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www.solidstateplc.com
Solid State PLC
CONTENTS
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1
Solid State PLC
Directors:
DIRECTORS, SECRETARY AND ADVISERS
Chief Executive Officer
Anthony Brian Frere, Chairman
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Gordon Leonard Comben, Director
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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:
W H Ireland Limited
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haysmacintyre
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Shakespeares
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HSBC plc
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Capita Registrars Limited
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UT4 3RB
Country of Incorporation
of Parent Company:
Great Britain
Legal Form:
Public Limited Company
Domicile:
Great Britain
2
CHAIRMAN’S STATEMENT AND STRATEGIC REPORT
Solid State PLC
Highlights in the period include:
Financial:
revonruT
Profit before tax
Earnings per share (basic)
Gross profit margin
Operating margin
dnediviD
4102
m90.23£
£2.15m
25.3p
29.2%
6.9%
p5.8
3102
m05.13£
£1.87m*
21.8p
26.1%
6.2%*
p0.8
egnahC
%2+
+15%
+16%
+310bps
+70bps
%6+
*Before exceptional items of £0.1m in FY12/13
Operational:
(cid:129) Acquisition of Q-Par Angus Ltd in May 2013 for £1.001m
(cid:129) £1.8m secure communications contract with MOD
(cid:129) Acquisition of 2001 Electronic Components Ltd for £1.974m in December 2013
(cid:129) Oversubscribed placing to raise £2.54m
(cid:129) Expansion of higher margin ancillary services offering
(cid:129) Development of proprietary products range
(cid:129) Open order book at 30th April 2014 of £14.7m (30th April 2013: £10.4m)
Commenting on the results, Tony Frere, Chairman of Solid State said:
“I am pleased to report on a landmark year for Solid State, having made two successful acquisitions and completed
an oversubscribed placing to raise £2.54m. These events have added new colleagues, clients and institutional
shareholders to the Group who we welcome and look forward to working with going forward.
“Each strategic step strengthens Solid State in niche product areas and ultimately builds scale in our business. This
strengthened market position has increasingly presented new products and market opportunities to the Group which
is, in turn, driving a strong sales pipeline and building momentum.
“The Board remains confident in the growth strategy and is optimistic about the Group’s prospects.”
Financial Review
I would like to start by expressing my thanks on behalf of the Board to Gordon Comben for his leadership as
Chairman of Solid State over the last two years. He hands over a business that has a strong management team and I
look forward to continuing his good work in driving the business forward.
It gives me great pleasure therefore, in my first annual results statement as Chairman of Solid State, to report that the
Group has delivered a fourth consecutive year of record results, demonstrating the success of both our organic and
acquisitive growth strategies.
Revenues increased by 2% to £32.09m (2013: £31.50m). The Group benefited from the additional revenue from
acquisitions in May 2013 and December 2013, however we must recognise that the revenue in the period from the
acquisition of 2001 Electronic Components Ltd was restricted to three months. On a comparative basis, the
financial year 12/13 was flattered by an export order for £3.5m shipped in FY12/13 that did not repeat last year.
Future periods will represent a more normalised comparison.
Revenue by division was represented by a contribution of £22.19m by the Steatite division, which includes an 11
month contribution from Q-Par of £2.64m, and £9.9m by the Solid State Supplies division, which includes a three
month contribution from 2001 Electronic Components Ltd of £2.12m.
3
Solid State PLC
CHAIRMAN’S STATEMENT AND STRATEGIC REPORT (continued)
Profit before tax rose by 15% to £2.15m (2013: £1.87m). As reported at the half year stage, there was a second half
bias to the results. This is typical for the Group however the acquisition of 2001 Electronic Components Ltd will
moderate that effect in future years.
Margins vary with order size and product mix however in overall terms the Group commands good gross margins
due to the value added nature of its offering. Pleasingly, Group gross margins increased to 29.2% (2013: 26.1%).
Operating margins increased to 6.9% (2013: 6.2%), with earnings per share rising by 16% to 25.3p (2013: 21.8p)
despite an increase in the shares in issue principally as a result of the placing in December 2013.
The balance sheet strengthened significantly during the period following the two acquisitions and the fundraising.
Total net assets grew by 66% to £10.4m (2013: 6.3m) with net gearing levels reducing to 23% (2013: 37%)
Dividends
We have continued our stated policy of offering our shareholders a progressive dividend whilst ensuring we retain a
prudent level of dividend cover. Dividends were 2.98 times covered in 2014 (2013: 2.73 times). The Board is
recommending a final dividend of 5.75p. An interim dividend of 2.75p per share was paid on 31st January 2014
giving a total dividend for the year of 8.5p per share, a 6% increase on the prior year (2013: 8.0p). The final
dividend will be paid on 2nd September 2014 to shareholders on the register at the close of business on 8th August
2014. The shares will go ex-dividend on 6th August 2014.
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, industrial/rugged computers and
secure communications systems.
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
Steatite
Steatite is one of the leading UK suppliers of specialist electronic equipment. It designs, manufactures and supplies a
range of products and solutions that include bespoke lithium battery packs, rugged mobile computing/radio
solutions, secure communications systems, industrial computer hardware and software. Key to its strategy is the
ability to design, manufacture and test to customer requirements for use 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 a 3% growth in profit margin, continuing the significant
progress made over the past few years.
