4TITUDE_LIMITED - Accounts
4TITUDE_LIMITED - Accounts
The directors present the strategic report for the period ended 30 September 2018.
The financial results are set out in the statement of comprehensive income. The revenue is analysed by activity in note 3 to the financial statements.
The board are pleased to report a growth in activity, with revenue increased by 4.6% (if the short comparative period is prorated for 12 months) to £11.8m (2017 - £8.4m - nine-month period). The gross profit margin, which is closely monitored by management, has also improved to 60.4% (2017 - 57.6%). Net assets stand at £7.3m (2017 - £4.6m), which includes £3.8m (2017 - £2.0m) of cash at bank.
The board remain satisfied with the trading performance of the company as a whole.
The company uses various financial instruments which include cash at bank, trade receivables, and trade payables that arise directly from its operations. The existence of these financial instruments exposes the company to a number of financial risks, which are described in more detail below.
Liquidity risk
Cashflow is regularly monitored through cashflow forecasting and a regular review of strategic plans. The Directors hold a significant amount of liquid resources to mitigate the risk and, if required, debt finance can be provided by the ultimate parent company, Brooks Automation Inc.
Foreign currency risk
The principal foreign currency exposures arise from trading with fellow group companies and though overseas trading. Foreign currency bank accounts are held to mitigate some of the exposure of foreign currency.
BREXIT
The company trades throughout Europe and the directors are continually assessing the impact of the UK's decision to leave the European Union as the political negotiations continue to progress.
The directors will revisit the appropriateness of these policies should the company's operations change in size or nature.
The company was acquired by Brooks Automation Limited on 5 October 2017, at which point it became part of the Brooks Automation Inc. group of companies. The board believe this will bolster the performance of the company and help it expand into new markets, which can already start to be seen with the growth in revenue.
The position of the company at the period end is shown on page 9.
The overall business performance has been strong, and the outlook remains very optimistic, despite the potential implications with BREXIT. The board would like to thank our highly skilled and loyal staff who have now been fully integrated into the Brooks organisation. It is through the talent, dedication and cooperation of our staff that we are confident about the future prospects of the company.
Management use a range of performance measures to monitor and manage the business. Our KPIs measure past performance and also provide information to allow us to manage the business into the future. Revenue, operating profit and cash indicate their profitability and the efficiency of which we have turned operating profits into cash; staff numbers show us how effective we have been in recruiting and retaining our key resource.
The indicators are presented in the financial statements, with the board's opinion that no further inclusion of financial and non-financial key performance indicators is necessary for an understanding of the development, performance or position of the company's business.
On behalf of the board
The directors present their annual report and financial statements for the period ended 30 September 2018.
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
The results for the period are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of financial instruments, principal risks and uncertainties.
During the year the company continued to invest significantly in research and development activities as it seeks to remain at the forefront of technology in its field.
The directors believe that there are no future developments that require disclosure.
MHA Carpenter Box were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006.
select suitable accounting policies and then apply them consistently; make judgements and accounting estimates that are reasonable and prudent; prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
Qualified opinion on financial statements
give a true and fair view of the state of the company's affairs as at 30 September 2018 and of its profit for the period then ended; have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for qualified opinion
We were appointed as auditors of the company during the current financial period, and thus did not observe the counting of physical inventories at the beginning of the period. We were unable to satisfy ourselves by alternative means concerning inventory values at 5 October 2017. Since opening inventories enter into the determination of the financial performance, we were unable to determine whether adjustments might have been necessary in respect of the statement of comprehensive income.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and we were unable to determine whether adequate accounting records had been maintained.
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or the financial statements are not in agreement with the accounting records and returns; or certain disclosures of directors' remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit; or the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the directors' report and take advantage of the small companies exemption from the requirement to prepare a strategic report.
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.
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 Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Other matters which we are required to address
In the previous accounting period the directors of the company took advantage of audit exemption under S477 of the Companies Act 2006. Therefore, the prior period financial statements were not subject to audit and are unaudited.
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.
The Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations.
4titude Limited is a private
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.
