SOLID STATE PLC
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www.solidstateplc.com
Solid State PLC
CONTENTS
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1
Solid State PLC
Directors:
DIRECTORS, SECRETARY AND ADVISERS
Deputy Chairman
Chief Executive Officer
Gordon Leonard Comben, Chairman
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John Michael Lavery, Director
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William George Marsh, Director
Director
Finance Director
Company Secretary and
Registered Office:
Peter Haining, FCA
Solid State PLC
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Company Number:
00771335
Nominated Adviser:
Broker:
Auditors:
Solicitors:
Bankers:
Registrars:
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Capita Registrars Limited
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Country of Incorporation
of Parent Company:
Great Britain
Legal Form:
Public Limited Company
Domicile:
Great Britain
2
CHAIRMAN’S STATEMENT
Solid State PLC
Financial Review
Financial Review
I am very pleased to report that the Group has performed strongly this year, delivering our third consecutive year of
I am very pleased to report that the Group has performed strongly this year, delivering our third consecutive year of
record results.
record results.
Revenues grew by 22% to £31.50m (2012: £25.87m) with profits before tax rising by 17% to £1.87m (2012:
Revenues grew by 22% to £31.50m (2012: £25.87m) with profits before tax rising by 17% to £1.87m (2012:
£1.60m) before charging exceptional costs totalling £100k in the year; comprising relocation costs of £85k and
£1.60m) before charging exceptional costs totalling £100k in the year; comprising relocation costs of £85k and
abortive acquisition costs of £15k.
abortive acquisition costs of £15k.
The £3.5m export contract delivered in the first half of the year illustrates the margin variation we experience due to
The £3.5m export contract delivered in the first half of the year illustrates the margin variation we experience due to
order size and product mix which resulted in our first half gross margins declining to 24.4%. However, as indicated
order size and product mix which resulted in our first half gross margins declining to 24.4%. However, as indicated
in our interim statement, our gross profit margin improved in the second half to 27.9% in line with recent years
in our interim statement, our gross profit margin improved in the second half to 27.9% in line with recent years
(2011 & 2012: 27.8%).
(2011 & 2012: 27.8%).
Operating margins after exceptional costs were stable at 6.2%, again in line with recent years (2011: 6.1% & 2012:
Operating margins after exceptional costs were stable at 6.2%, again in line with recent years (2011: 6.1% & 2012:
6.4%), with earnings per share increasing by 12% to 21.8p (2012: 19.5p).
6.4%), with earnings per share increasing by 12% to 21.8p (2012: 19.5p).
Total net assets strengthened by 23% to £6.3m (2012: £5.1m) with the Group’s net gearing levels being 37% (2012:
Total net assets strengthened by 23% to £6.3m (2012: £5.1m) with the Group’s net gearing levels being 37% (2012:
53%).
53%).
Highlights in the period include:
Highlights in the period include:
Financial:
Financial:
revonruT
revonruT
Profit before tax*
Profit before tax*
Earnings per share (basic)
Earnings per share (basic)
Gross profit margin
Gross profit margin
Operating margin*
Operating margin*
dnediviD
dnediviD
3102
3102
m05.13£
m05.13£
£1.87m
£1.87m
21.8p
21.8p
26.1%
26.1%
6.2%
6.2%
p0.8
p0.8
2102
2102
m78.52£
m78.52£
£1.60m
£1.60m
19.5p
19.5p
27.8%
27.8%
6.4%
6.4%
p52.7
p52.7
egnahC
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%22+
%22+
+17%
+17%
+12%
+12%
-170bps
-170bps
-20bps
-20bps
%01+
%01+
*Before exceptional items of £100k (£81k H1, £19k H2)
*Before exceptional items of £100k (£81k H1, £19k H2)
Operational:
Operational:
(cid:129) £3.5m in-vehicle rugged electronics contract for export
(cid:129) £3.5m in-vehicle rugged electronics contract for export
(cid:129) Successful relocation of Solid State Supplies to new Redditch HQ increasing scalability and scope for future
(cid:129) Successful relocation of Solid State Supplies to new Redditch HQ increasing scalability and scope for future
efficiency savings
efficiency savings
(cid:129) Acquisition of Q-Par Angus Ltd for £900k (post year end)
(cid:129) Acquisition of Q-Par Angus Ltd for £900k (post year end)
Commenting on the results, Gordon Comben, Chairman of Solid State said:
Commenting on the results, Gordon Comben, Chairman of Solid State said:
“These results highlight the positive momentum at Solid State, delivering our third consecutive year of record
“These results highlight the positive momentum at Solid State, delivering our third consecutive year of record
results. In recognition of this performance and future prospects the Board is recommending a 10% increase in the
results. In recognition of this performance and future prospects the Board is recommending a 10% increase in the
annual dividend.
annual dividend.
“The recent acquisition of Q-Par is further evidence of our commitment to making complementary acquisitions to
“The recent acquisition of Q-Par is further evidence of our commitment to making complementary acquisitions to
strengthen our position in global niche markets and to continue our growth strategy.”
strengthen our position in global niche markets and to continue our growth strategy.”
Dividends
Dividends
The resilient performance of the Group has enabled us to continue our stated policy of offering a progressive
The resilient performance of the Group has enabled us to continue our stated policy of offering a progressive
dividend to shareholders whilst retaining a prudent level of dividend cover. The Board is recommending a final
dividend to shareholders whilst retaining a prudent level of dividend cover. The Board is recommending a final
dividend of 5.25p. An interim dividend of 2.75p per share was paid on 28th January 2013 giving a total dividend in
dividend of 5.25p. An interim dividend of 2.75p per share was paid on 28th January 2013 giving a total dividend in
respect of the year of 8p per share, a 10% increase on the 2012 dividend of 7.25p. The final dividend will be paid
respect of the year of 8p per share, a 10% increase on the 2012 dividend of 7.25p. The final dividend will be paid
on 2nd September 2013 to shareholders on the register at the close of business on 9th August 2013. The shares will
on 2nd September 2013 to shareholders on the register at the close of business on 9th August 2013. The shares will
go ex-dividend on 7th August 2013.
go ex-dividend on 7th August 2013.
3
Solid State PLC
CHAIRMAN’S STATEMENT (continued)
Business Review
The Group is focussed on the supply and support of specialist electronics equipment which include high tolerance
and tailor made battery packs, specialist electronic components, specialist antennas and industrial/rugged computers.
The market for the Group’s products and services is driven by the need for custom electronic solutions to address
complex needs, typically in harsh environments where enhanced durability and resistance to extreme and volatile
temperatures is vital. Drivers in our markets include efficiency improvement, cost saving, environmental
monitoring and safety.
Divisional Review
The key performance indicators measured by management are billings, bookings and gross profit margins. Bookings
are sales orders received and billings are sales delivered.
Steatite
Steatite is one of the leading UK suppliers of electronic equipment. It designs, manufactures and supplies a range of
products and solutions that include bespoke Lithium battery packs, rugged mobile computing/radio solutions,
antennas and industrial computer hardware and software. Key to its strategy is the ability to design, manufacture and
test to customer requirements for usage in some of the most difficult and harsh environments against the most
stringent of standards and qualifications.
Steatite has performed well during the year delivering 20% growth in sales and a 25.5% increase in pre tax profits,
matching the significant progress made over the past few years.
The Steatite division has benefited from taking market share from competitors who are unable to match the breadth
and technical depth of our business offering, whilst continuing to attract both new supply partners from around the
world and continuing to invest in the development of new products.
The strategy we have followed, as a niche specialist business, is continuing to bear fruit. The successful acquisition
of Q-Par, post the year end, extends our product offering and client base in a high margin environment. We will
proactively continue to look for acquisitions that offer both synergy and market opportunities enhancing our product
range and engineering capacity.
The business is well resourced to take benefit from the growing pipeline of new opportunities in markets such as Oil
& Gas, Transport and Security and it is well positioned for further growth as economic conditions improve. It is
worth noting that the Division will not have the benefit of the one off £3.5million export order in financial year
2013/2014. This order was delivered at lower than average margin due to its scale however made a meaningful
contribution to the results for the Division.
Given the continuing difficult economic conditions and the uncertainty of the pace of any recovery, we remain
cautious for the year ahead, but well positioned to accelerate growth as and when conditions improve.
Solid State Supplies
Solid State Supplies is a distributor of specialist components to the UK OEM community; selling semiconductors,
related components and modules for embedded processing, control and communications switches, power
management units and components for LED lighting.
Despite the broader market decline in the electronics component sector during the financial 2012/13 period, which
saw a decline of c.-13% as reported by our industry association AFDEC, Solid State Supplies continued to
outperform the sector as a whole and achieved growth in excess of 10%. The improved performance has been
derived through a combination of organic growth and the impact of franchises signed in the previous year. I am
pleased to be able to report that this now concludes three successive years in which the company has achieved
significant growth.
4
4
CHAIRMAN’S STATEMENT (continued)
Solid State PLC
Solid State Supplies (continued)
2012/13 was a very significant period for Solid State Supplies in which it relocated its business from Paddock Wood
in Kent to Redditch in the West Midlands. Significantly, the company only lost three members of staff during the
transition process and was able to maintain its shipments without impact to the customer base. The company now
operates from approximately 18,000 square feet of modern warehouse and office facilities and this has enabled the
company to execute on its plan to enter the value added services market. Value added services are now contributing
to the gross margin development of the company and have increased the perceived value of the company to its
customers. The company expects to see this element of its business increase throughout the next financial year.
Franchises added in the previous financial year and during the early part of this financial year are now contributing
well to turnover growth and are expected to have a significant impact in the forthcoming year with several high
value projects already pipelined.
In all, 2012/13 was a strong year for the distribution business despite the one off costs associated with the relocation.
The outlook for 2013/14 remains positive and the company expects to continue to outperform the market.
Divisional Summary
The companies in the Solid State group have distinct characteristics in their market places. A depth of technical
understanding and a collaborative approach to client relationships have always promoted an integrated process of
product design and supply. The degree of co-operation has always been appreciated by our clients and we believe it
is of significant commercial value both to us and our customers. Solid State will continue to pursue this approach
and to extend it into new relationships where appropriate.
Our stated strategy is to supplement organic growth with selective acquisitions within the electronics industry which
will complement our existing Group companies and enable us to achieve improved operating margins through the
employment of operational efficiencies, scale and distribution.
Acquisition of Q-Par Angus Limited
The acquisition of Q-Par Angus Ltd for a consideration of £900,000 in May 2013 is our 6th acquisition in the last 11
years. Q-Par’s expertise is in a range of antennas and microwave systems that will broaden the products and
services available to our customers. Its solutions are in a technically complex area that command higher gross
margins than we currently average across the Group. We also believe the wide network of international sales agents
used by Q-Par will benefit our overall business in the coming years.
Renewal of authority to purchase the Company’s shares and authorities to issue shares
Last year, a resolution was passed at the Annual General Meeting to give the Company the authority to purchase its
own Ordinary shares on the Stock Exchange. This authority would expire after a period of eighteen months from
the passing of the resolution. In order to avoid this authority expiring during the next year and the need to call an
extraordinary general meeting to renew the authority, a resolution to renew the authority is set out in the notice of
the Annual General Meeting at the end of this document.
Under the terms of the resolution to be proposed at the Annual General Meeting, the maximum number of shares
which may be purchased is 1,045,805 shares representing 15% of the issued Ordinary share capital of the Company.
The minimum price payable by the Company for its Ordinary shares will be 5p and the maximum price will be
determined by reference to current market prices. The authority will automatically expire after a period of eighteen
months from the passing of the resolution unless renewed.
It is not the Directors’ current intention to exercise the power to purchase the Company’s Ordinary shares but they
believe that under certain circumstances it would be in the Company’s best interests to do so.
Resolutions are also being proposed at the Annual General Meeting with regard to the issue of further shares. One
resolution will authorise the company to issue new shares up to a third of the current issued share capital by way of a
rights issue and the second resolution will authorise the company to issue new shares up to 20% of the current issued
share capital without rights of pre-emption for existing shareholders, and to the extent that new shares are issued
under the second resolution the limit on the first resolution will be reduced such that the total number of new shares
issued cannot exceed one third of the current share capital.
5
Solid State PLC
CHAIRMAN’S STATEMENT (continued)
Renewal of authority to purchase the Company’s shares and authorities to issue shares (continued)
Your Directors consider that the resolutions to be proposed at the meeting are in the best interests of the Company
and its shareholders. They unanimously recommend that all Ordinary shareholders vote in favour of the resolution
at the Annual General Meeting as they intend to do in respect of their beneficial holdings amounting to 4,480,640
Ordinary shares, representing 64.3% of the Company’s issued Ordinary share capital.
Outlook
The current year has started as anticipated and our order book remains strong, with a backlog of £10.4m as at 30th
April 2013 (£10.5m 31st March 2012). We will continue to drive organic growth and seek further acquisitions that
complement our existing operations and benefit shareholders.
Finally, I would like to thank my fellow Directors and all our staff for their continued support in delivering another
strong Group performance this year.
