Zettlex (UK) Limited - Accounts to registrar (filleted) - small 18.2

REGISTERED NUMBER: 06822548 (England and Wales)

ZETTLEX (UK) LIMITED

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

Page

Company Information

1

Balance Sheet

2

Notes to the Financial Statements

3

DIRECTORS:

R J Buckley

P A L Chang

K Singh

REGISTERED OFFICE:

Faraday House

Barrington Road

Foxton

CB22 6SL

REGISTERED NUMBER:

06822548 (England and Wales)

AUDITORS:

Clarke Nicklin LLP

Chartered Accountants and

Statutory Auditors

Clarke Nicklin House

Brooks Drive

Cheadle Royal Business Park

Cheadle

Cheshire

SK8 3TD

FIXED ASSETS

Intangible assets

4

20

31

Tangible assets

5

116

112

136

143

CURRENT ASSETS

Stocks

6

1,153

826

Debtors

7

2,015

987

Cash at bank

4,906

4,738

8,074

6,551

CREDITORS

Amounts falling due within one year

8

1,547

3,369

NET CURRENT ASSETS

6,527

3,182

TOTAL ASSETS LESS CURRENT LIABILITIES

6,663

3,325

PROVISIONS FOR LIABILITIES

10

29

22

NET ASSETS

6,634

3,303

CAPITAL AND RESERVES

Called up share capital

11

-

-

Retained earnings

6,634

3,303

SHAREHOLDERS' FUNDS

6,634

3,303

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

In accordance with Section 444 of the Companies Act 2006, the Statement of Income and Retained Earnings has not been delivered.

The financial statements were approved by the Board of Directors and authorised for issue on 28 September 2022 and were signed on its behalf by:

P A L Chang - Director

1.	STATUTORY INFORMATION

Zettlex (UK) Limited ("the Company") is a limited company incorporated in the United Kingdom and registered in England and Wales under the Companies Act 2006. The address of its registered office and principal place of business is Faraday House, Barrington Road, Foxton, CB22 6SL.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

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

The presentation currency of the financial statements is Sterling (£).

Going Concern

The financial statements have been prepared on a going concern basis as the directors believe that the company will be able to continue to meet its liabilities as they fall due for the foreseeable future. In drawing this conclusion, management have considered the outlook for the next 12 months and any economic implications of the COVID-19 pandemic.

Significant judgements and estimates

Preparation of the financial statements requires management to make significant judgements and estimates. The items in the financial statements where these judgements and estimates have been made include:

Depreciation of assets

The company depreciates its tangible assets over their estimated useful lives. The estimation of the useful lives of assets is based on historic experience as well as expectations about future use and therefore requires estimates and assumptions to be applied by the directors. The actual lives of these assets can vary depending on a variety of factors, including technological innovation, product life cycles and maintenance programmes.

Stock provisioning

The company designs, manufactures and sells inductive encoder products and is subject to changing consumer demands and industry trends. As a result, it is necessary to consider the recoverability of the cost of inventory and the associated provisioning required. When calculating the inventory provision, management considers the nature and condition of the inventory, as well as applying assumptions around anticipated saleability of finished goods and future usage of raw materials. See note 8 for the net carrying amount of the inventory and associated provision.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added tax.

The majority of the company's products are sold on an ex works basis and the revenue is recognised on dispatch. The remaining revenue is recognised when title to the goods is transferred to customers and is normally upon delivery of the product to the customer.

The company recognises turnover when (a) the significant risks and rewards of ownership have been transferred to the buyer, (b) the company retains no continuing involvement or control over the goods, (c) the amount of turnover can be measured reliably, (d) it is probable that future economic benefits will flow to the entity.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Computer software is being amortised evenly over its estimated useful life of three years.

Tangible fixed assets

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

Plant and machinery

-

25% on reducing balance

Fixtures and fittings

-

25% on reducing balance

Computer equipment

-

33% on cost

Impairment of assets

At each reporting date fixed assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared with its carrying amount. If estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in the income statement.

If an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset in the prior years. A reversal of an impairment loss is recognised immediately in the income statement.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Stocks are recognised as an expense in the period in which the related revenue is recognised.

Cost is valued at standard. The cost of purchased items is the purchase price.

