Company registration number SC569032 (Scotland)
CLAS-SIC WAFER FAB LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
CLAS-SIC WAFER FAB LIMITED
COMPANY INFORMATION
Directors
Mr J Brookhart
Mr C Johnson
Mr W West
(Appointed 14 July 2023)
Ms J Walls
(Appointed 1 January 2024)
Mr R Pendurthi
(Appointed 26 November 2024)
Company number
SC569032
Registered office
Unit 10 - 12
Avenue Industrial Estate
Lochgelly
KY5 9HQ
Auditor
Thomson Cooper
3 Castle Court
Carnegie Campus
Dunfermline
Fife
KY11 8PB
CLAS-SIC WAFER FAB LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 24
CLAS-SIC WAFER FAB LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2024
- 1 -
The directors present the strategic report for the year ended 30 June 2024.
Review of the business
After completing construction on the UK manufacturing facility late 2019, Clas-SiC Wafer Fab Limited has been engaged in the development of new silicon carbide process modules and process design kits for power MOSFETs and diodes, which due to their energy efficiency enable green energy applications such as electrification of transport and renewable energy.
Due to a very strong and growing global demand, the customer base for the development of new product designs continued to increase during the financial year ended 30 June 2024, with the company expanding its customer base to a wider global presence.
The company continues to have a strong foothold in the technology sector with an expanding technology roadmap secured by investment. The company also offer a Licence, Royalty, and Consulting (LR&C) model to support strategic customers and new entrants into the SiC market, to licence, design, and manufacturing on Clas-SiC’s IP, and provide consulting services to support the entire process of building and completing a SiC fab from scratch.
In June 2024, Clas-SiC saw its first LR&C project moved to shop-floor engagement with the opening of a fab in Asia. This unique agreement commenced in October of 2022 when Clas-SiC licensed design and manufacturing IP to help its customer leapfrog ahead of their competition.
Clas-SiC is currently engaged in a process transfer and qualification at the new fab. New Fab employees have already been trained at Clas-SiC in Lochgelly, Scotland and Clas-SiC teams are currently headed to Asia to work on machine and fab readiness. This customer will get to market two to three years earlier than it would have without the planning, technology, training, and execution support provided by Clas-SiC. Clas-SiC now has a proven track record in helping companies transition from Silicon (Si) to SiC manufacturing.
To expand growth in LR&C, Clas-SiC is in discussion with several large customers who want to establish SiC capabilities around the globe.
Clas-SiC experienced 6.5x growth in 2022-23 as the company established and qualified its PDK platforms for Diode and MOSFET and concentrated on low-rate production, design and prototyping, and licensing with its customers.
Between 2023-24, Clas-SiC held its revenue position, despite the challenges of new entrants into the market, customer price pressure, customers deferring loadings as they qualified their devices, and other market pressures.
Over the last year, the challenging market offered Clas-SiC an opportunity to double down on its strengths, cut costs, and improve quality with a goal of recovering from lost low-rate production revenue. To remain competitive, in a three-pronged approach, Clas-SiC spent the first half of 2024 developing a stronger foundation for future growth. Clas-SiC reprioritised customers to those needing rapid prototyping, proved success in the licensing business, and advanced its technology in numerous ways.
At the front end of the supply chain, we provide efficient rapid prototyping for the proof of concept and the proof of design phases. We also offer Tech customers cost effective, low-rate production so they can engage in the qualification process with their own customers to get their products to market. Tech project revenue and related low-rate production revenue offer Clas-SiC a direct line towards greater profitability.
Tech business will help us grow our capability alongside our customers, ensuring that we maintain our highly competitive industry position and reputation. Looking ahead, Clas-SiC are confident that our strategy, our people, and our quality offerings will propel us into profitability. 2024-25 reflects the potential for revenue growth by maximising our LR&C offerings and growing our high-margin, next generation Tech customer base. The ability to move customers who require high-volume production to our LR&C partner(s) where the cost base is lower and more market competitive is a key differentiator.