Gordon Comben
Chairman
18th June 2013
6
DIRECTORS’ REPORT
For the year ended 31st March 2013
Solid State PLC
The Directors submit their report together with the audited financial statements of the Group in respect of the year
ended 31st March 2013.
Principal Activities, Review of the Business and Future Developments
The principal activities of the Group during the year continued to be those of the manufacturing of electronic
equipment and the distribution of electronic components and materials.
The key performance indicators recognised by management are sales, bookings and group profit margins. Bookings
are sales orders received.
An overall review of the Group’s trading performance and future developments is given in the Chairman’s
Statement.
The principal risks faced by the Group are foreign currency risk, liquidity risk and credit risk.
Foreign currency risk primarily relates to the US dollar: Sterling exchange rate and although much progress has been
made in recent years in converting the sales currency into line with the purchase currency on any contract, the Group
still has purchases in dollars which are considerably in excess of the sales made in dollars. In the year under review the
Group purchased US$6,750,000.
The risk is managed by way of using forward purchase contracts to cover much of the required dollar purchases and
spot purchases to buy the balance of the dollars enabling the Group to take advantage of short term exchange rate
fluctuations. In addition, the extent of dollar holdings by the Group is minimised to avoid unnecessary exposure to
losses in the event of the decline of the dollar against sterling.
The nature of the business means that cash flow requirements fluctuate very significantly with some large contracts
requiring significant funding in the short term. Invoice discounting is used as a source of funding on trade debtors in
Steatite Limited, but in addition the Group has an overdraft facility of £2m to ensure that facilities are always available
to progress contracts, including circumstances where the contract has been awarded close to the date of commencement
and advance payments to suppliers are required. As last year, such a contract was completed just prior to the year end
giving rise, for a second year, to a significant increase in trade receivables and bank overdraft.
Credit risk arises as the vast majority of sales are on credit terms, and the high turnover in the last month of the year has
led again to trade receivables being unusually high at £6,713,844 compared with £6,519,349 at the end of last year.
However it is Group policy that all new customers are assessed for their credit risk before any binding contracts are
entered into and all existing accounts are reviewed at least once a year. In the year under review bad debts written off
have amounted to less than 0.03% of the turnover.
Since the end of the year the Group has acquired the whole of the issued share capital of Q-Par Angus Limited, a
company which specialises in the design and manufacture of microwave and other RF (radio frequency) products,
including antenna systems. The company will extend the range of products available within the manufacturing division
of the Group. The consideration for the purchase was £900,000 subject to a net asset adjustment.
The Group finances its operations by a mixture of retained profits, bank borrowings and invoice discounting facilities.
The directors are pleased to note that the net tangible assets of the Group have increased during the year under review
by over £1,000,000.
The Group does not comment on environmental matters.
The Group continues to look for suitable acquisitions within the electronics industry.
7
Solid State PLC
DIRECTORS’ REPORT
For the year ended 31st March 2013 (continued)
Results and Dividends
The consolidated statement of comprehensive income is set out on page 13. The Directors recommend that a final
dividend of 5.25p per share is paid. The total dividend for the year is thus 8.00p per share. The final dividend will be
paid on 2nd September 2013 to shareholders on the register at the close of business on 9th August 2013.
Directors
The Directors of the Company during the year were:
G L Comben
A B Frere
G S Marsh
P Haining, FCA
J M Lavery
J L Macmichael
W G Marsh
Gordon Comben, (dob 09/09/1939), Chairman
Gordon Comben trained as radio officer and after leaving the merchant navy worked in the electronics industry with
Plessey, Texas Instruments, Philips and International Rectifier. In 1971 he founded Solid State Supplies and has
been employed in various roles including Company Chairman. He is currently a Non-executive Director of the
Company, and was reappointed as Chairman in November 2011.
Tony Frere (dob 15/10/1947), Deputy Chairman
Tony Frere has been in the Electronics Industry for 40 years, 30 of which serving the component distribution sector.
Former directorships include Managing Director of DT Electronics and Nu Horizons Electronics. Currently sitting
on the executive council of the ECSN (the electronic component supply network trade association), and in 2013 was
appointed as Deputy Chairman.
Gary Marsh, (dob 27/04/1966), Chief Executive Officer
Gary Marsh joined the Company in 1986 having gained an HND in Business and Finance Studies. He has held
various positions within the Group including that of Operations Director of Solid State Supplies prior to his
appointment as its Managing Director in 1997. In addition to this role, Gary Marsh was appointed Group Managing
Director in 2002 following the acquisition of Steatite. In 2011 following the acquisition of Rugged Systems Ltd he
was appointed Chief Executive Officer of the Group.
Peter Haining FCA, (dob 05/09/1956), Finance Director and Company Secretary
Peter Haining qualified as a chartered accountant in 1980 and later worked at Binder Hamlyn. He left Binder
Hamlyn in 1992, together with three colleagues, to establish The Kings Mill Partnership. As well as fulfilling a role
as Finance Director and Company Secretary, Peter Haining has specific responsibility for reviewing and advising on
the Group’s budgets and financial affairs.
John Lavery, (dob 06/05/1961), Director
John Lavery is an apprenticed trained engineer in Electronics Communications. He moved into Sales in the 1980’s
with Steatite before being appointed to The Board of Directors at the age of 28.He has held positions of Director of
Sales and Marketing after a years training with the Institute of Directors for Corporate Governance, before being
appointed Managing Director of Steatite in 1999. He presently runs the operations of Steatite on behalf of Solid
State plc.
John Macmichael, (dob 20/04/1961), Director
John Macmichael is an electronics and communications graduate whose career has encompassed design and
development through applications engineering, sales, sales management and general business management. John has
gained extensive management experience of multiple sales channels with distributors and OEMs both here in the
UK and worldwide through his international sales management role whilst living in the USA. Formerly managing
director of Breckenridge Technologies Limited John joined Solid State Supplies Limited in 2006 before being
appointed managing director in April 2011.
8
DIRECTORS’ REPORT
For the year ended 31st March 2013 (continued)
Solid State PLC
William Marsh, (dob 23/07/1937), Director
Educated at Kingston-upon-Thames Technical College, Bill Marsh started work at Hackbridge Transformers in
1954 as a Student Apprentice. In 1960, having gained an HNC qualification in electrical/electronic engineering he
joined the Royal Air Force as an Air Radar Fitter. In 1962 he joined Hewittic Rectifiers where he worked as a
Design Engineer and later as a Contracts Engineer. In 1968 Bill joined International Rectifier as an Area Sales
Manager, rising to the position of General Sales Manager (Northern Europe). In 1974 he joined Solid State Supplies
as Managing Director until he stepped down in 1997. Following a spell as Company Chairman he has continued to
serve on the Board of Directors as a Non-executive Director.
Details of the interests of Directors in the shares of the Company and Directors’ service contracts are stated in Note
5 to the financial statements.
Corporate Governance
The Board confirms that the Group has had regard, throughout the accounting period, with the provisions set out in
the UK Corporate Governance Code which was issued by the Financial Reporting Council in May 2010. Whilst not
required to do so, as a matter of best practice, the Directors have voluntarily endeavoured to comply with those
provisions which they consider to be relevant to a company of this size.
The audit committee consists of Messrs W G Marsh and A B Frere, and meets regularly to ensure that the financial
performance of the Group is properly recorded and monitored, to meet the auditors and to review the reports from
the auditors relating to accounts and internal control systems.
The remuneration committee consists of Messrs G L Comben, A B Frere and P Haining. The purpose of the
committee is to review the performance of the full time executive Directors and to set the scale and structure of their
remuneration and the basis of their service agreements with due regard to the interests of the shareholders. It is a rule
of the committee that no Director shall participate in discussions or decisions concerning his own remuneration.
Board of Directors
The Board consists of four executive Directors and three Non-executive Directors and meets regularly throughout
the year.
The Board comprises the executive management of the Group and thus maintains full control over its activities.
Decisions are accordingly taken quickly and effectively following consultation among the Directors concerned if
any matters arise. The Board takes the view that this direct but flexible approach has enabled the Company to deal
effectively with all matters.
Going Concern
The Directors confirm that they are satisfied that the Group has adequate resources to continue in business for the
foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the accounts.
Purchase of Own Shares
At the year end the Company had in place authority to purchase 1,027,714 ordinary shares under authority given by
a resolution at the Annual General Meeting on 8th August 2012 This authority expires on 8th February 2014.
Financial Instruments
Details of the use of financial instruments by the Company and its subsidiaries are contained in Note 19 of the
financial statements.
Internal Control
In respect of internal controls, the Directors are aware of the Turnbull Report and are continually reviewing the
effectiveness of the systems of internal controls, the key elements of which having regard to the size of the Group
are that the Board meets regularly and takes the decisions on all material matters, the organisational structure
ensures that responsibilities are defined and authority only delegated where appropriate, and that the regular
management accounts are presented to the Board wherein the financial performance of the Group is analysed.
The Directors acknowledge that they are responsible for the system of internal control which is established in order
to safeguard the assets, maintain proper accounting records and ensure that financial information used within the
business or published is reliable. Any such system of control can, however, only provide reasonable, not absolute,
assurance against material misstatement or loss.
9
Solid State PLC
DIRECTORS’ REPORT
For the year ended 31st March 2013 (continued)
Statement of Directors’ Responsibilities
The Directors are responsible for keeping proper 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 group and
enable them to ensure that the financial statements comply with the Companies Act 2006 and Article 4 of the IAS
Regulation. They are also responsible for safeguarding the assets of the group and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
The Directors are also required to prepare financial statements for the Group in accordance with International
Financial Reporting Standards as adopted by the European Union (IFRSs) and the rules of the London Stock
Exchange for companies trading securities on the Alternative Investment Market. The Directors have chosen to
prepare financial statements for the Company in accordance with UK Generally Accepted Accounting Practice.
Group Financial Statements
Under company law the directors must not approve the financial statements unless they are satisfied that they
present fairly the financial position, financial performance and cash flows of the Group for that period.
In preparing the financial statements the Directors are required to:
(cid:129)
(cid:129)
(cid:129)
select suitable accounting policies in accordance with IAS 8 Accounting Policies, changes in Accounting
Estimates and Errors and then apply them consistently.
present information, including accounting policies, in a manner that provides relevant, reliable, comparable
and understandable information; and
provide additional disclosures when compliance with the specific requirements in IFRSs is insufficient to
enable users to understand the impact of particular transactions, other events and conditions on the entity’s
financial position and financial performance.
(cid:129) State that the group has complied with IFRS, subject to any material departures disclosed and explained in
the financial statements,
(cid:129)
and make judgements and estimates that are reasonable and prudent.
Parent company financial statements
Company law requires directors to prepare financial statements for each financial year which 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:
(cid:129)
(cid:129)
select suitable accounting policies and then apply them consistently.
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
company will continue in business.
(cid:129) make judgements and accounting estimates that are reasonable and prudent.
Financial statements are published on the Group’s website in accordance with legislation in the United Kingdom
governing the preparation and dissemination of financial statements, which may vary from legislation in other
jurisdictions. The maintenance and integrity of the corporate and financial information group’s website is the
responsibility of the Directors. The Directors’ responsibility also extends to the ongoing integrity of the financial
statements contained therein. The work carried out by the auditors does not include consideration of the maintenance
and the integrity of the website and accordingly the auditor accepts no responsibility for any changes that have
occurred to the financial statements when they are presented on the website.
10
DIRECTORS’ REPORT
For the year ended 31st March 2013 (continued)
Solid State PLC
Creditor Payment Policy
The Company’s policy for the year to 31st March 2013 for all suppliers is to fix terms of payment when agreeing the
terms of each business transaction, to ensure the supplier is aware of those terms and to abide by the agreed terms of
payment.
Creditor days based on the year end trade creditors and purchases made in the year were 38 days (2012: 47 days).
Auditors
Each of the persons who are Directors at the time when this Directors’ Report is approved has confirmed that:
(cid:129)
(cid:129)
so far as that Director is aware , there is no relevant audit information of which the company’s auditors are
unaware, and
that Director has taken all steps that ought to have been taken as a Director in order to be aware of any
information needed by the auditors in connection with preparing their report and to establish that the
company’s auditors are aware of that information.
A resolution to reappoint haysmacintyre as auditors will be proposed at the next annual general meeting.
By order of the Board
P Haining FCA
Secretary
18th June 2013
Registered Office: 2 Ravensbrook Business Park, Hedera Road, Redditch, B98 9EY
11
Solid State PLC
REPORT OF THE INDEPENDENT AUDITORS
TO THE SHAREHOLDERS OF SOLID STATE PLC
We have audited the financial statements of Solid State PLC for the year ended 31st March 2013 which comprise the
Consolidated Statement of Comprehensive Income, the Consolidated Statement of Changes in Equity, the
Consolidated Statement of Financial Position, the Consolidated Statement of Cash Flows, the Company Balance
Sheet and the related notes. The financial reporting framework that has been applied in the preparation of the group
financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the
European Union. The financial reporting framework that has been applied in the preparation of the parent company
financial statements is applicable law and United Kingdom Accounting Standards (United Kingdom GAAP).
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.
