Company Registration No. 05878200 (England and Wales)
MAGNOMATICS LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
PAGES FOR FILING WITH REGISTRAR
MAGNOMATICS LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 8
MAGNOMATICS LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2020
31 December 2020
- 1 -
2020
2019
Notes
£
£
£
£
Fixed assets
Intangible assets
3,058,711
3,000,977
Tangible assets
6
54,107
85,888
Current assets
Stocks
116,503
140,284
Debtors
7
97,349
559,832
Cash at bank and in hand
863,717
285,772
1,077,569
985,888
Creditors: amounts falling due within one year
8
(287,465)
(564,099)
Net current assets
790,104
421,789
Total assets less current liabilities
3,902,922
3,508,654
Creditors: amounts falling due after more than one year
9
(48,225)
(265,000)
Net assets
3,854,697
3,243,654
Capital and reserves
Called up share capital
10
68,054
57,862
Share premium account
11
6,536,214
5,742,033
Revaluation reserve
12
2,708,980
2,708,980
Profit and loss reserves
(5,458,551)
(5,265,221)
Total equity
3,854,697
3,243,654
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.
true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 14 June 2021 and are signed on its behalf by:
D Latimer
Director
Company Registration No. 05878200
MAGNOMATICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
- 2 -
1
Accounting policies
Company information
Magnomatics Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Park House, Bernard Road, Sheffield, South Yorkshire, S2 5BQ.
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 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 a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared on the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
The financial statements have been prepared on a going concern basis which assumes the continued support of the company's investors.
At 31 December the company has reported net assets of £3,854,697 and a loss before tax of (
£
174,033).
The directors have considered the impact of COVID-19 and are confident that the company will continue to be in existence for at least twelve months, they recognise that significant uncertainty exists which may cast doubt on that assumption. The financial statements do not include any adjustments that may be required if the company was unable to continue as a going concern.
1.3
Turnover
Turnover represents amounts receivable for goods, services, royalties and licences net of VAT and trade discounts. Turnover includes grants received from UK and EU Project Collaborations.
1.4
Intangible fixed assets other than goodwill
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
where
it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the
fair
value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Internally generated intangible assets are initially measured at cost and are subsequently measured at fair value and are amortised over the life of the project to which they relate.
MAGNOMATICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 3 -
1.5
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.
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:
Leasehold property improvements
Over term of lease
Plant and machinery
25% straight line
Fixtures, fittings & equipment
33% straight line
Motor vehicles
25% 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
.
1.6
Impairment of fixed assets
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).
1.7
Stocks
Stocks
are stated at the lower of cost and
estimated selling price
.
1.8
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.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs
, and thereafter are assessed for indicators of impairment at each reporting end date.
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 trade and other payables, 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 receipts discounted at a market rate of interest.
Trade payables are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. Accounts 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 payables are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
MAGNOMATICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 4 -
1.9
Compound instruments
The component parts of compound instruments issued by the
company
are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument. This amount is recorded as a liability on an amortised cost basis using the effective interest method until extinguished upon conversion or at the instrument's maturity date. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised and included in equity net of income tax effects and is not subsequently remeasured.
1.10
Share capital
Share capital 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.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense
.
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.
1.13
Retirement benefits
The company operates a defined contribution scheme for the benefit of its employees. Contributions payable are charged to the profit and loss account in the year they are payable.
1.14
Leases
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.
1.15
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.
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.
MAGNOMATICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 5 -
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.
3
Auditor's remuneration
2020
2019
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
8,400
9,000
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2020
2019
Number
Number
26
24
5
Intangible fixed assets
Intellectual Property
£
Cost or valuation
At 1 January 2020
3,045,977
Additions
57,734
At 31 December 2020
3,103,711
Amortisation and impairment
At 1 January 2020 and 31 December 2020
45,000
Carrying amount
At 31 December 2020
3,058,711
At 31 December 2019
3,000,977
The intellectual property has been revalued at the year end to reflect the expected future economic benefits. The valuation has been performed by the directors and is based on the present value of the expected future economic benefits.
MAGNOMATICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
5
Intangible fixed assets
(Continued)
- 6 -
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:
2020
2019
£
£
Cost
267,214
209,480
Accumulated amortisation
45,000
45,000
Carrying value
222,214
164,480
6
Tangible fixed assets
Leasehold property improvements
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2020
290,379
213,246
236,362
7,495
747,482
Additions
3,006
14,070
17,076
At 31 December 2020
290,379
216,252
250,432
7,495
764,558
Depreciation and impairment
At 1 January 2020
236,036
204,038
221,052
468
661,594
Depreciation charged in the year
32,305
4,329
10,349
1,874
48,857
At 31 December 2020
268,341
208,367
231,401
2,342
710,451
Carrying amount
At 31 December 2020
22,038
7,885
19,031
5,153
54,107
At 31 December 2019
54,343
9,208
15,310
7,027
85,888
7
Debtors
2020
2019
Amounts falling due within one year:
£
£
Trade debtors
44,590
89,249
Corporation tax recoverable
89,978
Other debtors
52,759
380,605
97,349
559,832
MAGNOMATICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 7 -
8
Creditors: amounts falling due within one year
2020
2019
£
£
Trade creditors
74,671
256,780
Taxation and social security
50,943
21,684
Other creditors
161,851
285,635
287,465
564,099
9
Creditors: amounts falling due after more than one year
2020
2019
Notes
£
£
Convertible loans
265,000
Other creditors
48,225
48,225
265,000
10
Called up share capital
2020
2019
2020
2019
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
26,671
16,479
26,671
16,479
Ordinary A shares of £1 each
41,202
41,202
41,202
41,202
Ordinary B and C shares of 1p each
18,100
18,100
181
181
85,973
75,781
68,054
57,862
On 19 March 2020 the company issued 3,818 shares Ordinary shares for £1 each. On 21 May 2020 5,886 Ordinary shares were issued for £127.55 each. On 28 August 2020 488 Ordinary shares were issued for £102.04 each.
During the year the company cancelled all outstanding options and granted replacement options, subsequently, 4,306 options were exercised in the year. At the year end 12,106 granted share options remained and of those, 870 were unallocated.
11
Share premium account
2020
2019
£
£
At beginning of year
5,742,033
5,742,033
Issue of new shares
794,181
At end of year
6,536,214
5,742,033
MAGNOMATICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 8 -
12
Revaluation reserve
2020
2019
£
£
At the beginning and end of the year
2,708,980
2,708,980
13
Audit report information
As the income statement has been omitted from the filing copy of the financial statements
,
the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006
:
The auditor's report was unqualified.
The senior statutory auditor was Adrian Staniforth.
The auditor was BHP LLP.
14
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2020
2019
£
£
Within one year
43,600
59,100
Between two and five years
5,250
48,850
48,850
107,950
Lease payments recognised as an expense during the year totalled £
48,850
(201
9
: £58,500).