The financial statements have been prepared under the historical cost convention.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Brooks Automation, Inc. a company incorporated in the United States of America. These consolidated financial statements are available at www.brooks.com.
Following the acquisition of the company by its new parent entity in the comparative period, prior period corrections have been made in order to bring the accounting estimates and procedures in line with the rest of the group.
Details of prior period adjustments are in note 26.
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
The current financial period is from 6 October 2017 to 30 September 2018, being eleven months and 26 days. The accounting period was shortened in order to bring it in line with the rest of the group.
The comparative period is from 1 January 2017 to 5 October 2018, being nine months and five days. The accounting period was shortened to the date the company was acquired by its new parent company.
Due to the difference in reporting length, the comparative amounts in the financial statements (including the related notes) are not entirely comparable.
Research expenditure is written off against profits in the year in which it is incurred.
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the cost or value of the asset can be measured reliably.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of inventories over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
Basic financial assets, which include trade and other receivables and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost. Financial assets classified as receivable within one year are not amortised.
Basic financial liabilities
Basic financial liabilities, including trade and other payables and loans from fellow group that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Financial assets are derecognised 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 to another entity. Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
A provision is recorded for the estimated cost of product warranties at the time revenue is recognised. Warranty obligations are affected by product failure rates, material usage or service deliver costs incurred in correcting a product failure. Warranty obligations are adjusted based on actual product failure rates, material usage or service delivery costs, which may result in revisions to the estimated warranty liabilities and additional benefits or charges to the operating profit.
An analysis of the company's revenue is as follows:
The average monthly number of persons (including directors) employed by the company during the period was:
Their aggregate remuneration comprised:
The actual charge for the period can be reconciled to the expected charge for the period based on the profit or loss and the standard rate of tax as follows:
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Included within plant and machinery are assets under construction of £91,132, which are not depreciated until they are brought into use.
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. The finance leases are secured against the assets which they relate.
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
The directors have considered the deferred tax liabilities noted above and concluded that it is not possible to state the estimated liabilities which will reverse within the next 12 months. This is due to the level of reversal being dependant on events which are not yet known.
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
Ordinary shares have attached to them full voting and dividend rights.
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Dividends totalling £nil (2017 - £191,000) were paid in the year in respect of shares held by the company's directors.
The financial statements of the company are consolidated in the financial statements of its ultimate parent company, Brooks Automation Inc., a company incorporated in USA. These consolidated financial statements are available from its registered office, 15 Elizabeth Drive, Chelmsford, Massachusetts 01824, USA.
The company is a subsidiary of Brooks Automation, Inc. Brooks Automation, Inc is the largest and smallest company of undertakings to consolidate these financial statements. The consolidated financial statements of Brooks Automation Inc can be obtained from 15 Elizabeth Drive, Chelmford, MA USA 01824.
The immediate parent undertaking is Brooks Automation Limited.
On 5 October 2017, the company was acquired by Brooks Automation Limited, on which the ultimate parent Brooks Automation Inc underwent a procedure to bring the company in line with the group reporting requirements. The adjustments have been disclosed in more details below and have resulted in a reduction of reported profit in the comparative period of £428,517.
Group policy is to capitalise items above £3,700 ($5,000). As a result, all assets with an original cost below $5,000 have been impaired, which has resulted in a reduction in net book value of £292,052.
As a result of this, there is also a reduction in the deferred tax liability due to a decrease in accelerated capital allowances. This has resulted in a reduction in the deferred tax liability of £39,700.
There was originally no inventory provision made in the accounts, however a provision has now been recognised for old and slow moving finished goods.
There was originally no warranty provision made in the accounts, however a provision has now been recognised for the potential costs for repairs of products which are under warranty.
A final acquisition completion bonus was provided to staff in the current year, however the accrual was not recognised in the comparative year financial statements.
Following a review of work in progress (WIP) costing and overheads allocation by the parent company, it was determined that the valuation method for WIP was too low.
The valuation estimate has been amended in order to bring the method in line with the rest of the group.
f) Reclassification of trade debtors
Trade debtors included a balance owed to the now parent company, totalling £141,125. This has now been reclassified to amounts due from group undertakings within trade and other receivables.