Systems Interface Limited - Limited company accounts 22.3

REGISTERED NUMBER: 01643486 (England and Wales)

Report of the Directors and

Audited Financial Statements

for the Year Ended 31 December 2022

for

Systems Interface Limited

Page

Company Information

1

Report of the Directors

2

Report of the Independent Auditors

4

Income Statement

7

Other Comprehensive Income

8

Statement of Financial Position

9

Statement of Changes in Equity

10

Notes to the Financial Statements

11

DIRECTORS:

Mr P A Gurney

Mr P R Heaney

Mr A W Madge

SECRETARY:

Mr M L Mulberry BA (Hons) FCCA CTA

REGISTERED OFFICE:

Suite 9C

Oakhanger Business Park

Oakhanger

Near Bordon

Hampshire

GU35 9JA

REGISTERED NUMBER:

01643486 (England and Wales)

SENIOR STATUTORY AUDITOR:

Mr Mark Williams FCA

AUDITORS:

Williams & Co Epsom LLP

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 2022.

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 2022.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2022 to the date of this report.

Mr P A Gurney

Mr P R Heaney

Other changes in directors holding office are as follows:

Mrs C A Webster - resigned 1 April 2022

Mr A W Madge - appointed 1 April 2022

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 ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Williams & Co Epsom LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr A W Madge - Director

24 January 2023

Opinion

We have audited the financial statements of Systems Interface Limited (the 'company') for the year ended 31 December 2022 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 2022 and of its profit 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

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 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 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.

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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

The entity's financial statements would mainly be at risk to material misstatement in the area of revenue recognition, alongside valuation of work-in-progress, and contract assets and liabilities. Fraud may occur through the booking of revenues earlier than allowed, or by deferring revenues to a later period. Other key risk areas included the application of IFRS 16 and management override.

Irregularities resulting from fraud are usually inherently more difficult to detect than those arising from error and the focus of the audit was on the high risk areas identified.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

" We enquired of management and those charged with governance around actual and potential litigation claims.

" We performed audit work over the risk of management override of controls, including testing journal entries for

appropriateness. Reviewing transactions for significant transactions outside the normal course of business.

" We reviewed accounting estimates for bias.

" We reviewed financial statement disclosures for consistency and application.

" We reviewed a sample of projects undertaken throughout the year and the application of IFRS 15 to assess

compliance with the standard.

" We tested project costs to complete and the valuation of work-in-progress.

" We carried out systems walkthroughs to better understand the control environment in place and to test the

adequacy of the controls in place.

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 Epsom LLP

8-10 South Street

Epsom

Surrey

KT18 7PF

24 January 2023

TURNOVER

3

4,012,448

3,385,645

Cost of sales

(2,868,291

)

(2,531,467

)

GROSS PROFIT

1,144,157

854,178

Distribution costs

(216,112

)

(102,317

)

Administrative expenses

(606,892

)

(588,491

)

321,153

163,370

Other operating income

-

10,061

OPERATING PROFIT

321,153

173,431

Interest receivable and similar income

5

67

2

321,220

173,433

Interest payable and similar expenses

6

(69,050

)

(70,486

)

PROFIT BEFORE TAXATION

7

252,170

102,947

Tax on profit

8

-

(7,957

)

PROFIT FOR THE FINANCIAL YEAR

252,170

94,990

PROFIT FOR THE YEAR

252,170

94,990

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

252,170

94,990

FIXED ASSETS

Owned

Tangible assets

9

12,757

1,007

Right-of-use

Tangible assets

9, 15

17,748

33,190

30,505

34,197

CURRENT ASSETS

Stocks

10

186,988

557,742

Debtors: amounts falling due within one year

11

270,266

516,144

Prepayments and accrued income

330,886

296,984

Cash at bank and in hand

839,227

822,699

1,627,367

2,193,569

CREDITORS

Amounts falling due within one year

12

(1,282,916

)

(2,158,826

)

NET CURRENT ASSETS

344,451

34,743

TOTAL ASSETS LESS CURRENT LIABILITIES

374,956

68,940

CREDITORS

Amounts falling due after more than one year

13

(1,156,794

)

(1,102,948

)

NET LIABILITIES

(781,838

)

(1,034,008

)

CAPITAL AND RESERVES

Called up share capital

17

10,000

10,000

Retained earnings

18

(791,838

)

(1,044,008

)

SHAREHOLDERS' FUNDS

(781,838

)

(1,034,008

)

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 and authorised for issue on 24 January 2023 and were signed on its behalf by:

Mr A W Madge - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2021

10,000

(1,138,998

)

(1,128,998

)

Changes in equity

Total comprehensive income

-

94,990

94,990

Balance at 31 December 2021

10,000

(1,044,008

)

(1,034,008

)

Changes in equity

Total comprehensive income

-

252,170

252,170

Balance at 31 December 2022

10,000

(791,838

)

(781,838

)

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 paragraph 24(6) of IFRS 6 Exploration for and Evaluation of Mineral Resources;

•

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.

Critical accounting judgements and key sources of estimation uncertainty

Revenue is recognised over time based on the progress towards satisfaction of the performance obligation using the input method. Invoicing of orders completed over time is based on estimated contract costs, the achievable contract revenue, and the risks associated with the contract. These estimates are regularly reviewed and revised. Although the estimates are made using all information available at the reporting date, changes may occur. These changes may affect both the revenue recognised and the carrying amounts of contract assets.

