SinterCast Limited - Accounts

Registered number

02021239

SinterCast Limited

Report and Financial Statements

31 December 2017

SinterCast Limited
Report and accounts
Contents
Page
Company information	1
Directors' report	2
Strategic report	4
Independent auditor's report	5
Income statement	7
Statement of comprehensive income	8
Statement of financial position	9
Statement of changes in equity	10
Statement of cash flows	11
Notes to the financial statements	12

SinterCast Limited

Company Information

Directors

Dr S Dawson

H E Andersson

Secretary

D Uhmeier

Auditors

Timothy N. Horne Ltd

Bay Villa

40 Church Road

Otley, Ipswich

Suffolk

IP6 9NP

Registered office

Kingswick House

Kingswick Drive

Ascot

Berkshire

SL5 7BH

Registered number

02021239

SinterCast Limited
Registered number:				02021239
Directors' Report
The directors present their report and financial statements for the year ended 31 December 2017.
Principal activities
The principal activity of SinterCast Ltd is providing marketing, business and management services to the parent company SinterCast AB (publ). SinterCast AB (publ) also engage SinterCast Ltd as a distributor for the marketing and sale of the products and the provision of after-market technical services to existing and potential future customers in SinterCast Ltd.'s local market. The defined strategy for the entire SinterCast Group is: SinterCast will focus primarily on providing process control technology and know-how for the reliable high volume production of Compacted Graphite Iron. SinterCast will promote CGI within the foundry and end-user communities to increase the overall market opportunity for CGI and to define the forefront of CGI development, production and application. This focus and these efforts will secure SinterCast's global leadership in the field of CGI. SinterCast will also build upon its technical expertise in thermal analysis and cast iron process control to develop and launch new technologies beyond the core CGI market. These focused activities will provide the foundation for increasing the long-term value of the Company for its shareholders. As a technology lead Company, SinterCast will grow and prosper by earning the respect of its customers.
Dividends
No dividends will be distributed for the year ended 31 December 2017.
Directors
The following persons served as directors during the year:
	Dr S Dawson
	H E Andersson
Directors' responsibilities

The directors are responsible for preparing the report and 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 (Financial Reporting Standard 102 and applicable law). 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 estimates that are reasonable and prudent;
●	state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
●	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.

Disclosure of information to auditors

Each person who was a director at the time this report was approved confirms that:
●	so far as he is aware, there is no relevant audit information of which the company's auditor is unaware; and
●	he 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 auditor is aware of that information.

This report was approved by the board on 6 August 2018 and signed on its behalf.

Dr S Dawson

Director

SinterCast Limited

Strategic Report

The directors present their strategic report for the year ended 31 December 2017. Review of business 2017 was a disappointing year. Even though we had indicated that it would be a ‘bridge’ year, the first quarter surprised us. Three of our high-volume programmes started slow, putting us 6.8% behind the full-year 2016 pace, and Sampling Cup shipments fell to a five-year low. It left a big hill to climb. Series production improved throughout the year, with two of the three slow-starters returning to full volume, and industrial power posting year-on-year growth of almost 75,000 Engine Equivalents to compensate for the first quarter deficit. Ultimately, the full-year production was only 0.3% short of 2016. Sampling Cup shipments also improved throughout the year, with the third and fourth quarters both ranking in our all-time top-five quarters. The shipment of 144,600 Sampling Cups in 2017 was 24,200 (14.3%) lower than 2016, burdening our year-on-year revenue comparison. But the actual consumption of Sampling Cups in the field was only 1,631 units (1.3%) lower, showing that the correlation between production and consumption was maintained. The decline in the first half of the year was entirely due to changes in customer inventory strategies and has no implications for our production outlook. After three years of stable production, with some frustrating headwinds that held us back, our outlook has become brighter. The market demand for many of our engines is increasing and our development pipeline is healthy, with new engine launches ahead. The Mini-System 3000 order at the Sanlian foundry in China in February provided a good start to our installation campaign and the outlook for additional installation commitments, both in our core CGI market and for our new Tracking Technologies, is positive. With the filling of the last of the Five Waves, 2018 will close the circle that we first sketched in 2002. We have done what we said we would do. Now we have the opportunity to do more.

Risks and Uncertainty Factors Uncertainty factors for SinterCast include the timing of OEM decisions for new CGI engines and other components, adherence to start-of-production dates and ramp projections, the global economy for new vehicle sales, technology trends and emissions legislation, and the individual sales success of vehicles equipped with SinterCast-CGI components. In Europe, passenger vehicle sales have increased for the last four years and most forecasters indicate a stable or positive near-term outlook for both passenger vehicles and commercial vehicles. However, political uncertainty remains and this could affect infrastructure, investment, trade and, ultimately, vehicle sales. In Asia, the dominant Chinese market has shown recovery in the commercial vehicle sector, which represents the primary opportunity for CGI. Growth for SinterCast in China depends on the continued modernisation of road infrastructure, enforcement of emissions legislation, and acceptance of the SinterCast business model. In North America, passenger vehicle sales remain strong and SinterCast has benefitted from the recent market growth and the trend toward larger crossovers, SUVs and pick-ups. Although the top three est-selling vehicles in America have recently committed to diesel engine options, the long-term outlook for diesel passenger vehicles remains uncertain. The possible renegotiation of free trade agreements could also have an impact on the North American passenger vehicle and commercial vehicle markets.

