REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTOR AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
FOR |
ADVANCED INSTRUMENTS LTD. |
REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTOR AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
FOR |
ADVANCED INSTRUMENTS LTD. |
ADVANCED INSTRUMENTS LTD. (REGISTERED NUMBER: 07284911) |
CONTENTS OF THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
Page |
Strategic Report | 1 |
Report of the Director | 3 |
Report of the Independent Auditors | 4 |
Statement of Income and Retained Earnings | 6 |
Balance Sheet | 7 |
Notes to the Financial Statements | 8 |
ADVANCED INSTRUMENTS LTD. (REGISTERED NUMBER: 07284911) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
The director presents her strategic report for the year ended 31 December 2023. |
REVIEW OF BUSINESS |
Advanced Instruments Ltd. ("AI") has continued to manufacture and distribute its instruments to customers in the clinical and bio pharma end markets. |
The company's performance for the year ended 31 December 2023 showed total revenues of £15.4m, a decrease of 5% on the year ended 31 December 2022. The decrease in sales was driven by a reduction in Solentim portfolio revenues in China and other key markets, partly offset by expanded sales and distribution of the Osmometer portfolio. Demand for capital equipment in the bio pharma end market began to slow down in 2022 following very robust buying in 2021. Those soft markets for capital equipment in bio pharma persisted into 2023. |
The company generated losses before interest, taxation, depreciation and amortisation (negative "EBITDA") of £1.5m (2022: £2.8m of positive EBITDA). |
In the view of the director, the company's key accomplishments, against the high-level strategic objectives for its group, have been: |
- | To continue to serve our customers in the important UK clinical and biopharma markets with timely delivery of high-quality products. |
- | To prepare the company for increased investment in research and development. |
Beginning in July of 2022, AI expanded its distribution of the Osmometer portfolio of products of Advanced Instruments LLC (US), (the sole shareholder of Advanced Instruments Holdings Ltd,) to certain European countries/customers in the clinical and biopharma end markets. |
During the year, the company impaired its investment in Advanced Instruments (Shanghai) Technology Co. Ltd by £3.1m. As a result of the impairment of investment in our China subsidiary, the company has reported increased losses in its financial statements. The impairment has been driven by a downturn in the market in China, which has significantly affected the value of this investment, necessitating an adjustment to the carrying amount. Consequently, the company's financial performance has been negatively impacted, reflecting the reduced recoverable amounts of this investment. This adjustment ensures that the financial statements accurately represent the current value of the company's assets and comply with relevant accounting standards. Future projections indicate that, while the performance levels will not return to their previous highs, they are expected to remain stable in the upcoming years. The impairment will be recoverable if market conditions improve, we will continue to monitor the economic landscape moving forward. |
PRINCIPAL RISKS AND UNCERTAINTIES |
Geopolitical events and security of supply |
With the increasing prevalence of supply chain disruptions across the industry, the company has sought to mitigate supply chain risk by increasing both inventory levels and committed purchase orders. |
Product and market risk |
The company is in a very competitive market. It must continue to innovate its products to maintain a leadership position with customers in the cell line development space. |
Regulatory risks |
Due to the nature of the industry in which we operate, the company is exposed to traditional regulatory risks (associated with the ongoing compliance of its business operations and products). Internal quality and regulatory issues are a core commitment of the Board, so suitable skills and experience are brought to bear to ensure that associated risks are managed. |
Economic risks |
Financial risks, which are primarily associated with the collectability of accounts receivable, and recoverability of inventory acquired to support key customers. These risks are appropriately managed through detailed oversight of our expert finance team. |
ADVANCED INSTRUMENTS LTD. (REGISTERED NUMBER: 07284911) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
ANALYSIS OF KEY FINANCIAL PERFORMANCE INDICATORS |
Performance measure | 2023 | 2022 | Movement % | Commentary |
Revenue | £m | 15.4 | 16.1 | (5 | ) | The decrease in revenue was driven by a reduction in sales of the Solentim portfolio instruments, partly offset by increased Osmometer revenues. |
Gross profit | £m | 5.1 | 8.3 | (39 | ) | Gross profit decreased due to the reduction in Solentim portfolio revenues. Additionally, inventory provisions were recorded to address excess and obsolescence risk. |
Gross margin | % | 33 | 51 | (35 | ) | A combination of lower instrument revenues and increasing purchase costs resulting in a reduced gross margin. |
