Systems Interface Limited - Limited company accounts 18.2

REGISTERED NUMBER: 01643486 (England and Wales)

Report of the Directors and

Audited Financial Statements

for the Year Ended 31 December 2019

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

Reconciliation of Equity

17

Reconciliation of Loss

19

DIRECTORS:

Mr P A Gurney

Mrs C A Webster

Mr P R Heaney

SECRETARY:

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 FCA

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 2019.

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 9001:2015

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2019.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2019 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 101 'Reduced

Disclosure Framework'. 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:

Mr M L Mulberry BA (Hons) FCCA CTA - Secretary

30 January 2020

Opinion

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

31 December 2019 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 101 'Reduced Disclosure Framework'

(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 2019 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.

Material Uncertainty related to going concern

We draw attention to note 17 in the financial statements, which indicates that the company incurred a net loss of

£241,926 during the year ended 31st December 2019. As stated in note 2 under the going concern heading, the events

or conditions, along with other matters, indicate that a material uncertainty exists that may cast significant doubt on the

company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Conclusions relating to going concern

Aside from the impact of the matters disclosed in the material uncertainty related to going concern section, 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.

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.

Opinions on other matters prescribed by the Companies Act 2006

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

-	the information given in the 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 FCA (Senior Statutory Auditor)

for and on behalf of Williams & Co Chartered Accountants

8-10 South Street

Epsom

Surrey

KT18 7PF

31 January 2020

TURNOVER

2,939,237

4,977,201

Cost of sales

(2,384,356

)

(4,276,665

)

GROSS PROFIT

554,881

700,536

Distribution costs

(84,093

)

-

Administrative expenses

(690,562

)

(777,264

)

OPERATING LOSS

(219,774

)

(76,728

)

Interest receivable and similar income

4

451

2,501

(219,323

)

(74,227

)

Interest payable and similar expenses

5

(75,700

)

(60,677

)

LOSS BEFORE TAXATION

6

(295,023

)

(134,904

)

Tax on loss

7

53,097

27,450

LOSS FOR THE FINANCIAL YEAR

(241,926

)

(107,454

)

LOSS FOR THE YEAR

(241,926

)

(107,454

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE LOSS FOR THE YEAR

(241,926

)

(107,454

)

FIXED ASSETS

Tangible assets

8

79,534

121,795

CURRENT ASSETS

Stocks

9

53,242

45,506

Debtors: amounts falling due within one year

10

1,886,569

1,340,348

Debtors: amounts falling due after more than one year

10

80,547

-

Prepayments and accrued income

175,001

948,014

Cash at bank and in hand

38,478

17,013

2,233,837

2,350,881

CREDITORS

Amounts falling due within one year

11

(2,094,137

)

(2,296,423

)

NET CURRENT ASSETS

139,700

54,458

TOTAL ASSETS LESS CURRENT LIABILITIES

219,234

176,253

CREDITORS

Amounts falling due after more than one year

12

(352,997

)

(68,090

)

NET (LIABILITIES)/ASSETS

(133,763

)

108,163

CAPITAL AND RESERVES

Called up share capital

16

10,000

10,000

Retained earnings

17

(143,763

)

98,163

SHAREHOLDERS' FUNDS

(133,763

)

108,163

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the Board of Directors on 30 January 2020 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 2018

10,000

205,617

215,617

Changes in equity

Total comprehensive loss

-

(107,454

)

(107,454

)

Balance at 31 December 2018

10,000

98,163

108,163

Changes in equity

Total comprehensive loss

-

(241,926

)

(241,926

)

Balance at 31 December 2019

10,000

(143,763

)

(133,763

)

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 preparation

These financial statements have been prepared in accordance with Financial Reporting Standard 101 "Reduced Disclosure Framework" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The company has taken advantage of the following disclosure exemptions in preparing these financial statements,

as permitted by FRS 101 "Reduced Disclosure Framework":

•

the requirements of paragraphs 45(b) and 46 to 52 of IFRS 2 Share-based Payment;

•

the requirements of paragraphs 62, B64(d), B64(e), B64(g), B64(h), B64(j) to B64(m), B64(n)(ii), B64(o)(ii), B64(p), B64(q)(ii), B66 and B67 of IFRS 3 Business Combinations;

•

the requirements of paragraph 33(c) of IFRS 5 Non Current Assets Held for Sale and Discontinued Operations;

•

the requirements of IFRS 7 Financial Instruments: Disclosures;

•

the requirements of paragraphs 91 to 99 of IFRS 13 Fair Value Measurement;

•

the requirements of paragraph 52, the second sentence of paragraph 89, and paragraphs 90, 91 and 93 of IFRS 16 Leases;

the requirements of paragraph 58 of IFRS 16;

•

the requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15 Revenue from Contracts with Customers;

•

the requirement in paragraph 38 of IAS 1 Presentation of Financial Statements to present comparative information in respect of:

-

paragraph 79(a)(iv) of IAS 1;

-

paragraph 73(e) of IAS 16 Property, Plant and Equipment;

-

paragraph 118(e) of IAS 38 Intangible Assets;

-

paragraphs 76 and 79(d) of IAS 40 Investment Property; and

-

paragraph 50 of IAS 41 Agriculture;

•

the requirements of paragraphs 10(d), 10)(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D and 111 of IAS 1 Presentation of Financial Statements;

•

the requirements of paragraphs 134 to 136 of IAS 1 Presentation of Financial Statements;

•

the requirements of IAS 7 Statement of Cash Flows;

•

the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;

•

the requirements of paragraphs 17 and 18A of IAS 24 Related Party Disclosures;

•

the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group;

•

the requirements of paragraphs 134(d) to 134(f) and 135(c) to 135(e) of IAS 36 Impairments of Assets.

