Company registration number 03342183 (England and Wales)
SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
COMPANY INFORMATION
Directors
O Furuhashi
G Kearney
(Appointed 1 April 2025)
N Mukai
(Appointed 26 June 2023)
D Okumura
(Appointed 1 April 2023)
Company number
03342183
Registered office
Wharfside
Trafford Wharf Road
Manchester
United Kingdom
M17 1GP
Auditor
Deloitte LLP
1 New Street Square
London
United Kingdom
EC4A 3HQ
Bankers
MUFG Bank Limited
Ropemaker Place
25 Ropemaker Street
London
United Kingdom
EC2Y 9AN
Solicitors
Simmons & Simmons LLP
CityPoint
1 Ropemaker Street
London
United Kingdom
EC2Y 9SS
SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
CONTENTS
Page
Directors' report
1 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Income statement
9
Statement of comprehensive income
10
Statement of financial position
11 - 12
Statement of changes in equity
13
Statement of cash flows
14
Notes to the financial statements
15 - 46
SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -

The directors present their annual report and the audited financial statements for the year ended 31 March 2024.

Principal activities

The principal activity of the Company in the year under review was to perform research and development services in core technology, specialising in analytical instrumentation including mass spectrometry, surface analysis and software informatics.

 

Review of business

The Company is a wholly-owned subsidiary of Shimadzu Corporation. A detailed review of the business of the Group headed by Shimadzu Corporation ("the Group") is included in the Group’s annual report and financial statements, which are published on the Group website, www.shimadzu.com.

 

As shown in the Company’s income statement on page 9, the Company’s revenue for the year ended 31 March 2024 was £1,761,063 (2023: £2,258,911) and the loss before tax for the year ended 31 March 2024 was £154,465 (2023: £226,054 profit). In the current year, the Company forecasted around £2.4 million revenues however the final outcome was £1.8 million.

 

This was significant drop as compared to the previous year's revenue which was caused by several issues such as delay of project approval and lack of appropriate human resource for certain projects. Extension of project period was required in numbers of projects this year. The reason behind this extension varies depending on each project, but mainly due to;

 

 

Though adjustments to the plan were required for new projects started in later the year due to the above extension, the projects approved in previous year have steadily brought revenue to the Company throughout the year.

 

The Statement of financial position on pages 11 to 12 of the financial statements shows that the Company’s net assets at 31 March 2024 were £4,320,015 (2023: £4,579,857). The average number of employees in the year was 23 (2023: 24). Dividends of £189,627 were paid during the year (2023: £nil). Cash decreased in 2024 to £1,049,168 (2023: £1,261,822) due to decrease in revenue.

 

Supply activities continued to be re-tendered to drive efficiencies and minimise the impact of macro environment factors such as rising commodity prices.

 

The Company’s main activity is research and development in the core technology of analytical instruments, mainly mass spectrometers and the global market of mass spectrometers is said to be 8 billion USD by 2027. The needs for mass spectrometers, particularly in pharmaceutical/medical industry/clinical field, is likely to be unchanged or even increased as developing a new technology in this area sets us apart from our competitors.

 

The Company respects all the rules and regulations in the communities where it operates. The directors are aware of the industry environmental impact and support the government and suppliers long term goals on factors such as CO2 emissions.

Results and dividends

The results for the year are set out on page 9. The Company has paid a dividend of £189,627 during the year (2023: £nil).

SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

O Furuhashi
S Horiike
(Resigned 1 April 2025)
G Kearney
(Appointed 1 April 2025)
N Mukai
(Appointed 26 June 2023)
D Okumura
(Appointed 1 April 2023)
K Shimazu
(Resigned 26 June 2023)

Going concern

The directors have assessed the Statement of financial position and likely future cash flows at the date of approving these financial statements. The Company has made a loss after tax of £199,965 (2023: profit £270,897) and net assets of £4,320,015 (2023: £4,579,857).

 

Revenue in this Company is derived from research requests from the ultimate parent company, Shimadzu Corporation ('Shimadzu HQ'). Shimadzu HQ consigned the research project to the Company based on their technology development road map which eventually applied to the commercial instruments. To achieve this, individual project has specific targets and scopes which are mutually agreed at the start of the project, and they are monitored regularly through communications and reports. Shimadzu HQ's willingness to support for successful research & development is not the only benefit for the Company but Shimadzu HQ itself, therefore, as long as the Company running projects for Shimadzu HQ, non-payment is highly unlikely. The cash flow is also monitored by Shimadzu HQ monthly.

 

The Company FY2026 Budget was approved by Shimadzu HQ in December 2024. Management has prepared a three year plan till FY28. The FY26 detailed budget was approved by the head office in December 2024. The FY27 plan projects revenue and profit growth from the FY26. We are currently running eleven projects (all Shimadzu projects) and will submit further several projects, other than the aforementioned eleven projects to Shimadzu in FY 2026 and beyond.

 

In term of principal risks and uncertainties, there is a possibility of exchange fluctuation, world economy changes like trading friction between US and China, and the delay or failure of research and development work. Project budget are denominated in GBP, so our exchange fluctuation risk is reduced by Shimadzu HQ. The project is on constant monitoring by management and relevant department in Shimadzu HQ. If there is delay or failure in a project, this will be reported and mutually agreed measures will be taken (e.g. extension of project period). It is impossible to deny the risk of the fluctuation mentioned above, but we believe it does not affect the Company’s assumption of going concern.

 

Moreover, we do not have any significant external liabilities, and we have relatively stable cash for our operating size; £1.0 million as of the end of March 2024 compared to £1.3 million last year. The cash position of the Company post year end as at 30 April 2025 is £1,159,975.

 

Considering all the above aspects, the directors are of the view that the Company will continue as a going concern for a period of at least next twelve months from the date of authorisation of financial statements for issue and, therefore, will meet their liabilities as they fall due within the normal course of the business.

 

Principal risks and uncertainties

The Company mainly transacts with Shimadzu Corporation, providing research and development services. Forecasting the feasibility of future technology, accurate budgeting and time scaling for each project and maintaining high levels of research results are the principal risk areas which contribute to the Company’s performance. The Company seeks to manage these risks by gathering relevant information, project management and investing in highly talented staff.

SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -

Financial risk management objectives and policies

The Company's activities expose it to a number of financial risks including market risk, credit risk and liquidity risk. The Board reviews and agrees policies on a regular basis for managing the risks associated with these assets and liabilities.

 

Market risk

The Company’s activities expose it primarily to the financial risks of changes in interest rates. Interest bearing assets and liabilities are held at fixed rate to ensure certainty of cash flows.

 

Project budgets are prepared in GBP, therefore, the risk of changes in foreign currency exchange rates is minimal.

Credit risk
The Company's principal financial assets are cash and trade and other receivables. The amounts presented in the Statement of financial position are net of allowances for doubtful receivables. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows.
The credit risk on cash balances is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.
Liquidity risk
The Company manages liquidity risk by closely monitoring cash flow performance and forecasting cash flow for future periods. Adequate cash reserves are maintained in order to support the future growth of the business.
There is a liquidity risk with regard to cost overruns for each project mitigated by performance monitoring of ongoing projects to ensure overruns are kept to a minimum.
Qualifying third party indemnity provisions

The Company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.

Post reporting date events

There have been no material post Statement of financial position events to report.

Future developments

The directors are not aware, at the date of this report, of any likely major changes in the Company's principal activities in the next year.

 

Research and development

During the year the Company continues to run research projects according to plan and as its principal activity. Please see note to the financial statements for more details.

Statement of disclosure to auditor

Each director in office at the date of approval of this annual report confirms that:

 

 

This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.