Steatite has benefited from gaining market share in new sectors due to the breadth and technical depth of our
business. In addition, the division has continued to attract new supply partners from around the world whilst
continuing to focus on new product development and the introduction of new market leading products to the range.
The organic growth in our new range of communications systems has contributed well and will continue to play a
key role in the next fiscal period. This a sector where we see considerable opportunities for developing our range of
higher margin proprietary products and growing market share.
The business is well resourced to benefit from the growing pipeline of new opportunities in markets such as Oil &
Gas, Transport, Security and from Government agencies, who have publicly stated their strategy of increasing their
supply contracts with the SME sector.
Steatite is well positioned to accelerate growth as conditions continue to improve, enhancing its position as one of
the leading UK suppliers of electronic equipment and further extending its reach into export markets.
4
Solid State PLC
CHAIRMAN’S STATEMENT AND STRATEGIC REPORT (continued)
Q-Par Angus Ltd (Q-Par)
Q-Par, acquired in May 2013, is at the forefront of antenna design and manufacture. The company excels in the
research, design and manufacture of commercial grade and bespoke microwave antennas, subsystems and associated
microwave components.
Since its acquisition, Q-Par has exceeded our expectations. The transition and restructure of the business under new
management has resulted in record turnover during its 11 month contribution to this period, which was
correspondingly matched by record profits. Q-Par adds significant margin enhancement to the Group due to the high
end technical solutions it offers its growing customer base.
The focus on, and development of, key market areas continues to provide opportunities with export markets
continuing to perform well through an enhanced network of agents throughout the world. New product introductions
and development have positioned Q-Par for another strong period ahead. Further investment will see Q-Par
developing its position as an industry leader in antenna design and manufacture.
Solid State Supplies (Including 2001 Electronic Components Ltd)
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 LED lighting.
This was another strong year of trading for Solid State Supplies with organic growth outstripping the industry
association reported numbers for the fifth year in a row. With all major franchises performing well, the company
continues to focus on its key differentiating strengths of providing high levels of engineering support and value
added services to its expanding client list. Both of these areas have been further strengthened in the year.
The latter part of FY13/14 saw the company execute on its plan to introduce own brand product with prototype
volumes of communications upgrade converters (HART protocol) now in the hands of key customers for evaluation.
The company expects to see limited revenues with gross margins above the company average from these products in
FY14/15 with the range expanding and sales increasing towards the end of the year.
After several years of looking for a complementary acquisition for the distribution business, the Group completed
the acquisition of 2001 Electronic Components Ltd (2K1) on 31st December 2013. This acquisition has added
strength and depth to the product offering, the sales team and the engineering support teams. The acquisition
positions Solid State Supplies as a midsize distributor now operating in a much less crowded space with a very
strong customer focused infrastructure. As a result, Solid State Supplies is already competing for much larger
contracts than it had previously seen and is engaging with new companies that have not traded with Solid State
Supplies before.
The company enjoyed a particularly strong fourth quarter driven by organic growth and capitalising on the
acquisition of 2K1. During this period, 2K1 traded independently under the leadership of the distribution division
with organic order intake up more than 50% on the comparable period of the previous year. As of 1st April 2014,
2K1 was successfully integrated into the Solid State Supplies division with both companies trading as a single
entity.
Increased sales and realised savings are expected to result in a strong performance for the 2014/15 financial year.
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.
5
Solid State PLC
CHAIRMAN’S STATEMENT AND STRATEGIC REPORT (continued)
Outlook
Having successfully completed seven acquisitions in the last twelve years the Group will continue its stated strategy
of both organic and acquisitive growth. We will proactively continue to look for acquisitions that offer both synergy
and market opportunities, enhancing our product range and engineering capacity.
Solid State has built a reputation for an innovative approach to product development and client partnerships. This
approach presents opportunities for further growing market share, particularly in export markets and niche
applications.
The order backlog at 30th April 2014 stood at £14.7m, which compares favourably to the same position last year
(30th April 2013: £10.4m), and gives a solid starting position coming into the new financial year.
Our strong pipeline of new designs across a wide range of products and markets enable us to look with confidence to
the year ahead.
Tony Frere
Chairman
7th July 2014
6
DIRECTORS’ REPORT
For the year ended 31st March 2014
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 2014.
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 and Strategic Report. The Group does not comment on environmental matters.
Directors
The Directors of the Company during the year were:
A B Frere
G S Marsh
G L Comben
P Haining, FCA
J M Lavery
J L Macmichael
W G Marsh
Tony Frere (dob 15/10/1947), 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, and was appointed as chairman in April 2014.
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.
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, having stood down as chairman in April 2014.
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 Limited. and Q-Par
Angus Limited. on behalf of Solid State plc.
7
Solid State PLC
DIRECTORS’ REPORT
For the year ended 31st March 2014 (continued)
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. He presently runs the operations of Solid State Supplies Limited on
behalf of 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 up to 15% of the issued ordinary shares under
authority given by a resolution at the Annual General Meeting on 7th August 2013 This authority expires on 7th
February 2015.