Respective responsibilities of directors and auditors
As explained more fully in the Directors’ Responsibilities Statement set out on pages 9 and 10, the directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law
and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing
Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or
error. This includes an assessment of: whether the accounting policies are appropriate to the group’s and the parent
company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of
significant accounting estimates made by the directors; and the overall presentation of the financial statements. In
addition, we read all the financial and non-financial information in the Directors’ Report to identify material
inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or
inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion:
(cid:129)
the financial statements give a true and fair view of the state of the group’s and of the parent company’s
affairs as at 31 March 2013 and the group’s profit for the year then ended;
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union;
the parent company financial statements have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the Companies Act
2006.
(cid:129)
(cid:129)
(cid:129)
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors’ Report for the financial year for which the financial
statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
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:
(cid:129)
adequate accounting records have not been kept by the parent company, or returns adequate for our audit
have not been received from branches visited by us; or
(cid:129)
the parent company financial statements are not in agreement with the accounting records and returns; or
(cid:129)
certain disclosures of directors’ remuneration specified by law are not made; or
(cid:129) we have not received all the information and explanations we require for our audit.
12
REPORT OF THE INDEPENDENT AUDITORS
TO THE SHAREHOLDERS OF SOLID STATE PLC (continued)
Solid State PLC
Notes
1. The maintenance and integrity of the group’s website is the responsibility of the directors, the work carried
out by the auditors does not involve consideration of those matters and, accordingly, the auditors accept no
responsibility for any changes that may have occurred to the financial statements since they were initially
presented on the website.
2. Legislation in the United Kingdom governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
David Cox (Senior statutory auditor)
for and on behalf of haysmacintyre, Statutory Auditor
18th June 2013
Fairfax House
15 Fulwood Place
London WC1V 6AY
13
Solid State PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31st March 2013
euneveR
selas fo tsoC
TIFORP SSORG
stsoc noitubirtsiD
sesnepxe evitartsinimdA
noitisiuqca no niaG
SNOITAREPO MORF TIFORP
stsoc ecnaniF
NOITAXAT EROFEB TIFORP
esnepxe xaT
YTIUQE OT ELBATUBIRTTA TIFORP
TNERAP EHT FO SREDLOH
EMOCNI EVISNEHERPMOC REHTO
Translation differences on overseas operations
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
setoN
2
3
6
7
2013
£
779,494,13
)915,062,32(
_________
854,432,8
)579,715,2(
)483,278,3(
-
_________
2012
£
151,478,52
)749,676,81(
_________
402,791,7
)908,813,2(
)039,173,3(
782,061
_________
990,448,1
257,666,1
)666,37(
_________
)806,76(
_________
334,077,1
)553,382(
_________
441,995,1
)951,282(
_________
870,784,1
_________
589,613,1
_________
-
_________
-
_________
1,487,078
_________
1,316,985
_________
ERAHS REP SGNINRAE
cisaB
detuliD
8
8
p8.12
p1.12
p5.91
p2.91
The notes on pages 19 to 50 form part of these financial statements.
14
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31st March 2013
Solid State PLC
erahS
latipaC
latipaC
erahS
deniateR egnahcxE noitpmedeR muimerP
evreseR
evreseR
ngieroF
Reserve Earnings Total
Balance at 31st March 2011
307,826
756,980
4,674
59,834
2,809,288
3,938,602
Total comprehensive income
For the year ended 31st March 2012
-
-
Issue of new shares
31,746
168,254
Share based payment expense
sdnediviD
Reallocation on winding up of a subsidiary
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,316,985
1,316,985
-
200,000
92,023
92,023
)344,144(
)344,144(
(59,834)
59,834
-
Balance at 31st March 2012
339,572
925,234
4,674
-
3,836,687
5,106,167
_______
_______
_______
_______
_______
_______
Total comprehensive income
For the year ended 31st March 2013
-
-
serahs wen fo eussI
030,9
071,841
Share based payment expense
sdnediviD
-
-
-
-
-
-
-
-
-
-
-
-
1,487,078
1,487,078
-
002,751
44,445
44,445
)758,315(
)758,315(
_______
_______
_______
_______
_______
_______
Balance at 31st March 2013
348,602
_______
1,073,404
_______
4,674
_______
-
_______
4,854,353
_______
6,281,033
_______
The notes on pages 19 to 50 form part of these financial statements.
15
Solid State PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 31st March 2013
Company Number: 00771335
setoN
£
£
£
£
2013
2012
STESSA
STESSA TNERRUC-NON
tnempiuqe dna tnalp ,ytreporP
stessa elbignatnI
TOTAL NON-CURRENT ASSETS
STESSA TNERRUC
seirotnevnI
selbaviecer rehto dna edarT
stnelaviuqe hsac dna hsaC
STESSA TNERRUC LATOT
STESSA LATOT
SEITILIBAIL
SEITILIBAIL TNERRUC
tfardrevo knaB
selbayap rehto dna edarT
sgniworrob knaB
seitilibail xat noitaroproC
01
11
41
51
949,419
207,693,2
________
3,311,651
071,158
975,524,2
________
3,276,749
537,650,3
057,271,7
279,790,1
________
500,260,3
086,278,6
868,14
________
754,723,11
_________
801,936,41
_________
355,679,9
_________
203,352,31
_________
61
71
549,694,2
054,417,4
225,509
037,981
________
599,763,1
765,563,5
714,460,1
353,162
________
TOTAL CURRENT LIABILITIES
8,306,647
8,059,332
81
02
-
824,15
________
-
308,78
________
NON CURRENT LIABILITIES
sgniworroB
ytilibail xat derrefeD
TOTAL NON-CURRENT LIABILITIES
SEITILIBAIL LATOT
STESSA TEN LATOT
CAPITAL AND RESERVES ATTRIBUTABLE TO EQUITY
TNERAP EHT FO SREDLOH
latipac erahS
evreser muimerp erahS
evreser noitpmeder latipaC
sgninrae deniateR
12
22
22
22
YTIUQE LATOT
51,428
________
570,853,8
________
330,182,6
________
206,843
404,370,1
476,4
353,458,4
________
330,182,6
________
87,803
________
531,741,8
________
761,601,5
________
275,933
432,529
476,4
786,638,3
________
761,601,5
________
The financial statements were approved by the Board of Directors and authorised for issue on 18th June 2013 and
were signed on its behalf by:
P. Haining, Director
G S Marsh, Director
The notes on pages 19 to 50 form part of these financial statements.
16
Solid State PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31st March 2013
2013
2012
£
£
£
£
SEITIVITCA GNITAREPO
noitaxat erofeb tiforP
Adjustments for:
noitaicerpeD
noitasitromA
Loss on disposal of property, plant and equipment
esnepxe tnemyap desab erahS
stsoc ecnaniF
noitisiuqca no niaG
segnahc erofeb snoitarepo morf tiforP
snoisivorp dna latipac gnikrow ni
seirotnevni ni )esaercni(/esaerceD
(Increase) in trade and other receivables
(Decrease)/increase in trade and other payables
snoitarepo morf detareneg hsaC
diap sexat emocnI
seitivitca gnitarepo morf wolf hsaC
SEITIVITCA GNITSEVNI
Purchase of property, plant and equipment
erawtfos retupmoc fo esahcruP
Proceeds of sales from property, plant and equipment
Consideration paid on acquisition of business
SEITIVITCA GNICNANIF
serahs yranidro fo eussI
Invoice discounting finance (net movement)
diap tseretnI
Dividend paid to equity shareholders
(DECREASE) IN CASH AND CASH
STNELAVIUQE
334,077,1
540,232
377,34
3,978
544,44
666,37
-
________
043,861,2
072,5
(300,070)
(651,117)
________
)333,69(
(2,657,987)
1,147,734
________
)719,549(
________
324,222,1
)353,193(
_______
)628,852(
_______
(313,885)
)698,41(
14,083
-
_______
002,751
(158,895)
)666,37(
(513,857)
_______
)353,193(
_______
070,138
)896,413(
_______
273,615
)812,985(
_______
)648,27(
_______
(288,787)
)411,8(
36,500
(200,000)
_______
000,002
(120,548)
)806,76(
(441,443)
_______
441,995,1
877,691
351,43
8,095
320,29
806,76
)782,061(
________
415,738,1
)685,606,1(
________
829,032
)628,852(
_______
)898,72(
)104,064(
_______
)992,884(
)995,924(
_______
)898,719(
_______
The notes on pages 19 to 50 form part of these financial statements.
17
Solid State PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31st March 2013 (continued)
Cash and cash equivalents comprise:
stnelaviuqe hsac dna hsac ni )esaerced( teN
)648,27(
)898,719(
raey fo gninnigeb ta stnelaviuqe hsac dna hsaC
)721,623,1(
)922,804(
2013
£
2012
£
stnelaviuqe hsac dna hsac no sniag egnahcxE
raey fo dne ta stnelaviuqe hsac dna hsaC
There were no significant non-cash transactions.
dnamed no elbaliava hsaC
stfardrevO
-
_________
-
_______
)379,893,1(
_________
)721,623,1(
_______
2013
£
2012
£
279,790,1
)549,694,2(
_________
868,14
)599,763,1(
________
)379,893,1(
_________
)721,623,1(
_______
18
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2013
1.
ACCOUNTING POLICIES AND CRITICAL ACCOUNTING JUDGEMENTS
Solid State PLC
The principal accounting policies adopted in the preparation of the financial statements are set out below.
The policies have been consistently applied to all the years presented, unless otherwise stated.
These financial statements have been prepared in accordance with International Financial Reporting
Standards, International Accounting Standards and Interpretations issued by the International Accounting
Standards Board as adopted by the European Union (“IFRSs”) and with those parts of the Companies Act
2006 applicable to companies preparing their accounts under IFRSs. The consolidated financial statements
have been prepared under the historical cost convention.
As allowed by IFRS 1, we have elected not to apply IFRS retrospectively for business combinations
computed prior to 1st April 2006 and have used the carrying value of goodwill resulting from business
combinations occurring before the date of transition as deemed costs, subjecting this to impairment reviews
at the date of transition (1st April 2006) and at the end of each financial year thereafter.
Basis of Consolidation
Where the company has the power, either directly or indirectly, to govern the financial and operating policies
of another entity or business so as to obtain benefits from its activities, it is classified as a subsidiary. The
consolidated financial statements present the results of the company and its subsidiaries (“the Group”) as if
they formed a single entity. Intercompany transactions and balances between Group companies are therefore
eliminated in full.
Business Combinations
The consolidated financial statements incorporate the results of business combinations using the purchase
method other than disclosed above. In the consolidated balance sheet, the acquiree’s identifiable assets,
liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The
results of acquired operations are included in the consolidated statement of comprehensive income from the
date on which control is obtained.
Goodwill
Goodwill represents the excess of the cost of a business combination over the interest in the fair value of
identifiable assets, liabilities and contingent liabilities acquired. Cost comprises the fair value of assets
given, liabilities assumed and equity instruments issued.
Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the
income statement.
Any gains on acquisition are recognised in the statement of comprehensive income on the date of acquisition.
Impairment of non-financial assets
Impairment tests on goodwill are undertaken annually on 31st March, and on other non-financial assets
whenever events or changes in circumstances indicate that their carrying value may not be reasonable. Where
the carrying value of an asset exceeds its recoverable amount (ie the higher of value in use and fair value less
costs to sell), the asset is written down accordingly.
Impairment charges are included in the administrative expenses line item in the consolidated statement of
comprehensive income, except to the extent that they reverse gains previously recognised in the consolidated
statement of recognised income and expense. An impairment loss recognised for goodwill is not reversed.
19
Solid State PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2013 (continued)
1.
ACCOUNTING POLICIES AND CRITICAL ACCOUNTING JUDGEMENTS (continued)
Intangible Assets (other than goodwill)
Intangible assets are recognised on business combinations if they are separable from the acquired entity or arise
from other contractual/legal rights. The amounts ascribed to such intangibles are arrived at by using appropriate
valuation techniques.
Externally acquired intangible assets are initially recognised at cost and subsequently amortised on a straight line
basis over their useful economic lives. Cost includes all directly attributable costs of acquisition. The
amortisation expense is included within the administration expense line in the consolidated statement of
comprehensive income. Software is amortised over its useful economic life of 5 years and other intangible assets
over their useful economic life of 10 years.
Intangible assets are subject to impairment tests whenever events or changes in circumstances indicate that their
carrying value may not be recoverable.
Revenue
Revenue represents sales to external customers at invoiced amounts less value added tax or local taxes on sales.
Revenue is recognised when the risks and rewards of owning the goods has passed to the customer which is
generally on collection. For goods that are subject to bill and hold arrangements this means:
the goods are complete and ready for collection;
the goods are separately identified from the Group’s other stock and are not used to fulfil any other orders;
•
•
• and the customer has specifically requested that the goods be held pending collection.
Normal payment terms apply to the bill and hold arrangements.
Property, plant and equipment
Items of property, plant and equipment are initially recognised at cost. As well as the purchase price, cost
includes directly attributable costs.