 

Pursuant to Section 487 of the Companies Act 2006, the auditor will be deemed to be re-appointed and Deloitte LLP will there continue in office.

SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -
Small companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption. The Company is exempt from preparing a Strategic Report.

Approved by the Board of Directors and signed on its behalf by:
G Kearney
Director
4 June 2025
SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
- 5 -

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 adopted international accounting standards. The financial statements also comply with the International Financial Reporting Standards (IFRSs) as issued by the IASB. 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, International Accounting Standard 1 requires that directors:

 

 

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.

SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
- 6 -

Report on the audit of the financial statements

 

Opinion

 

In our opinion the financial statements of Shimadzu Research Laboratory (Europe) Ltd. (the 'Company'):

 

We have audited the financial statements which comprise:

 

The financial reporting framework that has been applied in their preparation is applicable law, and United Kingdom adopted international accounting standards and IFRSs Accounting Standards as issued by the IASB.

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 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 Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The 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.

SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
- 7 -
Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

 

In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

 

A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

 

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

 

We considered the nature of the Company’s industry and its control environment, and reviewed the Company’s documentation of their policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of management and the directors about their own identification and assessment of the risks of irregularities, including those that are specific to the Company’s business sector.

 

We obtained an understanding of the legal and regulatory framework that the Company operates in, and

identified the key laws and regulations that:

 

We discussed among the audit engagement team regarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements.

 

As a result of performing the above, we identified the greatest potential for fraud was in relation to revenue recognition and specifically the calculation of work in progress which involves management judgement regarding the stage of completion for each contract which is ongoing at year-end. Our audit procedures included the following (but not limited to):

 

In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments; assessed whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business.

SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
- 8 -

In addition to the above, our procedures to respond to the risks identified included the following:

Report on other legal and regulatory requirements

 

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

 

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 any material misstatements in the directors’ report.

 

Matters on which we are required to report by exception

Under the Companies Act 2006 we are required to report in respect of the following matters if, in our opinion:

 

We have nothing to report in respect of these matters.

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 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.

Fred Hui, FCA (Senior Statutory Auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
4 June 2025
SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
- 9 -
2024
2023
Notes
£
£
Revenue
4
1,761,063
2,258,911
Cost of sales
(1,547,637)
(1,664,402)
Gross profit
213,426
594,509
Other operating income
139,540
136,121
Administrative expenses
(549,769)
(540,455)
Operating (loss)/profit
5
(196,803)
190,175
Investment income
9
44,000
36,000
Finance costs
10
(1,662)
(121)
(Loss)/profit before taxation
(154,465)
226,054
Income tax expense/(income)
11
(45,500)
44,843
(Loss)/profit for the year
(199,965)
270,897
SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 10 -
2024
2023
£
£
(Loss)/profit for the year
(199,965)
270,897
Other comprehensive income:
Items that will not be reclassified to profit or loss
Remeasurement of net defined benefit liability/(assets)
173,000
(424,000)
Deferred tax (charge)/credit
(43,250)
106,000
Total items that will not be reclassified to profit or loss
129,750
(318,000)
Total comprehensive expense for the year
(70,215)
(47,103)

Tax relating to items not reclassified above relates to deferred tax credit on actuarial differences.

 

All amounts relate to continuing operations.

SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
STATEMENT OF FINANCIAL POSITION
AS AT
31 MARCH 2024
31 March 2024
- 11 -
2024
2023
Notes
£
£
Non-current assets
Intangible assets
12
12,872
11,360
Property, plant and equipment
13
1,427,092
1,409,766
Deferred tax asset
20
222,114
454,309
Retirement benefit surplus
24
1,103,000
979,000
2,765,078
2,854,435
Current assets
Trade and other receivables
15
488,513
486,380
Current tax recoverable
17
233,923
180,265
Cash and cash equivalents
16
1,049,168
1,261,822
1,771,604
1,928,467
Current liabilities
Trade and other payables
18
98,669
109,478
Lease liabilities
19
2,402
-
0
101,071
109,478
Net current assets
1,670,533
1,818,989
Total assets less current liabilities
4,435,611
4,673,424
Non-current liabilities
Lease liabilities
19
24,829
-
0
Deferred revenue
21
90,767
93,567
115,596
93,567
Net assets
4,320,015
4,579,857
SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT
31 MARCH 2024
31 March 2024
2024
2023
Notes
£
£
- 12 -
Equity
Called up share capital
22
2,560,000
2,560,000
Retained earnings
1,760,015
2,019,857
Total equity
4,320,015
4,579,857
The financial statements were approved by the board of directors and authorised for issue on 4 June 2025 and are signed on its behalf by:
G Kearney
Director
Company registration number 03342183 (England and Wales)
SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 13 -
Share capital
Retained earnings
Total
£
£
£
Balance at 1 April 2022
2,560,000
2,066,960
4,626,960
Year ended 31 March 2023:
Profit
-
270,897
270,897
Other comprehensive income:
Remeasurement of net defined benefit assets
-
(424,000)
(424,000)
Deferred tax credit
-
106,000
106,000
Total comprehensive expense
-
(47,103)
(47,103)
Balance at 31 March 2023
2,560,000
2,019,857
4,579,857
Year ended 31 March 2024:
Loss
-
(199,965)
(199,965)
Other comprehensive income:
Remeasurement of net defined benefit liability
-
173,000
173,000
Deferred tax charge
-
(43,250)
(43,250)
Total comprehensive expense
-
(70,215)
(70,215)
Transactions with owners:
Dividends
-
(189,627)
(189,627)
Balance at 31 March 2024
2,560,000
1,760,015
4,320,015
SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
- 14 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
26
(29,048)
(22,830)
Income taxes refunded
89,787
129,142
Net cash inflow from operating activities
60,739
106,312
Investing activities
Purchase of intangible assets
12
(7,530)
(3,175)
Purchase of property, plant and equipment
13
(72,549)
(45,753)
Net cash used in investing activities
(80,079)
(48,928)
Financing activities
Payment of lease liabilities principal
(2,025)
(3,166)
Payment of lease liabilities interest
(1,662)
35,880
Dividends paid
(189,627)
-
0
Net cash (used in)/generated from financing activities
(193,314)
32,714
Net (decrease)/increase in cash and cash equivalents
(212,654)
90,098
Cash and cash equivalents at beginning of year
1,261,822
1,171,724
Cash and cash equivalents at end of year
1,049,168
1,261,822
SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 15 -
1
Material accounting policy information
Company information

Shimadzu Research Laboratory (Europe) Ltd. is a private company, limited by shares, incorporated in the UK under the Companies Act 2006 and registered in England and Wales . The address of the registered office is given on Company information page. The nature of the Company’s operations and its principal activities are set out in the Directors' report on page 1.

 

These financial statements are presented in GBP, which is the currency of the primary economic environment in which the Company operates.

1.1
Accounting convention

The financial statements have been prepared in accordance with United Kingdom adopted international accounting standards and with International Financial Reporting Standards as issued by the IASB.

The financial statements have been prepared on the historical cost basis. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of IFRS 2, leasing transactions that are within the scope of IFRS 16, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in IAS 2 or value in use in IAS 36.

 

The material accounting policies applied are listed below:

1.2
Going concern

The directors have assessed the Statement of financial position and likely future cash flows at the date of approving these financial statements. The Company has made a loss of trueafter tax of £199,965 (2023: profit £270,897) and net assets of £4,320,015 (2023: £4,579,857).

