in the overall sales level. This was due to the re balancing of inventory held at the distribution centres at key customers. Gross profit margin for the period was relatively consistent at amounted to 38.77% of sales compared to 39.33% for the year ended 31 March 23. Inflationary cost pressures driven by global economic events such as the war in Ukraine and the cost of living crisis have been mitigated against through prices increases with customers, cost control and efficiencies, together with a favourable product mix. The company saw overall post acquisition stability in administrative expenses which were £6.61m for the 9 month period compared to £9.49m for the prior year, with inflationary cost pressures in areas such as contract pricing in the energy market being offset by savings from restructuring activities undertaken. Profitability for the nine month financial period was £0.993m compared to £1.666m for the prior 12 months.
A dividend was made prior to the acquisition by ATL Technology LLC to the previous owners Olympus Group. This amounted to £19.542m and effectively cleared down the cash pooling arrangement that existed in the prior ownership group. As a result net assets reduced from £24.967m to £6.418m.
Future developments
Following acquisition, the company has continued to focus on financial targets and new product developments with both existing customers and new customers as well as ATL group companies. This will secure future success and will continue to carefully assess activities to ensure that the company delivers added value to their customers.
A number of technologically innovative projects are currently under development and the research and development teams will continue to focus on progressing the current development plans that should contribute and support the revenue growth in future years.
The company continues to implement efficiency improvement measures and have identified further improvement measures to ensure that cost improvements are realised.
GYRUS MEDICAL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 2 -
Principal risks and uncertainties
The nature of the business environment in which the company operates is inherently risky. Whilst it is not possible to eliminate all such risks and uncertainties, the company has an established risk management and internal control system in place to manage them.
The directors and management meet regularly to identify the risks that are considered most likely to have an impact on the business and its strategic priorities. If emerging risks are identified, these are incorporated immediately into the risk management process.
The following sets out the principal risks faced by the company and how they are mitigated:
Competition
To achieve the company's strategy the company must maintain its competitive advantage by continuing to be innovative in its research and development activities. If the company does not succeed in keeping its products and manufacturing capabilities at the cutting edge of innovation, then it could start to lose market share in its core markets.
People
The company depends on a flexible, diverse and well-motivated workforce. If the company fails in attracting, developing and retaining skilled people, as well as understanding and embracing the diversity of those people, it will not be able to grow the business as anticipated. The compnay monitors staff retention, pay and conditions against the prevailing market to ensure that the company remains competitive. Succession planning and staff development are managed at all levels in the company, underpinned by a performance review process which is designed to assist in the career development of its staff and to identify potential successors to key roles.
Reputation
The company's ability to win new business and its relationship with customers, supply chain partners, employees and other stakeholders depends in large on the good reputation that it has established and how it is perceived by others. The company's growth targets may not be achieved if its reputation is adversely affected. Steps taken to maintain, protect and enhance the company's reputation include effective leadership, community engagement and striving to operate a safe and sustainable business.
Health and safety
The company's activities are often complex and require the continuous monitoring and management of health, safety and environmental risks. Failure to manage these risks could expose the company to a significant potential liability and to reputational damage. Detailed policies and procedures exist to mitigate such risks and are subject to review and monitoring by the business and external specialists. Compliance is monitored in many ways including audit, leadership involvement and inspections.
Treasury operations and financial instruments
The company’s operations expose it to a variety of financial risks that include credit risks, liquidity risks and exchange rate risk. The company has a formal risk management programme to mitigate the potential adverse effects of such risks may pose, and monitors and takes actions in each of these areas as follows:
Credit risk
The company has implemented policies that require appropriate credit checks on potential customers before sales are made. In addition credit checks will be made annually on customers who are deemed to be a significant credit risk to the company.
Liquidity risk
The company has available resources to fund its operations and planned expansion through available and generated funds. For further detail on liquidity risk see the going concern statement in the directors report.
Exchange rate risk
The company actively monitors exchange rate risk for the company closely given a large percentage of turnover is into Europe and the US. A credit draw down facility was in place during the year with Bank of America USA, as part of their funding agreement with ATL Technology, LLC in minimising foreign exchange exposure.