Financial Instruments
Details of the use of financial instruments by the Company and its subsidiaries are contained in Note 19 of the
financial statements.
8
DIRECTORS’ REPORT
For the year ended 31st March 2014 (continued)
Solid State PLC
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.
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.
9
Solid State PLC
DIRECTORS’ REPORT
For the year ended 31st March 2014 (continued)
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.
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 1,234,608 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.
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 4,451,375
Ordinary shares, representing 54.1% of the Company’s issued Ordinary share capital.
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
7th July 2014
Registered Office: 2 Ravensbank Business Park, Hedera Road, Redditch, B98 9EY
10
REPORT OF THE INDEPENDENT AUDITORS
TO THE SHAREHOLDERS OF SOLID STATE PLC
Solid State PLC
We have audited the financial statements of Solid State PLC for the year ended 31st March 2014 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 and the Strategic Report to
identify material inconsistencies with the audited financial statements and to identify any information which is
apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course
of performing the audit. 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 2014 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 and the Strategic 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.
11
Solid State PLC
Notes
REPORT OF THE INDEPENDENT AUDITORS
TO THE SHAREHOLDERS OF SOLID STATE PLC (continued)
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
7th July 2014
26 Red Lion Square
London WC1R 4AG
12
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31st March 2014
Solid State PLC
euneveR
selas fo tsoC
TIFORP SSORG
stsoc noitubirtsiD
sesnepxe evitartsinimdA
SNOITAREPO MORF TIFORP
stsoc ecnaniF
PROFIT BEFORE TAXATIO
N
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
2014
£
234,580,23
)936,827,22(
_________
397,653,9
)505,348,2(
)356,782,4(
_________
2013
£
779,494,13
)915,062,32(
_________
854,432,8
)579,715,2(
)483,278,3(
_________
536,522,2
990,448,1
)629,17(
_________
)666,37(
_________
907,351,2
334,077,1
)046,772(
_________
)553,382(
_________
960,678,1
_________
870,784,1
_________
-
_________
-
_________
1,876,069
_________
1,487,078
_________
ERAHS REP SGNINRAE
cisaB
detuliD
8
8
p3.52
p2.52
p8.12
p1.12
The notes on pages 18 to 49 form part of these financial statements.
13
Solid State PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31st March 2014
erahS
latipaC
erahS
evreseR latipaC
deniateR noitpmedeR muimerP
latoT sgninraE evreseR
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
Share based payment expense
sdnediviD
-
-
030,9
071,841
-
-
-
-
-
-
-
-
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
Total comprehensive income
For the year ended 31st March 2014
-
-
serahs wen fo eussI
439,26
443,555,2
Share based payment expense
sdnediviD
-
-
-
-
-
-
-
-
1,876,069
1,876,069
-
872,816,2
235,056
)333,306(
235,056
)333,306(
Balance at 31st March 2014
411,536
_______
3,628,748
________
4,674
_______
6,362,145 10,407,103
_________ ________
_______
________
_______
_________ ________
The notes on pages 18 to 49 form part of these financial statements.
14
Solid State PLC
Company Number: 00771335
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 31st March 2014
setoN
£
£
£
£
2014
2013
STESSA
STESSA TNERRUC-NON
tnempiuqe dna tnalp ,ytreporP
stessa elbignatnI
TOTAL NON-CURRENT ASSETS
STESSA TNERRUC
seirotnevnI
selbaviecer rehto dna edarT
elbaviecer xat noitaroproC
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
684,950,1
005,539,4
________
5,994,986
949,419
207,693,2
________
3,311,651
41
095,475,4
951,834,01 51
587,54
104,586
________
537,650,3
057,271,7
-
279,790,1
________
539,347,51
_________
129,837,12
_________
754,723,11
_________
801,936,41
_________
61
71
917,498,1
299,984,7
857,341,1
699,793
________
549,694,2
054,417,4
225,509
037,981
________
TOTAL CURRENT LIABILITIES
10,926,465
8,306,647
NON CURRENT LIABILITIES
selbayap rehto dna edarT
ytilibail xat derrefeD
seitilibail rof noisivorP
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
22
32
32
32
81
02
12
962,11
480,422
000,071
________
-
824,15
________
405,353
________
818,133,11
________
301,704,01
________
635,114
847,826,3
476,4
541,263,6
________
51,428
________
570,853,8
________
330,182,6
________
206,843
404,370,1
476,4
353,458,4
________
YTIUQE LATOT
330,182,6
________
The financial statements were approved by the Board of Directors and authorised for issue on 7th July 2014 and were
signed on its behalf by:
301,704,01
________
G S Marsh, Director
P Haining, Director
The notes on pages 18 to 49 form part of these financial statements.