Principal risks and uncertainties
Recognising continual advancement of technology, the biggest risk to Clas-SiC is that the next generation of technology is not qualified in time to meet customer needs. To mitigate this, Clas-SiC have secured investment to fund CapEx for next generation technology tooling.
CLAS-SIC WAFER FAB LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 2 -
Future Developments
In October 2024, Clas-SiC signed a significant investment agreement with Archean Chemical Industries Limited (ACIL) for £10m to be invested in capex for technology expansion, along with a £2m loan for operating expenses and capital equipment.
Clas-SiC will leverage this investment to propel it into its next phase of technology innovation and profitability. By adding to its technical capabilities, Clas-SiC will be able to develop and produce the next generation of SiC devices.
To expand growth in LR&C, Clas-SiC is in discussion with several large customers who want to establish SiC capabilities around the globe.
Key performance indicators
A key offering of Clas-SiC to our customers is a fast cycle time and route to market - this is a key KPI. From our knowledge of the SiC sector, Clas-SiC is best in class.
Ms J Walls
Director
24 January 2025
CLAS-SIC WAFER FAB LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2024
- 3 -
The directors present their annual report and financial statements for the year ended 30 June 2024.
Principal activities
The principal activities of the company during the year continued to be in the development of new silicon carbide process modules and process design kits for power MOSFETs and diodes. The company also offer a Licence, Royalty, and Consulting (LR&C) model to support strategic customers and new entrants into the SiC market, to licence, design, and manufacturing on Clas-SiC’s IP, and provide consulting services to support the entire process of building and completing a SiC fab from scratch.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr J Brookhart
Mr C Johnson
Ms R Hyndman
(Resigned 23 September 2024)
Mr A Agarwal
(Resigned 19 August 2024)
Mr W West
(Appointed 14 July 2023)
Ms J Walls
(Appointed 1 January 2024)
Mr R Pendurthi
(Appointed 26 November 2024)
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.
CLAS-SIC WAFER FAB LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 4 -
On behalf of the board
Ms J Walls
Director
24 January 2025
CLAS-SIC WAFER FAB LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CLAS-SIC WAFER FAB LIMITED
- 5 -
Opinion
We have audited the financial statements of Clas-sic Wafer Fab Limited (the 'company') for the year ended 30 June 2024 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 30 June 2024 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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 year 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.
CLAS-SIC WAFER FAB LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CLAS-SIC WAFER FAB LIMITED (CONTINUED)
- 6 -
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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Extent to which the audit was considered capable of detecting irregularities, including fraud
We considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: existence and timing of recognition of income, misstatement of work in progress, posting of unusual journals along with complex transactions and manipulating the Company’s key performance indicators to meet targets. We discussed these risks with management, designed audit procedures to test the timing and existence of revenue, reviewed a sample of contracts focussing on cut off, tested a sample of journals to confirm they were appropriate, read minutes of Board meetings and reviewed areas of judgement for indicators of management bias to address these risks.
We reviewed areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our sector experience through discussion with the officers and other management (as required by the auditing standards). Whilst the company is subject to many laws and regulations, we did not identify any others where the consequence of non-compliance alone could have a material effect on amounts or disclosures in the financial statements.
We reviewed the laws and regulations in areas that directly affect the financial statements including financial and taxation legislation and considered the extent of compliance with those laws and regulations as part of our procedures on the related financial statement items.
With the exception of any known or possible non-compliance with relevant and significant laws and regulations, and as required by the auditing standards, our work in respect of these was limited to enquiry of the officers and management of the company.
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.
CLAS-SIC WAFER FAB LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CLAS-SIC WAFER FAB LIMITED (CONTINUED)
- 7 -
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
These inherent limitations are particularly significant in the case of misstatement resulting from fraud as this may involve sophisticated schemes designed to avoid detection, including deliberate failure to record transactions, collusion or the provision of intentional misrepresentations.
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.
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.