Depreciation is provided on all items of property, plant and equipment to write off the carrying value of items
over their expected useful economic lives. It is applied at the following rates:
Short leasehold property improvements- straight line over minimum life of lease
Fittings and equipment- 25% per annum on a reducing balance basis
Computers- 20% per annum on a straight line basis
Motor vehicles- 25% per annum on a reducing balance basis
Depreciation is provided on all UN licences to write off the carrying value of each licence over its expected
useful life, which is generally 10 years from its original grant.
Leased assets
Where substantially all of the risks and rewards incidental to ownership are retained by the lessor (an “operating
lease”), the total rentals payable under the lease are charged to the statement of comprehensive income on a
straight-line basis over the lease term.
The land and buildings elements of property leases are considered separately for the purposes of lease
classification.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is based on the cost of purchase on a first
in, first out basis. Work in progress and finished goods include labour and attributable overheads. Net realisable
value is based on estimated selling price less any additional costs to completion and disposal.
20
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2013 (continued)
Solid State PLC
1.
ACCOUNTING POLICIES AND CRITICAL ACCOUNTING JUDGEMENTS (continued)
Deferred taxation
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the balance
sheet differs from its tax base, except for differences arising on:
(cid:129)
(cid:129)
(cid:129)
the initial recognition of goodwill
the initial recognition of an asset or liability in a transaction which is not a business combination and at
the time of the transaction affects neither accounting nor taxable profit: and
investments in subsidiaries and jointly controlled entities where the Group is able to control the timing
of the reversal of the difference and it is probable the difference will not reverse in the foreseeable
future.
Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be
available against which the differences can be utilised.
The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted
by the balance sheet date and are expected to apply when the deferred tax liabilities/(assets) are
settled/(recovered)
Deferred tax assets and liabilities are offset when the Group 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.
Pensions
The pension schemes operated by the Group are defined contribution schemes. The pension cost charge
represents the contributions payable by the Group.
Foreign currency
Transactions entered into by Group entities in a currency other than the currency of the primary economic
environment in which it operates are recorded at the rates ruling when the transactions occur. Foreign currency
monetary assets and liabilities are retranslated at the rates ruling at the balance sheet date. Exchange differences
arising are recognised in the statement of comprehensive income.
On consolidation, the statement of financial position of overseas operations are translated into sterling at rates
approximating to those ruling at the statement of financial position date. Exchange differences arising on
retranslation of the net assets and results of the overseas operations are recognised directly in the “foreign
exchange reserve”.
Research and development costs
Expenditure on internally developed products is capitalised if it can be demonstrated that:
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
it is technically feasible to develop the product for it to be sold;
adequate resources are available to complete the development;
there is an intention to complete and sell the product;
the Group is able to sell the product;
sale of the product will generate future economic benefits; and
expenditure on the project can be measured reliably.
Capitalised development costs are amortised over the periods the Group expects to benefit from selling the
products developed. The amortisation expense is included within the cost of sales line in the statement of
comprehensive income.
Development expenditure not satisfying the above criteria and expenditure on the research phase of internal
projects are recognised in the statement of comprehensive income as incurred.
None of the development costs during the years ended 31st March 2012 and 31st March 2013 met the conditions
necessary for capitalisation.
21
Solid State PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2013 (continued)
1.
ACCOUNTING POLICIES AND CRITICAL ACCOUNTING JUDGEMENTS (continued)
Dividends
Equity dividends are recognised when they become legally payable. Interim dividends are recognised when paid.
Final dividends are recognised when approved by the shareholders at an annual general meeting.
Financial assets
The Group classifies its assets into one of the following categories, depending on the purpose for which the asset
was acquired. The Group’s accounting policy for each category is as follows:
Fair value through profit or loss: This category comprises only in-the-money derivatives. They are carried in the
statement of financial position at fair value with changes in fair value recognised in the statement of
comprehensive income. Other than derivatives, the Group does not have any assets held for trading nor does it
voluntarily classify any financial assets as being at fair value through the profit and loss account
Loans and receivables: These assets are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. They arise principally through the provision of goods and services to
customers (trade receivables), but also incorporate other types of contractual monetary asset. They are initially
recognised at fair value plus transaction costs that are directly attributable to the acquisition or issue and
subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.
The effect of discounting on these financial instruments is not considered to be material.
Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties
on the part of the counterparty or default or significant delay in payment) that the Group will be unable to collect
all the amounts due under the terms receivable, the amount of such a provision being the difference between the
net carrying amount and the present value of the future expected cash flows associated with the impaired
receivable. For trade receivables, such provisions are recorded in a separate allowance account with the loss
being recognised within administrative expenses in the income statement. On confirmation that the trade
receivable will not be collectable, the gross carrying value of the asset is written off against the associated
provision.
Financial liabilities
The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the
liability was acquired. Other than financial liabilities in a qualifying hedging relationship (see below), the
Group’s accounting policy for each category is as follows:
Fair value through the profit and loss: This category comprises only out-of-money derivatives. They are carried
in the statement of financial position at fair value with changes in fair value recognised in the statement of
comprehensive income.
Other financial liabilities: Other financial liabilities include the following items:
(cid:129) Trade payables and other short term monetary liabilities, which are recognised at amortised cost.
(cid:129) Bank borrowings are initially recognised at the amount advanced net of any transaction costs directly
attributable to the issue of the instrument. Such interest bearing liabilities are subsequently measured at
amortised cost using the effective interest rate method, which ensures that any interest expense over the
period to repayment is at a constant rate on the balance of liability carried in the statement of financial
position “Interest expense” in this context includes initial transaction costs and premia payable on
redemption, as well as any interest while the liability is outstanding.
22
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2013 (continued)
Solid State PLC
1.
ACCOUNTING POLICIES AND CRITICAL ACCOUNTING JUDGEMENTS (continued)
Shared based payment
Where share options are awarded to employees, the fair value of the options at the date of grant is charged to the
consolidated statement of comprehensive income over the vesting period. Non-market vesting conditions are
taken into account by adjusting the number of equity instruments expected to vest at each statement of financial
position date so that, ultimately, the cumulative amount recognised over the vesting period is based on the
number of options that eventually vest. Market vesting conditions are factored into the fair value of options
granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market
vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting
condition.
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the
options, measured immediately before and after the modification, is also charged to the statement of
comprehensive income over the remaining vesting period.
Standards and amendments and interpretations to published standards not yet effective
Certain new standards, amendments and interpretations to existing standards have been published that are
mandatory for the group’s accounting periods beginning on or after 1st April 2013 or later periods and which the
group has decided not to adopt early are:
IFRS 9 Financial Instruments (effective for accounting periods beginning or after 1st January 2015). IFRS 9
introduces new requirements for classifying and measuring financial assets and liabilities.
IFRS 10 Consolidated Financial Statements (effective for accounting periods beginning on or after 1st
January 2014). IFRS 10 establishes principles for the presentation and preparation of consolidated financial
statements when an entity controls one or more entities.
IFRS 11 Joint Arrangements (effective for accounting periods beginning on or after 1st January 2013). IFRS
11 focuses on the rights and obligations of joint arrangements, rather than its legal form.
IFRS 12 Disclosure of Interests in Other Entities (effective for accounting periods beginning on or after 1st
January 2014). IFRS 12 introduces new disclosure requirements for all forms of interests in other entities
including subsidiaries, joint arrangements, associates and unconsolidated structured entities.
IFRS 13 Fair Value Measurement (effective for accounting periods beginning on or after 1st January 2013).
IFRS 10 establishes a single framework for all fair value measurements when fair value is required or permitted
by IFRS.
IAS 1 (amended) Presentation of Items of Other Comprehensive Income (effective for accounting periods
beginning on or after 1st January 2013) IAS 1 prescribes the basis for presentation of general purpose financial
information to ensure comparability with the entity’s financial statements of previous periods and with financial
statements of other entities.
IAS 16 (revised) Property, Plant and Equipment (effective for accounting periods beginning on or after 1st
January 2013). IAS 16 outlines accounting treatment for most types of property, plant and equipment.
IAS 19 (revised) Employee Benefits (effective for accounting periods beginning on or after 1st January 2013)
IAS 19 prescribes the accounting and disclosure for employee benefits i.e. all forms of consideration given by an
entity in exchange for service rendered by an employee.
IAS 27 (revised) Separate Financial Statements (effective for accounting periods beginning on or after 1st
January 2014) IAS 27 assists in the preparation and presentation of consolidated financial statements for a group
of entities under the control of a parent and in accounting for investments in subsidiaries, jointly controlled
entities and associates when an entity elects, or is required by local regulations to present separate (non
consolidated) financial statements.
23
Solid State PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2013 (continued)
1.
ACCOUNTING POLICIES AND CRITICAL ACCOUNTING JUDGEMENTS (continued)
Standards and amendments and interpretations to published standards not yet effective (continued)
IAS 28 Investments in Associates and Joint Ventures (effective for accounting periods beginning on or after
1st January 2013) IAS 28 outlines how to apply, with certain limited exceptions, the equity method to
investments in associates and joint ventures.
IAS 34 Interim Financial Reporting (effective for accounting periods beginning on or after 1st January 2013)
IAS 34 prescribes the minimum content of an interim financial report and the principles for recognition and
measurement in financial statements presented for an interim period.
IAS 36 Impairment of Assets (effective for accounting periods beginning on or after 1st January 2014) IAS 36
prescribes the accounting treatment to ensure that assets are carried at no more than their recoverable amount and
to define how the recoverable amount is determined.
The implementation of these standards is not expected to have any material effect on the Group’s financial
statements.
2.
REVENUE
Revenue arises from:
sdoog fo elaS
secivres fo noisivorP
3.
PROFIT FROM OPERATIONS
This has been arrived at after charging/(crediting):
)4 eton ees( stsoc ffatS
)stsoc ffats ni dedulcni( stsoc noitanimret tnemyolpmE
tnempiuqe dna tnalp ,ytreporp fo noitaicerpeD
Amortisation of computer software and other intangible assets
tnempiuqe dna tnalp ,ytreporp fo lasopsid no ssoL
:noitarenumer ’srotiduA
seef tiduA
Audit of accounts of associates of the company pursuant to legislation
:slatner esael gnitarepO
yrenihcam dna tnalP
rehtO
stsoc tnempoleved dna hcraeseR
secnereffid egnahcxe ngieroF
snwod etirw kcotS
2013
£
2012
£
806,893,13
963,69
_________
681,287,52
569,19
_________
779,494,13
_________
151,478,52
_________
2013
£
351,356,4
665,81
540,232
43,773
879,3
000,3
36,000
199,13
716,403
450,613
)629,331(
000,252
_______
2012
£
066,470,4
064,501
877,691
34,153
590,8
005,5
32,000
005,14
349,202
014,871
)195,812(
000,031
_______
The foreign exchange differences have been treated as a reduction in cost of sales rather than as a negative
overhead.
24
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2013 (continued)
Solid State PLC
4.
STAFF COSTS
Staff costs for all employees during the year, including the executive Directors, were as follows:
seiralas dna segaW
stsoc ytiruces laicoS
stsoc noisnep rehtO
2013
£
746,881,4
825,444
879,91
________
351,356,4
________
2012
£
536,076,3
390,493
239,9
________
066,470,4
________
Wages and salaries include termination costs of £18,566 (2012: £105,460)
The average monthly number of employees during the year, including the three executive Directors, was as
follows:
noitubirtsid dna gnilleS
gnirutcafunaM
noitartsinimda dna tnemeganaM
2013
Number
2012
Number
43
73
34
___
411
___
23
72
73
__
69
__
25
Solid State PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2013 (continued)
5.
DIRECTORS’ EMOLUMENTS, INTERESTS AND SERVICES CONTRACTS
The value of all elements of remuneration received by each Director in the year was as follows:
Salary/
Fees
£
Bonuses
£
Benefits
in kind
£
Total
emoluments
£
Pension
contributions
£
Total
£
31st March 2013
W G Marsh
G S Marsh
J M Lavery
J L Macmichael
P Haining
G L Comben
A B Frere
Total
31st March 2012
W G Marsh
G S Marsh
J M Lavery
J L Macmichael
P Haining
G L Comben
ererF B A
Total
49,000
160,000
150,000
120,000
59,000
49,000
7,000
______
-
30,000
30,000
30,000
-
-
-
______
19,000
24,000
20,000
20,000
-
18,000
-
______
594,000
______
90,000
______
101,000
______
36,000
125,000
120,000
85,000
19,000
36,000
-
______
-
125,000
120,000
79,000
-
-
-
______
18,000
14,000
19,000
18,000
-
17,000
-
______
421,000
______
324,000
______
86,000
______
68,000
214,000
200,000
170,000
59,000
67,000
7,000
______
785,000
______
54,000
264,000
259,000
182,000
19,000
53,000
-
______
831,000
______
-
68,000
12,000 226,000
9,000 209,000
9,000 179,000
59,000
67,000
7,000
______
-
-
-
______
30,000
______
815,000
______
-
54,000
- 264,000
2,000 261,000
- 182,000
19,000
-
-
53,000
-
-
______
______
2,000
______
833,000
______
The principal benefits in kind relate to the provision of company cars.