15
Solid State PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31st March 2014
SEITIVITCA GNITAREPO
noitaxat erofeb tiforP
Adjustments for:
noitaicerpeD
noitasitromA
Loss on disposal of property, plant and equipment
esnepxe tnemyap desab erahS
stsoc ecnaniF
segnahc erofeb snoitarepo morf tiforP
snoisivorp dna latipac gnikrow ni
seirotnevni ni esaerced/)esaercnI(
(Increase) in trade and other receivables
Increase/ (decrease) in trade and other payables
snoisivorp ni esaercnI
snoitarepo morf detareneg hsaC
diap sexat emocnI
derevocer 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 subsidiaries
Cash with subsidiaries over which control
deniatbo neeb sah
SEITIVITCA GNICNANIF
serahs yranidro fo eussI
Invoice discounting finance (net movement)
diap tseretnI
Dividend paid to equity shareholders
INCREASE/ (DECREASE) IN CASH AND CASH
STNELAVIUQE
2014
2013
£
£
£
£
907,351,2
784,342
091,501
1,593
650,532
629,17
_______
169,018,2
)038,226(
(1,197,887)
1,053,543
000,071
________
072,5
(300,070)
(651,117)
-
________
)471,795(
________
787,312,2
)037,981(
023,82
_______
)353,193(
-
_______
)014,161(
_______
773,250,2
(403,487)
)527,7(
98,152
(2,974,029)
490,156
_______
872,816,2
(1,169,746)
)629,17(
(603,333)
_______
(313,885)
)698,41(
14,083
-
_______
002,751
(158,895)
)666,37(
(513,857)
_______
)599,536,2(
________
)816,385(
372,377
_______
556,981
_______
334,077,1
540,232
377,34
3,978
544,44
666,37
________
043,861,2
)719,549(
________
324,222,1
)353,193(
_______
070,138
)896,413(
_______
273,615
)812,985(
_______
)648,27(
_______
The notes on pages 18 to 49 form part of these financial statements.
16
Solid State PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31st March 2014 (continued)
Cash and cash equivalents comprise:
stnelaviuqe hsac dna hsac ni esaerced/esaercni /teN
556,981
)648,27(
raey fo gninnigeb ta stnelaviuqe hsac dna hsaC
)379,893,1(
)721,623,1(
2014
£
2013
£
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
-
_________
-
_______
)813,902,1(
_________
)379,893,1(
_______
2014
£
2013
£
104,586
)917,498,1(
_________
279,790,1
)549,694,2(
________
)813,902,1(
_________
)379,893,1(
_______
17
Solid State PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2014
1.
ACCOUNTING POLICIES AND CRITICAL ACCOUNTING JUDGEMENTS
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.
18
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2014 (continued)
1.
ACCOUNTING POLICIES AND CRITICAL ACCOUNTING JUDGEMENTS (continued)
Solid State PLC
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.
Where substantially all the risks and rewards of ownership have passed to the Group (a “ finance lease “) the
assets are capitalised as tangible fixed assets and are depreciated over the shorter of the lease term and their
useful lives. The capital elements of future obligations under the leases are included as liabilities in the
consolidated statement of financial position. The interest element of the rental obligation is charged to the
consolidated statement of comprehensive income over the period of the lease and represents a constant
proportion of the balance of the capital outstanding. Assets held under hire purchase agreements are treated as
assets held under finance leases for accounting purposes.
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.
19
Solid State PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2014 (continued)
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 2013 and 31st March 2014 met the conditions
necessary for capitalisation.
20
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2014 (continued)
1.
ACCOUNTING POLICIES AND CRITICAL ACCOUNTING JUDGEMENTS (continued)
Solid State PLC
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.
21
Solid State PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2014 (continued)
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 2018). IFRS 9
introduces new requirements for classifying and measuring financial assets and liabilities.
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
2014
£
2013
£
431,879,13
892,701
_________
806,893,13
963,69
_________
234,580,23
_________
779,494,13
_________
22
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2014 (continued)
3.
PROFIT FROM OPERATIONS
This has been arrived at after charging/(crediting):
)4 eton ees( stsoc ffatS
Employment termination costs (included in staff costs)
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
secivres yrosivda noitaxat :seef tidua noN
services relating to corporate finance transactions
:slatner esael gnitarepO
yrenihcam dna tnalP
rehtO
stsoc tnempoleved dna hcraeseR
secnereffid egnahcxe ngieroF
snwod etirw kcotS
Solid State PLC
2014
£
074,363,5
106,454
784,342
105,190
395,1
000,6
52,250
056,5
22,850
483,16
105,722
798,484
312,34
000,372
_______
2013
£
351,356,4
18,566
540,232
43,773
879,3
000,3
36,000
-
-
199,13
716,403
450,613
)629,331(
000,252
_______
The foreign exchange differences have been treated as an adjustment to cost of sales rather than as an overhead.
