Company Registration No. 00591930 (England and Wales)
Dynamic EMS Limited
Annual report and financial statements
for the year ended 31 December 2021
Dynamic EMS Limited
Company information
Directors
J J Dignan
J Watt
Secretary
J Watt
Company number
00591930
Registered office
Winterhill House
Station Approach
Marlow
SL7 1NT
Auditor
Henderson Loggie LLP
11 - 15 Thistle Street
Edinburgh
EH2 1DF
Business address
Taxi Way
Hillend Industrial Estate
Dalgety Bay
Fife
KY11 9ET
Solicitors
MacRoberts LLP
Capella
60 York Street
Glasgow
G2 8JX
Dynamic EMS Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 24
Dynamic EMS Limited
Strategic Report
for the year ended 31 December 2021
- 1 -
The directors present the strategic report for the year ended 31 December 2021.
Fair review of the business
Turnover decreased with a loss before tax of £145
,
901 (2020: profit of £317
,
354).
The company anticipates sustained levels of revenue and profitability in 2022 and the key performance indicators are:
- Revenue growth
- Increased profitability
- Cash flow management
- On time delivery to customer required date
- Zero returns under warranty
- Compliance as a minimum with employment, health & safety and environmental legislation
Principal risks and uncertainties
Principal risks and uncertainties are:
The company has reacted to these risks by:
-
Monitoring of customers' financial performance and payment of invoices.
-
Supply chain management and agreements with key suppliers of materials and adopted a strategy to secure material ahead of when it was required.
-
Energy Contracts in place which are the most competitive.
-
The company recognises that the successful roll out of vaccines in the UK will reduce the risk of disruption in our operations. With this strategy adopted at Dynamic EMS this should further mitigate this risk.
-
Stringent cost control.
-
Bulk of transactions denominated in Sterling. Exposure to currency fluctuations remain low. Foreign currency is held in denominated accounts and only exchanged for Sterling when rates are advantageous.
Dynamic EMS Limited
Strategic Report (continued)
for the year ended 31 December 2021
- 2 -
Development and performance
The continuation disruption due the coronavirus (Covid-19) pervaded into FY21 as the global economy and that of the UK struggle to recover. The company during this period introduced policies and procedures in line with government legislation to ensure social distancing and a safe working environment for its employees and continued to operate producing products, albeit at a reduced level, for critical infrastructure and medical customers. Like many businesses, our customers included, lower economic activity negatively impacted the financial performance of the business.
This, combined with Britain leaving the EU with limited trade agreements, may still have an impact on the business moving forward throughout FY22. However, if agreements are put in place by EU-UK we believe that trading will fall within a Zero-tariff EU-UK trade and cooperation agreement. Any trading out with such an agreement would then be under World trade Organisation agreements.
The disruption in supply chain caused by the Covid-19 virus is constraining output from component manufacturers at a time where there is a global surge in demand for these devices. This is impacting the overall availability and cost of components, but it is believed this will ease throughout FY22.
The company operates with a diverse portfolio of long-standing customers with a potential for organic growth and this will continue as part of the strategic direction of the company
The Directors would like to thank both management and staff for their efforts, commitment, and contribution to the business.
J J Dignan
Director
15 September 2022
Dynamic EMS Limited
Directors' report
for the year ended 31 December 2021
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2021.
Principal activities
The
company's
principal activity continue
s to be the supply of Electronic Manufacturing services comprising of PCB assembly and High Level (Complete Product) assembly and test. The directors do not envisage any change in the coming year.
Results and dividends
The results for the year are set out on page
7.
An interim ordinary dividend
of £7
2
,
499
(20
20
: £
270
,
882
)
was
declared of which
£72
,
499 (2020: £224,052)
has been paid
. The directors have not recommended a final dividend (2020: £Nil).
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
P V Birrell
(Resigned 31 July 2022)
J J Dignan
J Watt
Auditor
The auditor, Henderson Loggie LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s
auditor
is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s
auditor
is aware of that information.
On behalf of the board
J J Dignan
Director
15 September 2022
Dynamic EMS Limited
Directors' responsibilities statement
for the year ended 31 December 2021
- 4 -
The directors are responsible for preparing the annual report 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). 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.
