Sylatech_Limited - Accounts

The directors present their annual report and financial statements for the year ended 31 March 2017.

The year ended 31 March 2017 is the company's first year in which it has complied with the requirements of FRS 102 1A. No transitional adjustments arose from the transition to this new accounting standard.

The principal activity of the company is the design, manufacture and assembly of precision components from lost wax investment castings and associated machining operations. The business also includes the design, production and assembly of state of the art Microwave sub-assemblies, as well as Research and Development into future capabilities and opportunities. Business Review and Principal Activities. The company had a very productive year developing sales relationships with its existing customers, as well as taking on significant new contracted accounts. The business has continued to invest significantly into R&D with pioneering research and actual product delivery. The company hived their subsidiary MM Microwave Limited into Sylatech Limited at the end of the previous financial year and this has had a positive effect on the corporate identity and branding. Group sales have increased with profitability increasing materially in line with Board expectations due to some proactive overhead control and improved operational efficiencies. Principal Risks and Uncertainties. The basic commodity parts for the Company’s sales profile remain competitive against European and Far Eastern imports. The development of 3D printing and production robotics is creating some fresh challenges but to counter this, the Company has invested further in their own robotics programme which will make its standard offering much more competitive. Uncertainty surrounding the long-term effect of Brexit on the business remains prominent and is being actively monitored. In the short term, as a net exporter, we continue to benefit from more competitive Sterling rates. The Board of Directors and Senior Management Team continually review business risks and uncertainties. Management review financial and non-financial matrices every week to understand any risks facing the business. Financial Risk Management. The Company has minimal external funding requirements and covers all its current obligations through the generation of working capital from trading cash flow. With high levels of export, foreign exchange exposures are constantly watched with some risk mitigated by sourcing same currency supplies. Board approved internal policies mitigate against interest rate risk and working capital risk. Analysis Based on Key Performance Indicators. The Board and Senior Management Team use several KPI’s to monitor the business including new sales received, attainment to forecast, performance to general budget and cash generation. Important other non-financial KPI’s are used on a daily and weekly basis to measure Health & Safety, supply performance to customers, rejections and operational efficiencies. Future Outlook. The business is developing strongly with a continued, targeted focus and drive on developing customer relations, growing sales, increasing margins and developing the range of products we offer them. Having completed the Goldman Sachs 10,000 Small Businesses course in this financial year we will continue to invest in our management team to ensure we have the relevant skills to achieve our growth plans. Having built a solid platform in this financial year we will be investing heavily in capital equipment and site infrastructure over the next financial year. With a modernised IT infrastructure already well bedded in, overheads greatly reduced and under full control, with a very strong order book, the Company is well positioned for the year ahead. There will be challenges that we cannot foresee, but management will respond robustly and responsibly to all of these as they arise.

Business Review and Principal Activities.

The company had a very productive year developing sales relationships with its existing customers, as well as taking on significant new contracted accounts. The business has continued to invest significantly into R&D with pioneering research and actual product delivery. The company hived their subsidiary MM Microwave Limited into Sylatech Limited at the end of the previous financial year and this has had a positive effect on the corporate identity and branding. Group sales have increased with profitability increasing materially in line with Board expectations due to some proactive overhead control and improved operational efficiencies.

Principal Risks and Uncertainties.

The basic commodity parts for the Company’s sales profile remain competitive against European and Far Eastern imports. The development of 3D printing and production robotics is creating some fresh challenges but to counter this, the Company has invested further in their own robotics programme which will make its standard offering much more competitive. Uncertainty surrounding the long-term effect of Brexit on the business remains prominent and is being actively monitored. In the short term, as a net exporter, we continue to benefit from more competitive Sterling rates.

The Board of Directors and Senior Management Team continually review business risks and uncertainties. Management review financial and non-financial matrices every week to understand any risks facing the business.

Financial Risk Management.

The Company has minimal external funding requirements and covers all its current obligations through the generation of working capital from trading cash flow. With high levels of export, foreign exchange exposures are constantly watched with some risk mitigated by sourcing same currency supplies. Board approved internal policies mitigate against interest rate risk and working capital risk.

Analysis Based on Key Performance Indicators.

The Board and Senior Management Team use several KPI’s to monitor the business including new sales received, attainment to forecast, performance to general budget and cash generation. Important other non-financial KPI’s are used on a daily and weekly basis to measure Health & Safety, supply performance to customers, rejections and operational efficiencies.

Future Outlook.

The business is developing strongly with a continued, targeted focus and drive on developing customer relations, growing sales, increasing margins and developing the range of products we offer them. Having completed the Goldman Sachs 10,000 Small Businesses course in this financial year we will continue to invest in our management team to ensure we have the relevant skills to achieve our growth plans. Having built a solid platform in this financial year we will be investing heavily in capital equipment and site infrastructure over the next financial year. With a modernised IT infrastructure already well bedded in, overheads greatly reduced and under full control, with a very strong order book, the Company is well positioned for the year ahead. There will be challenges that we cannot foresee, but management will respond robustly and responsibly to all of these as they arise.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

A £20,000 dividend has been paid during the year.