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
2014
£
095,957,4
256,845
822,55
________
074,363,5
________
2013
£
746,881,4
825,444
879,91
________
351,356,4
________
Wages and salaries include termination costs of £106,454 (2013: £18,566)
The average monthly number of employees during the year, including the three executive Directors, was as
follows:
noitubirtsid dna gnilleS
gnirutcafunaM
noitartsinimda dna tnemeganaM
23
2014
Number
2013
Number
63
94
35
___
831
___
43
73
34
__
411
__
Solid State PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2014 (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 2014
W G Marsh
G S Marsh
J M Lavery
J L Macmichael
P Haining
G L Comben
A B Frere
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
50,000
162,000
150,000
120,000
60,000
50,000
12,000
______
-
30,000
70,000
-
-
-
-
______
20,000
25,000
21,000
19,000
14,000
-
______
604,000
______
100,000
______
99,000
______
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
______
70,000
217,000
241,000
139,000
60,000
64,000
12,000
______
803,000
______
68,000
214,000
200,000
170,000
59,000
67,000
7,000
______
785,000
______
-
70,000
1,000 218,000
8,000 249,000
3,000 142,000
60,000
64,000
12,000
______
-
-
-
______
12,000
______
815,000
______
-
68,000
12,000 226,000
9,000 209,000
9,000 179,000
59,000
67,000
7,000
______
-
-
-
______
30,000
______
815,000
______
The principal benefits in kind relate to the provision of company cars.
In addition to the above, fees totalling £40,518 (2013: £26,198) 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
£7,440(2013: £8,218) was due to The Kings Mill Partnership at 31st March 2014.
Fees totalling £39,249 (2013: £44,507) arose during the year in respect of the services of A B Frere provided by
Condev Limited. A balance of £3,825 (2013: £3,943) was due to Condev Limited at 31st March 2014.
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 7th July 2014 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 2014 and 31st March 2013 or date
of appointment if later, were as follows:
nebmoC L G
hsraM G W
hsraM S G
yrevaL M J
gniniaH P
J L Macmichael
ererF B A
07.07.14
31.03.14
31.03.13
000,009,1
000,003,1
318,115
669,834
005,25
142,096
000,601
24
000,009,1
000,003,1
318,115
669,834
005,25
142,096
000,601
000,000,2
000,834,1
291,193
894,834
005,25
54,000
000,601
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2014 (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 31.40.10
detnarG
G S Marsh
J M Lavery
J L Macmichael
120,603
-
-
-
120,603
-
-
-
-
-
-
-
-
-
88,085
-
-
-
88,085
-
-
-
-
42,000
36,400
31,600
42,000
36,400
31,600
-
42,000
36,400
31,600
snoitpO
ta dleh
41.30.13
-
42,000
36,400
31,600
42,000
36,400
31,600
-
42,000
36,400
31,600
esicrexE
ecirp
fo etaD
tnarg
esicrexE
doirep
99.5p
5p
5p
5p
5p
5p
5p
94p
5p
5p
5p
10.05.11
07.08.13
07.08.13
07.08.13
07.08.13
07.08.13
07.08.13
01.04.11
07.08.13
07.08.13
07.08.13
May 2012- March 2016
August 2014 onwards
August 2015 onwards
August 2016 onwards
August 2014 onwards
August 2015 onwards
August 2016 onwards
April 2012 onwards
August 2014 onwards
August 2015 onwards
August 2016 onwards
The market price of the shares at 31st March 2014 was £3.44 (2013: £2.19), with a quoted range during the year
of £2.02 to £3.78
All the options at 31st March 2014 are subject to performance criteria based on the year ended 31st March 2014,
31st March 2015 and 31st March 2016 respectively, although the options are non cumulative. They vest in three
tranches based on performance criteria over the three years. The market value at the date of grant was £2.38.
For G S Marsh the criteria are based on the pre-tax profit of the group, for J M Lavery on the pre-tax profit of the
manufacturing division and for J L Macmichael on the pre-tax profit of the distribution division.
The aggregate gain on exercise of share options in the year was £277,183.
On 12th December 2013, G L Comben made a loan of £600,000 to the group. The loan was interest free and was
repaid on 13th February 2014.
6.
FINANCE COSTS
sgniworrob knaB
tseretni gnitnuocsid eciovnI
tseretni rehtO
2014
£
103,14
517,92
019
______
71,926
______
2013
£
023,05
575,81
177,4
______
73,666
______
Other interest includes £Nil (2013: £4,001) to G L Comben and £Nil (2013: £770) 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.
25
Solid State PLC
7.
TAX EXPENSE
Current tax expense
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2014 (continued)
raey eht rof sessol ro stiforp no xat noitaroproc KU
sdoirep roirp fo tcepser ni tnemtsujdA
Deferred tax charge/(credit)
Total tax charge
2014
£
2013
£
517,562
)983,62(
_______
037,913
-
______
239,326
319,730
38,314
_______
277,640
_______
(36,375)
_______
283,355
_______
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
)%42 – 3102( %32 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
etar xat fo egnahc no gnisira tiderc xat derrefeD
egrahc xat latoT
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
2014
£
2013
£
907,351,2
_______
334,077,1
_______
353,594
409,424
563,42
(7,926)
(1,002)
(63,752)
-
)008,1(
(166,031)
)765,1(
_______
046,772
_______
2014
£
960,678,1
_________
343,214,7
768,134,7
p3.52
p2.52
207,51
(4,900)
4,793
(54,677)
(3,651)
)000,4(
(94,816)
-
_______
553,382
_______
2013
£
870,784,1
_______
205,538,6
321,661,7
p8.12
p1.12
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 7,412,343 (2013: 6,835,502).