Dynamic EMS Limited
Independent auditor's report
to the members of Dynamic EMS Limited
- 5 -
Opinion
We have audited the financial statements of Dynamic EMS Limited (the 'company') for the year ended 31 December 2021 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including 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 Republic of Ireland
(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 2021 and of its loss for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
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
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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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.
Dynamic EMS Limited
Independent auditor's report (continued)
to the members of Dynamic EMS Limited
- 6 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors'
r
eport 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 identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
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
remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, 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
.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The
specific procedures for this engagement and the
extent to
which these
are capable of detecting irregularities, including fraud, is detailed below
.
Dynamic EMS Limited
Independent auditor's report (continued)
to the members of Dynamic EMS Limited
- 7 -
-
Enquiring with management about any known or suspected instances of non-compliance with laws and regulations, including employment law, and fraud;
-
Review of correspondence with regulators including the Health & Safety Executive;
-
Review of legal fee expenditure;
-
Challenging assumptions and judgements made by management in their significant accounting estimates, in particular in relation to provision for stock; and
-
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness.
Because of the field in which the client operates, we identified the following areas as those most likely to have a material impact on the financial statements: Health and Safety; employment law (including the Working Time Directive); and compliance with the UK Companies Act.
Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's 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 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.
Diana Penny (Senior Statutory Auditor)
For and on behalf of Henderson Loggie LLP
15 September 2022
Chartered Accountants
Statutory Auditor
11 - 15 Thistle Street
Edinburgh
EH2 1DF
Dynamic EMS Limited
Statement of comprehensive income
for the year ended 31 December 2021
- 8 -
2021
2020
Notes
£
£
Turnover
3
8,344,577
8,540,037
Cost of sales
(7,613,993)
(7,391,374)
Gross profit
730,584
1,148,663
Administrative expenses
(863,051)
(906,716)
Other operating income
81,243
Operating (loss)/profit
4
(132,467)
323,190
Interest payable and similar expenses
7
(13,434)
(5,836)
(Loss)/profit before taxation
(145,901)
317,354
Tax on (loss)/profit
8
14,451
9,819
(Loss)/profit for the financial year
(131,450)
327,173
Other comprehensive income
Tax relating to other comprehensive income
153,041
Total comprehensive income for the year
(131,450)
480,214
The profit and loss account has been prepared on the basis that all operations are continuing operations.
Dynamic EMS Limited
Balance sheet
as at 31 December 2021
- 9 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
10
1,248,209
1,319,945
Current assets
Stocks
11
1,710,176
1,070,863
Debtors
12
3,979,640
3,941,196
Cash at bank and in hand
38,790
165,486
5,728,606
5,177,545
Creditors: amounts falling due within one year
13
(2,235,988)
(1,541,681)
Net current assets
3,492,618
3,635,864
Total assets less current liabilities
4,740,827
4,955,809
Creditors: amounts falling due after more than one year
14
(17,318)
Provisions for liabilities
Deferred tax liability
17
28,805
22,520
(28,805)
(22,520)
Net assets
4,712,022
4,915,971
Capital and reserves
Called up share capital
19
1,505,603
1,505,603
Revaluation reserve
20
837,068
868,653
Profit and loss reserves
2,369,351
2,541,715
Total equity
4,712,022
4,915,971
The financial statements were approved by the board of directors and authorised for issue on 15 September 2022 and are signed on its behalf by:
J J Dignan
Director
Company Registration No. 00591930
Dynamic EMS Limited
Statement of changes in equity
for the year ended 31 December 2021
- 10 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2020
1,505,603
747,199
2,453,837
4,706,639
Year ended 31 December 2020:
Profit for the year
-
-
327,173
327,173
Other comprehensive income:
Tax relating to other comprehensive income
-
153,041
153,041
Total comprehensive income for the year
153,041
327,173
480,214
Dividends
9
-
-
(270,882)
(270,882)
Transfers
-
(31,587)
31,587
-
Balance at 31 December 2020
1,505,603
868,653
2,541,715
4,915,971
Year ended 31 December 2021:
Loss and total comprehensive income for the year
-
-
(131,450)
(131,450)
Dividends
9
-
-
(72,499)
(72,499)
Transfers
-
(31,585)
31,585
-
Balance at 31 December 2021
1,505,603
837,068
2,369,351
4,712,022
Dynamic EMS Limited
Notes to the financial statements
for the year ended 31 December 2021
- 11 -
1
Accounting policies
Company information
Dynamic EMS Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
Winterhill House, Station Approach, Marlow, SL7 1NT.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared on the historical cost convention, modified to include the revaluation of freehold properties . The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares
publicly available consolidated financial statements
, including this company,
which are
intended to give a true and fair view of the assets, liabilities,
financial position and profit or loss
of the group
.