This report has been prepared in accordance with the special provisions relating to small companies within part 15 of the Companies Act 2006.

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

For the financial year ended 31 March 2017 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

T he directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of financial statements.he directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of financial statements.

T he members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476 .he members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.

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

Sylatech Limited is a private company limited by shares incorporated in England and Wales. The registered office is Foundry Buildings Kirkdale Road, Kirkbymoorside, York, North Yorkshire, YO62 6PX.

These financial statements have been prepared in accordance with The Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

These financial statements for the year ended 31 March 2017 are the first financial statements of Sylatech Limited prepared in accordance with FRS 102. The date of transition to FRS 102 was 1 April 2015. The reported financial position and financial performance for the previous period are not affected by the transition to FRS 102.

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Revenue is recognised upon dispatch of goods and represents amounts receivable for goods and services net of VAT and trade discounts.

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

G oodwill represents the excess or consideration over fair value of assets and liabilities acquired and is written off in equal annual installments over its estimated useful economic life of 10 years.oodwill represents the excess or consideration over fair value of assets and liabilities acquired and is written off in equal annual installments over its estimated useful economic life of 10 years.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date if the fair value can be measured reliably.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities. are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments. Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument. Financial assets and liabilities are offset , with the net amounts presented in the financial statements , when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Trade debtors, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.

Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.

Financial assets, other than those held at fair value through profit and loss , are assessed for indicators of impairment at each reporting end date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. 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 profit or loss. 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 profit or loss.held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. 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 profit or loss.

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 profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans and loans from fellow group companies are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable 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.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value though profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets. The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received. Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases. Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the profit and loss account so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the profit and loss account so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term. Rentals payable under operating leases, including any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed.

Rentals payable under operating leases, including any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed.

Government grants are recognised at the fair value of the asset receive d or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received. A grant that specifies performance conditions is recognised in income when the performance conditions are met . Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable . A grant received before the recognition criteria are satisfied is recognised as a liability.d or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the profit and loss account for the period.

The average monthly number of persons (including directors) employed by the company during the year was 126 (2016 - 137).

Details of the company's subsidiaries at 31 March 2017 are as follows:

Bank loans and overdrafts relates to an invoice discounting arrangement which is secured against all assets of the company.

Other creditors includes hire purchase liabilities of £21,200 (2016 - £21,641) are secured against the assets to which they relate.

Other creditors includes a balance of £37,500 (2016 - £50,000) which is secured against all assets of the company.

Other creditors includes hire purchase liabilities of £25,002 (2016 - 45,673) are secured against the assets to which they relate.

Other creditors includes a balance of £38,542 (2016 - £12,500) which is secured against all assets of the company.

The invoice discounting arrangement has been secured by personal guarantees and warranties offered by the Directors and from Mr W B Shaw and Miss J R Shaw, shareholders of the parent company. During the year Thornton Riseborough Limited, a company controlled by Mr M D Chappell, a former director, received £76,018 (2016 - £121,095) in consultancy fees of which £nil (2016 - £82,000) fell due at the balance sheet date and was included in creditors: amounts falling due within one year. During the year Superprop Limited, a company controlled by Mr C W Shaw, a director, charged £48,000 (2016 - £56,000) in consultancy fees of which £50,680 (2016 - £20,000) fell due at the balance sheet date and was included within creditors: amounts falling due within one year. Non-controlling shareholders of the parent company have made aggregate loan advances to the company of £549,000 on which interest was charged at 1% per annum in arrears until 1 May 2015 and 3% thereafter. Interest has been charged and paid in the year amounting to £16,760 (2016 - £31,408). In the prior year interest was unpaid owing to amendments due to be made to the underlying loan agreements and the total accrual at 31 March 2016 amounted to £36,908.

During the year Thornton Riseborough Limited, a company controlled by Mr M D Chappell, a former director, received £76,018 (2016 - £121,095) in consultancy fees of which £nil (2016 - £82,000) fell due at the balance sheet date and was included in creditors: amounts falling due within one year.

During the year Superprop Limited, a company controlled by Mr C W Shaw, a director, charged £48,000 (2016 - £56,000) in consultancy fees of which £50,680 (2016 - £20,000) fell due at the balance sheet date and was included within creditors: amounts falling due within one year.

Non-controlling shareholders of the parent company have made aggregate loan advances to the company of £549,000 on which interest was charged at 1% per annum in arrears until 1 May 2015 and 3% thereafter. Interest has been charged and paid in the year amounting to £16,760 (2016 - £31,408). In the prior year interest was unpaid owing to amendments due to be made to the underlying loan agreements and the total accrual at 31 March 2016 amounted to £36,908.

The ultimate parent company and controlling party is SRF Holdings Limited.

The directors are of the opinion that there is no ultimate controlling party.