At the end of each reporting period, stocks are assessed for impairment. If an item of inventory is impaired, the identified inventory is reduced to its selling price less costs to complete and sell and an impairment charge is recognised in the income statement. Where a reversal of the impairment is recognised, the impairment charge is reversed, up to the original impairment loss, and is recognised as a credit in the income statement.

Financial instruments

The company has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments. The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities, including amounts owed by and to group undertakings.

Financial assets

Basic financial assets, including trade debtors, cash and bank balances and amounts owed by group undertakings, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at the market rate of interest.

Such assets are subsequently carried at amortised cost using the effective interest method.

At the end of each reporting period, financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in the income statement.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in the income statement.

Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party, or (c) control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.

Financial liabilities

Basic financial liabilities, including trade creditors and amounts owed to group undertakings, 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.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.

Taxation

Taxation expense for the period comprises current and deferred tax recognised in the reporting period. 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. In this case tax is also recognised in other comprehensive income or directly in equity respectively.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is the amount of income tax payable in respect of the taxable profit for the year or prior years. Tax is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the period end.

Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred tax

Deferred tax arises from timing differences that are differences between taxable profits reported in the tax return and total comprehensive income as stated in the financial statements. These timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements.

Deferred tax is recognised on all timing differences at the reporting date except for certain exceptions. Unrelieved tax losses and other deferred tax assets are only recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the period end and that are expected to apply to the reversal of timing difference.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations. The contributions are recognised as an expense when they are due. Amounts not paid are shown in accruals in the balance sheet. The assets of the plan are held separately from the company in independently administered funds.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was 38 (2020 - 37 ) .

4.	INTANGIBLE FIXED ASSETS

Other

intangible

assets

£'000

COST

At 1 January 2021

and 31 December 2021

32

AMORTISATION

At 1 January 2021

1

Charge for year

11

At 31 December 2021

12

NET BOOK VALUE

At 31 December 2021

20

At 31 December 2020

31

5.	TANGIBLE FIXED ASSETS

Fixtures

Plant and

and

Computer

machinery

fittings

equipment

Totals

£'000

£'000

£'000

£'000

COST

At 1 January 2021

193

44

99

336

Additions

40

-

-

40

Disposals

-

(3

)

-

(3

)

At 31 December 2021

233

41

99

373

DEPRECIATION

At 1 January 2021

111

33

80

224

Charge for year

21

2

12

35

Eliminated on disposal

-

(2

)

-

(2

)

At 31 December 2021

132

33

92

257

NET BOOK VALUE

At 31 December 2021

101

8

7

116

At 31 December 2020

82

11

19

112

6.

STOCKS

2021

2020

£'000

£'000

Stocks

1,048

701

Work-in-progress

105

125

1,153

826

Stock is stated after provision for impairment of £306,540 (2020: £286,666).

7.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2021

2020

£'000

£'000

Trade debtors

1,804

863

Amounts owed by group undertakings

8

7

Other debtors

58

44

VAT

87

33

Prepayments

58

40

2,015

987

8.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2021

2020

£'000

£'000

Trade creditors

513

463

Amounts owed to group undertakings

323

195

Tax

385

8

Social security and other taxes

49

59

Other creditors

211

2,612

Accrued expenses

66

32

1,547

3,369

9.	LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:

2021

2020

£'000

£'000

Within one year

82

82

10.	PROVISIONS FOR LIABILITIES

2021

2020

£'000

£'000

Deferred tax

29

22

Deferred

tax

£'000

Balance at 1 January 2021

22

Provided during year

7

Balance at 31 December 2021

29

The provision for deferred taxation is made up as follows

2021

2020

£'000

£'000

Accelerated capital allowances

29

22

29

22

11.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2021

2020

value:

£

£

4

Ordinary

£1

4

4

12.	DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006

The Report of the Auditors was unqualified.

Graham Travis FCA (Senior Statutory Auditor)

for and on behalf of Clarke Nicklin LLP

13.	ULTIMATE PARENT COMPANY

Novanta Inc (incorporated in Canada) is regarded by the directors as being the company's ultimate parent company.

The largest and smallest group in which the results of the company are consolidated is Novanta Inc. The consolidated financial statements of Novanta Inc can be found at www.sec.gov or by writing to Novanta Inc, 125 Middlesex Turnpike, Bedford, MA 01730, USA.