GYRUS MEDICAL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 3 -
David Smith
Director
14 November 2024
GYRUS MEDICAL LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 4 -
The directors present their annual report and financial statements for the period ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of the design, development and manufacture of specialised medical devices to market worldwide.
Results and dividends
The results for the period are set out on page 10.
Ordinary dividends were paid amounting to £19,542,084. The directors do not recommend payment of a further dividend.
Going concern
During the finanical period, on 21 April 2023, the company was acquired by ATL Technology UK Holdings Limited, a company registered in England and Wales with company number 14795385, and in doing so became part of the group headed by ATL Technology, LLC a Delaware limited liability company whose registered office is in Springville Utah.
The Directors have reviewed the current performance and position of the Company along with the future benefits of the acquisition and forecast future trading. The operations of the Company continue to be profitable and cash generative. The directors have received written confirmation from ATL Technology, LLC, that, following the acquisition, they will not take any actions which might impact the going concern status of the Company during this assessment period. Further, confirmation has also been obtained that if required, ATL Technology, LLC will provide the support required for the company to meet its obligations as they fall due for a period of at least 12 months from the date of approval of these financial statements. The Company's Directors therefore have a reasonable expectation that the Company will be able to continue to operate within its existing facilities for at least this period. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Directors
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
Brad Brown
(Appointed 21 April 2023)
Joe Glover
(Appointed 21 April 2023 and resigned 10 September 2024)
David Edwards
(Resigned 21 April 2023)
Christian Meyer
(Resigned 21 April 2023)
David Smith
(Appointed 21 April 2023)
Research and development
The costs as regards research and development activity are set out in note 5. The company will continue its policy of investments in research and development in order to retain a competitive position in the market.
Future developments
The future developments of the company are set out in the strategic report.
Auditor
The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
GYRUS MEDICAL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 5 -
Statement of directors' responsibilities
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:
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 of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Financial control
The Directors acknowledge responsibility for the company's system of internal financial controls and believe that they are appropriate for the business. The accounting policies have been applied consistently and disclose with reasonable accuracy the financial position of the company.
It is the view of the Directors that the financial statements presented represent a true and fair view of the company.
GYRUS MEDICAL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 6 -
Section 172(1) Statement
The Board of Directors, in line with their duties under section 172(1) of the Companies Act 2016, act in a way they consider, in good faith, would be most likely to promote the long term success of the company for the benefit of its members as a whole. The Board has duty to achieve the Company's purpose of making people's lives heather, safer and more fulfilling. It does this by having regard for the interests of our customers, our people, our relationship with suppliers and shareholders and the impact of our operations on the community in which we operate.
- Consequences of any decision on the long term;
The company is continuing the development of products that addresses long term clinical needs with significant markets.
- Companies employees.
Our people are key to our business and the 5 global values (Honesty, Excellence, Accountability, Respect and Teamwork) are shared among our employees and are reflected in everything that we do Gyrus Medical. Effective communication with all employs is ensured by a variety of such as regular review meetings with the leadership team, monthly Team Brief presentations to all employees and heath and safety committee.
- Business relationship with suppliers, customers and others.
The company holds strong relationships with all business contacts from suppliers to customers. Customers are at the heart of everything that the company does with the Company's purpose of making people’s lives healthier, safer and more fulling at the forefront of the relationship. It is the company's policy that Supplier payments are made in accordance with the terms and conditions agreed with the supplier.
- Community and environment.
We are committed to making a positive contribution to the community within which we operate including reducing our environmental impact and creating employment opportunities. The company also has a dedicated team that run a number of events during the year in support of local charities.
The company’s reputation for high standards of business conduct is at the centre of everything we do. We expect all employees of the company the high standards that we set ourselves. These standards are central to our policies, our working practices and our systems.
On behalf of the board
David Smith
Director
14 November 2024
GYRUS MEDICAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GYRUS MEDICAL LIMITED
- 7 -
Opinion
We have audited the financial statements of Gyrus Medical Limited (the 'company') for the period ended 31 December 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the period 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.