Alan Mitchell (Senior Statutory Auditor)
For and on behalf of Thomson Cooper, Statutory Auditors
Dunfermline
24 January 2025
CLAS-SIC WAFER FAB LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 JUNE 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
9,797,272
10,332,259
Cost of sales
(11,313,619)
(9,235,323)
Gross (loss)/profit
(1,516,347)
1,096,936
Distribution costs
(406,692)
(450,022)
Administrative expenses
(2,556,468)
(2,307,705)
Other operating income
213,342
318,521
Exceptional item
4
(405,797)
Operating loss
5
(4,266,165)
(1,748,067)
Interest receivable and similar income
8
286
137
Interest payable and similar expenses
9
(7,325)
(1,131)
Loss before taxation
(4,273,204)
(1,749,061)
Tax on loss
10
332,506
289,369
Loss for the financial year
(3,940,698)
(1,459,692)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
CLAS-SIC WAFER FAB LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
- 9 -
2024
2023
£
£
Loss for the year
(3,940,698)
(1,459,692)
Other comprehensive income
-
-
Total comprehensive income for the year
(3,940,698)
(1,459,692)
CLAS-SIC WAFER FAB LIMITED
BALANCE SHEET
AS AT 30 JUNE 2024
30 June 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
21,856,141
23,726,064
Current assets
Stocks
13
1,581,039
1,494,246
Debtors
14
4,507,250
3,319,239
Cash at bank and in hand
218,558
798,752
6,306,847
5,612,237
Creditors: amounts falling due within one year
15
(5,661,338)
(2,896,962)
Net current assets
645,509
2,715,275
Total assets less current liabilities
22,501,650
26,441,339
Capital and reserves
Called up share capital
106,223
106,223
Share premium account
48,902,038
48,902,038
Other reserves
1,725
716
Profit and loss reserves
(26,508,336)
(22,567,638)
Total equity
22,501,650
26,441,339
The financial statements were approved by the board of directors and authorised for issue on 24 January 2025 and are signed on its behalf by:
Ms J Walls
Director
Company Registration No. SC569032
CLAS-SIC WAFER FAB LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
- 11 -
Share capital
Share premium account
Share based payment
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 July 2022
105,845
48,902,038
496
(21,107,946)
27,900,433
Year ended 30 June 2023:
Loss and total comprehensive income
-
-
-
(1,459,692)
(1,459,692)
Issue of share capital
378
-
-
378
Transfers
-
-
220
220
Balance at 30 June 2023
106,223
48,902,038
716
(22,567,638)
26,441,339
Year ended 30 June 2024:
Loss and total comprehensive income
-
-
-
(3,940,698)
(3,940,698)
Transfers
-
-
1,009
1,009
Balance at 30 June 2024
106,223
48,902,038
1,725
(26,508,336)
22,501,650
CLAS-SIC WAFER FAB LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024
- 12 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
23
(505,157)
(772,828)
Interest paid
(7,325)
(1,131)
Corporate taxes refunded
289,368
332,474
Net cash outflow from operating activities
(223,114)
(441,485)
Investing activities
Purchase of tangible fixed assets
(353,954)
(313,279)
Interest received
286
137
Net cash used in investing activities
(353,668)
(313,142)
Financing activities
Proceeds from issue of shares
378
Payment of finance leases obligations
(3,412)
(4,093)
Net cash used in financing activities
(3,412)
(3,715)
Net decrease in cash and cash equivalents
(580,194)
(758,342)
Cash and cash equivalents at beginning of year
798,752
1,557,094
Cash and cash equivalents at end of year
218,558
798,752
CLAS-SIC WAFER FAB LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
- 13 -
1
Accounting policies
Company information
Clas-sic Wafer Fab Limited is a private company limited by shares incorporated in Scotland. The registered office is Unit 10 - 12, Avenue Industrial Estate, Lochgelly, KY5 9HQ.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
As detailed in note 22 and the Strategic Report, post year end the company has received investment of £10m and a further £2m loan facility. Based on budgets and projections atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for a period of not less than 12 months. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover relates to the provision of engineering design, feasibility services and fabrication of silicon carbide device wafers and 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.