T
he company has
therefore
taken advantage of
e
xemptions from the following disclosure requirements:
-
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
-
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’
:
Interest
income/expense and net gains/losses for each category of financial instrument;
basis
of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income
;
-
Section 33 ‘Related Party Disclosures’
:
Compensation for key management personnel
.
The financial statements of the company are consolidated in the financial statements of
Kaydanic Solutions Limited.
These consolidated financial statements are available from
Companies House, 4th Floor, Edinburgh Quay 2, 139 Fountainbridge, Edinburgh, EH3 9FF.
1.2
Going concern
A
true
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. The directors have considered the impact of the Covid-19 pandemic
on the global economy
and consider it appropriate to prepare the financial statements on a going concern basis of preparation for the reasons as set out in the Strategic Report.
1.3
Turnover
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer
(usually on dispatch of the goods)
, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Dynamic EMS Limited
Notes to the financial statements (continued)
for the year ended 31 December 2021
1
Accounting policies (continued)
- 12 -
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:
Land and buildings freehold
over 20 years (straight line)
Equipment
over 5 - 10 years (straight line)
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
.
1.5
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
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.
1.6
Stocks
Stocks
are stated at the lower of cost and
estimated selling price less costs to complete and sell
, based on FIFO system.
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.
Net realisable value is based on estimated normal selling price less further costs expected to be incurred on completion.
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.
1.7
Cash and cash equivalents
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.
1.8
Financial instruments
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.
Basic financial assets
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.
Dynamic EMS Limited
Notes to the financial statements (continued)
for the year ended 31 December 2021
1
Accounting policies (continued)
- 13 -
Other financial assets
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.
Impairment of financial assets
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.
The impairment loss is recognised in profit or loss.
Derecognition of financial assets
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.
Classification of financial liabilities
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
Basic financial liabilities, including
creditors
, bank loans, loans from
fellow group companies and preference shares that are classified as debt, 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
paymen
ts 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. A
m
ounts 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.
Other financial liabilities
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
s
ubsequently 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 th
r
ough 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.
Dynamic EMS Limited
Notes to the financial statements (continued)
for the year ended 31 December 2021
1
Accounting policies (continued)
- 14 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current 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.
Deferred tax
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.
1.11
Employee benefits
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.
1.12
Retirement benefits
The company operates a defined contribution pension scheme. Contributions are charged in the profit and loss account as they become payable in accordance with the rules of the scheme.
Dynamic EMS Limited
Notes to the financial statements (continued)
for the year ended 31 December 2021
1
Accounting policies (continued)
- 15 -
1.13
Leases
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 profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
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
s
asset are consumed.
1.14
Government grants
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.
Government grants relating to turnover are recognised as income over the periods when the related costs are incurred
. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange periodically set by management based on prevailing rates in market. At each reporting end date, bank balances that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant
effect on amounts recognised in the financial statements.
Land and buildings valuation
In the year the directors have considered whether the value of land and buildings as stated in the accounts remains appropriate. They do not consider there to be any indications of impairment and as such the valuation of land and buildings is considered appropriate.
Dynamic EMS Limited
Notes to the financial statements (continued)
for the year ended 31 December 2021
2
Judgements and key sources of estimation uncertainty (continued)
- 16 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are
as follows.