Operating profit | £m | (2.9 | ) | 2.6 | (214 | ) | The reduction in gross profit and the increase in operating expenses, drove the reduction in operating profit. The current year also includes £1.0m of goodwill amortisation (2022: £nil). |
EBITDA | £m | (1.5 | ) | 2.8 | (153 | ) | The reduction in operating profit drove the reduction in EBITDA. |
AREAS DEEMED TO BE OF KEY STRATEGIC IMPORTANCE |
Long-range plans |
We have a long-range plan for the business that includes continued investment in research and development staff to continuously innovate our products (to meet the needs of our customer base) and to continue to expand our distribution capabilities and reach across Europe. |
Employees |
To achieve our long range plans we need to attract and retain a talented workforce. We want to provide a challenging and stimulating workplace to both retain, develop and attract new team members. |
Business relationships |
We are committed to maintain strong relationships with our customers and suppliers. For our customers we seek to understand their unique needs, and to continuously innovate and bring those customers products and services to improve their workflows. Similarly, to serve those customers we need strong relationships with our suppliers to ensure that they are in a position to continue to meet our needs. |
Community and environment |
We are committed to supporting our community and reducing our CO2 emissions through various means. |
FINANCIAL INSTRUMENTS |
The company has an interest-free, unsecured loan from its parent company of £11,972,754. The loan is repayable on demand. As described in note 2 to the financial statements, the director has obtained confirmation from the parent company that it will not require repayment of the loan in the foreseeable future. The director considers the exposure to credit, liquidity and cash flow risk to be limited. |
SIGNED BY THE DIRECTOR: |
ADVANCED INSTRUMENTS LTD. (REGISTERED NUMBER: 07284911) |
REPORT OF THE DIRECTOR |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
The director presents her report with the financial statements of the company for the year ended 31 December 2023. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 December 2023. |
DIRECTORS |
Other changes in directors holding office are as follows: |
DISCLOSURE IN THE STRATEGIC REPORT |
The company has chosen, in accordance with the Companies Act 2006 s414C(11), to set out in the company's strategic report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 to be contained in the directors' report. |
STATEMENT OF DIRECTOR'S RESPONSIBILITIES |
The director is responsible for preparing the Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations. |
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless she is 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 director is 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 director is 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 her to ensure that the financial statements comply with the Companies Act 2006. She is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and she has taken all the steps that she ought to have taken as a director in order to make herself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
SIGNED BY THE DIRECTOR: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
ADVANCED INSTRUMENTS LTD. |
Opinion |
We have audited the financial statements of Advanced Instruments Ltd. (the 'company') for the year ended 31 December 2023 which comprise the Statement of Income and Retained Earnings, Balance Sheet and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its loss for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report. |
Other information |
The director is responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Director, but does not include the financial statements and our Report of the Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Director. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of director's remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
ADVANCED INSTRUMENTS LTD. |
Responsibilities of director |
As explained more fully in the Statement of Director's Responsibilities set out on page three, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so. |
Auditors' responsibilities for the audit of the financial statements |
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
Based on our understanding of the company and industry, we considered the risk of non-compliance with laws and regulations, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls). Audit procedures performed included: |
- | Enquiring of management whether there were instances of non-compliance with laws and regulation or fraud; |
- | Review of legal expenses for evidence of fees relating to non-compliance; |
- | Review of provision estimates to ensure not influenced by management bias; |
- | Review of journal entries, non-sales bank receipts and non-purchase bank payments for unusual accounting entries; and |
- | Cut off procedures to confirm that revenue from goods and services had been recognised as revenue in the correct period. |
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by for example, forgery or intentional misrepresentations, or through collusion. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Statutory Auditor |