In addition to the above, fees totalling £26,198 (2012: £63,345) arose during the year in respect of accountancy
services provided by The Kings Mill Partnership, a firm of which P Haining is a partner. A balance of £8,218
(2012: £7,458) was due to The Kings Mill Partnership at 31st March 2013.
Fees totalling £44,507 (2012: £16,053) arose during the year in respect of the services of A B Frere provided by
Condev Limited. A balance of £3,943 (2012: £1,938) was due to Condev Limited at 31st March 2013.
The executive Directors have service contracts with the Company which are terminable by the Company, or the
relevant Director, on one year’s notice.
The Directors of the Company on 18th June 2013 and at the statement of financial position date, and their
interest in the issued ordinary share capital of the Company at that date, at 31st March 2013 and 31st March
2012 or date of appointment if later, were as follows:
nebmoC L G
hsraM G W
hsraM S G
yrevaL M J
gniniaH P
leahcimcaM L J
ererF B A
18.06.13
31.03.13
31.03.12
000,000,2
000,834,1
291,193
849,834
005,25
000,45
000,601
000,000,2
000,834,1
291,193
894,834
005,25
000,45
000,601
000,000,2
000,884,1
291,193
543,813
005,25
000,11
000,65
26
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2013 (continued)
Solid State PLC
5.
DIRECTORS’ EMOLUMENTS, INTERESTS AND SERVICES CONTRACTS (continued)
Details of the options over the Company’s shares granted under the Enterprise Management Incentives Scheme
are as follows:
snoitpO
ta dleh
desicrexE 21.40.10
detnarG
snoitpO
ta dleh
31.30.13
esicrexE
ecirp
fo etaD
tnarg
esicrexE
doirep
G S Marsh
120,603
-
J M Lavery
120,603
120,603
J L Macmichael
60,000
88,085
60,000
-
-
-
-
-
120,603
99.5p
10.05.11
May 2012- March 2016
-
99.5p
10.05.11 May 2012- March 2016
-
88,085
62.0p
94.0p
23.12.10
01.04.11
December 2011 onwards
April 2012 onwards
The market price of the shares at 31st March 2013 was £2.19 (2012: £1.96), with a quoted range during the year
of £1.90 to £2.75
All the options at 31st March 2013 are subject to performance criteria which have been satisfied.
The options held by G S Marsh are split into two equal tranches. For the first tranche to be exercisable, Solid
State PLC’s ordinary share price needs to have exceeded £2.00 per share for 20 consecutive days and for the
second tranche to be exercised the ordinary share price needs to have exceeded £2.50 per share for 20
consecutive days. At the balance sheet date all these criteria had been met.
The options held by J Macmichael are subject to Solid State Supplies Limited exceeding a certain level of annual
turnover. They are split into two equal tranches. For the first tranche to be exercisable, the annual turnover must
exceed £5m and for the second tranche the annual turnover must exceed £6m. At the balance sheet date all these
criteria had been met.
27
Solid State PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2013 (continued)
6.
FINANCE COSTS
sgniworrob knaB
tseretni gnitnuocsid eciovnI
tseretni rehtO
2013
£
023,05
575,81
177,4
______
73,666
______
2012
£
443,72
481,62
080,41
______
67,608
______
Other interest includes £4,001 (2012: £9,000) to G L Comben and £770 (2012: £5,080) to W G Marsh in respect
of their unsecured loans to the group. Further details of these loans are stated in Note 18 on page 31.
7.
TAX EXPENSE
Current tax expense
raey eht rof sessol ro stiforp no xat noitaroproc KU
sdoirep roirp fo tcepser ni tnemtsujdA
Deferred tax (credit)/charge
Total tax charge
2013
£
2012
£
037,913
-
_______
353,162
-
______
319,730
261,353
(36,375)
_______
283,355
_______
20,806
_______
282,159
_______
The deferred tax credit has been increased by £1,124 (2012: £4,883) as a result of the reduction in the applicable
rate of corporation tax from 24% to 23%.
The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax
in the UK applied to profits for the year are as follows:
xat erofeb tiforP
Expected tax charge based on the standard rate of
)%62 – 2102( %42 fo KU eht ni xat noitaroproc
Effect of:
sesoprup xat rof elbitcuded ton sesnepxE
Deductible expenses not charged in Group accounts
Difference between depreciation for the year and capital allowances
Tax relief on exercise of share options at less than market value
Timing difference on recognition of gain on acquisition for tax purposes
feiler lanigraM
Enhanced relief on research and development expenditure
egrahc xat latoT
2013
£
2012
£
334,077,1
_______
441,995,1
_______
409,424
777,514
207,51
(4,900)
4,793
(54,677)
(3,651)
)000,4(
(94,816)
_______
553,382
_______
805,82
(5,308)
(26)
(104,825)
(1,600)
)005,4(
(45,867)
_______
951,282
_______
28
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2013 (continued)
Solid State PLC
8.
EARNINGS PER SHARE
The earnings per share is based on the following:
sgninraE
serahs fo rebmun egareva dethgieW
serahs fo rebmun detuliD
erahs rep sgninraE
erahs rep sgninrae detuliD
2013
£
870,784,1
_________
205,538,6
937,330,7
2012
£
589,613,1
_______
316,077,6
252,078,6
p8.12
p1.12
p5.91
p2.91
Earnings per ordinary share has been calculated using the weighted average number of shares in issue during the
year. The weighted average number of equity shares in issue was 6,835,502 (2012: 6,770,613).
The diluted earnings per share is based on 7,033,739 (2012: 6,870,252) ordinary shares which allow for the
exercise of all dilutive potential ordinary shares.
9.
DIVIDENDS
Final dividend paid for the prior year of 4.75p per share (2012: 4p)
)p5.2 :2102( erahs rep p57.2 fo diap dnedivid miretnI
Final dividend proposed for the year 5.25p per share (2012: 4.75p)
2013
£
325,443
414,881
_______
513,857
_______
366,032
_______
2012
£
271,657
687,961
_______
441,443
_______
322,593
_______
The proposed final dividend has not been accrued for as the dividend was declared after the statement of
financial position date.
29
Solid State PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2013 (continued)
10. PROPERTY, PLANT AND EQUIPMENT
Year ended 31st March 2012
tsoC
1102 lirpA ts1
snoitiddA
slasopsiD
2102 hcraM ts13
noitaicerpeD
1102 lirpA ts1
raey eht rof egrahC
lasopsid nO
2102 hcraM ts13
eulav koob teN
2102 hcraM ts13
Year ended 31st March 2013
tsoC
2102 lirpA ts1
snoitiddA
slasopsiD
3102 hcraM ts13
noitaicerpeD
2102 lirpA ts1
raey eht rof egrahC
lasopsid nO
3102 hcraM ts13
eulav koob teN
3102 hcraM ts13
trohS
dlohesael
ytreporp
rotoM
selcihev stnemevorpmi
sgnittiF
dna tnempiuqe
sretupmoc
£
£
£
latoT
£
133,991
543,91
-
030,893
050,491
)578,06(
342,979
293,562
-
406,675,1
787,874
)578,06(
_______
_______
_______
________
676,812
_______
502,135
_______
536,442,1
_______
615,499,1
________
274,8
168,43
-
_______
532,09
093,99
)082,61(
_______
141,468
725,26
-
_______
848,269
877,691
)082,61(
________
333,34
_______
543,371
_______
866,629
_______
643,341,1
________
343,571
_______
068,753
_______
769,713
_______
071,158
________
676,812
042,901
)716,02(
_______
502,135
083,811
)423,14(
_______
536,442,1
562,68
-
_______
615,499,1
588,313
)149,16(
________
992,703
_______
162,806
_______
009,033,1
_______
064,642,2
________
333,34
674,73
)716,02(
_______
543,371
422,501
)362,32(
_______
866,629
543,98
-
_______
643,341,1
540,232
)088,34(
________
291,06
_______
603,552
_______
310,610,1
_______
115,133,1
________
701,742
_______
559,253
_______
788,413
_______
949,419
________
30
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2013 (continued)
Solid State PLC
11.
INTANGIBLE ASSETS
NU
secneciL
£
retupmoC
erawtfos
£
no lliwdooG
noitadilosnoc
£
Other
elbignatni
stessa
£
latoT
£
Year ended 31st March 2012
tsoC
1st April 2011
snoitiddA
31st March 2012
noitasitromA
1102 lirpA ts1
Charge for the year
31st March 2012
eulav koob teN
31st March 2012
Year ended 31st March 2013
tsoC
1st April 2012
snoitiddA
31st March 2013
noitasitromA
2102 lirpA ts1
Charge for the year
31st March 2013
eulav koob teN
31st March 2013
9,800
-
_____
9,800
_____
-
-
_____
-
_____
9,800
_____
9,800
-
_____
9,800
_____
-
-
_____
-
_____
9,800
_____
56,089
411,58
_______
141,203
_______
049,32
20,110
______
44,050
______
97,153
______
141,203
698,41
_______
156,099
_______
050,44
29,730
______
73,780
______
82,319
______
2,206,278
-
________
2,206,278
________
-
-
________
-
________
2,206,278
________
2,206,278
-
________
2,206,278
________
-
-
________
-
________
2,206,278
________
140,434
-
_______
2,412,601
411,58
________
140,434
_______
2,497,715
________
340,41
14,043
_______
389,73
34,153
________
28,086
_______
72,136
________
112,348
_______
2,425,579
________
140,434
-
_______
2,497,715
698,41
________
140,434
_______
2,512,611
________
680,82
14,043
_______
631,27
43,773
________
42,129
_______
115,909
________
98,305
_______
2,396,702
________
Other intangible assets comprise the estimated net present value of customer relationships of Rugged Systems
Limited at the date of acquisition.
31
Solid State PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2013 (continued)
12. GOODWILL AND IMPAIRMENT
Details of the carrying amount of goodwill allocated to cash generating units (CGUs) is as follows:
detimiL etitaetS
Goodwill carrying amount
2013
£
2012
£
872,602,2
________
872,602,2
________
2,206,278
________
2,206,278
________
The recoverable amounts of all the above CGUs have been determined from a review of the current and
anticipated performance of these units. In preparing the projection, a discount rate of 15% (2012: 15%) has been
used based on the weighted average cost of capital and a future growth rate of 2.25% has been assumed beyond
the first year for which the projection is based on the budget approved by the board of directors. The future
growth rate has been applied for the next four years. It has been assumed investment in capital equipment will
equate to depreciation over this period. The discount rate was based on the group’s “beta” which is a measure of
the volatility of the share price against the market. This amounts to 0.84 (2012: 0.84).
The recoverable amount exceeds the carrying amount by £9,217,000 (2012: £9,719,000). If any one of the
following changes were made to the above key assumptions, the carrying amount would still exceed the
recoverable amount.
Discount rate: Increase from 15% to 18%
Growth rate: Reduction from 2.25% to 1.75%
13.
SUBSIDIARIES
The principal subsidiaries of Solid State PLC, both of which have been included in these consolidated financial
statements are as follows:
Subsidiary undertakings
Country of
Incorporation
Proportion of
voting rights and
Ordinary share
capital held
Proportion of
voting rights and
Ordinary share
capital held
Solid State Supplies Limited
Steatite Limited
Great Britain
Great Britain
100%
100%
100%
100%
Nature of business
Nature of business
Distribution of electronic components.
Distribution of electronic components.
Distribution of electronic components
Distribution of electronic components
and manufacture of electronic
and manufacture of electronic
equipment.
equipment.
In both cases the country of operation and of incorporation is England.
32
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2013 (continued)
14.
INVENTORIES
elaser rof sdoog dna sdoog dehsiniF
ssergorp ni kroW
Solid State PLC
2013
£
201,865,2
336,884
________
3,056,735
________
2012
£
591,457,2
018,703
________
3,062,005
________
There is no material difference between the replacement cost of inventories and the amount stated above.
15. TRADE AND OTHER RECEIVABLES
selbaviecer edarT
selbaviecer rehtO
stnemyaperP
2013
£
448,317,6
281,231
427,623
________
7,172,750
________
2012
£
943,915,6
-
133,353
________
6,872,680
________
Group trade receivables include £1,254,755 (2012: £1,572,639) which are subject to an invoice discounting
agreement. Under this agreement, borrowing equal to 85% of the relevant book debts can be taken with interest
charged at 2% over bank base rate and an administration fee of 0.175% of the gross value of the debts per month.
At 31st March 2013 borrowing under the agreement of £1,040,439 (2012: £1,280,235) was available of which
£905,522 (2012: £1,064,417) was taken up. Interest charges in the year amounted to £18,575 (2012: £26,184)
and administration fees to £21,640 (2012: £22,935).
16. TRADE AND OTHER PAYABLES (CURRENT)
selbayap edarT
sexat ytiruces laicos dna sexat rehtO
selbayap rehtO
slaurccA
emocni derrefeD
2013
£
356,680,3
073,807
446,105
195,032
291,781
________
4,714,450
________
2012
£
552,061,3
276,708
773,946
571,745
880,102
________
5,365,567
________
33
Solid State PLC
17. BANK BORROWINGS
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2013 (continued)
sretnuocsid eciovni ot eud stnuomA
2013
£
2012
£
225,509
_______
714,460,1
________
The bank overdraft is secured by a fixed and floating charge over the assets of the Company and the Group. At
the balance sheet date, the Group had an undrawn overdraft facility of £637,000 (2012: £632,000).