The diluted earnings per share is based on 7,431,867 (2013: 7,166,123) ordinary shares which allow for the
exercise of all dilutive potential ordinary shares.
26
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2014 (continued)
9.
DIVIDENDS
Final dividend paid for the prior year of 5.25p per share (2013: 4.75p)
)p57.2 :3102( erahs rep p57.2 fo diap dnedivid miretnI
Final dividend proposed for the year 5.75p per share (2013: 5.25p)
Solid State PLC
2014
£
376,988
543,622
_______
603,333
_______
473,267
_______
2013
£
325,443
414,881
_______
513,857
_______
366,032
_______
The proposed final dividend has not been accrued for as the dividend was declared after the statement of
financial position date.
27
Solid State PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2014 (continued)
10. PROPERTY, PLANT AND EQUIPMENT
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
Year ended 31st March 2014
tsoC
3102 lirpA ts1
snoitiddA
seiraidisbus fo noitisiuqcA
slasopsiD
4102 hcraM ts13
noitaicerpeD
3102 lirpA ts1
raey eht rof egrahC
lasopsid nO
4102 hcraM ts13
eulav koob teN
4102 hcraM ts13
trohS
dlohesael
ytreporp
rotoM
selcihev stnemevorpmi
sgnittiF
dna tnempiuqe
sretupmoc
£
£
£
latoT
£
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
________
992,703
009,2
-
)008,11(
_______
162,806
159,173
231,81
)167,142(
_______
009,033,1
636,82
051,66
)057,11(
_______
064,642,2
784,304
282,48
)113,562(
________
993,892
_______
385,657
_______
639,314,1
_______
819,864,2
________
291,06
832,03
)008,11(
_______
603,552
732,901
)611,051(
_______
310,610,1
210,401
)056,3(
_______
115,133,1
784,342
)665,561(
________
036,87
_______
724,412
_______
573,611,1
_______
234,904,1
________
967,912
_______
651,245
_______
195,792
_______
684,950,1
________
28
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2014 (continued)
Solid State PLC
11.
INTANGIBLE ASSETS
NU
secneciL
£
retupmoC
erawtfos
£
no lliwdooG
olidation
snoc
£
Other
elbignatni
assets
£
Total
£
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
Year ended 31st March 2014
tsoC
1st April 2013
snoitiddA
31st March 2014
noitasitromA
3102 lirpA ts1
Charge for the year
31st March 2014
eulav koob teN
31st March 2014
9,800
-
_____
9,800
_____
-
-
_____
-
_____
9,800
_____
9,800
-
_____
9,800
_____
-
-
_____
-
_____
9,800
_____
141,203
698,41
_______
156,099
_______
050,44
29,730
______
73,780
______
82,319
______
156,099
527,7
_______
163,824
_______
087,37
32,765
______
106,545
______
57,279
______
2,206,278
-
________
2,206,278
________
-
-
________
-
________
2,206,278
________
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
________
2,206,278
993,203,1
________
140,434
468,333,1
_______
2,512,611
889,346,2
________
3,508,677
________
1,474,298
_______
5,156,599
________
-
-
________
-
________
921,24
72,425
_______
909,511
105,190
________
114,554
_______
221,099
________
3,508,677
________
1,359,744
_______
4,935,500
________
Other intangible assets comprise the estimated net present value of customer relationships of Rugged Systems
Limited Q-Par Angus Limited and customer and supplier relationships of 2001 Electronic Components
Limited at the date of acquisition.
29
Solid State PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2014 (continued)
12.
GOODWILL AND IMPAIRMENT
Details of the carrying amount of goodwill allocated to cash generating units (CGUs) is as follows:
detimiL etitaetS
detimiL sugnA raP-Q
detimiL seilppuS etatS diloS
Goodwill carrying amount
2014
£
2013
£
872,602,2
233,42
760,872,1
872,602,2
-
-
________
________
3,508,677
________
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% (2013 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 (2013: 0.84).
The recoverable amount exceeds the carrying amount by £10,176,000 (2013: £9,217,000). 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, which have been included in these consolidated financial
statements are as follows:
Subsidiary undertakings
Country of
Incorporation
Solid State Supplies Limited
Great Britain
Steatite Limited
Great Britain
Q-Par Angus Limited
Great Britain
2001 Electronic Components
Limited
Great Britain
Proportion of
voting rights and
Ordinary share
capital held
100%
100%
100%
100%
Nature of business
Distribution of electronic
components.
Distribution of electronic components
and manufacture of electronic
equipment.
Manufacture of microwave and RF
equipment
Distribution of electronic components
In all cases the country of operation and of incorporation is England.
With effect from 1st April 2014 the business and relevant assets and liabilities of 2001 Electronic Components
Limited have been transferred to Solid State Supplies Limited and this company has become dormant.
30
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2014 (continued)
14.
