Systems Interface Limited - Limited company accounts 18.2

REGISTERED NUMBER: 01643486 (England and Wales)

Report of the Directors and

Financial Statements

for the Year Ended 31 December 2018

for

Systems Interface Limited

Page

Company Information

1

Report of the Directors

2

Report of the Independent Auditors

4

Income Statement

6

Other Comprehensive Income

7

Statement of Financial Position

8

Statement of Changes in Equity

9

Notes to the Financial Statements

10

DIRECTORS:

Mr P A Gurney

Mrs C A Webster

Mr P R Heaney

SECRETARIES:

Mrs D Meer

Mr M L Mulberry BA (Hons) FCCA CTA

REGISTERED OFFICE:

Unit 71.5

Dunsfold Park

Stovolds Hill

Cranleigh

Surrey

GU6 8TB

REGISTERED NUMBER:

01643486 (England and Wales)

SENIOR STATUTORY AUDITOR:

Mr Mark Williams

AUDITORS:

Williams & Co Chartered Accountants

8-10 South Street

Epsom

Surrey

KT18 7PF

The directors present their report with the financial statements of the company for the year ended 31 December 2018.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of the provision of complex airport and air traffic

control systems, including design, integration, installation, commissioning and maintenance services, which includes

amongst others,

Navigation Aids – such as ILS, DME, DVOR, NDB, DF

Communications – VHF/UHF Voice, VCS and Data

Airfield Lighting - Including LED Solar lights

Meteorological Systems - IRVR, Weather Stations

The company also offers a wide spectrum of aviation related products and services both in the UK and worldwide, and is

a distributor for Nautel for NDB's and Avlite for their solar powered lights.

Systems interface Limited is Quality Approved to BS EN 9001:2008

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2018.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2018 to the date of this

report.

Mr P A Gurney

Mrs C A Webster

Mr P R Heaney

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Report of the Directors and the financial statements in accordance with

applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors

have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting

Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The

Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not

approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the

company and of the profit or loss of the company for that period. In preparing these financial statements, the directors

are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the

company's transactions and disclose with reasonable accuracy at any time the financial position of the company and

enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for

safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud

and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act

2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to

have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that

the company's auditors are aware of that information.

AUDITORS

The auditors, Williams & Co Chartered Accountants, will be proposed for re-appointment at the forthcoming Annual

General Meeting.

ON BEHALF OF THE BOARD:

Mrs D Meer - Secretary

28 February 2019

Opinion

We have audited the financial statements of Systems Interface Limited (the 'company') for the year ended

31 December 2018 which comprise the Income Statement, Other Comprehensive Income, Statement of Financial

Position, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant

accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and

United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard

applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2018 and of its loss for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our

responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial

statements section of our report. We are independent of the company in accordance with the ethical requirements that

are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled

our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have

obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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 in the Report of

the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise

explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing

so, consider whether the other information is materially inconsistent with the financial statements or our knowledge

obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or

apparent material misstatements, we are required to determine whether 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.

Opinion on other matters prescribed by the Companies Act 2006

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

-	the information given in the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Report of the Directors has been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit,

we have not identified material misstatements in the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you

if, in our opinion:

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of 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 from the requirement to prepare a Strategic Report.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page two, 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 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.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from

material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with

ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are

considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic

decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting

Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the

Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those

matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent

permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's

members as a body, for our audit work, for this report, or for the opinions we have formed.

Mr Mark Williams (Senior Statutory Auditor)

for and on behalf of Williams & Co Chartered Accountants

8-10 South Street

Epsom

Surrey

KT18 7PF

28 February 2019

TURNOVER

4,977,201

5,487,754

Cost of sales

(4,276,665

)

(4,383,504

)

GROSS PROFIT

700,536

1,104,250

Administrative expenses

(777,264

)

(642,125

)

OPERATING (LOSS)/PROFIT

4

(76,728

)

462,125

Interest receivable and similar income

2,501

97

(74,227

)

462,222

Interest payable and similar expenses

5

(60,677

)

(50,806

)

(LOSS)/PROFIT BEFORE TAXATION

(134,904

)

411,416

Tax on (loss)/profit

6

27,450

-

(LOSS)/PROFIT FOR THE FINANCIAL YEAR

(107,454

)

411,416

(LOSS)/PROFIT FOR THE YEAR

(107,454

)

411,416

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(107,454

)

411,416

FIXED ASSETS

Tangible assets

7

14,677

12,587

CURRENT ASSETS

Stocks

8

45,506

45,505

Debtors

9

1,340,348

1,667,369

Prepayments and accrued income

948,014

424,935

Cash at bank and in hand

17,013

4,128

2,350,881

2,141,937

CREDITORS

Amounts falling due within one year

10

(2,257,395

)

(1,611,327

)

NET CURRENT ASSETS

93,486

530,610

TOTAL ASSETS LESS CURRENT LIABILITIES

108,163

543,197

CREDITORS

Amounts falling due after more than one year

11

-

(327,580

)

NET ASSETS

108,163

215,617

CAPITAL AND RESERVES

Called up share capital

10,000

10,000

Retained earnings

98,163

205,617

SHAREHOLDERS' FUNDS

108,163

215,617

The financial statements have been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies.