18. TRADE AND OTHER PAYABLES (NON CURRENT)
snaol mret muideM
2012
£
2013
£
-
_______
-
________
At 31st March 2012, the medium term loans comprised loans of £150,000 from G L Comben and £150,000 from
W G Marsh and these were included within other payables due within less than one year. The loans were
unsecured and, for G L Comben’s loan, interest was payable at the rate of 6% per annum and for W G Marsh’s
loan, interest was payable at the rate of 6% per annum on the first £50,000 and at 2% over base rate for the
remainder. Both loans were repaid on 21st May 2012. There were no loans outstanding at 31st March 2013.
A further loan of £700,000 was provided by G L Comben from 2nd July 2012 to 20th August 2012 at an interest
rate of 2.8572%
19. FINANCIAL INSTRUMENTS
The Group’s overall risk management programme seeks to minimise potential adverse effects on the Group’s
financial performance.
The Group’s financial instruments comprise cash and cash equivalents and various items such as trade payables
and receivables that arise directly from its operations. The Group is exposed through its operations to the
following risks:
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
Credit risk
Foreign currency risk
Liquidity risk
Cash flow interest rate risk
In common with all other businesses, the Group is exposed to risks that arise from its use of financial
instruments. This note describes the Group’s objectives, policies and processes for managing those risks.
Further quantitative information in respect of these risks is presented throughout these financial statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks and consequently
the objectives, policies and processes are unchanged from the previous period.
The Board has overall responsibility for the determination of the Group’s risk management policies. The
objective of the Board is to set policies that seek to reduce the risk as far as possible without unduly affecting the
Group’s competitiveness and effectiveness. Further details of these policies are set out on the next page:
34
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2013 (continued)
19. FINANCIAL INSTRUMENTS (continued)
Solid State PLC
Credit risk
The Group is exposed to credit risk primarily on its trade receivables, which are spread over a range of
customers and countries, a factor that helps to dilute the concentration of the risk.
It is Group policy, implemented locally, to assess the credit risk of each new customer before entering into
binding contracts. Each customer account is then reviewed on an ongoing basis (at least once a year) based on
available information and payment history.
The maximum exposure to credit risk is represented by the carrying value in the statement of financial position
as shown in note 15 and in the statement of financial position. The amount of the exposure shown in note 15 is
stated net of provisions for doubtful debts.
The credit risk on liquid funds is low as the funds are held at banks with high credit ratings assigned by
international credit rating agencies.
Foreign currency risk
Foreign exchange transaction risk arises when individual Group operations enter into transactions denominated
in a currency other than their functional currency. The general policy for the Group is to sell to customers in the
same currency that goods are purchased in reducing the transactional risk. Where transactions are not matched
excess foreign currency amounts generated from trading are converted back to sterling and required foreign
currency amounts are converted from sterling and the use of forward currency contracts is considered.
Foreign exchange translation risk arises on translation of the balance sheets of Group operations whose
functional currency is different to that of the Group as a whole. The predominant area where this risk applies is
US dollars and Swiss francs.
Liquidity risk
The Group operates a Group overdraft facility common to all its trading companies and invoice discounting is
used on some sales to customers meaning that the UK business can receive immediate payment on its sales.
The Group has approximately a three month visibility in its trading and runs a rolling 3 month cash flow
forecast. If any part of the Group identifies a shortfall in its future cash position the Group has sufficient
facilities that it can direct funds to the location where they are required. If this situation is forecast to continue
into the future remedial action is taken.
Cash flow interest rate risk
External Group borrowings are approved centrally. The Board accepts that this neither protects the Group
entirely from the risk of paying rates in excess of current market rates nor eliminates fully cash flow risk
associated with interest payments. It considers, however, that by ensuring approval of borrowings is made by
the Board the risk of borrowing at excessive interest rates is reduced. The Board considers that the rates being
paid are in line with the most competitive rates it is possible for the Group to achieve.
Credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to
credit risk at the reporting date was:
Current financial assets
selbaviecer rehto dna edarT
stnelaviuqe hsac dna hsaC
35
Loans and Receivables
2012
£
2013
£
057,271,7
279,790,1
________
227,072,8
________
086,278,6
868,14
________
845,419,6
________
Solid State PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2013 (continued)
19. FINANCIAL INSTRUMENTS (continued)
The maximum exposure to credit risk for trade receivables at the reporting date by geographic region was:
KU
KU noN
Carrying value
2013
£
724,812,6
714,594
________
6,713,844
________
2012
£
570,303,6
472,612
________
6,519,349
________
The Group policy is to make a provision against those debts that are overdue, unless there are grounds for
believing that all or some of the debts will be collected. During the year the value of provisions made in respect
of bad and doubtful debts was £9,909 (2012: £Nil) which represented 0.03% (2012: 0%) of revenue. This
provision is included within the management and administration costs in the Consolidated Statement of
Comprehensive Income.
Trade receivables ageing by geographical segment
Geographical area
3102
KU
KU noN
latoT
Total
£
Current
£
30 days
past due
£
60 days
past due
£
90 days
past due
£
323,823,6
714,594
________
599,768,5
704,084
________
571,893
010,51
_______
291,16
-
______
169
-
______
047,328,6
204,843,6
581,314
291,16
169
snoisivorP :sseL
)698,901(
-
)347,74(
)291,16(
)169(
latoT
2012
KU
KU noN
latoT
________
________
_______
______
______
448,317,6
________
204,843,6
________
244,563
_______
-
______
-
______
311,193,6
390,532
________
162,890,6
946,491
________
368,572
526,12
_______
371,21
838,11
______
618,4
189,6
______
602,626,6
019,292,6
884,792
110,42
797,11
snoisivorP :sseL
)758,601(
-
)940,17(
)110,42(
)797,11(
latoT
________
________
_______
______
______
943,915,6
________
019,292,6
________
934,622
_______
-
______
-
______
36
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2013 (continued)
Solid State PLC
19. FINANCIAL INSTRUMENTS (continued)
The Group records impairment losses on its trade receivables separately from gross receivables. The movements
on this allowance account during the year are summarised below:
ecnalab gninepO
snoisivorp ni sesaercnI
snoisivorp tsniaga ffo nettirW
ecnalab gnisolC
2013
£
758,601
909,9
)758,6(
_______
909,901
_______
2012
£
509,901
758,6
)509,9(
_______
758,601
_______
The main factor used in assessing the impairment of trade receivables is the age of the balances and the
circumstances of the individual customer.
As shown in the earlier table, at 31st March 2013 trade receivables of £365,442 which were past their due date
were not impaired (2012: £226,439). All of these were less than 60 days past their due date.
Liquidity risk
Current financial liabilities
selbayap rehto dna edarT
sgniworrob knaB
tfardrevo knaB
Non current financial liabilities
sgniworrob dna snaoL
Financial liabilities
measured at amortised cost
2013
£
054,417,4
225,509
549,694,2
________
8,116,917
________
-
________
2012
£
765,563,5
714,460,1
599,763,1
________
7,797,979
________
-
________
37
Solid State PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2013 (continued)
19. FINANCIAL INSTRUMENTS (continued)
The following are maturities of financial liabilities, including estimated contracted interest payments.
lautcartnoC gniyrraC
tnuoma
wolf hsac
shtnom 6
ssel ro
21 – 6
shtnom
erom ro 1
sraey
2013
Secured bank loans
Bank overdrafts
Amounts due to invoice
discounters
Trade and other payables
2012
Secured bank loans
Bank overdrafts
Amounts due to invoice
discounters
Trade and other payables
-
2,496,945
-
2,496,945
-
2,496,945
-
-
-
-
905,522
4,714,450
________
905,522
4,714,450
________
-
905,522
4,714,450
-
________ _______
-
_______
8,116,917
________
8,116,917
________
8,116,917
-
________ _______
-
_______
-
1,367,995
-
1,367,995
-
1,367,995
-
-
-
-
1,064,417
5,365,567
________
1,064,417
5,365,567
________
-
1,064,417
5,365,567
-
________ _______
-
_______
7
,797,979
________
7,797,979
________
7,797,979
-
________ _______
-
_______
Interest rate risk
The Group finances its business through a mixture of bank overdrafts and invoice discounting facilities. During
the year the Group utilised these facilities at floating rates of interest.
The Group bank overdraft with HSBC plc incurs interest at the rate of 2.3% over the HSBC’s base rate. The
Group is affected by changes in the UK interest rate.
Details of interest payable under the invoice discounting agreement are stated in Note 15.
The US Dollar overdraft facility bears the interest rate of 2.3% over the HSBC’s US dollar base rate and is
therefore affected by changes in the US interest rate.
The fair value of the Group’s financial instruments is not materially different to the book value.
In terms of sensitivity, if the HSBC base rate had been 1% higher throughout the year the level of interest
payable would have been £24,605 (2012: £19,117) higher and if 1% lower throughout the year the level of
interest payable would have been lower by the same amount.
38
Solid State PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2013 (continued)
19. FINANCIAL INSTRUMENTS (continued)
Foreign currency risk
The Group’s main foreign currency risk is the short term risk associated with accounts receivable and payable
denominated in currencies that are not the subsidiaries functional currency. The risk arises on the difference in
the exchange rate between the time invoices are raised/received and the time invoices are settled/paid. For sales
denominated in foreign currencies the Group will try to ensure that the purchases associated with the sale will be
in the same currency.
All monetary assets and liabilities of the Group were denominated in sterling with the exception of the following
items which were denominated in US dollars, and which are included in the financial statements at the sterling
value based on the exchange rate ruling at the statement of financial position date.
The following table shows the net liabilities exposed to exchange rate risk that the Group has at 31st March
2013:
selbaviecer edarT
stnelaviuqe hsac dna hsaC
selbayap edarT
2013
£
2012
£
217,762,4
916,390,1
)492,346,1(
________
952,394,1
036,8
)591,228,1(
________
3,718,037
________
(320,306)
_______
There were also net liabilities of £19,775 in euros (2012: £7,660).
The Group is exposed to currency risk because it undertakes trading transactions in US dollars and euros. The
Directors do not generally consider it necessary to enter into derivative financial instruments to manage the
exchange risk arising from its operations, but from time to time when the Directors consider foreign currencies
are weak and it is known that there will be a requirement to purchase those currencies, forward arrangements are
entered into. Details of those outstanding at the statement of financial position date are given later in this note.
The effect of a strengthening of 10% in the rate of exchange in the currencies against sterling at the statement of
financial position date would have resulted in an estimated net increase/(decrease) in pre-tax profit for the year
and an increase/(decrease) in net assets of approximately £370,000 (2012: £(32,000)) and the effect of a
weakening of 10% in the rate of exchange in the currencies against sterling at the statement of financial position
date would have resulted in an estimated net decrease/(increase) in pre-tax profit for the year and a
decrease/(increase) in net assets of approximately £370,000 (2012: £(32,000)).
39
Solid State PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2013 (continued)
19. FINANCIAL INSTRUMENTS (continued)
Foreign currency risk (continued)
At 31st March 2012 the Group had entered into agreement with its bankers to purchase US dollars as follows:
2102 lirpA dn2
2102 yaM ts1
2102 yaM ts1
2102 enuJ ts1
$
000,005
000,003,1
000,005
000,005
Rate
1065.1
975.1
8295.1
6295.1
At 31st March 2013 the Group had entered into agreement with its bankers to purchase US dollars as follows:
Up to 19th April 2013
Up to 19th April 2013
$
1,100,000
1,100,000
Rate
1.6257
1.6023
Applying the actual exchange rate at the statement of financial position date to these agreements gives rise to a
liability of £86,035 at 31st March 2013 (2012: £19,521). A full provision for these liabilities has been made in
the financial statements.
Capital under management
The Group considers its capital to comprise its ordinary share capital, share premium account, capital redemption
reserve, foreign exchange reserve and accumulated retained earnings.
In managing its capital, the Group’s primary objective is to maximise returns for its equity shareholders. The
Group seeks to maintain a gearing ratio that balances risks and returns at an acceptable level and also to maintain
sufficient funding to enable the Group to meet its working capital and strategic investment need. In making
decisions to adjust its capital structure to achieve these aims the Group considers not only its short term position
but also its long term operational and strategic objectives.
The Group’s gearing ratio at 31st March 2013 is shown below:
2013
£
)279,790,1(
549,694,2
225,509
-
-
________
2,304,495
________
206,843
404,370,1
353,458,4
476,4
________
6,281,033
________
73.0
________
2012
£
)868,14(
599,763,1
714,460,1
-
000,003
________
2,690,544
________
275,933
432,529
786,638,3
476,4
________
5,106,167
________
35.0
________
stnelaviuqe hsac dna hsaC
stfardrevo knaB
ecnavda gnitnuocsid eciovnI
snaol mret muideM
snaol mret trohS
latipac erahS
tnuocca muimerp erahS
sgninrae deniateR
evreser noitpmeder latipaC
oitar gniraeG
40
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2013 (continued)
20. DEFERRED TAX
2102 lirpA
secnawolla latipac detareleccA
At 1st
raey eht rof egrahc/)tiderC(
egnahc etar xat fo tceffE
At 31st
3102 hcraM
Deferred tax rates are at 23% (2012: 24%) being the rate substantially enacted.