INVENTORIES
elaser rof sdoog dna sdoog dehsiniF
ssergorp ni kroW
Solid State PLC
2014
£
605,668,3
480,807
________
4,574,590
________
2013
£
201,865,2
336,884
________
3,056,735
________
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
2014
£
717,588,9
545,951
798,293
________
10,438,159
________
2013
£
448,317,6
281,231
427,623
________
7,172,750
________
Group trade receivables include £1,500,000 (2013: £1,254,755) 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 2014 borrowing under the agreement of £1,500,000 (2013: £1,040,439) was available of which
£1,143,758 (2013: £905,522) was taken up. Interest charges in the year amounted to £24,332 (2013: £18,575)
and administration fees to £21,156 (2013: £21,640).
16.
TRADE AND OTHER PAYABLES (CURRENT)
selbayap edarT
sexat ytiruces laicos dna sexat rehtO
stnemeerga esahcrup erih rednu eud stnuomA
selbayap rehtO
slaurccA
emocni derrefeD
2014
£
574,434,5
398,571,1
564,2
761,431
421,814
868,423
________
7,489,992
________
2013
£
356,680,3
073,807
-
446,105
195,032
291,781
________
4,714,450
________
31
Solid State PLC
17.
BANK BORROWINGS
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2014 (continued)
Amounts due to invoice di
sretnuocs
2014
£
2013
£
857,341,1
_______
225,509
________
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 £1,407,192 (2013: £637,000).
18.
TRADE AND OTHER PAYABLES (NON CURRENT)
stnemeerga esahcrup erih rednu eud stnuomA
19.
FINANCIAL INSTRUMENTS
2014
£
2013
£
962,11
_______
-
________
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)
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:
32
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2014 (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 euros.
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
33
Loans and Receivables
2013
2014
£
£
951,834,01
104,586
_________
065,321,11
_________
057,271,7
279,790,1
________
227,072,8
________
Solid State PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2014 (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
2014
£
475,970,9
341,608
________
9,885,717
________
2013
£
724,812,6
714,594
________
6,713,844
________
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 £30,109 (2012: £9,909) which represented 0.09% (2013: 0.03%) 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
4102
KU
KU noN
latoT
snoisivorP :sseL
latoT
3102
KU
KU noN
latoT
Total
£
Current
£
696,612,9
341,608
________
862,672,8
159,636
________
30 days
past due
£
948,207
227,32
_______
60 days
past due
£
576,771
552,8
______
938,220,01
)221,731(
912,319,8
175,627
039,581
90 days
past due
£
409,95
512,731
______
911,791
)221,731(
________
________
_______
______
______
717,588,9
________
912,319,8
________
175,627
_______
039,581
______
799,95
______
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
________
________
_______
______
______
448,317,6
________
204,843,6
________
244,563
_______
-
______
-
______
snoisivorP :sseL
)758,601(
-
)940,17(
)110,42(
)797,11(
latoT
________
________
_______
______
______
943,915,6
________
019,292,6
________
934,622
_______
-
______
-
______
34
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2014 (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
2014
£
909,901
901,03
)698,2(
_______
221,731
_______
2013
£
758,601
909,9
)758,6(
_______
909,901
_______
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 2014 trade receivables of £972,498 which were past their due date
were not impaired (2013: £226,439). All of these were less than 90 days past their due date.
Liquidity risk
Current financial liabilities
selbayap rehto dna edarT
sgniworrob knaB
tfardrevo knaB
Non current financial liabilities
srotiderc esahcrup eriH
Financial liabilities
measured at amortised cost
2014
£
299,984,7
857,341,1
917,498,1
________
10,528,469
________
962,11
________
2013
£
054,417,4
225,509
549,694,2
________
8,116,917
________
-
________
35
Solid State PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2014 (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
2014
Secured bank loans
Bank overdrafts
Amounts due to invoice
discounters
Trade and other payables
Hire purchase creditors
2013
Secured bank loans
Bank overdrafts
Amounts due to invoice
discounters
Trade and other payables
-
1,894,719
-
1,894,719
-
1,894,719
1,143,758
7,487,527
13,734
_________
1,143,758
7,487,527
13,734
1,143,758
7,487,527
1,188
1,277
_________ _________ _______
-
-
-
-
-
11,269
_______
10,539,738
_________
10,539,738 10,527,192
1,277
_________ _________ _______
11,269
_______
-
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
-
________ _______
-
_______
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 £14,750 (2013: £24,605) higher and if 1% lower throughout the year the level of
interest payable would have been lower by the same amount.
36
Solid State PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2014 (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
2014:
selbaviecer edarT
stnelaviuqe hsac dna hsaC
tfardrevo knaB
selbayap edarT
2014
£
2013
£
308,494,5
279,011
)656,091(
)992,768,2(
________
217,762,4
916,390,1
-
)492,346,1(
________
2,547,820
________
3,718,037
_______
There were also net assets of £95,398 in euros (2013: net liabilities of £19,775).
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 £264,000 (2013: £(370,000)) 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 £264,000 (2013: £(370,000)).
37
Solid State PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2014 (continued)
19.
FINANCIAL INSTRUMENTS (continued)
Foreign currency risk (continued)
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. A full provision for these liabilities was made in the financial statements
at 31st March 2013.