The financial statements were approved by the Board of Directors on 28 February 2019 and were signed on its behalf by:

Mr P A Gurney - Director

Mrs C A Webster - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2017

10,000

(205,799

)

(195,799

)

Changes in equity

Total comprehensive income

-

411,416

411,416

Balance at 31 December 2017

10,000

205,617

215,617

Changes in equity

Total comprehensive income

-

(107,454

)

(107,454

)

Balance at 31 December 2018

10,000

98,163

108,163

1.	STATUTORY INFORMATION

Systems Interface Limited is a private company, limited by shares , registered in England and Wales. The

company's registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with the provisions of Section 1A "Small Entities" of Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Significant judgements and estimates

The Company makes estimates and assumptions concerning the future. Estimates will, by definition, seldom be

identical to the actual results. Estimates and assumptions are based on historical experience and other

factors, including expectations of future events that may be reasonably occur based on the current situation.

Estimates are continuously evaluated. The estimates and assumptions that have a significant risk

of causing a material adjustment to the carrying values of assets and liabilities within the next financial year are

disclosed in the notes to the financial statements.

Project results

If the result of the contract can be estimated reliably, revenues and costs are accounted for over the period of

the contract, in proportion to the progress of the activities performed as measured by costs incurred. The

activities performed are measured in accordance with the ‘percentage of completion method’. If it is probable that

the total project cost will exceed the total contract value, the total expected loss is recognised as an expense.

This system is based on periodic assessments by the project teams using project accounts, project files and the

expertise of those involved. Estimates are an inherent part of this process and they may differ from the

subsequent reality, especially for long-term (complex) projects. However, historical experience has also shown

that estimates are, on the whole, sufficiently reliable.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates,

value added tax and other sales taxes.

When the outcome of a construction contract can be estimated reliably and it is probable that the contract will be

profitable, contract revenue is recognised over the period of the contract by reference to the stage of

completion.

The outcome of a construction contract can be estimated reliably when all the following conditions are satisfied:

1. Total contract revenue can be measured reliably;

2. It is probable that the economic benefits associated with the contract will flow to the Company;

3. Both the contract costs to complete and the stage of contract completion at the end of the reporting period

can be measured reliably; and

4. The contract costs attributable to the contract can be clearly identified and measured reliably so that actual

contract costs incurred can be compared with prior estimates.

Contract costs are recognised as expenses by reference to the stage of completion of the contract activity at the

end of the reporting period. The stage of completion is measured by dividing the actual costs by the total

forecasted costs. When it is probable that total contract costs will exceed total contract revenue, the expected

loss is recognised as an expense immediately.

When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised only to

the extent of contract costs incurred that are likely to be recoverable.

Variations in contract work, claims and incentive payments are included in contract revenue to the extent that

may have been agreed with the customer and are capable of being reliably measured.

The Company uses the ‘percentage-of-completion method’ to determine the appropriate amount to recognise in a

given period. The stage of completion is measured by reference to the contract costs incurred up to the end of

the reporting period as a percentage of total estimated costs for each contract. Costs incurred in the year in

connection with future activity on a contract are excluded from contract costs in determining the stage of

completion.

Insurance claims can only be recognised if it is virtually certain that the amount recognised will be reimbursed.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life.

Freehold property

-

in accordance with the property

Plant and machinery

-

10% on cost

Fixtures and fittings

-

25% on reducing balance

Motor vehicles

-

25% on cost

Computer equipment

-

25% on cost and 25% on reducing balance

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow

moving items.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to

the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or

substantively enacted by the statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the

statement of financial position date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from

those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that

have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the

timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they

will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

The Company’s financial statements are presented in sterling, which is also the Company’s functional currency.

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the

statement of financial position date. Transactions in foreign currencies are translated into sterling at the rate of

exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the

operating result.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the

lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension

scheme are charged to profit or loss in the period to which they relate.

Going concern

During the financial year ended 31st December 2018 the company experienced operating losses of

£76,728, (2017: Profit £462,125) and a decline in cash flows. This extremely disappointing performance reflected

the continued difficult trading conditions in the both the local and global markets in which the company operates.

The viability of the company and its ability to continue as a going concern is dependent upon the company being

successful in its ongoing efforts in securing new contracts and the continued financial support of its parent

company.

The parent company has pledged its continuing support for a minimum of 12 months from the date of issuing

these financial statements.