Turnover

For the vast majority of the entity's contracts with customers, revenue is recognised over time and therefore revenue is recognised on the basis of the progress towards satisfaction of the performance obligation using the input method.

Under this method, revenues are recognised on the basis of the production costs actually incurred in relation to expected total cost. The impact of changes in the estimated total cost is recognised in profit or loss in the period in which it occurs.

For other revenue items, turnover represents net invoiced sales of goods and work done, excluding value added tax.

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 or, if held under a finance lease, over the lease term, whichever is the shorter.

Freehold property

-

in accordance with the property

Fixtures and fittings

-

25% on reducing balance

Motor vehicles

-

25% on cost

Computer equipment

-

25% on cost and 25% on reducing balance

Stocks

Stocks and work in progress 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

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.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

31.12.22

31.12.21

£

£

United Kingdom

379,400

898,749

Europe

143,798

43,765

Africa

1,321,399

2,394,885

Middle east

100,170

9,954

Rest of World

2,067,681

38,292

4,012,448

3,385,645

4.	EMPLOYEES AND DIRECTORS

31.12.22

31.12.21

£

£

Wages and salaries

494,463

460,076

Social security costs

51,723

48,951

Other pension costs

60,532

44,537

606,718

553,564

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

31.12.22

31.12.21

Directors

2

3

Administration

2

2

Direct

5

4

9

9

31.12.22

31.12.21

£

£

Directors' remuneration

226,282

215,960

Directors' pension contributions to money purchase schemes

50,933

34,735

Information regarding the highest paid director is as follows:

31.12.22

31.12.21

£

£

Emoluments etc

86,994

84,460

Pension contributions to money purchase schemes

10,980

10,135

5.

INTEREST RECEIVABLE AND SIMILAR INCOME

31.12.22

31.12.21

£

£

Deposit account interest

67

2

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

31.12.22

31.12.21

£

£

Bank interest

4,107

47,067

Bank loan interest

48,586

-

Other interest and charges

16,357

23,419

69,050

70,486

7.	PROFIT BEFORE TAXATION

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

31.12.22

31.12.21

£

£

Cost of inventories recognised as expense

2,868,291

2,531,467

Leases

12,271

13,730

Depreciation - owned assets

4,253

3,199

Depreciation - assets on hire purchase contracts or finance leases

15,442

16,378

Auditors' remuneration

8,500

7,500

Foreign exchange differences

(27,324

)

33,845

8.

TAXATION

Analysis of tax expense

31.12.22

31.12.21

£

£

Current tax:

Tax

-

7,957

Total tax expense in income statement

-

7,957

9.	TANGIBLE FIXED ASSETS

Fixtures

Freehold

Short

and

property

leasehold

fittings

£

£

£

COST

At 1 January 2022

46,251

51,715

15,615

Additions

-

-

-

At 31 December 2022

46,251

51,715

15,615

DEPRECIATION

At 1 January 2022

46,251

18,525

14,608

Charge for year

-

15,442

252

At 31 December 2022

46,251

33,967

14,860

NET BOOK VALUE

At 31 December 2022

-

17,748

755

At 31 December 2021

-

33,190

1,007

Motor

Computer

vehicles

equipment

Totals

£

£

£

COST

At 1 January 2022

13,214

106,588

233,383

Additions

-

16,003

16,003

At 31 December 2022

13,214

122,591

249,386

DEPRECIATION

At 1 January 2022

13,214

106,588

199,186

Charge for year

-

4,001

19,695

At 31 December 2022

13,214

110,589

218,881

NET BOOK VALUE

At 31 December 2022

-

12,002

30,505

At 31 December 2021

-

-

34,197

10.

STOCKS

31.12.22

31.12.21

£

£

Stocks

39,178

42,305

Work-in-progress

147,810

515,437

186,988

557,742

11.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.22

31.12.21

£

£

Trade debtors

266,638

516,144

Other debtors

2,898

-

VAT

730

-

270,266

516,144

12.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.22

31.12.21

£

£

Bank loans and overdrafts (see note 14)

10,648

9,922

Leases (see note 14)

12,654

13,370

Payments on account

957,286

-

Trade creditors

58,121

592,684

Amounts owed to group undertakings

47,655

13,794

Social security and other taxes

15,314

13,671

VAT

-

7,118

Other creditors

-

898,539

Accruals and deferred income

172,738

602,728

Accrued expenses

8,500

7,000

1,282,916

2,158,826

13.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

31.12.22

31.12.21

£

£

Bank loans (see note 14)

24,192

35,270

Leases (see note 14)

9,408

22,063

Amounts owed to group undertakings

745,651

745,651

Other creditors

108,560

-

Directors' loan accounts

268,983

299,964

1,156,794

1,102,948

14.

FINANCIAL LIABILITIES - BORROWINGS

31.12.22

31.12.21

£

£

Current:

Bank loans

10,648

9,922

Leases (see note 15)

12,654

13,370

23,302

23,292

Non-current:

Bank loans - 1-2 years

24,192

35,270

Leases (see note 15)

9,408

22,063

33,600

57,333