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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
GYRUS MEDICAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GYRUS MEDICAL LIMITED
- 8 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
GYRUS MEDICAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GYRUS MEDICAL LIMITED
- 9 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
Paul Bowden
Senior Statutory Auditor
For and on behalf of Azets Audit Services
14 November 2024
2024-11-14
Chartered Accountants
Statutory Auditor
Charter Court
Phoenix Way Enterprise Park
Swansea
United Kingdom
SA7 9FS
GYRUS MEDICAL LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 10 -
9 months
Year
ended
ended
31 December
31 March
2023
2023
Notes
£000
£000
Turnover
3
22,415
33,033
Cost of sales
(13,725)
(20,038)
Gross profit
8,690
12,995
Administrative expenses
(6,611)
(9,491)
Exceptional item
4
(993)
(2,226)
Operating profit
5
1,086
1,278
Interest receivable and similar income
8
128
230
Interest payable and similar expenses
9
(4)
Profit before taxation
1,214
1,504
Tax on profit
10
(221)
162
Profit for the financial period
993
1,666
The profit and loss account has been prepared on the basis that all operations are continuing operations.
GYRUS MEDICAL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 11 -
9 months
Year
ended
ended
31 December
31 March
2023
2023
£000
£000
Profit for the period
993
1,666
Other comprehensive income
-
-
Total comprehensive income for the period
993
1,666
GYRUS MEDICAL LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 12 -
31 December 2023
31 March 2023
Notes
£000
£000
£000
£000
Fixed assets
Tangible assets
13
2,361
2,363
Current assets
Stocks
14
6,213
6,166
Debtors
15
9,100
21,078
Cash at bank and in hand
1,251
6
16,564
27,250
Creditors: amounts falling due within one year
16
(12,507)
(4,646)
Net current assets
4,057
22,604
Net assets
6,418
24,967
Capital and reserves
Called up share capital
19
1,536
1,536
Share premium account
4,058
4,058
Profit and loss reserves
824
19,373
Total equity
6,418
24,967
The financial statements were approved by the board of directors and authorised for issue on 14 November 2024 and are signed on its behalf by:
David Smith
Director
Company Registration No. 02349996
GYRUS MEDICAL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 13 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£000
£000
£000
£000
Balance at 1 April 2022
1,536
4,058
17,707
23,301
Year ended 31 March 2023:
Profit and total comprehensive income for the year
-
-
1,666
1,666
Balance at 31 March 2023
1,536
4,058
19,373
24,967
Period ended 31 December 2023:
Profit and total comprehensive income for the period
-
-
993
993
Dividends
11
-
-
(19,542)
(19,542)
Balance at 31 December 2023
1,536
4,058
824
6,418
GYRUS MEDICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 14 -
1
Accounting policies
Company information
Gyrus Medical Limited is a private company limited by shares incorporated in England and Wales. The registered office is Castleton Court, Fortran Road, Cardiff, United Kingdom, CF3 0LT.
1.1
Reporting period
The financial statements are for the 9 month period to 31 December 2023. The period has been shortened to align with the year end of the new parent company following the acquisition of the company during the period. The comparative amounts presented in the financial statements (including the related notes) are for the 12 months to 31 March 2023.
1.2
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
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 £000.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 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.
The financial statements of the company are consolidated in the financial statements of its ultimate parent company at 31 December 2023, ATL Technology, LLC. These consolidated financial statements are available from its registered office, ATL Global Headquarters, 1335 W 1650 N Springville, UT 84663.
GYRUS MEDICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.3
Going concern
During the financial period, on 21 April 2023, the company was acquired by ATL Technology UK Holdings Limited, a company registered in England and Wales with company number 14795385, and in doing so became part of the group headed by ATL Technology, LLC a Delaware limited liability company whose registered office is in Springville Utah.true
The Directors have reviewed the current performance and position of the Company along with the future benefits of the acquisition and forecast future trading. The operations of the Company continue to be profitable and cash generative. The directors have received written confirmation from ATL Technology, LLC, that, following the acquisition, they will not take any actions which might impact the going concern status of the Company during this assessment period. Further, confirmation has also been obtained that if required, ATL Technology, LLC will provide the support required for the company to meet its obligations as they fall due for a period of at least 12 months from the date of approval of these financial statements. The Company's Directors therefore have a reasonable expectation that the Company will be able to continue to operate within its existing facilities for at least this period. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.4
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.5
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
1.6
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Brand equity
8 Years
1.7
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.