 

Revenue in this Company is derived from research requests from the ultimate parent company, Shimadzu Corporation ('Shimadzu HQ'). Shimadzu HQ consigned the research project to the Company based on their technology development road map which eventually applied to the commercial instruments. To achieve this, individual project has specific targets and scopes which are mutually agreed at the start of the project, and they are monitored regularly through communications and reports. Shimadzu HQ's willingness to support for successful research & development is not the only benefit for the Company but Shimadzu HQ itself, therefore, as long as the Company running projects for Shimadzu HQ, non-payment is highly unlikely. The cash flow is also monitored by Shimadzu HQ monthly.

 

The Company FY2026 Budget was approved by Shimadzu HQ in December 2024. We are currently running eleven projects (all Shimadzu projects) and will submit further several projects, other than the aforementioned eleven projects to Shimadzu in FY 2026. Total contracted sales post year end as at 30 April 2025 is £3.1 million and the projected gross profit is £184,973.

SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Material accounting policy information
(Continued)
- 16 -

In term of principal risks and uncertainties, there is a possibility of exchange fluctuation, world economy changes like trading friction between US and China, and the delay or failure of research and development work. Project budget are denominated in GBP, so our exchange fluctuation risk is reduced by Shimadzu HQ. The project is on constant monitoring by management and relevant department in Shimadzu HQ. If there is delay or failure in a project, this will be reported and mutually agree measures to be taken (e.g. extension of project period). It is impossible to deny the risk of the fluctuation mentioned above, but we believe it does not affect the Company’s assumption of going concern.

 

Moreover, we do not have any significant external liabilities, and we have relatively stable cash for our operating size; £1.0 million as of the end of March 2024 compared to £1.3 million last year. The cash position of the Company post year end as at 30 April 2025 is £1,159,975.

 

Considering all the above aspects, in year FY2024, the directors are of the view that the Company will continue as a going concern for a period of at least next twelve months from the date of authorisation of financial statements for issue and, therefore, will meet their liabilities as they fall due within the normal course of the business.

1.3
Revenue

The Company perform research and development services in core technology, specialising in analytical instrumentation including mass spectrometry, surface analysis and software informatics. Consistent with the industry, contracts are typically short-term in nature and the Company is generally entitled to payment for work performed to date.

 

Revenue represents amounts recognised over the period of contracts for the provision of services which fall within the Company’s ordinary activities after deduction of value added tax. As per IFRS 15, the performance obligations are to be satisfied in respect of the following:

 

Where the outcome of a contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the Statement of financial position date. This is normally measured by the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs, except where this would not be representative of the stage of completion. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable. Majority of projects are invoiced on the quarterly schedule to the stage of completion of the contract activity and are paid timely.

 

Where the outcome of a contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable they will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

 

If the services rendered exceed the payments, a contract asset is recognised. If the payments exceed the services rendered, a contract liability is recognised.

 

Rental income are recognised evenly over the period to which the income relates.

 

Interest income is recognised when it is probable that the economic benefits will flow to the Company and the amount of the revenue can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.

SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Material accounting policy information
(Continued)
- 17 -
1.4
Property, plant and equipment

Property, plant and equipment are stated at cost, less depreciation and provision for impairment where appropriate.

Property, plant and equipment are depreciated by equal annual instalments (straight line basis) to write down the assets to their estimated disposal value at the end of their useful lives as follows:

Leasehold property
50 years
Furniture and fittings
3-5 years
Plant and machinery
3-5 years
Computer equipment
3-5 years
Plant and machinery (ROU)
3-5 years

Residual value represents the estimated amount which would currently be obtained from disposal of an asset, after deducting estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life.

 

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 recognised in the Income statement.

Assets are de-recognised when no future economic benefits will flow to the Company.

1.5
Impairment of tangible and intangible assets

At each Statement of financial position 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 any impairment loss. Where the asset does not generate cash flows that are independent from other assets, 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 the Income statement, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

 

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 the Income statement, 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.

SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Material accounting policy information
(Continued)
- 18 -

Financial instruments

Financial assets and financial liabilities are recognised in the Company Statement of financial position when the Company becomes a party to the contractual provisions of the instrument.

 

Financial assets and financial liabilities are measured initially at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through the Income statement) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through the Income statement are recognised immediately in the Income statement.

1.6
Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

 

1.7
Financial assets

All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the market place.

 

All recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value.

Classification of financial assets

Debt instruments that meet the following conditions are measured subsequently at amortised cost:

 

Financial assets held by the Company are classified as ‘loans and trade receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of the initial recognition. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.

 

Recognition and measurement

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period.

 

For financial assets other than purchased or originated credit-impaired financial assets (i.e. assets that are credit-impaired on initial recognition), the effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) excluding expected credit losses, through the expected life of the debt instrument, or, where appropriate, a shorter period, to the gross carrying amount of the debt instrument on initial recognition. For purchased or originated credit-impaired financial assets, a credit-adjusted effective interest rate is calculated by discounting the estimated future cash flows, including expected credit losses, to the amortised cost of the debt instrument on initial recognition.

 

The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset is the amortised cost of a financial asset before adjusting for any loss allowance.

SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Material accounting policy information
(Continued)
- 19 -
Impairment of financial assets

The Company recognises a loss allowance for expected credit losses on investments in debt instruments that are measured at amortised cost, trade debtors and contract assets. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument.

 

The Company always recognises Lifetime Expected Credit Loss (ECL) for trade debtors and contract assets. The expected credit losses on these financial assets are estimated using a provision matrix based on the Company’s historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate.

 

For all other financial instruments, the Company recognises lifetime ECL when there has been a significant increase in credit risk since initial recognition.

 

Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

 

(i) Significant increase in credit risk

In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the Company compares the risk of a default occurring on the financial instrument at the reporting date with the risk of a default occurring on the financial instrument at the date of initial recognition. In making this assessment, the Company considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort. Forward-looking information considered includes the future prospects of the industries in which the Company’s debtors operate, obtained from economic expert reports, financial analysts, governmental bodies, relevant think-tanks and other similar organisations, as well as consideration of various external sources of actual and forecast economic information that relate to the Company’s core operations.

 

In particular, the following information is taken into account when assessing whether credit risk has increased significantly since initial recognition:

 

Irrespective of the outcome of the above assessment, the Company presumes that the credit risk on a financial asset has increased significantly since initial recognition when contractual payments are more than 30 days past due, unless the Company has reasonable and supportable information that demonstrates otherwise.

SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Material accounting policy information
(Continued)
- 20 -

Despite the foregoing, the Company assumes that the credit risk on a financial instrument has not increased significantly since initial recognition if the financial instrument is determined to have low credit risk at the reporting date. A financial instrument is determined to have low credit risk if:

The Company considers a financial asset to have low credit risk when the asset has external credit rating of investment grade’ in accordance with the globally understood definition or if an external rating is not available, the asset has an internal rating of ‘performing’. Performing means that the counterparty has a strong financial position and there is no past due amounts.

 

The Company regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase in credit risk and revises them as appropriate to ensure that the criteria are capable of identifying significant increase in credit risk before the amount becomes past due.

 

(ii) Definition of default

The Company considers the following as constituting an event of default for internal credit risk management purposes as historical experience indicates that financial assets that meet either of the following criteria are generally not recoverable:

Irrespective of the above analysis, the Company considers that default has occurred when a financial asset is more than 90 days past due unless the Company has reasonable and supportable information to demonstrate that a more lagging default criterion is more appropriate.

 

(iii) Credit-impaired financial assets

A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired includes observable data about the following events:

 

(iv) Write-off policy

The Company writes off a financial asset when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into bankruptcy proceedings, or in the case of trade debtors, when the amounts are over two years past due, whichever occurs sooner. Financial assets written off may still be subject to enforcement activities under the Company’s recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognised in the Income statement.

SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Material accounting policy information
(Continued)
- 21 -

(v) Measurement and recognition of expected credit losses

The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the magnitude of the loss if there is a default) and the exposure at default. The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information as described above. As for the exposure at default, for financial assets, this is represented by the assets’ gross carrying amount at the reporting date.

 

For financial assets, the expected credit loss is estimated as the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive, discounted at the original effective interest rate.

 

If the Company has measured the loss allowance for a financial instrument at an amount equal to lifetime ECL in the previous reporting period, but determines at the current reporting date that the conditions for lifetime ECL are no longer met, the Company measures the loss allowance at an amount equal to 12-month ECL at the current reporting date, except for assets for which simplified approach was used.

 

If the Company has measured the loss allowance for a financial instrument at an amount equal to lifetime ECL in the previous reporting period, but determines at the current reporting date that the conditions for lifetime ECL are no longer met, the Company measures the loss allowance at an amount equal to 12-month ECL at the current reporting date, except for assets for which simplified approach was used.

 

The Company recognises an impairment gain or loss in the Income statement for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account and does not reduce the carrying amount of the financial asset in the Statement of financial position.

Derecognition of financial assets

The Company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

 

On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognised in the Income statement.

Classification as debt or equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

 

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.

 

Repurchase of the Company’s own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in the Income statement, sale, issue or cancellation of the Company’s own equity instruments.

 

 

 

 

 

 

 

SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Material accounting policy information
(Continued)
- 22 -
1.8
Financial liabilities

All financial liabilities are measured subsequently at amortised cost using the effective interest method.

Derecognition of financial liabilities

The Company derecognises financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in the Income statement.

 

Long-term contracts

Amounts due from contract customers, which are included in trade and other receivables, are stated at the net sales value of the work done less amounts received as progress payments on account. Excess progress payments are included in trade and other payables as amounts due to contract customers.

 

Retirement benefit costs

For defined benefit retirement benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations or updates thereof being carried out at the end of each reporting period.

 

Remeasurements comprising actuarial gains and losses and the return on scheme assets (excluding interest) are recognised immediately in the Statement of financial position with a charge or credit to the Statement of Comprehensive Income in the period in which they occur. Remeasurement recorded in the Statement of Comprehensive Income is not recycled. Usual practice in the UK is for the remeasurement, included in the Statement of Comprehensive Income, to be taken to retained earnings but this is not a requirement of the standard. Past service cost is recognised in the Income statement in the period of scheme amendment. Net-interest is calculated by applying a discount rate to the net defined benefit liability or asset. Defined benefit costs are split into three categories:

The Company presents the first component of defined benefit costs within cost of sales and in its Income statement. Curtailments gains and losses are accounted for as past-service cost. Net interest cost is recognised within finance costs.

The retirement benefit obligation recognised in the Statement of financial position represents the deficit or surplus in the Company’s defined benefit scheme. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the scheme or reductions in future contributions to the scheme.

 

A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognises any related restructuring costs.

 

Further details concerning pension arrangements are set out in note 24 to the financial statements.

1.9
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.

 

The Company claims research and development tax credits for qualifying expenditure which is recognised within operating profit or loss.

SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Material accounting policy information
(Continued)
- 23 -
Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the Statement of financial position liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary 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 Statement of financial position 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 and the Company intends to settle its current tax assets and liabilities on a net basis.

1.10
Leases

The Company assesses whether a contract is or contains a lease, at inception of the contract. The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets (such as tablets and personal computers, small items of office furniture and telephones). For these leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.

 

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Whenever the Company incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and measured under IAS 37. To the extent that the costs relate to a right-of-use asset, the costs are included in the related right-of-use asset, unless those costs are incurred to produce inventories.

 

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.

 

The right-of-use assets are presented within the tangible fixed assets line in the Statement of financial position.

 

The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's incremental borrowing rate.

SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Material accounting policy information
(Continued)
- 24 -

Lease payments included in the measurement of the lease liability comprise:

 

The lease liability is presented as a separate line in the Statement of financial position.

 

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

 

The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.

The Company applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in the ‘impairment of tangible and intangible assets’ policy.

 

 

As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Company has not used this practical expedient. For a contracts that contain a lease component and one or more additional lease or non-lease components, the Company allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components.

1.11
Grants

Government grants are not recognised until there is reasonable assurance that the Company will comply with the conditions attaching to them and that the grants will be received. Government grants relating to property, plant and equipment are treated as deferred income and released to the Income Statement over the expected useful lives of the assets concerned.

SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Material accounting policy information
(Continued)
- 25 -
1.12

Foreign currencies

Transactions denominated in foreign currencies are translated into Sterling at rates prevailing at the dates of the individual transactions. Foreign currency monetary assets and liabilities are translated at the rates prevailing at the Statement of financial position date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange gains and losses arising are charged or credited in the period in which they arise to the Income statement within operating expenses. Foreign currency non-monetary amounts are translated at rates prevailing at the time of establishing the fair value of the asset or liability.

1.13

Research and development

Research expenditure is written off as incurred. Development expenditure is also written off, except where the directors are satisfied as to the technical, commercial and financial viability of individual projects. In such cases, the identifiable expenditure is recharged to the ultimate parent company, Shimadzu Corporation and recognised as an asset by Shimadzu Corporation.

1.14

Pension policy

For defined benefit schemes the amounts charged to operating profit are the costs arising from employee services rendered during the period and the cost of plan introductions, benefit changes, settlements and curtailments. They are included as part of staff costs. The net interest cost on the net defined benefit liability is charged to the Statement of Comprehensive Income and included within finance costs. Remeasurement comprising actuarial gains and losses and the return on scheme assets (excluding amounts included in net interest on the net defined benefit liability) are recognised immediately in the Statement of Comprehensive Income.

 

Defined benefit schemes are funded, with the assets of the scheme held separately from those of the Company, in separate trustee administered funds. Pension scheme assets are measured at fair value and liabilities are measured on an actuarial basis using the projected unit credit method. Actuarial valuations are obtained at least triennially and are updated at each Statement of Financial Position date.

2
Adoption of new and revised standards and changes in accounting policies

In the current year, the Company has applied a number of amendments to IFRS Accounting Standards issued by the International Accounting Standards Board (IASB) that are mandatorily effective for an accounting period that begins on or after 1 January 2023. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements.

SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
2
Adoption of new and revised standards and changes in accounting policies
(Continued)
- 26 -
IFRS 17 Insurance Contracts (including the June 2020 and December 2021 Amendments to IFRS 17)
The Company has adopted IFRS 17 and the related amendments for the first time in the current year. IFRS 17 establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts and supersedes IFRS 4 Insurance Contracts.
IFRS 17 outlines a general model, which is modified for insurance contracts with direct participation features, described as the variable fee approach. The general model is simplified if certain criteria are met by measuring the liability for remaining coverage using the premium allocation approach. The general model uses current assumptions to estimate the amount, timing and uncertainty of future cash flows and it explicitly measures the cost of that uncertainty. It takes into account market interest rates and the impact of policyholders' options and guarantees.
The Company does not have any contracts that meet the definition of an insurance contract under IFRS 17.
Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements—Disclosure of Accounting Policies
The Company has adopted the amendments to IAS 1 for the first time in the current year. The amendments change the requirements in IAS 1 with regard to disclosure of accounting policies. The amendments replace all instances of the term ‘significant accounting policies' with ‘material accounting policy information'. Accounting policy information is material if, when considered together with other information included in an entity's financial statements, it can reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements.
The supporting paragraphs in IAS 1 are also amended to clarify that accounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed. Accounting policy information may be material because of the nature of the related transactions, other events or conditions, even if the amounts are immaterial. However, not all accounting policy information relating to material transactions, other events or conditions is itself material.
The IASB has also developed guidance and examples to explain and demonstrate the application of the ‘four-step materiality process' described in IFRS Practice Statement 2.
SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
2
Adoption of new and revised standards and changes in accounting policies
(Continued)
- 27 -
Amendments to IAS 12 Income Taxes—Deferred Tax related to Assets and Liabilities arising from a Single Transaction
The Company has adopted the amendments to IAS 12 for the first time in the current year. The amendments introduce a further exception from the initial recognition exemption. Under the amendments, an entity does not apply the initial recognition exemption for transactions that give rise to equal taxable and deductible temporary differences. Depending on the applicable tax law, equal taxable and deductible temporary differences may arise on initial recognition of an asset and liability in a transaction that is not a business combination and affects neither accounting profit nor taxable profit.
Following the amendments to IAS 12, an entity is required to recognise the related deferred tax asset and liability, with the recognition of any deferred tax asset being subject to the recoverability criteria in IAS 12.
Amendments to IAS 12 Income Taxes— International Tax Reform — Pillar Two Model Rules
The Company has adopted the amendments to IAS 12 for the first time in the current year. The IASB amends the scope of IAS 12 to clarify that the Standard applies to income taxes arising from tax law enacted or substantively enacted to implement the Pillar Two model rules published by the OECD, including tax law that implements qualified domestic minimum top-up taxes described in those rules.
The amendments introduce a temporary exception to the accounting requirements for deferred taxes in IAS 12, so that an entity would neither recognise nor disclose information about deferred tax assets and liabilities related to Pillar Two income taxes.
Following the amendments, the Company is required to disclose that it has applied the exception and to disclose separately its current tax expense (income) related to Pillar Two income taxes.
Amendments to IAS 8 Accounting Polices, Changes in Accounting Estimates and Errors—Definition of Accounting Estimates
The Company has adopted the amendments to IAS 8 for the first time in the current year. The amendments replace the definition of a change in accounting estimates with a definition of accounting estimates. Under the new definition, accounting estimates are “monetary amounts in financial statements that are subject to measurement uncertainty”. The definition of a change in accounting estimates was deleted.
SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
2
Adoption of new and revised standards and changes in accounting policies
(Continued)
- 28 -
Standards which are in issue but not yet effective

At the date of authorisation of these financial statements, the following Standards and Interpretations, which have not yet been applied in these financial statements, were in issue but not yet effective:

Amendments to IAS 1
Classification of liabilities as current or non-current
Amendments to IAS 1
Non-current Liabilities with Covenants
Amendments to IFRS 16
Lease Liability in a Sale and Leaseback
Amendments to IAS 7 and IFRS 7
Supplier finance arrangements
Amendments to IAS 10 and IAS 28
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

No significant impact on the Company’s financial statements has been identified because of these additional standards and amendments. New standards or interpretations applicable to the Company or accounting periods commencing on or after 1 January 2024 are not expected to have a material impact on the Company.

3
Critical accounting estimates and judgements

In the application of the Company’s accounting policies, which are described in note 1, the directors are required to make judgements, estimates and assumptions about the carrying amounts 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.

 

Estimates and assumptions are used to assess the recoverability of intangible assets, receivables, taxation, revenue and provisions for various purposes. These estimates and assumptions are based on data that reflects the knowledge currently available. They are revised periodically and the effects of any changes are recognised in the Income statement. Management periodically evaluates and updates the estimates based on the conditions which influence these variables. The assumptions and conditions for determining impairments reflect management’s best assumptions and estimates, but these items involve inherent uncertainties described below, many of which are not under management’s control. As a result, the accounting for such items could result in different estimates or amounts if management used different assumptions or if different conditions occur in future accounting periods.

 

The following are the critical judgements and estimates that the directors have made in the process of applying the Company’s accounting policies and that have the most significant effect on the amounts recognised in financial statements:

Critical accounting judgement

 

The directors do not consider there to be any critical areas of judgment in applying the Company's accounting policies in the current year.

SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
3
Critical accounting estimates and judgements
(Continued)
- 29 -

Key sources of estimation uncertainty

 

Retirement benefit obligations assumptions

The directors have made estimates around the assumptions to adopt in relation to the valuation of retirement benefit obligations under IAS 19 (revised). The key assumptions made include RPI assumption for future pension increases in payment and CPI for increases in the revaluation rates in deferment. The results under IAS 19R are sensitive to the assumptions adopted. The results are most sensitive to the net relationship between the financial assumptions, the valuation rate of interest, salary increases, inflation, and also to the mortality assumptions. See note 24 for more details.

 

Revenue stage of completion

In determining revenue on customer engagements, management makes certain estimates as to the stage of completion of those engagements. Management estimates the remaining time and external costs to be incurred in completing the engagements and the customer's willingness and ability to pay for the services provided. A different assessment of the outcome on an engagement may result in a different value being determined for revenue and also a different carrying value being determined for contract assets.

 

Revenue is recognised based on the estimated stage of completion of a project taking into account the costs incurred to date as a percentage of total costs to complete the project. In making its judgement, management considered the detailed criteria for the recognition of revenue from the rendering of services set out in IFRS 15 ‘Revenue’ and, in particular, when the outcome of a transaction involving the rendering of services can be estimated reliably. Revenue recognised based on the stage of completion for the seven contracts not completed at 31 March 2024 was £850,976 (2023: £925,526 for five open contracts). Based on the actual total cost incurred post year end, revenue recognised would increase by £35,000. From the application of hindsight and sensitivities applied, an additional profit of circa £35,000 could have been for March 2024. However, no adjustment is required given it is not material.

 

Recognition of deferred tax asset

The Company has recognised deferred tax assets of £654k in connection with trading losses brought forward.

The recognition of these assets is contingent upon the generation of future taxable income. There are inherent uncertainties and the recognition involves estimation due to the reliance on future profitability assumptions, which are subject to the parent company’s strategic plans. As at 31 March 2024, the deferred tax asset recognised includes £145k which is based on the forecast profit for the next three years to 31 March 2028, with the remaining deferred tax assets of £509k supported by group relief with considerations and deferred tax liability that can be offset against. Management believes that it is probable that sufficient taxable profits will be available, considering current assessments and projections.

.

 

 

4
Revenue

Revenue from contracts with customers

2024
2023
£
£
Revenue analysed by class of business
Revenue from provision of services to other group undertakings
1,761,063
2,258,911
2024
2023
£
£
Other income
Grants received
2,800
2,800
Research and development tax
-
(3,419)
Rental income
136,740
136,740
SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
4
Revenue
(Continued)
- 30 -

 

The business operates in one primary segment, being the provision of research and development services.

 

The Company operates primarily in the UK, with no other geographical segment being material for disclosure.

5
Operating (loss)/profit
2024
2023
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Government grants - Selective Finance for Investment interim claim
(2,800)
(2,800)
Depreciation of property, plant and equipment
81,553
77,177
Depreciation of ROU assets
2,926
2,738
Amortisation of intangible assets (included within administrative expenses)
6,018
5,214
6
Employees

The average monthly number of persons (including directors) employed by the Company during the year was:

2024
2023
Number
Number
Research and development staff
19
20
Administration staff
4
4
Total
23
24

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
1,182,422
1,010,336
Social security costs
103,097
92,136
Pension costs
193,908
184,755
1,479,427
1,287,227

Pension costs include only those defined benefit plan costs included within operating costs.