1.4
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.
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold land and buildings
Straight line over 7 to 20 years
Plant and equipment
Straight line over 15 years
Fixtures and fittings
Straight line over 4 years
Computers and IT equipment
Straight line over 3 years
Assets in the course of construction are not depreciated until the asset is brought into use and transferred to the appropriate category.
CLAS-SIC WAFER FAB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 14 -
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.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
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.
1.8
Cash at bank and in hand
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial 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.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
CLAS-SIC WAFER FAB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 15 -
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.
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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
CLAS-SIC WAFER FAB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 16 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.11
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.
1.12
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.
Where material 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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
CLAS-SIC WAFER FAB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 17 -
1.14
Share-based payments
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black-Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.
Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.
1.15
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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.
1.16
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.17
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
CLAS-SIC WAFER FAB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 18 -
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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Stock valuation
The valuation of stock reflects the amount paid when purchased. For stocks bought in foreign currency, the value in stock represents the sterling equivalent using HMRC exchange rates for the month.
Accrued income
The timing of revenue recognition on orders depends on the stage of completion of contract activity at the balance sheet date. This assessment requires the expected total order revenues and costs be valued on the current progress of the contract.
Deferred income
The deferral of income at the balance sheet date is assessed based on the stage of completion of orders. Where income is received in advance of the production of wafers, the amount attributable to production in the subsequent period is deferred.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Product Sales
9,797,272
10,332,259
2024
2023
£
£
Turnover analysed by geographical market
China and East Asia
4,798,591
4,927,024
Europe
1,211,225
467,290
USA and North America
3,787,456
4,937,945
9,797,272
10,332,259
2024
2023
£
£
Other revenue
Interest income
286
137
Grants received
205,222
318,521
CLAS-SIC WAFER FAB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 19 -
4
Exceptional item
2024
2023
£
£
Expenditure
Supplier payment
-
405,797
A fraudulent transaction was perpetrated against the company last year by a third party resulting in payments totalling £405,797 being made.
5
Operating loss
2024
2023
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange gains
(80)
(5,861)
Research and development costs
640,359
482,123
Government grants
(205,222)
(318,521)
Fees payable to the company's auditor for the audit of the company's financial statements
9,250
8,750
Depreciation of owned tangible fixed assets
2,223,877
2,216,627
Share-based payments
1,009
219
Operating lease charges
8,199
9,028
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
78
59
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
3,305,770
2,826,469
Social security costs
328,378
292,115
Pension costs
124,456
115,436
3,758,604
3,234,020
CLAS-SIC WAFER FAB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 20 -
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
188,138
139,048
Company pension contributions to defined contribution schemes
25,224
8,863
213,362
147,911
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
286
137
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
286
137
9
Interest payable and similar expenses
2024
2023
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
7,325
1,131
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
(332,506)
(289,369)
CLAS-SIC WAFER FAB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
10
Taxation
(Continued)
- 21 -