15 West Street |
Brighton |
East Sussex |
BN1 2RL |
ADVANCED INSTRUMENTS LTD. (REGISTERED NUMBER: 07284911) |
STATEMENT OF INCOME AND |
RETAINED EARNINGS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
2023 | 2022 |
as restated |
Notes | £ | £ | £ | £ |
TURNOVER | 3 |
Cost of sales |
GROSS PROFIT |
Distribution costs |
Administrative expenses |
8,023,202 | 5,723,089 |
(2,957,184 | ) | 2,552,929 |
Other operating income |
OPERATING (LOSS)/PROFIT | ( |
) |
Interest receivable and similar income |
(2,913,211 | ) | 2,553,784 |
Amounts written off investments | 5 | 3,067,203 | - |
(5,980,414 | ) | 2,553,784 |
Interest payable and similar expenses | 6 |
(LOSS)/PROFIT BEFORE TAXATION | 7 | ( |
) |
Tax on (loss)/profit | 8 | ( |
) |
(LOSS)/PROFIT FOR THE FINANCIAL YEAR | ( |
) |
Retained earnings at beginning of year as previously reported |
11,865,207 |
Prior year adjustment - corrections of material errors |
9 |
(262,440 |
) |
- |
RETAINED EARNINGS AT END OF YEAR |
ADVANCED INSTRUMENTS LTD. (REGISTERED NUMBER: 07284911) |
BALANCE SHEET |
31 DECEMBER 2023 |
2023 | 2022 |
as restated |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 10 |
Tangible assets | 11 |
Investments | 12 |
CURRENT ASSETS |
Stocks | 13 |
Debtors | 14 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 15 |
NET CURRENT LIABILITIES | ( |
) | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
16 |
( |
) |
PROVISIONS FOR LIABILITIES | 18 | ( |
) | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 19 |
Retained earnings | 20 | 11,602,767 |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the director and authorised for issue on |
ADVANCED INSTRUMENTS LTD. (REGISTERED NUMBER: 07284911) |
NOTES TO THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
1. | STATUTORY INFORMATION |
Advanced Instruments Ltd. is a |
Registered number: |
Registered office: |
The presentation currency of the financial statements is the Pound Sterling (£). |
The principal activity of the company is the manufacture and sale of cell line development instruments and associated services. |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Going concern |
The company's balance sheet position of net current liabilities of £9,499,310 represents the impact of the funding terms for the investment made to acquire Advanced (Shanghai) Technology Co., Ltd. The funding for this investment was obtained through the £11,972,754 loan as disclosed in note 15. While the terms of this loan specify it is repayable on demand, a letter of support has been provided by the parent company, confirming repayment of the loan will not be demanded in the near future. |
The director's assessment of going concern takes into account the representation provided in the letter of support in conjunction with their assessment of the Advanced Instruments LLC group's ability to provide such support. Group cash flow forecasts have provided the director with confidence the group will have no need for the loan to be repaid up the chain to LLC in the near future. |
Financial Reporting Standard 102 - reduced disclosure exemptions |
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": |
• | the requirements of Section 7 Statement of Cash Flows; |
• | the requirement of paragraph 3.17(d); |
• | the requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c); |
• | the requirement of paragraph 33.7. |
Preparation of consolidated financial statements |
The financial statements contain information about Advanced Instruments Ltd. as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under Section 400 of the Companies Act 2006 from the requirements to prepare consolidated financial statements as it and its subsidiary undertaking are included by full consolidation in the consolidated financial statements of its parent, Advanced Instruments Holdings Ltd, 5th Floor One New Change, London EC4M 9AF. |
ADVANCED INSTRUMENTS LTD. (REGISTERED NUMBER: 07284911) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
2. | ACCOUNTING POLICIES - continued |
Critical accounting judgements and key sources of estimation uncertainty |
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. |
The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below. |
i. Dilapidation provision |
Provision is made for dilapidations. This requires management’s best estimate of the expenditure that will be incurred based on contractual requirements. The provision has been calculated using market data for properties of a similar nature. |
ii. Investments valuation |
Annually, the company considers whether investments in subsidiaries may be impaired. Where an indication of impairment is identified the estimation of recoverable value requires estimation of the recoverable value of the cash generating unit (CGU). |
This requires estimation of the future cash flows from the CGUs and also selection of appropriate discount rates in order to calculate the net present value of those cash flows. The recoverable amount of the CGUs is a source of significant estimation uncertainty and determining this involved the use of significant assumptions. |
Turnover |
