Company registration number 04294298 (England and Wales)
CXR LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 JUNE 2024
CXR LIMITED
COMPANY INFORMATION
Directors
Mr A Mehra
Mr A Mixer
Mr K Kent
Mr P Diamond
Secretary
Gravitas Company Secretarial Services Limited
Company number
04294298
Registered office
One New Change
London
EC4M 9AF
Auditor
Mercer & Hole LLP
72 London Road
St Albans
Hertfordshire
AL1 1NS
CXR LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Statement of financial position
9
Statement of changes in equity
10
Notes to the financial statements
11 - 21
CXR LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 29 JUNE 2024
- 1 -
The directors present the strategic report for the year ended 29 June 2024.
Business Review
The Directors consider the results for the year to be satisfactory. The company sold and transferred its intangible assets during the year to fellow group subsidiary Rapiscan Systems Ltd. It also transferred its research activities to the fellow group subsidiary Rapiscan Systems Ltd
Sale of Developed Software (Intellectual property)
The developed software was sold by the company to fellow group subsidiary, Rapiscan Systems Ltd, during the year for $16.9m.
Principal risks and uncertainties
The key business risks affecting the company are set out below:
Distribution
The company previously went to market through a licence agreement with another group company, Rapiscan Systems Limited. Rapiscan Systems Limited has an extensive network of distributors; these distributors also provide valuable market knowledge. The company was dependent on Rapiscan Systems Limited's ability to manage its distributors effectively in order for the company's products to be sold worldwide. The licence agreement with Rapiscan Systems Limited was waived in the year.
Financial risk management
From the perspective of the company, the financial risks and uncertainties are integrated with those of the OSI Systems Inc. group to which it belongs and are not managed separately. Accordingly, the principal financial risks and uncertainties of OSI Systems Inc., are discussed on pages 18-32 Part I, Item 1A "Risk Factors" of the 2024 Form 10-K published on 29 August 2024 which does not form part of this report.
Whilst some of the risks do not affect the company directly, the company is dependent on the group as its source of financing, and therefore these risks could have an effect on the company.
The company's operations expose it to a variety of financial risks that include the effects of changes in credit risk and liquidity risk.
Liquidity risk
The group maintains sufficient funds to cover CXR Ltd's operations.
Foreign currency risk
The company has transactions in US dollars. The exchange risk is managed by matching receivables with payables as the bulk of the purchases are also US dollar based. The company's exposure to exchange rate fluctuations is managed as part of OSI Systems Inc. group's overall policy on foreign currency.
Mr K Kent
Director
28 March 2025
CXR LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 29 JUNE 2024
- 2 -
The directors present their annual report and financial statements for the year ended 29 June 2024.
Principal activities
The company was principally engaged in the research and design of multifocus X-Ray sources, adopting real-time tomography. During the year the company ceased engaging in these activities and transferred its intangible fixed assets to a fellow group company.
Results and dividends
The results for the year are set out on page 9.
The company's statement of financial position is set out on page 10.
Going concern
During the year the company transferred it's intangible fixed assets to a fellow group company and ceased operations. Accordingly, the directors have concluded that the company is no longer has a trade and these financial statements have not been prepared on a going concern basis.
Matters covered in the strategic report
A review of the business and future developments is included in the Strategic Report, together with an explanation of the risks the company faces.
Directors
The directors who held office during the year or were directors at the time of the signing of the financial statements were as follows:
Mr A Mehra
Mr A Mixer
Mr K Kent
Mr P Diamond
Qualifying third party indemnity provisions
The company’s Articles of Association provide, subject to the provisions of UK legislation, an indemnity for directors and officers of the company in respect of liabilities they may incur in the discharge of their duties or in the exercise of their powers, including any liabilities relating to the defence of any proceedings brought against them which relate to anything done or omitted, or alleged to have been done or omitted, by them as officers or employees of the company. Appropriate directors’ and officers’ liability insurance cover is in place in respect of all of the company's directors.
Post reporting date events
There are no post balance sheet events to report.
Auditor
The auditor, Mercer & Hole LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
CXR LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 29 JUNE 2024
- 3 -
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr K Kent
Director
28 March 2025
CXR LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 29 JUNE 2024
- 4 -
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; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. 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.