The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Loss before taxation
(4,273,204)
(1,749,061)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2023: 25.00%)
(1,068,301)
(437,265)
Unutilised tax losses carried forward
1,068,301
437,265
Research and development tax credit
(332,506)
(289,369)
Taxation credit for the year
(332,506)
(289,369)
11
Tangible fixed assets
Leasehold land and buildings
Assets under construction
Plant and equipment
Fixtures and fittings
Computers and IT equipment
Total
£
£
£
£
£
£
Cost
At 1 July 2023
19,738,576
17,741
11,927,923
50,793
46,924
31,781,957
Additions
277,169
76,785
353,954
Transfers
(232,983)
232,983
At 30 June 2024
19,738,576
61,927
12,237,691
50,793
46,924
32,135,911
Depreciation and impairment
At 1 July 2023
5,426,201
2,532,653
50,115
46,924
8,055,893
Depreciation charged in the year
1,415,532
807,667
678
2,223,877
At 30 June 2024
6,841,733
3,340,320
50,793
46,924
10,279,770
Carrying amount
At 30 June 2024
12,896,843
61,927
8,897,371
21,856,141
At 30 June 2023
14,312,375
17,741
9,395,270
678
23,726,064
12
Financial instruments
2024
2023
Carrying amount of financial assets
£
£
Debt instruments measured at amortised cost
3,860,024
1,155,995
Carrying amount of financial liabilities
Measured at amortised cost
5,573,377
2,820,316
CLAS-SIC WAFER FAB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 22 -
13
Stocks
2024
2023
£
£
Raw materials and consumables
1,581,039
1,494,246
14
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
3,840,024
1,135,994
Corporation tax recoverable
332,506
289,368
Other debtors
124,367
294,391
Prepayments and accrued income
210,353
1,599,486
4,507,250
3,319,239
15
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Obligations under finance leases
16
3,412
Trade creditors
825,501
1,112,621
Other taxation and social security
87,961
76,646
Other creditors
9,418
7,911
Accruals and deferred income
4,738,458
1,696,372
5,661,338
2,896,962
There is a fixed charge up to the amount of £20,000, which is held by The Royal Bank of Scotland plc.
There is a bond and floating charge over the assets, which is held by Carl Johnson and CJ&M Holdings, L.P.
16
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
3,412
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 10 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
CLAS-SIC WAFER FAB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 23 -
17
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
124,456
115,436
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.
18
Share-based payment transactions
Number of share options
Weighted average exercise price
2024
2023
2024
2023
Number
Number
£
£
Outstanding at 1 July 2023
230,737
171,010
0.01
0.01
Granted
165,000
144,355
0.01
0.01
Forfeited
(6,586)
(46,728)
0.01
0.01
Exercised
(15,995)
(37,900)
0.01
0.01
Outstanding at 30 June 2024
373,156
230,737
0.01
0.01
Exercisable at 30 June 2024
57,523
23,114
0.01
0.01
The options outstanding at 30 June 2024 had an exercise price of £0.01 and a remaining contractual life of 0.08 years, 1.75 years, 2.92 years, 3.92 years and 4.33 years for 33,117, 22,124, 49,738, 119,172 and 165,000 options respectively.
Liabilities and expenses
During the year, the company recognised total share-based payment expenses of £1,009 (2023 - £219) which related to equity settled share based payment transactions.
19
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:
2024
2023
£
£
Within one year
84,500
84,500
Between two and five years
238,650
323,150
323,150
407,650
CLAS-SIC WAFER FAB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 24 -
20
Capital commitments
Amounts contracted for but not provided in the financial statements:
2024
2023
£
£
Acquisition of tangible fixed assets
60,587
308,853
22
Events since the reporting date
On 26 October 2024, the company issued 925,926 A-1 ordinary shares of £0.01 each to Archean Chemicals (an Indian Stock Exchange listed plc) for a consideration of £10m. Archean Chemicals hold 7.1% of the issued share capital of the company. Along with the purchase of shares, Archean Chemicals have also provided a loan facility of £2m.
23
Cash absorbed by operations
2024
2023
£
£
Loss for the year after tax
(3,940,698)
(1,459,692)
Adjustments for:
Taxation credited
(332,506)
(289,369)
Finance costs
7,325
1,131
Investment income
(286)
(137)
Depreciation and impairment of tangible fixed assets
2,223,877
2,216,627
Equity settled share based payment expense
1,009
219
Movements in working capital:
Increase in stocks
(86,793)
(756,392)
Increase in debtors
(1,144,873)
(2,515,698)
Increase in creditors
2,767,788
2,030,483
Cash absorbed by operations
(505,157)
(772,828)
24
Analysis of changes in net funds
1 July 2023
Cash flows
30 June 2024
£
£
£
Cash at bank and in hand
798,752
(580,194)
218,558
Obligations under finance leases
(3,412)
3,412
-
795,340
(576,782)
218,558
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