Turnover is measured at the fair value of the consideration received or receivable net of VAT and trade discounts. The policies adopted for the recognition of turnover are as follows: |
Sale of goods |
Turnover from the sale of machines and consumables is recognised when significant risks and rewards of ownership of the goods have transferred to the buyer, the amount of turnover can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the company and the costs incurred or to be incurred in respect of the transaction can be measured reliably. This is usually on dispatch of the goods. |
Rendering of services |
When the outcome of a transaction can be estimated reliably, turnover from service agreements is recognised on a straight line basis over the service agreement. Where the outcome cannot be measured reliably, turnover is recognised only to the extent of the expenses recognised that are recoverable. |
Goodwill |
Goodwill arising on a hive up of trade and assets from a subsidiary is capitalised, classified as an asset on the balance sheet and amortised on a straight line basis over its useful life. The period chosen for writing off goodwill is 5 years. The reason for choosing this period is to reflect the changing drug development patterns of customers. Provision is made for any impairment. |
Intangible assets |
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. |
The estimated useful lives range as follows (pending patents are not amortised): |
Patents and licences | - 5% on cost |
ADVANCED INSTRUMENTS LTD. (REGISTERED NUMBER: 07284911) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
2. | ACCOUNTING POLICIES - continued |
Tangible fixed assets |
Office equipment | - |
Plant and machinery | - |
Fixtures and fittings | - |
Computer equipment | - |
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. |
Investments in subsidiaries |
Investments in subsidiaries are measured at cost less accumulated impairment. |
Stocks |
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Stock is valued on a first in, first out basis. Work in progress and finished goods are valued for direct material only, and do not include labour or attributable overheads. |
At each balance sheet date, stocks are assessed for impairment, If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment is recognised immediately in the profit and loss. |
Financial instruments |
The company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties. |
Short term debtors and creditors are measured at the transaction price. Other financial instruments, including loans, are measured initially at fair value, net of transactions costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Research and development tax credit |
The R&D tax credit is recognised when it is certain that the tax credit in relation to research and development carried out will be received. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
ADVANCED INSTRUMENTS LTD. (REGISTERED NUMBER: 07284911) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
2. | ACCOUNTING POLICIES - continued |
Research and development |
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence are all recognised an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequent amortised on a straight line basis over their useful economic lives. |
Foreign currencies translation |
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
Leases |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
Assets acquired under finance leases are capitalised and depreciated over the shorter of the lease term and the expected useful life of the asset. Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding lease liability using the effective interest method. The related obligations, net of future finance charges, are included in creditors. |
Pensions |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
Provisions |
Provisions are recognised when the company has an obligation at the balance sheet date as a result of a past event, it is probable that an outflow of economic benefits will be required in settlement and the amount can be reliably estimated. |
Impairment |
Assets not measured at fair value are reviewed for any indication that the asset may be impaired at each balance sheet date. If such indication exists, the recoverable amount of the asset, or the asset's cash generating unit, is estimated and compared to the carrying amount. Where the carrying amount exceeds its recoverable amount, an impairment loss is recognised in profit or loss unless the asset is carried at a revalued amount where the impairment loss is a revaluation decrease. |
3. | TURNOVER |
The turnover and loss (2022 - profit) before taxation are attributable to the one principal activity of the company. |
An analysis of turnover by geographical market is given below: |
2023 | 2022 |
as restated |
£ | £ |
United Kingdom |
Europe |
United States of America |
Asia |
Australasia | 32,754 | 122,717 |
ADVANCED INSTRUMENTS LTD. (REGISTERED NUMBER: 07284911) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
3. | TURNOVER - continued |
Turnover is categorised as following: |
2023 | 2022 |
£ | £ |
as restated |
Sale of goods | 13,657,199 | 15,195,670 |
Rendering of services | 1,708,923 | 938,630 |
15,366,122 | 16,134,300 |
4. | EMPLOYEES AND DIRECTORS |
2023 | 2022 |