21.
SHARE CAPITAL
SHARE CAPITAL
diap ylluf dna deussi dettollA
6,972,034 (2012: 6,791,431) ordinary shares of 5p each
diap ylluf dna deussi dettollA
6,972,034 (2012: 6,791,431) ordinary shares of 5p each
Solid State PLC
2013
£
308,78
)152,53(
)421,1(
______
824,15
______
2012
£
899,66
886,52
)388,4(
_____
308,78
_____
2013
2013
£
£
2012
2012
£
£
348,602
______
348,602
______
339,572
______
339,572
______
On 27th July 2012, Mr J L Macmichael exercised share options over 60,000 ordinary shares which were
issued at an exercise price of 62p.
On 27th July 2012, Mr J L Macmichael exercised share options over 60,000 ordinary shares which were
issued at an exercise price of 62p.
On 22nd March 2013, Mr J M Lavery exercised share options over 120,603 ordinary shares which were
issued at an exercise price of 99.5p.
On 22nd March 2013, Mr J M Lavery exercised share options over 120,603 ordinary shares which were
issued at an exercise price of 99.5p.
An Enterprise Management Incentive Scheme was adopted by the Company in September 2000 and
formally approved at an Extraordinary General Meeting on 12th December 2000.
An Enterprise Management Incentive Scheme was adopted by the Company in September 2000 and
formally approved at an Extraordinary General Meeting on 12th December 2000.
Details of options granted are set out in Note 5. At 31st March 2013 the number of shares covered by option
agreements amounted to 208,688 (2012: 389,291).
Details of options granted are set out in Note 5. At 31st March 2013 the number of shares covered by option
agreements amounted to 208,688 (2012: 389,291).
22.
RESERVES
RESERVES
Full details of movements in reserves are set out in the consolidated statement of changes in equity on page
14.
Full details of movements in reserves are set out in the consolidated statement of changes in equity on page
14.
The following describes the nature and purpose of each reserve within owners’ equity.
The following describes the nature and purpose of each reserve within owners’ equity.
evreseR
evreseR
esopruP dna noitpircseD
esopruP dna noitpircseD
Share premium
Share premium
Capital redemption
Capital redemption
Retained earnings
Retained earnings
Amount subscribed for share capital in excess of nominal value.
Amounts transferred from share capital on redemption of issued shares.
Cumulative net gains and losses recognised in the consolidated income
statement.
Amount subscribed for share capital in excess of nominal value.
Amounts transferred from share capital on redemption of issued shares.
Cumulative net gains and losses recognised in the consolidated income
statement.
23.
LEASING COMMITMENTS
LEASING COMMITMENTS
The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
raey 1 naht retal oN
sraey 5 naht retal on dna raey 1 naht retaL
sraey 5 naht retaL
raey 1 naht retal oN
sraey 5 naht retal on dna raey 1 naht retaL
sraey 5 naht retaL
41
2013
2013
£
£
055,262
055,262
328,388
328,388
005,947
005,947
______
______
2012
2012
£
£
463,551
463,551
178,305
178,305
005,244
005,244
______
______
Solid State PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2013 (continued)
24.
SHARE BASED PAYMENT
SHARE BASED PAYMENT
The Group operates an approved Enterprise Management Incentive Scheme whereby Mr G S Marsh, Mr J M
Lavery and Mr J L Macmichael have been granted options to purchase shares in Solid State PLC at a
subscription price which was not less than the market value at the time the option was granted. The options in
place at 31st March 2013 all have an exercise period of any time after one year from the date of the grant
subject to certain criteria having been met. As at the year end all criteria have been met. Full details are set
out in Note 5 on pages 25 and 26.
The Group operates an approved Enterprise Management Incentive Scheme whereby Mr G S Marsh, Mr J M
Lavery and Mr J L Macmichael have been granted options to purchase shares in Solid State PLC at a
subscription price which was not less than the market value at the time the option was granted. The options in
place at 31st March 2013 all have an exercise period of any time after one year from the date of the grant
subject to certain criteria having been met. As at the year end all criteria have been met. Full details are set
out in Note 5 on pages 25 and 26.
The share-based remuneration expenses amounted to £44,445 for the year (2012: £92,023).
The share-based remuneration expenses amounted to £44,445 for the year (2012: £92,023).
The following information is relevant to the determination of the fair value of the options.
The following information is relevant to the determination of the fair value of the options.
Equity settled share based payments
Equity settled share based payments
Option pricing model used
Option pricing model used
etad tnarg ta ecirp erahS
etad tnarg ta ecirp erahS
ecirp esicrexE
ecirp esicrexE
noitaived dradnatS
noitaived dradnatS
etar tseretni eerf ksiR
etar tseretni eerf ksiR
Black Scholes
Black Scholes
p0.26
p0.26
p0.26
p0.26
%15
%15
%78.1
%78.1
Black Scholes
Black Scholes
p0.49
p0.49
p0.49
p0.49
%35
%35
%61.2
%61.2
Black Scholes
Black Scholes
p5.99
p5.99
p5.99
p5.99
%05
%05
%61.2
%61.2
The standard deviation is based on the statistical analysis of daily share prices over the twelve months prior to
the date of the grant.
The standard deviation is based on the statistical analysis of daily share prices over the twelve months prior to
the date of the grant.
The market vesting conditions have been factored into the calculation by applying an appropriate discount to
the fair value of equivalent share options without the specified vesting conditions.
The market vesting conditions have been factored into the calculation by applying an appropriate discount to
the fair value of equivalent share options without the specified vesting conditions.
42
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2013 (continued)
Solid State PLC
25.
SEGMENT INFORMATION
SEGMENT INFORMATION
The Group’s primary reporting format for segment information is business segments which reflect the
The Group’s primary reporting format for segment information is business segments which reflect the
management reporting structure in the Group. The distribution division includes Solid State Supplies Limited
management reporting structure in the Group. The distribution division includes Solid State Supplies Limited
and the manufacturing division includes Steatite Blazepoint Limited and Steatite Limited.
and the manufacturing division includes Steatite Blazepoint Limited and Steatite Limited.
Year ended 31st March 2013
Year ended 31st March 2013
Revenue
Revenue
lanretxE
lanretxE
ynapmocretnI
ynapmocretnI
Distribution
Distribution
noisivid
noisivid
£
£
Manufacturing
Manufacturing
noisivid
noisivid
£
£
Head
Head
eciffo
eciffo
£
£
latoT
latoT
£
£
500,641,7
500,641,7
-
-
________
________
279,843,42
279,843,42
437,6
437,6
_________
_________
-
-
-
-
________
________
779,494,13
779,494,13
437,6
437,6
_________
_________
500,641,7
500,641,7
________
________
607,553,42
607,553,42
_________
_________
-
-
________
________
117,105,13
117,105,13
_________
_________
Profit/(loss) before tax
Profit/(loss) before tax
105,385
105,385
________
________
2,456,104
2,456,104
________
________
(791,056)
(791,056)
________
________
1,770,433
1,770,433
________
________
Balance sheet
Balance sheet
stessA
stessA
seitilibaiL
seitilibaiL
155,501,4
155,501,4
)459,993,4(
)459,993,4(
_________
_________
206,216,11
206,216,11
)405,410,6(
)405,410,6(
________
________
)540,970,1(
)540,970,1(
383,650,2
383,650,2
_______
_______
801,936,41
801,936,41
)570,853,8(
)570,853,8(
________
________
Net (liabilities)/assets
Net (liabilities)/assets
(294,403)
(294,403)
_________
_________
5,598,098
5,598,098
________
________
977,338
977,338
_______
_______
6,281,033
6,281,033
________
________
Other
Other
erutidnepxe latipaC
erutidnepxe latipaC
- Tangible fixed assets
- Tangible fixed assets
- Intangible fixed assets
- Intangible fixed assets
Depreciation, amortisation and
Depreciation, amortisation and
other non cash expenses
other non cash expenses
diap tseretnI
diap tseretnI
206,348
206,348
11,341
11,341
102,549
102,549
836,52
836,52
________
________
107,537
107,537
3,555
3,555
143,183
143,183
752,13
752,13
________
________
-
-
-
-
313,885
313,885
14,896
14,896
78,509
78,509
177,61
177,61
________
________
324,241
324,241
666,37
666,37
________
________
43
Solid State PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2013 (continued)
25.
SEGMENT INFORMATION (continued)
Year ended 31st March 2012
euneveR
lanretxE
ynapmocretnI
Profit/(loss) before tax
Balance sheet
stessA
seitilibaiL
Distribution
noisivid
£
Manufacturing
noisivid
£
Head
eciffo
£
latoT
£
011,934,6
-
________
011,934,6
________
493,518
________
140,534,91
269,04
________
-
-
________
151,478,52
269,04
_________
300,674,91
________
-
________
311,519,52
_________
1,709,874
________
(604,248)
________
1,599,144
________
511,956,2
)084,180,3(
_________
851,965,01
(4,416,212)
________
920,52
649,443
_______
203,352,31
(8,147,135)
________
Net (liabilities)/assets
(422,365)
_________
6,152,946
________
(624,414)
_______
5,106,167
________
Other
erutidnepxe latipaC
- Tangible fixed assets
stessa dexif elbignatnI -
Depreciation, amortisation and
other non cash expenses
diap tseretnI
159,664
-
57,119
607,71
________
319,123
411,58
147,843
222,62
________
-
-
34,064
086,32
________
478,787
411,58
239,026
806,76
________
yb eunever lanretxE
remotsuc fo noitacol
2012
£
2013
£
ts by
essa latoT
stessa fo noitacol
2012
2013
£
£
25,443,731 24,352,381 14,639,108 13,253,302
-
-
-
-
-
-
-
_________ _________ _________ _________
86,809
1,012,698
863,688
4,059,015
23,671
5,112
253
172,762
1,069,359
95,497
143,803
30,000
10,089
260
-
-
-
-
-
-
-
Net tangible capital
expenditure by location
stessa fo
2013
£
313,885
-
-
-
-
-
-
-
_______
2012
£
478,787
-
-
-
-
-
-
-
_______
United Kingdom
Ireland
Rest of Europe
North America
Asia
Africa
Australasia
South America
203,352,31 801,936,41 151,478,52 779,494,13
_________ _________ _________ _________
588,313
_______
787,874
_______
All the above relate to continuing operations.
44
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2012 (continued)
Solid State PLC
26.
POST BALANCE SHEET EVENT
POST BALANCE SHEET EVENT
On 1st May 2013 the Group acquired 100% of the ordinary shares in Q-Par Angus Limited for a cash
consideration of £900,000 subject to a net asset adjustment. The investment in Q-Par Angus Limited will be
included in the Group’s balance sheet at its fair value at the date of acquisition. Q-Par Angus Limited is a
specialist electronics business involved in the design and manufacture of microwave and other RF (radio
frequency) engineering with specialisation in antenna systems.
On 1st May 2013 the Group acquired 100% of the ordinary shares in Q-Par Angus Limited for a cash
consideration of £900,000 subject to a net asset adjustment. The investment in Q-Par Angus Limited will be
included in the Group’s balance sheet at its fair value at the date of acquisition. Q-Par Angus Limited is a
specialist electronics business involved in the design and manufacture of microwave and other RF (radio
frequency) engineering with specialisation in antenna systems.
45
Solid State PLC
Company Number: 00771335
COMPANY BALANCE SHEET
at 31st March 2013
STESSA DEXIF
stnemtsevnI
STESSA TNERRUC
srotbeD
dnah ni dna knab ta hsaC
CREDITORS: Amounts falling due within
raey eno
NET CURRENT (LIABILITIES)/ASSETS
STESSA TEN
SEVRESER DNA LATIPAC
latipac erahs pu dellaC
tnuocca muimerp erahS
evreser noitpmeder latipaC
tnuocca ssol dna tiforP
SDNUF ’SREDLOHERAHS
setoN
3102
2102
£
£
£
£
4
5
153,567,2
_________
353,617,2
________
153,567,2
353,617,2
444,308,1
-
________
940,761,1
-
________
444,308,1
940,761,1
6
365,758,2
________
417,172,1
________
(1,054,119)
________
232,117,1
________
206,843
404,370,1
476,4
255,482
________
232,117,1
________
(104,665)
________
886,116,2
________
275,933
432,529
476,4
802,243,1
________
886,116,2
________
7
8
8
8
The financial statements were approved by the Board of Directors and authorised for issue on 18th June 2013.
P Haining
Director
G S Marsh
Director
The notes on pages 47 to 50 form part of these financial statements.
46
NOTES TO THE COMPANY FINANCIAL STATEMENTS
For the year ended 31st March 2013
Solid State PLC
1.