GYRUS MEDICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold improvements
Term of the lease
Plant and equipment
3 to 8 Years
Fixtures and fittings
3 Years
Motor vehicles
3 Years
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.
1.8
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.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.9
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.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.10
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
GYRUS MEDICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.11
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
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.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal 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.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
GYRUS MEDICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.12
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.13
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
GYRUS MEDICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
1.14
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
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.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.16
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
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 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.
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.
Accruals
Provision is made for costs that have been incurred and obligations which have been entered into, but neither of which have yet been invoiced for. This requires managements best estimate of final costs that have been incurred based on the fulfilment by suppliers of their contractual agreements and based on legislative and contractual requirements. Where settlement for such liabilities will be incurred in future periods, the timing of cash flows and the discount rates used to establish net present value of the obligations require managements judgement.
3
Turnover and other revenue
2023
2023
£000
£000
Turnover analysed by class of business
Specialised medical devices
22,415
33,033
GYRUS MEDICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
3
Turnover and other revenue
(Continued)
- 20 -
2023
2023
£000
£000
Turnover analysed by geographical market
United Kingdom and Rest of Europe
17,335
27,016
North America
2,824
5,395
Rest of World
2,256
622
22,415
33,033
2023
2023
£000
£000
Other revenue
Interest income
128
230
4
Exceptional item
2023
2023
£000
£000
Expenditure
Impairment of intercompany debtor
-
2,226
Restructuring costs
993
-
993
2,226
During the period ended 31 December 2023, the company undertook a restructuring excercise which resulted in £993,000 (31 March 2023: £nil) of redundancy and retention payments being incurred.
During the year ended 31 March 2023 amounts totalling £2,226,000 due to the group of which it formed a part as at that date, were formally written off as unrecoverable in that year.
5
Operating profit
2023
2023
Operating profit for the period is stated after charging/(crediting):
£000
£000
Exchange losses/(gains)
591
(252)
Research and development costs
3,196
5,999
Fees payable to the company's auditor for the audit of the company's financial statements
46
66
Depreciation of owned tangible fixed assets
633
1,018
Impairment of owned tangible fixed assets
529
(Profit)/loss on disposal of tangible fixed assets
-
46
Amortisation of intangible assets
-
58
Profit on disposal of intangible assets
-
(331)
Operating lease charges
669
1,153
GYRUS MEDICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 21 -
6
Employees
The average monthly number of persons (including directors) employed by the company during the period was:
2023
2023
Number
Number
Research and Development
58
70
Production
114
116
General and Administration
15
14
Total
187
200
Their aggregate remuneration comprised:
2023
2023
£000
£000
Wages and salaries
5,826
8,211
Social security costs
645
842
Pension costs
532
739
7,003
9,792
7
Directors' remuneration
2023
2023
£000
£000
Remuneration for qualifying services
236
Company pension contributions to defined contribution schemes
-
15
251
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2023
£000
£000
Remuneration for qualifying services
n/a
236
Company pension contributions to defined contribution schemes
n/a
15
During the period ended 31 December 2023 no directors were remunerated for their services by the company.
GYRUS MEDICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 22 -
8
Interest receivable and similar income
2023
2023
£000
£000
Interest income
Interest on bank deposits
73
Interest receivable from group companies
55
230
Total income
128
230
9
Interest payable and similar expenses
2023
2023
£000
£000
Interest payable to group undertakings
4
10
Taxation
2023
2023
£000
£000
Current tax
UK corporation tax on profits for the current period
270
Adjustments in respect of prior periods
65
(399)
Total current tax
65
(129)
Deferred tax
Origination and reversal of timing differences
90
18
Adjustment in respect of prior periods
66
(51)
Total deferred tax
156
(33)
Total tax charge/(credit)
221
(162)
GYRUS MEDICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
10
Taxation
(Continued)
- 23 -
The actual charge/(credit) for the period can be reconciled to the expected charge for the period based on the profit or loss and the standard rate of tax as follows:
2023
2023
£000
£000
Profit before taxation
1,214
1,504
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
304
286
Tax effect of expenses that are not deductible in determining taxable profit
20
427
Adjustments in respect of prior years
131
(450)
Group relief
(234)
Research and development tax credit
(300)
Fixed asset differences
(58)
Change in tax rate
4
Patent box deduction
(71)
Taxation charge/(credit) for the period
221
(162)
11
Dividends
2023
2023
£000
£000
Final paid
19,542
12
Impairments
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
2023
2023
Notes
£000
£000
In respect of:
Property, plant and equipment
13
529
Recognised in:
Administrative expenses
-
529
£nil (31 March 2003: £529,000) of impairment losses are recognised in administration expenses in the profit and loss account. The impairment relates to assets which were wholly relevant to a project which had been terminated by the Company in that year, and for which there is deemed to not be a recoverable amount.