as restated |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
2023 | 2022 |
as restated |
Production | 44 | 40 |
Distribution | 8 | 7 |
Service | 8 | 5 |
Administration and management | 17 | 17 |
2023 | 2022 |
as restated |
£ | £ |
Directors' remuneration |
Directors' pension contributions to money purchase schemes |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes |
5. | AMOUNTS WRITTEN OFF INVESTMENTS |
2023 | 2022 |
as restated |
£ | £ |
Amounts written off investments | 3,067,203 | - |
The above is the amount written off following the company's impairment review of its investment in a subsidiary. |
ADVANCED INSTRUMENTS LTD. (REGISTERED NUMBER: 07284911) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2023 | 2022 |
as restated |
£ | £ |
Bank loan interest |
Leasing |
7. | (LOSS)/PROFIT BEFORE TAXATION |
The loss (2022 - profit) is stated after charging/(crediting): |
2023 | 2022 |
as restated |
£ | £ |
Other operating leases |
Depreciation - owned assets |
Profit on disposal of fixed assets | ( |
) |
Goodwill amortisation |
Patents and licences amortisation |
Auditors' remuneration |
Foreign exchange differences | ( |
) | ( |
) |
Research and development |
8. | TAXATION |
Analysis of the tax charge/(credit) |
The tax charge/(credit) on the loss for the year was as follows: |
2023 | 2022 |
as restated |
£ | £ |
Current tax: |
Prior period (over)/under provision | - | (557,520 | ) |
Deferred tax | ( |
) |
Tax on (loss)/profit | ( |
) |
UK corporation tax has been charged at 23.50% (2022 - 19%). |
ADVANCED INSTRUMENTS LTD. (REGISTERED NUMBER: 07284911) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
8. | TAXATION - continued |
Reconciliation of total tax charge/(credit) included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
2023 | 2022 |
as restated |
£ | £ |
(Loss)/profit before tax | ( |
) |
(Loss)/profit multiplied by the standard rate of corporation tax in the UK of |
( |
) |
Effects of: |
Expenses not deductible for tax purposes |
Income not taxable for tax purposes | ( |
) |
Utilisation of tax losses | ( |
) |
Adjustments to tax charge in respect of previous periods | ( |
) |
Tax at different rates | 150,324 | 45,278 |
Tax losses carried forward | - | (1,156,687 | ) |
Unrecognised deferred tax asset | 993,887 | - |
Total tax charge/(credit) | 993,887 | (1,610,571 | ) |
An increase in the UK corporation rate from 19% to 25% was effective from 1 April 2023. |
The company did not recognise a deferred tax asset in 2023, and reversed the asset previously recognised, since it is no longer certain that the company will return to generating taxable profits in the foreseeable future. |
9. | PRIOR YEAR ADJUSTMENT |
The financial statements include a prior year adjustment for an omitted management charge of £196,151. The adjustment has increased prior year administrative costs and reduced intercompany debtors by £196,151. |
The financial statements also include a prior year adjustment to recognise the transfer of goodwill from investments on the hive up of the trade and assets of a subsidiary, which occurred in the year ended 31 December 2022.The adjustments has increased goodwill by £4,974,402, decreased investments by £5,040,691, and increased administrative costs by £66,289. |
10. | INTANGIBLE FIXED ASSETS |
Patents |
and |
Goodwill | licences | Trademarks | Totals |
£ | £ | £ | £ |
COST |
At 1 January 2023 |
Additions |
At 31 December 2023 |
AMORTISATION |
At 1 January 2023 |
Amortisation for year |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
ADVANCED INSTRUMENTS LTD. (REGISTERED NUMBER: 07284911) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
10. | INTANGIBLE FIXED ASSETS - continued |
The goodwill opening balance has been restated (see note 9). |
11. | TANGIBLE FIXED ASSETS |
Fixtures |
Office | Plant and | and |
equipment | machinery | fittings |
£ | £ | £ |
COST |
At 1 January 2023 |
Additions |
Disposals | ( |
) | ( |
) | ( |
) |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
Motor | Computer |
vehicles | equipment | Totals |
£ | £ | £ |
COST |
At 1 January 2023 |
Additions |
Disposals | ( |
) |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
Eliminated on disposal | ( |
) |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
ADVANCED INSTRUMENTS LTD. (REGISTERED NUMBER: 07284911) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
12. | FIXED ASSET INVESTMENTS |
Shares in |
group |
undertakings |
£ |
COST |
At 1 January 2023 |
Additions |
Impairments | ( |
) |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
The company's investments at the Balance Sheet date in the share capital of companies include the following: |
Registered office: Room 721, Building 1, No 22-23, Lane 466, Yindu Road, Minhang District, Shanghai, People's Republic of China |
Nature of business: |
% |
Class of shares: | holding |
Registered office: 6th Floor, Riverpoint, Lower Mallow Street, Limerick, V94 WC6A, Ireland |
Nature of business: |
% |
Class of shares: | holding |
Registered office: Solent House, Johnson Road, Fernside Business Park, Wimborne, Dorset BH21 7SE |
Nature of business: |
% |
Class of shares: | holding |
Registered office: c/o Intertrust (Suisse) SA, Zahlerweg 6, 6300 Zug, Switzerland |
Nature of business: |
% |
Class of shares: | holding |