CXR LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF CXR LIMITED
- 5 -
Opinion
We have audited the financial statements of CXR Limited (the 'company') for the year ended 29 June 2024 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 29 June 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
Emphasis of matter - financial statements prepared on a basis other than going concern
In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosure made in note 1.2 to the financial statements. In their assessment of going concern, the directors have concluded that the company no longer has a trade and the financial statements have therefore been prepared on a basis other than a going concern.
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.
CXR LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF CXR 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
Based on our understanding of the company and the industry, we identified that there were no specific laws or regulations that were critical to the operation of the business. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006.
We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements and the financial report (including the risk of override of controls), and determined that the principle risks were related to posting inappropriate entries including journals to understate revenue or overstate expenditure, and management bias in accounting estimates.
Audit procedures performed by the engagement team included:
• discussions with management, including considerations of known or suspected instances of non-compliance with laws and regulations and fraud;
• evaluation of the operating effectiveness of management's controls designed to prevent and detect irregularities;
• challenging assumptions and judgements made by management in its significant accounting estimates;
• identifying and testing journal entries.
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. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
CXR LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF CXR LIMITED (CONTINUED)
- 7 -
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 member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Ross Lane (Senior Statutory Auditor)
For and on behalf of Mercer & Hole LLP, Statutory Auditor
Chartered Accountants
72 London Road
St Albans
Hertfordshire
AL1 1NS
28 March 2025
CXR LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 29 JUNE 2024
- 8 -
2024
2023
Notes
$
$
Revenue
3
-
5,502,319
Administrative expenses
(1,882,136)
(4,804,179)
Other operating income
197,354
340,342
Operating (loss)/profit
4
(1,684,782)
1,038,482
Finance costs
6
(589,472)
(489,791)
Other gains and losses
7
18,596,346
-
Profit on disposal of intangible assets
10
16,902,240
Profit before taxation
33,224,332
548,691
Tax on profit
8
156,562
157,936
Profit for the financial year
33,380,894
706,627
The income statement has been prepared on the basis that all operations are continuing operations.
CXR LIMITED
STATEMENT OF FINANCIAL POSITION
- 9 -
2024
2023
Notes
$
$
$
$
Non-current assets
Intangible assets
9
2,700,215
Investments
11
10,000
10,000
10,000
2,710,215
Current assets
Trade and other receivables
13
917,711
8,544,580
Current liabilities
14
(10,744)
(31,021,040)
Net current assets/(liabilities)
906,967
(22,476,460)
Total assets less current liabilities
916,967
(19,766,245)
Non-current liabilities
15
(12,306,305)
Provisions for liabilities
Deferred tax liability
17
391,377
-
(391,377)
Net assets/(liabilities)
916,967
(32,463,927)
Equity
Called up share capital
18
2,369
2,369
Share premium account
19
2,256,822
2,256,822
Other reserves
(982,423)
(982,423)
Retained earnings
(359,801)
(33,740,695)
Total equity
916,967
(32,463,927)
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 28 March 2025 and are signed on its behalf by:
Mr K Kent
Director
Company registration number 04294298 (England and Wales)
CXR LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 29 JUNE 2024
- 10 -
Share capital
Share premium account
Currency translation reserve
Retained earnings
Total
$
$
$
$
$
Balance at 30 June 2022
2,369
2,256,822
(982,423)
(34,447,322)
(33,170,554)
Year ended 29 June 2023:
Profit and total comprehensive income
-
-
-
706,627
706,627
Balance at 29 June 2023
2,369
2,256,822
(982,423)
(33,740,695)
(32,463,927)
Year ended 29 June 2024:
Profit and total comprehensive income
-
-
-
33,380,894
33,380,894
Balance at 29 June 2024
2,369
2,256,822
(982,423)
(359,801)
916,967
CXR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 JUNE 2024
- 11 -
1
Accounting policies
Company information
CXR Limited is a private company limited by shares incorporated in England and Wales. The registered office is One New Change, London, EC4M 9AF and the principal place of business is X Ray House, 8 Bonehurst Road, Salfords, Surrey, RH1 5GG.
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 US Dollars, 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.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of OSI Systems Inc., the ultimate parent undertaking, incorporated in the USA. These consolidated financial statements are available from its registered office, 12525 Chadron Avenue, Hawthorne, CA 90250, USA.