This report was approved by the board on 6 August 2018 and signed on its behalf.

Dr S Dawson

Director

SinterCast Limited

Independent auditor's report

to the members of SinterCast Limited

Opinion

We have audited the financial statements of SinterCast Limited for the year ended 31 December 2017 which comprise the Income Statement, the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, the Statement of Cash Flows 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 FRS 102 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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 an auditor's report 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.
In our opinion the financial statements:
●	give a true and fair view of the state of the company's affairs as at 31 December 2017 and of its profit for the year then ended;
●	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;
●	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 Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
●	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
●	the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
Other information
The other information comprises the information included in the report and financial statements, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information. 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 strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
●	the strategic report and the directors’ report have 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 strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which 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

Responsibilities of directors

As explained more fully in the directors’ responsibilities statement, 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 is 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.

Auditor’s 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 an auditor’s report 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 auditor’s report.

Timothy Noel Horne
(Senior Statutory Auditor)		Bay Villa
for and on behalf of		40 Church Road
Timothy N. Horne Ltd		Otley, Ipswich
Accountants and Statutory Auditors		Suffolk
10 August 2018		IP6 9NP

SinterCast Limited
Income Statement
for the year ended 31 December 2017
Notes						2017		2016
£							£
Turnover				2		555,553		550,127
Cost of sales						(8,625)		(12,428)
Gross profit						546,928		537,699
Administrative expenses						(540,883)		(509,018)
Operating profit				3		6,045		28,681
Profit on ordinary activities before taxation						6,045		28,681
Tax on profit on ordinary activities				6		-		-
Profit for the financial year						6,045		28,681

SinterCast Limited
Statement of comprehensive income
for the year ended 31 December 2017
Notes					2017		2016
£						£
Profit for the financial year					6,045		28,681
Other comprehensive income					-		-
Total comprehensive income for the year					6,045		28,681

SinterCast Limited
Statement of Financial Position
as at 31 December 2017
Notes				2017			2016
£					£
Fixed assets
Tangible assets	7			1,479			2,286
Current assets
Debtors	8		369,913			534,037
Cash at bank and in hand			10,253			50,099
			380,166			584,136
Creditors: amounts falling due within one year	9		(272,605)			(483,427)
Net current assets				107,561			100,709
Net assets				109,040			102,995
Capital and reserves
Called up share capital	10			3,159,093			3,159,093
Other reserves	11			286,775			286,775
Profit and loss account	12			(3,336,828)			(3,342,873)
Total equity				109,040			102,995
Dr S Dawson
Director
Approved by the board on 6 August 2018

SinterCast Limited
Statement of Changes in Equity
for the year ended 31 December 2017
Share			Other		Profit		Total
capital			reserves		and loss
account
£			£		£		£
At 1 January 2016		3,159,093		286,775		(3,371,554)		74,314
Profit for the financial year						28,681		28,681
At 31 December 2016		3,159,093		286,775		(3,342,873)		102,995
At 1 January 2017		3,159,093		286,775		(3,342,873)		102,995
Profit for the financial year						6,045		6,045
At 31 December 2017		3,159,093		286,775		(3,336,828)		109,040

SinterCast Limited
Statement of Cash Flows
for the year ended 31 December 2017
Notes			2017		2016
£				£
Operating activities
Profit for the financial year			6,045		28,681
Adjustments for:
Depreciation			807		134
Decrease/(increase) in debtors			164,124		(207,603)
(Decrease)/increase in creditors			(210,822)		139,657
			(39,846)		(39,131)
Cash used in operating activities			(39,846)		(39,131)
Investing activities
Payments to acquire tangible fixed assets			-		(2,420)
Cash used in investing activities			-		(2,420)
Net cash used
Cash used in operating activities			(39,846)		(39,131)
Cash used in investing activities			-		(2,420)
Net cash used			(39,846)		(41,551)
Cash and cash equivalents at 1 January			50,099		91,650
Cash and cash equivalents at 31 December			10,253		50,099
Cash and cash equivalents comprise:
Cash at bank			10,253		50,099

SinterCast Limited
Notes to the Accounts
for the year ended 31 December 2017
1	Summary of significant accounting policies
	Basis of preparation
	The financial statements have been prepared under the historical cost convention and in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland.
	Turnover
	Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the sale of goods and from the rendering of services. Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer. Turnover from the rendering of services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs.
	Tangible fixed assets

	Tangible fixed assets are measured at cost less accumulative depreciation and any accumulative impairment losses. Depreciation is provided on all tangible fixed assets, other than freehold land, at rates calculated to write off the cost, less estimated residual value, of each asset evenly over its expected useful life, as follows:
	Computer equipment			over 3 years
	Fixtures and fittings			over 5 years