Stock valuation
In arriving at the valuation of stock it may be necessary for management to make an assessment over the carrying value of stock items and where applicable apply a provision to amend this carrying value to a more accurate level. These provisions are arrived at using management's knowledge and understanding of the business and the industry in which it operates and focuses on potentially obsolete or old items for which the full value may no longer be recoverable.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2021
2020
£
£
Turnover analysed by class of business
Product Sales
8,330,731
8,505,914
Foreign exchange movements
13,846
34,123
8,344,577
8,540,037
2021
2020
£
£
Turnover analysed by geographical market
United Kingdom
8,064,248
8,236,461
Other
280,329
303,576
8,344,577
8,540,037
2021
2020
£
£
Other significant revenue
Grants received
81,243
4
Operating (loss)/profit
2021
2020
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Government grants
(81,243)
Fees payable to the company's auditor for the audit of the company's financial statements
13,340
12,940
Depreciation of owned tangible fixed assets
91,674
86,583
Depreciation of tangible fixed assets held under finance leases
4,233
4,233
Operating lease charges
17,753
23,554
Dynamic EMS Limited
Notes to the financial statements (continued)
for the year ended 31 December 2021
- 17 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Production
69
73
Administration and marketing
15
16
Total
84
89
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
1,856,932
1,916,763
Social security costs
156,010
153,880
Pension costs
104,397
101,941
2,117,339
2,172,584
Included above are total termination payments of £Nil. (2020: £1
,
821).
6
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
188,634
212,122
Company pension contributions to defined contribution schemes
15,610
15,460
204,244
227,582
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2020 - 3).
Dynamic EMS Limited
Notes to the financial statements (continued)
for the year ended 31 December 2021
6
Directors' remuneration (continued)
- 18 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2021
2020
£
£
Remuneration for qualifying services
n/a
85,195
Company pension contributions to defined contribution schemes
n/a
2,420
As total directors' remuneration was less than £200,000 in the current year, no disclosure is provided for that year.
7
Interest payable and similar expenses
2021
2020
£
£
Interest on invoice finance arrangements
12,801
4,992
Interest on finance leases and hire purchase contracts
633
844
13,434
5,836
8
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
20,603
Adjustments in respect of prior periods
(20,736)
(38,905)
Total current tax
(20,736)
(18,302)
Deferred tax
Origination and reversal of timing differences
(826)
15,311
Changes in tax rates
7,111
(6,828)
Total deferred tax
6,285
8,483
Total tax credit
(14,451)
(9,819)
Dynamic EMS Limited
Notes to the financial statements (continued)
for the year ended 31 December 2021
8
Taxation (continued)
- 19 -
The actual credit for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
£
£
(Loss)/profit before taxation
(145,901)
317,354
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 19% (2020: 19%)
(27,721)
60,297
Tax effect of expenses that are not deductible in determining taxable profit
104
280
Adjustments in respect of prior years
(20,736)
(38,905)
Effect of change in corporation tax rate
6,913
759
Group relief
(11,433)
Depreciation on assets not qualifying for tax allowances
7,355
7,355
Research and development tax credit
(20,585)
Deferred tax adjustments in respect of prior years
(7,587)
Super-deduction adjustment
(1,080)
Losses carried back
20,714
Taxation credit for the year
(14,451)
(9,819)
In addition to the amount credited to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:
2021
2020
£
£
Deferred tax arising on:
Revaluation of property
-
(153,041)
9
Dividends
2021
2020
£
£
Interim paid
72,499
270,882
Dynamic EMS Limited
Notes to the financial statements (continued)
for the year ended 31 December 2021
- 20 -
10
Tangible fixed assets
Land and buildings freehold
Equipment
Total
£
£
£
Cost or valuation
At 1 January 2021
1,200,000
3,289,085
4,489,085
Additions
24,171
24,171
Disposals
(249,192)
(249,192)
At 31 December 2021
1,200,000
3,064,064
4,264,064
Depreciation and impairment
At 1 January 2021
64,516
3,104,624
3,169,140
Depreciation charged in the year
38,710
57,197
95,907
Eliminated in respect of disposals
(249,192)
(249,192)
At 31 December 2021
103,226
2,912,629
3,015,855
Carrying amount
At 31 December 2021
1,096,774
151,435
1,248,209
At 31 December 2020
1,135,484
184,461
1,319,945
No depreciation is provided in respect of freehold land, which is valued at:
2021
2020
£
£
Freehold
400,000
400,000
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2021
2020
£
£
Equipment
6,349
10,582
The freehold land and buildings were valued at £1,200,000
at
14 May 2019
by
DM Hall
, independent valuers not connected with the company on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties.