ACCOUNTING POLICIES
The following accounting policies have been applied consistently in dealing with items which are considered
material in relation to the Company’s financial statements.
Basis of preparation
The financial statements have been prepared in accordance with applicable UK accounting standards and
under the historical cost convention. The accounts have been prepared on the going concern basis.
Profit and loss account
Under section 408(4) of the Companies Act 2006 the Company is exempt from the requirement to present its
own profit and loss account. The loss for the year ended 31st March 2013 is disclosed in Note 8.
Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at closing rates of exchange.
Investments in subsidiaries
Investments in subsidiaries are stated at cost less amounts provided for impairment.
Other financial liabilities
Other financial liabilities include the following items:
(cid:129)(cid:129)(cid:129) Amounts owed by group undertakings and other creditors, which are recognised at amortised cost.
(cid:129)(cid:129) Bank borrowings are initially recognised at the amount advanced net of any transaction costs directly
attributable to the issue of the instrument. Such interest bearing liabilities are subsequently measured at
amortised cost using the effective interest rate method which ensures that any interest expense over the period
to repayment is at a constant rate on the balance of the liabilities carried in the balance sheet. Interest
expense in this context includes initial transaction costs and premium payable on redemption, as well as any
interest or coupon payable while the liability is outstanding.
Shared based payment
Where share options are awarded to employees, the fair value of the options at the date of grant is charged to
the profit and loss account over the vesting period. Non-market vesting conditions are taken into account by
adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the
cumulative amount recognised over the vesting period is based on the number of options that eventually vest.
Market vesting conditions are factored into the fair value of options granted. As long as all other vesting
conditions are satisfied, a change is made irrespective of whether the market vesting conditions are satisfied.
The cumulative expense is not adjusted for factors to achieve a market vesting condition.
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the
options, measured immediately before and after the modification, is also charged to the profit and loss
account over the remaining vesting period.
2.
STAFF COSTS
Staff costs amounted £505,894 (2012: £471,235) and comprised the share based payment expense of £44,445
(2012: £93,023) and salary and related costs in respect of Mr G L Comben, Mr W G Marsh, Mr A B Frere,
Mr G S Marsh and Mr P Haining. No other remuneration was paid by the Company. Details of directors’
emoluments are given in note 5 to the Group financial statements.
47
Solid State PLC
NOTES TO THE COMPANY FINANCIAL STATEMENTS
For the year ended 31st March 2013
3.
SHARE BASED PAYMENT
The Group operates an approved Enterprise Management Incentive Scheme whereby Mr G S Marsh, Mr J M
Lavery and Mr J L Macmichael have been granted options to purchase shares in Solid State PLC at a
subscription price which was not less than the market value at the time the option was granted. The options in
place at 31st March 2013 all have an exercise period of any time after one year from the date of the grant
subject to certain criteria having been met. Full details are set out in Note 5 on pages 25 and 26.
The share-based remuneration expenses amounted to £44,445 for the year (2012: £92,023).
The following information is relevant to the determination of the fair value of the options.
Equity settled share based payments
Option pricing model used
etad tnarg ta ecirp erahS
ecirp esicrexE
noitaived dradnatS
etar tseretni eerf ksiR
Black Scholes
Black Scholes
Black Scholes
p0.26
p0.26
%15
%78.1
p0.49
p0.49
%35
%61.2
p5.99
p5.99
%05
%61.2
The standard deviation is based on the statistical analysis of daily share prices over the twelve months prior to
the date of the grant.
The market vesting conditions have been factored into the calculation by applying an appropriate discount to
the fair value of equivalent share options without the specified vesting conditions.
48
NOTES TO THE COMPANY FINANCIAL STATEMENTS
For the year ended 31st March 2013 (continued)
4. INVESTMENTS
Company
Cost
1st April 2012
Addition
Disposal
3102 hcraM ts13
Net book value
3102 hcraM ts13
2102 hcraM ts13
Subsidiary undertakings
Solid State PLC
Group
undertakings
£
2,716,353
49,998
(1,000)
________
153,567,2
________
153,567,2
________
353,617,2
________
The principal undertakings in which the Company’s interest at the year end is 20% or more are as follows:
gnitov fo noitroporP
rights and Ordinary
share capital held
gnitov fo noitroporP
rights and Ordinary
share capital held
Nature of business
Nature of business
Nature of business
sgnikatrednu yraidisbuS
detimiL seilppuS etatS diloS
detimiL etitaetS
%001
%001
%001
%001
stnenopmoc cinortcele fo noitubirtsiD
stnenopmoc cinortcele fo noitubirtsiD
dna stnenopmoc cinortcele fo noitubirtsiD
dna stnenopmoc cinortcele fo noitubirtsiD
manufacture of electronic equipment
manufacture of electronic equipment
In both cases the country of operation and of incorporation or registration is England.
5.
DEBTORS
sgnikatrednu puorG yb dewo stnuomA
srotbed rehtO
stnemyaperP
6.
CREDITORS: Amounts falling due within one year
)deruces( tfardrevo knaB
sgnikatrednu puorG ot dewo stnuomA
srotiderc rehtO
slaurccA
49
2013
£
2012
£
617,467,1
417,8
410,03
_________
020,241,1
944,42
085
_________
444,308,1
_________
940,761,1
________
371,357
382,770,2
601,12
100,6
________
365,758,2
________
657,913
463,833
946,323
549,982
________
417,172,1
________
Solid State PLC
NOTES TO THE COMPANY FINANCIAL STATEMENTS
For the year ended 31st March 2013 (continued)
6.
CREDITORS: Amounts falling due within one year (continued)
The Company has guaranteed bank borrowings of its subsidiary undertakings, Solid State Supplies Limited
and Steatite Limited. At the year end the liabilities covered by those guarantees amounted to £505,374 (2012:
£1,048,239). The Company accounts for guarantees provided to Group companies as insurance contracts,
recognising a liability only to the extent that it is probable the guarantees will be called upon.
7.
SHARE CAPITAL
Allotted issued and fully paid
6,972,034 (2012: 6,791,431) ordinary shares of 5p each
2013
£
348,602
_______
2012
£
339,572
_______
On 27th July 2012, Mr J L Macmichael exercised share options over 60,000 ordinary shares which were
issued at an exercise price of 62p.
On 22nd March 2013, Mr J M Lavery exercised share options over 120,603 ordinary shares which were
issued at an exercise price of 99.5p.
An Enterprise Management Incentive Scheme was adopted by the Company in September 2000 and formally
approved at an Extraordinary General Meeting on 12th December 2000.
Details of options granted are set out in Note 5. At 31st March 2013 the number of shares covered by option
agreements amounted to 208,688 (2012: 389,291).
8.
RESERVES
2102 lirpA ts1
serahs fo eussI
raey eht rof )ssoL(
esnepxe desab erahS :ddA
diap dnediviD
3102 hcraM ts13
Share premium Capital redemption Profit & loss
ser
tnuocca
account
erve
432,529
071,841
-
_______
404,370,1
-
_______
404,370,1
-
________
404,370,1
________
476,4
-
-
_____
476,4
-
_____
476,4
-
_____
476,4
_____
802,243,1
-
)442,885(
_______
469,357
544,44
_______
904,897
758,315
_______
255,482
_______
The cumulative amount of goodwill which has been eliminated against reserves at 31st March 2013 is
£30,000 (2012: £30,000).
50
Solid State PLC
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the annual general meeting of Solid State PLC will be held at 2, Ravensbank Business Park,
Hedera Road Redditch B98 9EY, on 7th August 2013 at noon for the following purposes:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
ORDINARY RESOLUTIONS
To receive and adopt the accounts for the year ended 31st March 2013, together with the reports of the
Directors and auditors thereon. (Resolution 1)
To declare a final dividend of 5.25p per share. (Resolution 2)
To reappoint John Michael Lavery, who retires by rotation, as a Director of the Company in accordance with
the Company’s Articles of Association. (Resolution 3)
To reappoint William George Marsh, who retires by rotation, as a Director of the Company in accordance with
the Company’s Articles of Association. (Resolution 4)
To reappoint haysmacintyre as auditors of the Company. (Resolution 5)
To authorise the Directors to fix the auditors’ remuneration, (Resolution 6)
To pass the following resolution:
That the Directors be generally and unconditionally authorised to allot shares in the Company (Relevant
Securities):
i)
comprising equity securities (as defined by section 560 of the Companies Act 2006) up to an
aggregate nominal amount of £116,200.50 (which is 33% of the issued share capital) (such amount
to be reduced by the nominal amount of any Relevant Securities allotted under paragraph (ii) below)
in connection with an offer by way of a rights issue:
ii)
(a) to holders of ordinary shares in proportion (as nearly as may be practicable) to their
respective holdings; and
(b) to holders of other equity securities as required by the rights of those securities or as the
Directors otherwise consider necessary,
but subject to such exclusions or other arrangements as the Board may deem necessary or expedient
in relation to treasury shares, fractional entitlements, record dates, legal or practical problems in or
under the laws of any territory or the requirements of any regulatory body or stock exchange; and
in any other case, up to an aggregate nominal amount of £69,720.40 (which is 20% of the issued
share capital) (such amount to be reduced by the nominal amount of any equity securities allotted
under paragraph i) above,
provided that this authority shall, unless renewed, varied or revoked by the Company, expire after a
period of 18 months from the passing of this resolution or, if earlier, the date of the next annual
general meeting of the Company save that the Company may, before such expiry, make offers or
agreements which would or might require Relevant Securities to be allotted and the Directors may
allot Relevant Securities in pursuance of such offer or agreement notwithstanding that the authority
conferred by this resolution has expired.
This resolution revokes and replaces all unexercised authorities previously granted to the Directors to allot
Relevant Securities but without prejudice to any allotment of shares or grant of rights already made, offered
or agreed to be made pursuant to such authorities. (Resolution 7)
SPECIAL RESOLUTIONS
(8)
To pass the following resolution:
That the Company is authorised to allot equity securities pursuant to resolution 7 above up to an aggregate
nominal amount of £69,720.40, which is 20% of the issued share capital , as if Section 561 of the Companies
Act 2006 (existing shareholders – right of pre-emption):
i)
ii)
did not apply to the allotment; or
applied to the allotment with such modifications as the Directors may determine provided that this
authority shall, unless renewed, varied or revoked by the company, expire after a period of 18 months
from the passing of this resolution save that the company may, before such expiry, make offers or
agreements which would or might require equity securities to be allotted and the Directors may allot
equity securities in pursuance of such offer or agreement not withstanding that the authority conferred
by the resolution ahs expired. (Resolution 8)
51
Solid State PLC
NOTICE OF ANNUAL GENERAL MEETING (continued)
SPECIAL RESOLUTIONS (continued)
(9)
i)
ii)
To pass the following resolution:
That the Company is, pursuant to Section 701 of the Companies Act 2006, hereby generally and
unconditionally authorised to make market purchases (within the meaning of Section 693 of the Companies
Act 2006) of ordinary shares of 5p each in the capital of the Company (“ordinary shares”) provided that:-
the minimum price which may be paid for the ordinary shares is 5p per ordinary share;
the maximum price that may be paid for such shares is, in respect of a share contracted to be
purchased on any day , an amount (exclusive of all expenses) equal to 105 per cent of the average
middle market quotations of the ordinary shares of the company as derived from the Daily Official
List of the London Stock Exchange on the 10 dealing days immediately preceding the day on which
the shares are contracted to be purchased;
the authority hereby conferred shall expire after a period of 18 months from the passing of this
resolution unless such authority is renewed prior to such expiry;
the authority hereby conferred is in substitution for any existing authority to purchase ordinary shares
under the said Section 701;
the Company may make a contract to purchase ordinary shares under the authority hereby conferred
prior to the expiry of such authority which will be executed wholly or partly after the expiry of such
authority and may make a purchase or purchases of ordinary shares in pursuance of any such contract;
and
the maximum number of ordinary shares hereby authorised to be purchased by the Company does not
exceed 15 per cent of the issued ordinary share capital of the Company at the date of the passing of
this resolution. (Resolution 9)
iii)
iv)
vi)
v)
BY ORDER OF THE BOARD
P Haining FCA
Director
18th June 2013
Registered office: 2 Ravensbrook Business Park, Hedera Road, Redditch, B98 9EY
NOTES:
1.
2.
Proxies
Only holders of ordinary shares are entitled to attend and vote at this meeting. A member entitled to attend and
vote may appoint a proxy or proxies who need not be a member of the Company to attend and to vote instead of
him or her. Forms of proxy need to be deposited with the Company’s registrar, Capita Group plc, Balfour
House, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU, not later than 48 hours before the time
of the meeting. Completion of a form of proxy will not preclude a member attending and voting in person at the
meeting.
Documents on Display
The register of Directors’ interests in the share capital and debentures of the Company, together with copies of
service agreements under which Directors of the Company are employed, are available for inspection at the
Company’s registered office during normal business hours from the date of this notice until the date of the
Annual General Meeting and will also be available for inspection at the place of the Annual General Meeting for
at least 15 minutes prior to the meeting.
52
www.solidstateplc.com