GYRUS MEDICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 24 -
13
Tangible fixed assets
Leasehold improvements
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£000
£000
£000
£000
£000
Cost
At 1 April 2023
4,236
9,949
7,486
52
21,723
Additions
251
346
34
631
At 31 December 2023
4,487
10,295
7,520
52
22,354
Depreciation and impairment
At 1 April 2023
3,602
8,402
7,304
52
19,360
Depreciation charged in the period
111
465
57
633
At 31 December 2023
3,713
8,867
7,361
52
19,993
Carrying amount
At 31 December 2023
774
1,428
159
2,361
At 31 March 2023
634
1,547
182
2,363
More information on impairment movements in the period is given in note 12.
14
Stocks
2023
2023
£000
£000
Raw materials and consumables
4,847
4,588
Work in progress
365
584
Finished goods and goods for resale
1,001
994
6,213
6,166
15
Debtors
2023
2023
Amounts falling due within one year:
£000
£000
Trade debtors
5,129
4,563
Corporation tax recoverable
47
Amounts owed by group undertakings
2,867
15,381
Other debtors
552
298
Prepayments and accrued income
301
382
8,849
20,671
GYRUS MEDICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
15
Debtors
(Continued)
- 25 -
2023
2023
Amounts falling due after more than one year:
£000
£000
Deferred tax asset (note 17)
251
407
Total debtors
9,100
21,078
The amounts owed by group undertakings at 31 December 2023 of £2,867,000 (31 March 2023: £nil) are due from the immedaite parent company, ATL Technology UK Holdings Ltd, and are unsecured, interest free and have no fixed terms for repayment. The amounts owed at 31 March 2023 were owed to the former group of which the company formed a part and were settled in the year.
16
Creditors: amounts falling due within one year
2023
2023
£000
£000
Trade creditors
1,094
1,330
Amounts owed to group undertakings
7,874
86
Corporation tax
229
Other creditors
2
Accruals and deferred income
3,308
3,230
12,507
4,646
The amounts owed to group undertakings is due to the ultimate parent company, ATL Technology, LLC, and is unsecured, interest free and has no fixed terms for repayment.
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Assets
Assets
2023
2023
Balances:
£000
£000
Accelerated capital allowances
251
407
2023
Movements in the period:
£000
Asset at 1 April 2023
(407)
Charge to profit or loss
156
Asset at 31 December 2023
(251)
GYRUS MEDICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
17
Deferred taxation
(Continued)
- 26 -
The deferred tax asset set out above is expected to reverse after 12 months and relates to the utilisation of tax losses against future expected profits of the same period.
An increase in the UK Corporation Tax rate to 25% for profits arising on or after 1 April 2023 as set out in the Finance Bill 2021 was substantively enacted on 24 May 2021. The calculation of the deferred tax asset as at 31 December 2023 therefore reflects this rate (31 March 2023: 25%).
18
Retirement benefit schemes
2023
2023
Defined contribution schemes
£000
£000
Charge to profit or loss in respect of defined contribution schemes
532
739
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.
19
Share capital
2023
2023
2023
2023
Ordinary share capital
Number
Number
£000
£000
Issued and fully paid
Ordinary shares of £1 each
1,535,517
1,535,517
1,536
1,536
20
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2023
£000
£000
Within one year
308
308
Between two and five years
1,230
1,230
In over five years
304
536
1,842
2,074
21
Ultimate controlling party
During the year, the company was acquired by ATL Technology UK Holdings LImited, a company registered in England and Wales with company number 14795385, who became the immediate parent undertaking. The ultimate controlling party is ATL Technology, LLC, a Delaware limited liability company whose registered office is in Springville Utah.
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