 

SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 31 -
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
73,953
73,203
Estimated money value of other benefits received otherwise than in cash
-
1,656
73,953
74,859

No director is a member of the Company's defined benefit pension scheme (2023: £nil).

8
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
50,820
27,735
For other services
Taxation compliance service
4,500
3,500
9
Investment income
2024
2023
£
£
Interest income
Financial instruments not measured at amortised cost:
Net interest on defined benefit asset
44,000
36,000
Income above relates to assets held at amortised cost, unless stated otherwise.
10
Finance costs
2024
2023
£
£
Interest on lease liabilities - equipment leasing
1,662
121
SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 32 -
11
Income tax expense
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
(143,445)
(87,484)
Deferred tax
Origination and reversal of temporary differences
220,692
32,407
Changes in tax rates
(31,747)
10,234
188,945
42,641
Total tax charge/(credit)
45,500
(44,843)

The charge for the year can be reconciled to the (loss)/profit per the income statement as follows:

2024
2023
£
£
(Loss)/profit before taxation
(154,465)
226,054
Expected tax (credit)/charge based on a corporation tax rate of 25.00% (2023: 19.00%)
(38,616)
42,950
Effect of expenses not deductible in determining taxable profit
496
187
Effect of change in UK corporation tax rate
2,096
10,234
Group relief
(300,000)
-
0
Depreciation on assets not qualifying for tax allowances
294
(2,875)
RDEC
-
0
(66,313)
Deferred tax adjustments in respect of prior years
(31,747)
-
0
Amounts not recognised
412,977
(29,026)
Taxation charge/(credit) for the year
45,500
(44,843)

In addition to the amount charged to the income statement, the following amounts relating to tax have been recognised directly in other comprehensive income:

2024
2023
£
£
Deferred tax charge/(credit) arising on:
Actuarial differences recognised as other comprehensive income
43,250
(106,000)

In the Spring Budget 2021, the UK Government announced that from 1 April 2023 the main corporation tax rate would increase to 25% (rather than remaining at 19%, as previously enacted). The new law was substantively enacted on 24 May 2021. The change in tax rate has no material impact on the Company’s financial performance and position. In the Spring budget 2024, there was no change in the tax rate.

 

Deferred tax has been calculated using these rates based on the timing of when each individual deferred tax balance is expected to reverse in the future. The entity is not within the scope of Pillar Two legislation.

SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 33 -
12
Intangible assets
Patents & licences
£
Cost
At 1 April 2022
209,858
Additions
3,175
At 31 March 2023
213,033
Additions - purchased
7,530
At 31 March 2024
220,563
Amortisation
At 1 April 2022
196,459
Charge for the year
5,214
At 31 March 2023
201,673
Charge for the year
6,018
At 31 March 2024
207,691
Carrying amount
At 31 March 2024
12,872
At 31 March 2023
11,360
At 31 December 2022
13,399

Amortisation is included within administrative expenses in the income statement.

SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 34 -
13
Property, plant and equipment
Leasehold property
Plant and machinery
Furniture and fittings
Computer equipment
Plant and machinery (ROU)
Total
£
£
£
£
£
£
Cost
At 1 April 2022
2,067,251
1,095,754
32,805
184,630
10,669
3,391,109
Additions
2,901
40,374
-
0
2,407
71
45,753
Disposals
-
0
(1,238)
-
0
(2,885)
-
0
(4,123)
At 31 March 2023
2,070,152
1,134,890
32,805
184,152
10,740
3,432,739
Additions
16,768
50,091
-
0
5,690
-
0
72,549
Disposals
-
(85)
(101)
(3,338)
-
0
(3,524)
Revaluation increase
-
0
-
0
-
0
-
0
18,516
18,516
At 31 March 2024
2,086,920
1,184,896
32,704
186,504
29,256
3,520,280
Accumulated depreciation
At 1 April 2022
646,224
1,087,442
32,805
172,708
8,002
1,947,181
Charge for the year
53,108
15,850
-
0
8,219
2,738
79,915
Eliminated on disposal
-
0
(1,238)
-
0
(2,885)
-
0
(4,123)
At 31 March 2023
699,332
1,102,054
32,805
178,042
10,740
2,022,973
Charge for the year
50,140
26,203
-
0
5,210
2,926
84,479
Eliminated on disposal
-
0
(85)
(101)
(3,338)
-
0
(3,524)
Eliminated on revaluation
-
0
-
0
-
0
-
0
(10,740)
(10,740)
At 31 March 2024
749,472
1,128,172
32,704
179,914
2,926
2,093,188
Carrying amount
At 31 March 2024
1,337,448
56,724
-
6,590
26,330
1,427,092
At 31 March 2023
1,370,820
32,836
-
6,110
-
1,409,766

Property, plant and equipment includes right-of-use assets, as follows:

Right-of-use assets
2024
2023
£
£
Net values at the year end
Plant and machinery
26,330
-
Total additions in the year
-
71
Depreciation charge for the year
Plant and machinery
2,926
2,738

The average lease term is 120 months (2023: nil).

SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
13
Property, plant and equipment
(Continued)
- 35 -

Amounts in the different categories of fixed assets are verified per prior year, except for total amounts which cannot be verified per prior year as the total in the prior year did not include right-of-use assets (ROU). The right-of-use assets was disclosed as a separate note in the prior year.

14
Contracts with customers
Analysis of contract assets
2024
2023
£
£
Amounts due from contract customers included in trade and other receivables b/f
208,541
165,730
Contract costs incurred plus recognised profits less recognised losses to date
162,476
42,811
Amounts due from contract customers included in trade and other receivables c/f
371,017
208,541

 

Analysis of contract liabilities
2024
2023
£
£
Amounts due to contract customers included in trade and other payables b/f
(54,978)
(149,539)
Less: progress billings
34,464
94,561
Amounts due to contract customers included in trade and other payables c/f
(20,514)
(54,978)

Amounts relating to contract assets are balances due from customers under contracts that arise when the Company receives payments from customers in line with a series of performance related milestones. The Company will previously have recognised a contract asset for any work performed. Any amount previously recognised as a contract asset is reclassified to trade receivables at the point at which it is invoiced to the customer.

 

The directors of the Company always measure the loss allowance on amounts due from customers at an amount equal to lifetime ECL, taking into account the historical default experience and the future prospects of the construction industry. None of the amounts due from customers at the end of the reporting period is past due.

Contract revenues recognised
2024
2023
£
£
Costs incurred plus recognised profits less recognised losses to date
1,914,622
2,085,076
Less: progress billing
(1,564,123)
(1,931,513)
350,499
153,563
SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 36 -
15
Trade and other receivables
2024
2023
£
£
VAT recoverable
6,636
7,648
Amounts owed by fellow group undertakings (see note 25)
2,641
201,567
Amounts owed from contract customers (group undertakings)
371,017
208,541
Other receivables
58,742
30,096
Prepayments
49,477
38,528
488,513
486,380

The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.

 

No allowance for expected credit losses made as the amounts are recovered subsequently and no history of bad debts or significant delays in recoveries.

 

Amounts owed by group undertakings are unsecured and repayable on demand. The directors consider that the amount remains recoverable for the amounts owed on contracts and by group undertakings.

 

Ageing of amounts owed by group undertakings:

2024
2023
£
£
Neither impaired nor past due date
-
410,108
16
Cash and cash equivalents

Cash and cash equivalents comprise cash held by the Company and short-term bank deposits with an original maturity of three months or less. The carrying amount of these assets approximates their fair value.