The directors are not aware of any subsequent material change in the value of freehold land and buildings on a depreciated replacement cost basis.
If revalued assets were stated on an historical cost basis rather than a fair value basis, the total amounts included would have been as follows:
Dynamic EMS Limited
Notes to the financial statements (continued)
for the year ended 31 December 2021
10
Tangible fixed assets (continued)
- 21 -
2021
2020
£
£
Cost
846,980
846,980
Accumulated depreciation
(587,275)
(580,151)
Carrying value
259,705
266,829
11
Stocks
2021
2020
£
£
Raw materials and consumables
1,515,863
915,393
Work in progress
194,313
155,470
1,710,176
1,070,863
12
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
1,642,160
1,607,139
Corporation tax recoverable
20,736
Amounts owed by group undertakings
2,292,484
2,306,751
Prepayments and accrued income
24,260
27,306
3,979,640
3,941,196
13
Creditors: amounts falling due within one year
2021
2020
Notes
£
£
Bank loans and overdrafts
15
427,003
112,627
Obligations under finance leases
16
5,291
Trade creditors
1,537,365
846,008
Corporation tax
22
20,603
Other taxation and social security
140,571
384,583
Other creditors
46,830
Accruals and deferred income
131,027
125,739
2,235,988
1,541,681
Dynamic EMS Limited
Notes to the financial statements (continued)
for the year ended 31 December 2021
- 22 -
14
Creditors: amounts falling due after more than one year
2021
2020
£
£
Taxation and social security
17,318
15
Loans and overdrafts
2021
2020
£
£
Bank overdrafts
427,003
112,627
Payable within one year
427,003
112,627
Bank loans and overdrafts are secured by debenture and standard security over the assets of the company. They include £427,003 (2020: £112
,
627) of debts drawn against factored debts.
16
Finance lease obligations
2021
2020
Future minimum lease payments due under finance leases:
£
£
Within one year
5,291
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
17
Deferred taxation
Liabilities
Liabilities
2021
2020
Balances:
£
£
ACAs
28,805
22,520
2021
Movements in the year:
£
Liability at 1 January 2021
22,520
Charge to profit or loss
6,285
Liability at 31 December 2021
28,805
Dynamic EMS Limited
Notes to the financial statements (continued)
for the year ended 31 December 2021
- 23 -
18
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
104,397
101,941
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
19
Share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 50p each
2,983,206
2,983,206
1,505,603
1,491,603
Unclassified shares of £1 each
14,000
14,000
-
14,000
2,997,206
2,997,206
1,505,603
1,505,603
Both ordinary and unclassified shares carry full voting rights.
20
Revaluation reserve
The revaluation reserve consists of accumulated gains and losses on revaluation of freehold properties. An annual transfer is made between revaluation reserve and retained earnings to reflect the difference in depreciation charge between historical cost and revaluation model. Any change in deferred tax charge on revalued assets is also reflected through the revaluation reserve on an annual basis
.
21
Financial commitments, guarantees and contingent liabilities
A guarantee for £372,247 (2020: £
4
05,861) has been provided to the company's bankers in respect of its ultimate parent undertaking, Kaydanic Solutions Limited, in respect of loan funding.
22
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2021
2020
£
£
Within one year
25,912
16,846
Between two and five years
49,038
33,460
74,950
50,306
Dynamic EMS Limited
Notes to the financial statements (continued)
for the year ended 31 December 2021
- 24 -
23
Ultimate controlling party
The company is a wholly owned subsidiary of HW Manufacturing Limited which is a wholly owned subsidiary of Kaydanic Solutions Limited.
The ultimate controlling party is J Dignan.
The smallest and largest groups into which the entity is included within group consolidated accounts is Kaydanic Solutions Limited. These are available from Companies House, 4th Floor, Edinburgh Quay 2, 139 Fountainbridge, Edinburgh, EH3 9FF.
2021-12-31
2021-01-01
false
CCH Software
CCH Accounts Production 2022.100
P V Birrell
J J Dignan
J Watt
J Watt
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