	Debtors
	Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts.
	Creditors
	Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method.
	Taxation
	A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted.
	Provisions
	Provisions (ie liabilities of uncertain timing or amount) are recognised when there is an obligation at the reporting date as a result of a past event, it is probable that economic benefit will be transferred to settle the obligation and the amount of the obligation can be estimated reliably.
	Foreign currency translation
	Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss.
	Leased assets
	Operating lease payments are recognised as an expense on a straight line basis over the lease term.
	Pensions
	Contributions to defined contribution plans are expensed in the period to which they relate.
2	Analysis of turnover					2017		2016
£							£
	Sale of goods					6,148		7,972
	Services rendered					549,405		542,155
						555,553		550,127
	By geographical market:
	UK					6,146		16,788
	Europe					549,407		533,339
						555,553		550,127
3	Operating profit					2017		2016
£							£
	This is stated after charging:
	Depreciation of owned fixed assets					807		134
	Auditors' remuneration for audit services					3,500		3,500
	Key management personnel compensation (including directors' emoluments)					390,503		384,165
	Foreign exchange differences					2		327
	Production costs					5,425		7,052
4	Directors' emoluments					2017		2016
£							£
	Emoluments					323,003		319,665
	Company contributions to defined contribution pension plans					67,500		64,500
						390,503		384,165
	Highest paid director:
	Emoluments					323,003		319,665
	Company contributions to defined contribution pension plans					67,500		64,500
						390,503		384,165
	Number of directors to whom retirement benefits accrued:					2017		2016
Number							Number
	Defined contribution plans					1		1
5	Staff costs					2017		2016
£							£
	Wages and salaries					323,003		319,665
	Social security costs					45,330		45,078
	Other pension costs					67,500		64,500
						435,833		429,243
	Average number of employees during the year					Number	Number
	Administration					1		1
6	Taxation					2017		2016
£							£
	Analysis of charge in period
	Tax on profit on ordinary activities					-		-
	Factors affecting tax charge for period
	The differences between the tax assessed for the period and the standard rate of corporation tax are explained as follows:
						2017		2016
£							£
	Profit on ordinary activities before tax					6,045		28,681
	Standard rate of corporation tax in the UK					19.25%		20.00%
£							£
	Profit on ordinary activities multiplied by the standard rate of corporation tax					1,164		5,736
	Effects of:
	Expenses not deductible for tax purposes					11,885		10,748
	Utilisation of tax losses					(13,049)		(16,484)
	Current tax charge for period					-		-
	Factors that may affect future tax charges
	The company has estimated tax losses of £2,756,093 (2016 - £2,823,882) available for carry forward against future trading profits.
7	Tangible fixed assets
				Computer equipment		Fixtures and fittings		Total
				At cost		At cost
£					£		£
	Cost or valuation
	At 1 January 2017			3,763		2,914		6,677
	At 31 December 2017			3,763		2,914		6,677
	Depreciation
	At 1 January 2017			1,477		2,914		4,391
	Charge for the year			807		-		807
	At 31 December 2017			2,284		2,914		5,198
	Carrying amount
	At 31 December 2017			1,479		-		1,479
	At 31 December 2016			2,286		-		2,286
8	Debtors					2017		2016
£							£
	Trade debtors					5,321		4,802
	Amounts owed by group undertakings and undertakings in which the company has a participating interest					362,355		524,484
	Other debtors					538		811
	Prepayments and accrued income					1,699		3,940
						369,913		534,037
9	Creditors: amounts falling due within one year					2017		2016
£							£
	Trade creditors					30		315
	Other taxes and social security costs					11,157		11,524
	Other creditors					3,045		9,197
	Accruals and deferred income					258,373		462,391
						272,605		483,427
10	Share capital	Nominal		2017		2017		2016
value			Number		£		£
	Allotted, called up and fully paid:
	Ordinary shares	£1 each		3,159,093		3,159,093		3,159,093
11	Other reserves					2017		2016
£							£
	At 1 January 2017					286,775		286,775
	At 31 December 2017					286,775		286,775
12	Profit and loss account					2017		2016
£							£
	At 1 January 2017					(3,342,873)		(3,371,554)
	Profit for the financial year					6,045		28,681
	At 31 December 2017					(3,336,828)		(3,342,873)
13	Related party transactions
	The company has taken advantage of the exemption in FRS 102 from the requirement to disclose transactions with the company's parent company on the grounds that the company is a wholly owned subsidiary of that parent company. There were no other related party transactions.
14	Controlling party
	The immediate and ultimate parent company is SinterCast AB (publ), a company registered in Sweden, Company registration no. 556233-6494, SinterCast AB (publ) prepares group financial statements and copies can be obtained from Box 10203, SE-100 55, Stockholm, Sweden.
15	Presentation currency
	The financial statements are presented in Sterling.
16	Legal form of entity and country of incorporation
	SinterCast Limited is a private company limited by shares and incorporated in England.
17	Principal place of business
	The address of the company's principal place of business and registered office is:
	Kingswick House
	Kingswick Drive
	Ascot
	Berkshire
	SL5 7BH