Registered office: Seoul, World Trade Center, 27th, 30th, 33rd Fl., Trade Tower, 511 Young Dong St. (159-1 Samsung-dong), Gangnam-gu, Seoul, South Korea 06164 |
Nature of business: |
% |
Class of shares: | holding |
Advanced Instruments Korea, LLC was incorporated on 25 September 2023. |
The shares in group undertakings opening balance has been restated (see note 9). |
ADVANCED INSTRUMENTS LTD. (REGISTERED NUMBER: 07284911) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
13. | STOCKS |
2023 | 2022 |
as restated |
£ | £ |
Consumables |
Raw materials |
Work-in-progress |
Finished goods |
Stock is stated after provisions for impairment of £550,329 (2022: £275,329). |
14. | DEBTORS |
2023 | 2022 |
as restated |
£ | £ |
Amounts falling due within one year: |
Trade debtors |
Amounts owed by group undertakings |
Other debtors |
Tax |
VAT |
Prepayments and accrued income |
Amounts falling due after more than one year: |
Deferred tax asset | - | 993,887 |
Aggregate amounts |
Deferred tax asset |
2023 | 2022 |
as restated |
£ | £ |
Accelerated capital allowances | ( |
) |
Tax losses carried forward |
The deferred tax asset was reversed in the year since it is no longer certain that the company will return to generating taxable profits in the foreseeable future. |
15. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
as restated |
£ | £ |
Finance leases (see note 17) |
Trade creditors |
Amounts owed to group undertakings |
Social security and other taxes |
VAT | 76,702 | - |
Other creditors |
Accruals and deferred income |
ADVANCED INSTRUMENTS LTD. (REGISTERED NUMBER: 07284911) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
15. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR - continued |
Amounts due to group undertakings includes £11,972,754 (2022: £10,262,648) which is an amount due to the company's parent undertaking and is interest-free, unsecured and repayable on demand. |
16. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
2023 | 2022 |
as restated |
£ | £ |
Finance leases (see note 17) |
17. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Finance leases |
2023 | 2022 |
as restated |
£ | £ |
Net obligations repayable: |
Within one year |
Between one and five years |
The finance leases related to motor vehicles. The net carrying amount of the finance leased vehicles is £62,567 (2022: £nil). |
Non-cancellable | operating leases |
2023 | 2022 |
as restated |
£ | £ |
Within one year |
Between one and five years |
18. | PROVISIONS FOR LIABILITIES |
2023 | 2022 |
as restated |
£ | £ |
Other provisions |
Warranty provision | 23,297 | 1,687 |
Dilapidation provision | 100,000 | 100,000 |
Deferred | Other |
tax | provisions |
£ | £ |
Balance at 1 January 2023 | ( |
) |
Charge to Statement of Comprehensive Income during year |
Balance at 31 December 2023 |
ADVANCED INSTRUMENTS LTD. (REGISTERED NUMBER: 07284911) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
18. | PROVISIONS FOR LIABILITIES - continued |
See note 14 for deferred tax asset. |
Other provisions include £100,000 for dilapidations (2022: £100,000) and £23,297 for warranties (2022: £1,687). |
Dilapidations provision |
As part of the company’s property leasing arrangements there is an obligation to repair damages which are incurred during the life of the lease, such as wear and tear. The cost is charged to profit and loss as the obligation arises. The provision is expected to be utilised in 2024 when the lease terminates. |
Warranty provision |
The company provides warranties for its instruments. The provision is an estimate of the expected costs to be incurred based on historical costs. |
19. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | as restated |
£ | £ |
Ordinary | £0.0001 | 9 | 9 |
The shares have full voting, dividend and capital distribution rights. |
20. | RESERVES |
Retained |
earnings |
£ |
At 1 January 2023 |
Prior year adjustment | ( |
) |
Deficit for the year | ( |
) |
At 31 December 2023 |
21. | PENSION COMMITMENTS |
The company operates a defined contribution pension plan for its employees. The amount recognised as an expense in the period was £155,972 (2022: £139,938). |
22. | ULTIMATE PARENT COMPANY |
Advanced Instruments Ltd is a subsidiary undertaking of Advanced Instruments Holdings Ltd, which is the immediate parent company. It's registered office is 5th Floor One New Change, London EC4M 9AF. |
The ultimate parent company is Investor AB, a company incorporated in Sweden. Its registered office is Arsenalsgatan 8C, 103 32 Stockholm . |
Advanced Instruments Holdings Ltd is the smallest group to consolidate these financial statements. The consolidated financial statements for Advanced Instruments Holdings Ltd are publicly available and can be obtained from www.find-and-update.company-information.service.gov.uk. Investor AB is the largest group to consolidate these financial statements. The consolidated financial statements for Investor AB are publicly available and can be obtained from www.investorab.com. |
23. | CONTINGENT LIABILITIES |
There are fixed and floating charges in place over the company's assets as security for loans. At 31 December 2023, the group debt outstanding, subject to these cross guarantees totalled $234.5 million (2022: £219.5 million). |