1.2
Going concern
During the year the company transferred it's intellectual property to a fellow group entity and ceased engaging in research and design activities with the royalty agreement which derived the company's income being waived. The directors have considered the factors discussed in the directors report and have resolved that they do not consider the company to be a going concern. These financial statements have not been prepared on a going concern basis.true
1.3
Revenue
Revenue is recognised at the fair value of the consideration received or receivable from license fee income, 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.
CXR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 JUNE 2024
1
Accounting policies
(Continued)
- 12 -
1.4
Intangible fixed assets other than goodwill
Patents are measured at cost. Amortisation is calculated to write off the cost in equal instalments over their estimated useful lives, which is deemed to be 20 years. External costs relating to product-integrated software development are measured at cost, and capitalised until production activity commences. These capitalised costs are amortised at a flat rate per RTT systems sold. Internally generated research and development expenditure is charged to the income statement when it is incurred.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Software
Method/rate is based on sale of RTT units
Patents & licences
20 years straight line
1.5
Non-current investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
1.6
Impairment of non-current assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
CXR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 JUNE 2024
1
Accounting policies
(Continued)
- 13 -
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
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 statement of financial position 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 trade and other receivables and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
CXR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 JUNE 2024
1
Accounting policies
(Continued)
- 14 -
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 trade and other payables, 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 payables 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
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 income statement 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 income statement, 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.
CXR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 JUNE 2024
1
Accounting policies
(Continued)
- 15 -
1.11
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 non-current assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Government grants
Government grants are recognised on an accrual model basis. The company receives government grants in the form of the Research and Development Expenditure Credit (RDEC). The company does not benefit from any other forms of government assistance.
1.13
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.
2
Judgements and key sources of estimation uncertainty
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) Impairment of intangible assets
The value of intangible assets is dependent on the technological advances and discoveries created by the company being able to provide the solutions to security needs as required by customers and legislation. These circumstances are assessed annually by management, and intangible assets are impaired when necessary to reflect expectations regarding technological changes, future investment and economic conditions in the market.
ii) Impairment of accounts receivable
The company makes an estimate of the recoverable value of trade and other accounts receivable. When assessing impairment of trade and other accounts receivable, management considers factors including the current credit rating, ageing profile of accounts receivable and historical experience.
3
Revenue
2024
2023
$
$
Revenue analysed by class of business
Licence fee receivable
-
5,502,319
2024
2023
$
$
Other revenue
Grants received
197,354
340,342
CXR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 JUNE 2024
3
Revenue
(Continued)
- 16 -
All revenue arises from activities in the UK.
4
Operating (loss)/profit
2024
2023
Operating (loss)/profit for the year is stated after charging/(crediting):
$
$
Research and development costs
-
3,936,990
Government grants
(197,354)
(340,342)
Fees payable to the company's auditor for the audit of the company's financial statements
10,744
14,519
Amortisation of intangible assets
1,871,391
625,371
(Profit)/loss on disposal of intangible assets
-
56,594
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Directors
4
4
Directors are remunerated by other members of the group.
6
Finance costs
2024
2023
$
$
Interest payable to group undertakings
589,472
489,791
7
Other gains and losses
2024
2023
$
$
Amounts waived in respect of loans from group entities
18,596,346
-
8
Taxation
2024
2023
$
$
Current tax
UK corporation tax on profits for the current period
(224,976)
234,585
Adjustments in respect of prior periods
461,340
(35,231)
Group tax relief
(245,123)
Total current tax
236,364
(45,769)
CXR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 JUNE 2024
8
Taxation
2024
2023
$
$
(Continued)
- 17 -
Deferred tax
Origination and reversal of timing differences
(392,926)
(112,167)
Total tax credit
(156,562)
(157,936)
An increase in the UK corporation tax rate from 19% to 25% (effective from 1 April 2023) was substantively enacted on 10 June 2021.The increase in the rate will apply to companies with profits over £250k. Also announced in the Budget on 3 March 2021 was the introduction of small profits rate of 19% to apply to profits under £50k with a tapered rate to apply on profits above this threshold but under £250k. Deferred tax has been provided at 25% as that is the rate that was substantially enacted at the balance sheet date.