At this time, the directors are of the opinion that no debtor is likely to be realised for an amount less than the

amount at which it is recorded in the financial statements and accordingly, no adjustments have been made to

the financial statements relating to the recoverability and classification of debtor carrying amounts or to the

amount and classification of liabilities that might be necessary should the Company not continue as a going

concern.

However, in the event that the company is not able to win new contracts referred to above, there is uncertainty

whether the company would continue as a going concern and therefore, whether it would be able to settle its

liabilities and commitments in the normal course of business.

The directors believe that the company will be successful in the above matters and have drawn up detailed cash

flow forecasts for the remainder of the 2019 year and budget forecasts for 2020 and 2021, which indicate that

the company will have sufficient cash assets to be able to meet its debts as they fall due and also show over the

longer term the company moves in a positive cash flow and profit position. Accordingly, they have prepared the

financial statements on a going concern basis.

3.	EMPLOYEES AND DIRECTORS

31.12.18

31.12.17

£

£

Wages and salaries

508,249

482,957

Social security costs

54,426

51,167

Other pension costs

30,684

21,612

593,359

555,736

The average number of employees during the year was as follows:

31.12.18

31.12.17

Directors

3

3

Administration

3

3

Direct

5

4

11

10

4.	OPERATING (LOSS)/PROFIT

The operating loss (2017 - operating profit) is stated after charging:

31.12.18

31.12.17

£

£

Depreciation - owned assets

9,365

6,882

5.

INTEREST PAYABLE AND SIMILAR EXPENSES

31.12.18

31.12.17

£

£

Bank interest

9,041

3,035

Other interest and charges

51,636

47,771

60,677

50,806

6.

TAXATION

Analysis of the tax credit

The tax credit on the loss for the year was as follows:

31.12.18

31.12.17

£

£

Deferred tax

(27,450

)

-

Tax on (loss)/profit

(27,450

)

-

7.	TANGIBLE FIXED ASSETS

Fixtures

Freehold

Plant and

and

property

machinery

fittings

£

£

£

COST

At 1 January 2018

46,251

29,660

13,540

At 31 December 2018

46,251

29,660

13,540

DEPRECIATION

At 1 January 2018

42,011

25,655

12,773

Charge for year

4,240

1,159

192

At 31 December 2018

46,251

26,814

12,965

NET BOOK VALUE

At 31 December 2018

-

2,846

575

At 31 December 2017

4,240

4,005

767

Motor

Computer

vehicles

equipment

Totals

£

£

£

COST

At 1 January 2018

13,214

95,133

197,798

Additions

-

11,455

11,455

At 31 December 2018

13,214

106,588

209,253

DEPRECIATION

At 1 January 2018

13,214

91,558

185,211

Charge for year

-

3,774

9,365

At 31 December 2018

13,214

95,332

194,576

NET BOOK VALUE

At 31 December 2018

-

11,256

14,677

At 31 December 2017

-

3,575

12,587

8.

STOCKS

31.12.18

31.12.17

£

£

Stocks

45,506

45,505

9.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.18

31.12.17

£

£

Trade debtors

1,291,264

1,647,546

VAT

21,634

19,823

Deferred tax asset

27,450

-

1,340,348

1,667,369

10.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.18

31.12.17

£

£

Bank loans and overdrafts

208,189

179,933

Trade creditors

703,298

1,093,228

Amounts owed to group undertakings

665,458

-

Social security and other taxes

16,495

14,821

Other creditors

83,865

-

Directors' loan accounts

323,304

323,345

Accruals and deferred income

249,659

-

Accrued expenses

7,127

-

2,257,395

1,611,327

11.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

31.12.18

31.12.17

£

£

Amounts owed to group undertakings

-

250,000

Other creditors

-

77,580

-

327,580

12.	SECURED DEBTS

The following secured debts are included within creditors:

31.12.18

31.12.17

£

£

Bank overdrafts

208,189

179,933

The bank holds a charge over the assets of the Company together with personal guarantees by the principle

shareholders.

13.	RELATED PARTY DISCLOSURES

The company has during the year traded commercially with Frequentis AG its majority shareholder. In addition to

this, Frequentis has supported the company through a scheme of invoice factoring and also provided security for

performance and tender bonds.

Included in the Income Statement

2018

2017

£

£

Sales

12,500

-

Purchases

293,181

344,454

Admin costs

24,131

-

Finance charges

51,636

44,720

Included in the Balance Sheet

2018

2017

£

£

Long Term Loan - Intercompany

250,000

250,000

Short Term Loan - Intercompany

378,643

-

Trade Creditors - Trade Creditors

37,554

38,997

14.	ULTIMATE CONTROLLING PARTY

The ultimate controlling party is Mr Bardach by virtue of his controlling shareholding in Frequentis AG