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

Current taxes are based on the results shown in the financial statements and are calculated according to local tax

rules, using tax rates enacted or substantially enacted by the statement of financial position date.

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.

Leases

Leases are recognised as finance leases. The lease liability is initially recognised at the present value of the lease

payments which have not yet been made and subsequently measured under the amortised cost method. The

initial cost of the right-of-use asset comprises the amount of the initial measurement of the lease liability, lease

payments made prior to the lease commencement date, initial direct costs and the estimated costs of removing or

dismantling the underlying asset per the conditions of the contract.

Where ownership of the right-of-use asset transfers to the lessee at the end of the lease term, the right-of-use

asset is depreciated over the asset’s remaining useful life. If ownership of the right-of-use asset does not transfer

to the lessee at the end of the lease term, depreciation is charged over the shorter of the useful life of the

right-of-use asset and the lease term.

Employee benefit costs

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

scheme are charged to the income statement in the period to which they relate.

Going concern

During the financial year ended 31st December 2019 the company experienced operating losses of £219,774

(2018: £76,728) and a decline in cash flow due to overrunning contracts and cost increases on two of its main

projects undertaken during the year. As a result of this, the company was required to use the support of its

parent company to meet its financial obligations.

We start 2020 with contractual orders on hand of £1.9m and a potential order book of £4m of contracts with a

high probability of being secured and delivered in the year. Projections show that cash flow will return to a

positive position as contracts are awarded and completed with a projected positive cash at bank position by the

year end date.

Our parent Company remains positive to our situation and continues to offer financial support and accordingly the

directors have prepared the financial statements on a going concern basis.

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.

3.	EMPLOYEES AND DIRECTORS

31.12.19

31.12.18

£

£

Wages and salaries

536,908

508,249

Social security costs

59,033

54,426

Other pension costs

39,478

30,684

635,419

593,359

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

31.12.19

31.12.18

Directors

3

3

Administration

2

3

Direct

4

5

9

11

31.12.19

31.12.18

£

£

Directors' remuneration

231,230

226,395

Directors' pension contributions to money purchase schemes

24,711

21,215

Information regarding the highest paid director is as follows:

31.12.19

31.12.18

£

£

Emoluments etc

83,230

80,785

Pension contributions to money purchase schemes

7,491

7,071

4.

INTEREST RECEIVABLE AND SIMILAR INCOME

31.12.19

31.12.18

£

£

Deposit account interest

451

2,501

5.

INTEREST PAYABLE AND SIMILAR EXPENSES

31.12.19

31.12.18

£

£

Bank interest

8,948

9,041

Other interest and charges

66,752

51,636

75,700

60,677

6.	LOSS BEFORE TAXATION

The loss before taxation is stated after charging/(crediting):

31.12.19

31.12.18

£

£

Cost of inventories recognised as expense

2,384,356

4,276,665

Leases

2,564

50,305

Depreciation - owned assets

44,336

9,365

Auditors' remuneration

6,500

6,100

Foreign exchange differences

(9,173

)

62,018

7.

TAXATION

Analysis of tax income

31.12.19

31.12.18

£

£

Deferred tax

(53,097

)

(27,450

)

Total tax income in income statement

(53,097

)

(27,450

)

8.	TANGIBLE FIXED ASSETS

Freehold

Short

Plant and

property

leasehold

machinery

£

£

£

COST

At 1 January 2019

46,251

107,118

29,660

At 31 December 2019

46,251

107,118

29,660

DEPRECIATION

At 1 January 2019

46,251

-

26,814

Charge for year

-

38,952

1,160

At 31 December 2019

46,251

38,952

27,974

NET BOOK VALUE

At 31 December 2019

-

68,166

1,686

At 31 December 2018

-

107,118

2,846

Fixtures

and

Motor

Computer

fittings

vehicles

equipment

Totals

£

£

£

£

COST

At 1 January 2019

13,540

13,214

106,588

316,371

Additions

2,075

-

-

2,075

At 31 December 2019

15,615

13,214

106,588

318,446

DEPRECIATION

At 1 January 2019

12,965

13,214

95,332

194,576

Charge for year

662

-

3,562

44,336

At 31 December 2019

13,627

13,214

98,894

238,912

NET BOOK VALUE

At 31 December 2019

1,988

-

7,694

79,534

At 31 December 2018

575

-

11,256

121,795

9.

STOCKS

31.12.19

31.12.18

£

£

Stocks

53,242

45,506

10.

DEBTORS

31.12.19

31.12.18

£

£

Amounts falling due within one year:

Trade debtors

1,884,815

1,291,264

VAT

1,754

21,634

Deferred tax asset

-

27,450

1,886,569

1,340,348

Amounts falling due after more than one year:

Deferred tax

80,547

-

Aggregate amounts

1,967,116

1,340,348

11.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.19

31.12.18

£

£

Bank loans and overdrafts (see note 13)

238,643

208,189

Leases (see note 13)

39,028

39,028

Trade creditors

441,857

703,298

Amounts owed to group undertakings

1,048,274

665,458

Social security and other taxes

16,430

16,495

Other creditors

96,783

83,865

Directors' loan accounts

50,000

323,304

Accruals and deferred income

156,622

249,659

Accrued expenses

6,500

7,127

2,094,137

2,296,423

12.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

31.12.19

31.12.18

£

£

Leases (see note 13)

29,692

68,090

Directors' loan accounts

323,305

-

352,997

68,090

13.

FINANCIAL LIABILITIES - BORROWINGS

31.12.19

31.12.18

£

£

Current:

Bank overdrafts

238,643

208,189

Leases (see note 14)

39,028

-

277,671

208,189

Non-current:

Leases (see note 14)

29,692

-