The actual credit for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
$
$
Profit before taxation
33,224,332
548,691
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 20.50%)
8,306,083
112,482
Tax effect of income not taxable in determining taxable profit
(4,441,881)
Adjustments in respect of prior years
461,340
(280,354)
Permanent capital allowances in excess of depreciation
(207,206)
Research and development tax credit
(49,338)
Other permanent differences
(4,225,560)
Foreign exchange differences
9,936
Taxation credit for the year
(156,562)
(157,936)
CXR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 JUNE 2024
- 18 -
9
Intangible fixed assets
Software
Patents & licences
Total
$
$
$
Cost
At 30 June 2023
11,108,457
1,807,328
12,915,785
Disposals
(11,108,457)
(1,807,328)
(12,915,785)
At 29 June 2024
Amortisation and impairment
At 30 June 2023
9,237,066
978,504
10,215,570
Amortisation charged for the year
1,871,391
1,871,391
Disposals
(11,108,457)
(978,504)
(12,086,961)
At 29 June 2024
Carrying amount
At 29 June 2024
At 29 June 2023
1,871,391
828,824
2,700,215
All intangible fixed assets were sold to fellow subsidiary, Rapiscan System Limited. Further information on the disposal of intangible fixed assets is given in note 10.
10
Disposal of intangible fixed assets
During the year, all intangible fixed assets held by the company were transferred to fellow subsidiary Rapiscan Systems Limited resulting in a profit on disposal of $16.9m.
11
Fixed asset investments
2024
2023
Notes
$
$
Investments in associates
12
10,000
10,000
12
Associates
Details of the company's associates at 29 June 2024 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
ES Rapiscan Systems Turkmen
Turkmenistan
Ordinary shares
10.00
CXR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 JUNE 2024
- 19 -
13
Trade and other receivables
2024
2023
Amounts falling due within one year:
$
$
Corporation tax recoverable
671,040
550,296
Amounts owed by group undertakings
245,123
7,994,284
916,163
8,544,580
2024
2023
Amounts falling due after more than one year:
$
$
Deferred tax asset (note 17)
1,548
Total debtors
917,711
8,544,580
Amounts owed by group undertakings are unsecured, have no fixed date of repayment, are repayable on demand and are interest free.
14
Current liabilities
2024
2023
$
$
Amounts owed to group undertakings
30,984,399
Accruals and deferred income
10,744
36,641
10,744
31,021,040
Amounts owed to group undertakings are unsecured, have no fixed date of repayment, are repayable on demand and interest free.
15
Non-current liabilities
2024
2023
Notes
$
$
Other borrowings
16
12,306,305
Amounts owed to group undertakings are unsecured, are repayable 10 years from inception date, and are interest bearing at the annual Applicable Federal Rate of the US Inland Revenue Service.
CXR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 JUNE 2024
- 20 -
16
Borrowings
2024
2023
$
$
Loans from group undertakings
12,306,305
Payable after one year
12,306,305
Amounts owed to group undertakings are unsecured, are repayable 10 years from inception date, and are interest bearing at the annual Applicable Federal Rate of the US Inland Revenue Service.
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
Assets
Assets
2024
2023
2024
2023
Balances:
$
$
$
$
Accelerated capital allowances
-
391,377
1,548
-
2024
Movements in the year:
$
Liability at 30 June 2023
391,377
Credit to profit or loss
(392,925)
Asset at 29 June 2024
(1,548)
The deferred tax asset set out above is not expected to reverse within 12 months and relates to accelerated capital allowances.
18
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
$
$
Issued and fully paid
Ordinary shares of £1 each
1,577
1,577
2,369
2,369
19
Share premium account
This account represents the difference between the actual price paid and the nominal value of the shares that have been issued.
CXR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 JUNE 2024
- 21 -
20
Events after the reporting date
There are no reportable post balance sheet events.
21
Related party transactions
The company has taken advantage of the exemption under FRS 102 section 33.1A, as a wholly owned subsidiary of OSI Systems Inc. and has not disclosed details of transactions with other group companies.
22
Ultimate controlling party
CXR Limited is a wholly owned subsidiary of OSI (Holdings) Company Limited, a company registered in England and Wales. OSI (Holdings) Company Limited is a subsidiary undertaking of OSI Systems Inc., a company registered in the State of California USA. The directors consider OSI Systems Inc. to be the controlling ultimate parent company and a copy of this company's accounts can be obtained from 12525 Chadron Avenue, Hawthorne, CA 90250, USA.
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