 

2024
2023
£
£
Cash and cash equivalents
1,049,168
1,261,822
17
Current tax recoverable
2024
2023
£
£
R&D expenditure tax credit receivable
233,923
180,265
SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 37 -
18
Trade and other payables
2024
2023
£
£
Trade payables
49,859
19,527
Amounts owed to fellow group undertakings (see note 25)
20,514
54,978
Accruals
2,800
7,385
Social security and other taxation
25,496
27,588
98,669
109,478

The directors consider that the carrying amount of trade creditors approximates to their fair value.

 

Trade creditors and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. All amounts are interest free and are repayable on demand. Amounts owed to group undertakings are unsecured, repayable on demand and interest free.

 

 

19
Lease liabilities
2024
2023
Maturity analysis
£
£
Within one year
3,948
-
In two to five years
31,584
-
Total undiscounted liabilities
35,532
-

Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:

2024
2023
£
£
Current liabilities
2,402
-
0
Non-current liabilities
24,829
-
0
27,231
-
2024
2023
Amounts recognised in profit or loss include the following:
£
£
Interest on lease liabilities
1,662
121

The Company does not face a significant liquidity risk with regard to its lease liabilities. Lease liabilities are monitored within the Company’s treasury function.

SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 38 -
20
Deferred taxation
Assets
2024
2023
£
£
Deferred tax balances
222,114
454,309
Deferred tax assets are expected to be recovered after more than one year.

The following are the major deferred tax liabilities and assets recognised by the Company and movements thereon during the current and prior reporting period.

£
Asset at 1 April 2022
390,950
Deferred tax movements in prior year
Charge to profit or loss
(42,641)
Credit to other comprehensive income
106,000
Asset at 1 April 2023
454,309
Deferred tax movements in current year
Charge to profit or loss
(188,945)
Charge to other comprehensive income
(43,250)
Asset at 31 March 2024
222,114
2024
2023
£
£
Pension scheme
(275,750)
(244,750)
Losses brought forward
653,968
829,352
Accelerated depreciation and amortisation
(156,104)
(130,293)
222,114
454,309

Deferred tax assets of £654k has been recognised in connection with some trading losses brought forward.

See note 3 for details. The Company has accumulated trading losses of £1m for which no deferred tax asset

is recognised. These amounts can be carried forward indefinitely, however it is not probable that future taxable

profits will be available against which they can be utilised.

 

SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 39 -
21
Deferred revenue
2024
2023
£
£
Deferred grant brought forward
93,567
96,367
Released to Income statement (see note 4)
(2,800)
(2,800)
Deferred grant carried forward
90,767
93,567
All deferred revenues are expected to be settled after more than 12 months from the reporting date.
22
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
2,560,000
2,560,000
2,560,000
2,560,000
23
Financial instruments
All financial instruments comprising cash and bank balances, trade and other receivables and trade and other payables are measured at amortised cost. The carrying amount of all financial instruments approximates their fair value.
The main risks arising from the Company's financial assets and liabilities are market risk (foreign currency risk and interest rate risk), credit risk and liquidity risk. The Board reviews and agrees policies on a regular basis for managing the risks associated with these assets and liabilities.
It is, and has been throughout the year under review, the Company's policy that no trading in financial instruments shall be undertaken and the Company does not hold or issue derivative financial instruments for speculative purposes.
Foreign currency risk
Translation and transaction
The Company has minimal foreign currency transactions and primarily transacts in Sterling. Any transactions denominated in foreign currencies are translated into Sterling at rates prevailing at the dates of the individual transactions, no currency risk hedging takes place.
Interest rate risk
The only interest bearing financial assets and liabilities held by the Company are cash and cash equivalents.
Cash and cash equivalents have the following interest rate types:
2024
2023
Floating rate
Floating rate
£
£
Sterling
1,049,168
1,261,822
No other financial assets or liabilities are interest bearing.
Interest income is not significant (2024: £nil, 2023: £nil) and therefore it is unlikely that a change in the interest rate would have material impact on the financial statements.
SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
23
Financial instruments
(Continued)
- 40 -
Credit risk
The Company's principal financial assets are bank balances and trade and other receivables.
The Company's primarily receivables are amounts receivable from the Company's ultimate parent undertaking, Shimadzu Corporation and another group undertaking, and as such credit risk is limited and controlled by Group.
The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies. See note 15 for further details.
2024
2023
£
£
Other receivables
4,673
30,096
Amounts owed by fellow group undertakings
2,641
201,567
Amounts owed from contract customers (group undertakings)
371,017
208,541
The amounts of ageing of past due but not impaired debtors for the current year are £nil (£2023: £nil).
Liquidity risk
Cash is managed to ensure that sufficient liquid funds are available with a variety of counterparties through short, medium and long-term cash flow forecasting.
Capital risk management
The Company's capital risks are managed and mitigated at a group level through a cash management system. Cash management consists of short term, medium term and long term budgeting between the Company and the parent company Shimadzu. Short term, the Company completes monthly and quarterly reporting which includes cash flow report and a 3–6-month prospect of profit & loss. Reports are reviewed by Shimadzu Corporation finance team and may result in queries. Medium term, the Company complete an annual budget for each following financial year which is submitted to Shimadzu for review and aims to ensure the Company achieves a profit each year. Long term, the Company completes regular 3 year budget plans with Shimadzu, with a similar aim of planning the expected costs and revenue for 3 years.
SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 41 -
24
Retirement benefit schemes

Employees of the Company have access to membership of the Shimadzu Research Laboratory (Europe) Ltd. Pensions Scheme. The defined benefit scheme is administered by a separate fund that is legally separated from the Company. The trustees of the pension fund are required by law to act in the interest of the fund and of all relevant stakeholders in the scheme. The trustees of the pension fund are responsible for the investment policy with regard to the assets of the fund.

 

From 1 April 1997 to 31 December 2014, the Company participated in the Kratos Pension & Life Assurance Scheme ("the Kratos scheme"). The Kratos scheme is a Shimadzu group plan and the related costs of the Kratos scheme were assessed in accordance with the advice of a qualified independent actuary.

 

On 1 January 2015 the liability for current active members and former members who had been employed by the Company transferred to the Shimadzu Research Laboratory (Europe) Ltd. Pensions Scheme. As the members’ benefits have been unchanged as a result of the move, a single disclosure has been prepared reflecting the movement in the Company’s liability in the Kratos Scheme at the start of the year and the Company’s liability in the Shimadzu Research Laboratory (Europe) Ltd. Pension Scheme at the Statement of financial position date.

The most recent full actuarial valuation of the scheme was conducted as at 5 April 2023 using the projected unit method by First Actuarial, Fellow of the Institute of Actuaries. The valuation as at 5 April 2023 has been updated by the actuary on an IAS19 (revised) (IAS 19R) basis as at 31 March 2023.
The plan exposes the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk. The risk relating to benefits to be paid to the dependants of plan members is reinsured by an external insurance company.
Investment risk
The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to high quality corporate bond yields; if the return on plan asset is below this rate, it will create a plan deficit. Currently the plan has a relatively balanced investment in equity securities, debt instruments and real estate. Due to the long-term nature of the plan liabilities, the trustees of the pension fund consider it appropriate that a reasonable portion of the plan assets should be invested in equity securities and in real estate to leverage the return generated by the fund.
Interest risk
A decrease in the bond interest rate will increase the plan liability but this will be partially offset by an increase in the return on the plan's debt investments.
Longevity risk
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan's liability
Salary risk
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan's liability.
No other post-retirement benefits are provided to these employees.
SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
24
Retirement benefit schemes
(Continued)
- 42 -
The principal assumptions used for the purposes of the actuarial valuations were as follows:
2024
2023
Discount rate
4.9%
4.7%
Expected return on plan assets
n/a
n/a
Expected rate of salary increases
n/a
n/a
Inflation
3.2%
3.2%
Rate of increase of pensions in payment
3.1%
3.1%
Revaluation in deferment
2.8%
2.8%
Life expectancy of 65 year old male
21.5 years
22.0 years
Life expectancy of 65 year old female
23.9 years
24.4 years
The proportion of married assumption is 85% for both males and females, consistent with the assumption adopted in the prior year.
The assumptions used by the actuary are the best estimates chosen from a range of possible actuarial assumptions which, due to the time scale covered, may not necessarily be borne out in practice. As was the case last year, the scheme uses the RPI assumption for future pension increases in payment and CPI for increases in the revaluation rates in deferment.
The following information is given in respect of the Company's share of the scheme.
Amounts recognised in the Income statement in respect of the defined benefit scheme are as follows:
2024
2023
£'000
£'000
Service cost:
Administrative costs
93
88
Charges to operating costs
49
88
Total expense recognised in the income statement
49
88
The amounts recognised in the statement of comprehensive income are as follows:
2024
2023
£'000
£'000
Return on plan assets (excluding the amounts recognised in net interest cost)
253
1,836
Actuarial loss/(gain) arising from changes in financial assumptions
(80)
(1,412)
173
424
SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
24
Retirement benefit schemes
(Continued)
- 43 -
The amount included in the statement of financial position arising from the Company's defined benefit obligations is as follows:
2024
2023
2022
2021
£'000
£'000
£'000
£'000
Present value of defined benefit obligations
(4,217)
(4,068)
(5,559)
(6,527)
Fair value of scheme assets
5,320
5,047
6,864
6,703
Surplus in scheme and net asset recognised
1,103
979
1,305
176
in the Statement of financial position
Movements in the present value of defined benefit obligations were as follows:
2024
2023
£'000
£'000
At the start of the year
4,068
5,559
Interest cost
188
147
Remeasurement (gains)/losses:
Actuarial gains - change in assumptions
(124)
(1,929)
Actuarial gains - change in demographic assumptions
(79)
(5)
Actuarial loss - experience differing from that assumed
283
522
Benefits paid
(119)
(226)
At the end of the year
4,217
4,068
Movements in the fair value of scheme assets were as follows:
2024
2023
£'000
£'000
At the start of the year
5,047
6,864
Interest income
232
183
Remeasurement gains/(losses):
The return on plan assets (excluding amounts included in net interest cost)
253
(1,836)
Total contributions
-
150
Benefits paid
(119)
(226)
Expenses
(93)
(88)
At the end of the year
5,320
5,047
The analysis of the scheme assets and the expected rate of return at the Statement of financial position date was as follows:
Asset split
Fair value of assets
2024
2023
2024
2023
%
%
£'000
£'000
Equity instruments
44
40
2,346
1,988
Cash
2
6
104
301
Fixed interest
34
34
1,817
1,728
Defined benefit scheme
-
-
8
8
LDI
20
20
1,045
1,022
100
100
5,320
5,047
SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
24
Retirement benefit schemes
(Continued)
- 44 -
As mentioned above the results under IAS 19R are sensitive to the assumptions adopted. The results are most sensitive to the net relationship between the financial assumptions, the valuation rate of interest, salary increases, inflation, and also to the mortality assumptions. The following table illustrates the sensitivity of the liabilities to changes in these key assumptions. In particular it illustrates the effect of the assumptions adopted not being borne out in practice, with future experience instead following the revised assumptions. Each change is considered in isolation in the table.
Approximate increase
in liabilities %
Change in assumption
Interest rate reduced by 1% p.a.
15
Salary assumption increased by 1 %
-
Inflation assumption increased by 0.5 %
5
Increase in life expectancy of 1 year for a member reaching (age 65)
3
Comparative information on sensitivity analysis is not required for periods beginning before 1 January 2014 under IAS 19R.
Maturity profile of defined benefit obligation: The weighted average duration of the scheme's liabilities is 13 to 14 years (2023 -13 to 14 years).
The employer's contributions to the scheme for the year ending 31 March 2024 are expected to be £nil.
Asset-liability matching strategies: The investment strategy is monitored and reviewed by the Trustees on a regular basis, part of which is considering whether the assets held match the long term profile of the liabilities. The strategy also takes into account the future expected cash flows of the scheme in order to determine the asset allocation between equities, property and fixed interest securities. The investment manager performance is monitored by St James Place on behalf of the Trustees.
25
Related party transactions
Remuneration of key management personnel

The remuneration of the directors, who are the key management personnel of the Company, is set out below in aggregate for each of the categories specified in IAS24 Related Party Disclosures.

2024
2023
£
£
Short-term employee benefits
73,953
74,859
SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
25
Related party transactions
(Continued)
- 45 -
Other transactions with related parties

During the year, the Company entered into the following transactions with its ultimate parent undertaking, Shimadzu Corporation and other group undertakings:

Sale of services
Purchase of services
2024
2023
2024
2023
£
£
£
£
Parent company
1,564,123
2,258,911
132,553
27,247
Other related parties
136,740
136,740
41,583
10,575
1,700,863
2,395,651
174,136
37,822
2024
2023
Amounts due to related parties
£
£
Parent company
20,302
54,978
Other related parties
212
-
0
20,514
54,978
2024
2023
Amounts due from related parties
£
£
Parent company
2,641
201,567

The parent company above is the ultimate parent company, see note 28 for more details.

 

Other related parties relate to other group companies within the Group

 

Transactions between group companies are conducted on an arm's length basis.

 

The amounts outstanding are unsecured and will be settled in cash. No guarantees have been received and no provisions have been made for doubtful debts.

SHIMADZU RESEARCH LABORATORY (EUROPE) LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 46 -
26
Cash absorbed by operations
2024
2023
£
£
(Loss)/profit for the year before income tax
(154,465)
226,054
Adjustments for:
Finance costs
1,662
121
Investment income
(44,000)
(36,000)
Amortisation of intangible assets
6,018
5,214
Depreciation of property, plant and equipment
81,553
77,177
Depreciation of right-of-use assets
2,926
2,738
Pension service cost and gain on curtailment less contributions
93,000
(98,000)
Movements in working capital:
Increase in trade and other receivables
(2,133)
(86,725)
Decrease in trade and other payables
(10,809)
(110,609)
Decrease in deferred revenue outstanding
(2,800)
(2,800)
Cash absorbed by operations
(29,048)
(22,830)
27
Analysis of changes in net funds
1 April 2023
Cash flows
31 March 2024
£
£
£
Cash at bank and in hand
1,261,822
(212,654)
1,049,168
Obligations under finance leases
-
(27,231)
(27,231)
1,261,822
(239,885)
1,021,937
1 April 2022
Cash flows
31 March 2023
Prior year:
£
£
£
Cash at bank and in hand
1,171,724
90,098
1,261,822
Obligations under finance leases
(3,166)
3,166
-
1,168,558
93,264
1,261,822
28
Controlling party

The directors consider that the Company’s immediate and ultimate parent undertaking is Shimadzu Corporation, a company incorporated in Japan. The smallest and largest group of which the Company is a member and for which the Group accounts are drawn up is Shimadzu Corporation which is the ultimate controlling party. The registered address for Shimadzu Corporation is 1, Nishinokyo Kuwabara-cho, Nakagyo-ku, Kyoto 604-8511, Japan. The financial statements of the Group are publicly available and may be obtained from the Company secretary at the registered office shown on the Company information page, and on the Group's website, www.shimadzu.com.

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