There were no forward purchase agreements in place at 31st March 2014
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 2014 is shown below:
stnelaviuqe hsac dna hsaC
stfardrevo knaB
ecnavda gnitnuocsid eciovnI
ecnanif esahcrup eriH
latipac erahS
tnuocca muimerp erahS
sgninrae deniateR
evreser noitpmeder latipaC
oitar gniraeG
20.
DEFERRED TAX
3102 lirpA
Accelerated capital allowances and goodwill on acquisition of subsidiaries
At 1st
seiraidisbus fo noitisiuqca no gnisira xat derrefeD
raey eht rof egrahc/)tiderC(
egnahc etar xat fo tceffE
At 31st
4102 hcraM
2014
£
)104,586(
917,498,1
857,341,1
437,31
________
2,366,810
________
635,114
847,826,3
541,263,6
476,4
________
10,407,103
________
32.0
________
2014
£
824,15
243,431
747,63
765,1
______
480,422
______
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
________
2013
£
308,78
-
152,53
)421,1(
_____
824,15
_____
Deferred tax rates are at 21% (2013: 23%) being the rate substantially enacted.
38
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2014 (continued)
Solid State PLC
21.
PROVISION FOR LIABILITIES
Provision for liabilities on the termination of two building leases. Due to the ongoing negotiations with the
two landlords we have not disclosed any further information as this may prejudice seriously the position of the
Group.
noisivorp gninepO
Reclassification of liabilities at 31st March 2013
raey rof snoisivorP
noisivorp gnisolC
22.
SHARE CAPITAL
56,000
000,411
_______
000,071£
_______
diap ylluf dna deussi dettollA
8,230,722 (2013: 6,972,034) ordinary shares of 5p each
2014
£
411,536
______
2013
£
348,602
______
On 27th June 2013, Mr J L Macmichael exercised share options over 88,085 ordinary shares which were
issued at an exercise price of 94p.
On 27th June 2013, Mr G S Marsh exercised share options over 120,603 ordinary shares which were issued at
an exercise price of 99.5p.
On 23rd December 2013 the company issued 1,050,000 ordinary shares at £2.42 per share and incurred costs
of issue of £125,521
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 2014 the number of shares covered by option
agreements amounted to 330,000 (2013: 208,688).
23.
RESERVES
Full details of movements in reserves are set out in the consolidated statement of changes in equity on page
15.
The following describes the nature and purpose of each reserve within owners’ equity.
evreseR
esopruP dna noitpircseD
Share premium
Capital redemption
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.
39
Solid State PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2014 (continued)
24.
LEASING COMMITMENTS
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
2014
£
057,353
360,050,1
005,135
________
2013
£
055,262
328,388
005,947
______
Since the end of the year, a lease has been surrendered by arrangement with the lessor which reduces the
commitments by a total of £172,000
25.
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 of 5p per share. The options in place at 31st March 2014 all have exercise periods of any
time after finalisation of the accounts for the year on which the performance criteria are based. Full details are
set out in Note 5 on pages 25 and 26.
The fair value of the options is based on the market value at the date of grant of the number of shares for which
the performance criteria have been met for the year less the exercise price of 5p per share. The market value
per share at the date of grant was £2.38.
The share based remuneration expenses amount to £235,056 for the year (2013: £44,445)
26.
CONTINGENT LIABILITIES
A claim has been notified but not yet quantified by a customer following the failure of battery components in
several examples of a certain product which comprises a meter and which has been installed in several
countries around the world, often in remote locations. The customer is currently inspecting these meters, a
process which is protracted due to the difficulty of access in many cases. Our supplier’s insurers have indicated
that they will cover the part of the claim directly attributable to the failure of the cells and the Group’s own
insurers will cover any part of the claim relating to damage to property arising from the faulty product. The
Group anticipates that part of the claim relating to consequential loss arising from the faulty product will fail to
be covered by either insurer and thus will be a liability payable by the Group. At this stage it is not practical to
estimate the extent of that liability, but the at this stage the directors do not believe that it will be material or
detrimental to the ongoing performance of the business.
40
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2014 (continued)
Solid State PLC
27.
SEGMENT INFORMATION
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
and 2001 Electronic Components Limited and the manufacturing division includes Steatite Limited and Q-
Par Angus Limited.
Year ended 31st March 2014
euneveR
lanretxE
ynapmocretnI
Distribution
noisivid
£
Manufacturing
noisivid
£
Head
eciffo
£
latoT
£
699,498,9
996,91
634,091,22
-
-
-
234,580,23
996,91
________
_________
________
_________
596,419,9
634,091,22
-
131,501,23
________
_________
________
_________
Profit/(loss) before tax
esnepxe xaT
397,419
692,08
2,898,649
255,434
(1,142,359)
)802,732(
2,153,709
046,772
Balance sheet
Assets
seitilibaiL
Net assets/(liabilities)
Other
erutidnepxe latipaC
- Tangible fixed assets
- Intangible fixed assets
Depreciation, amortisation and
other non cash expenses
diap tseretnI
________
________
________
________
8,563,535
)060,487,2(
_________
5,779,475
_________
13,129,946
)579,261,7(
________
45,440
)387,483,1(
_______
21,738,921
)818,133,11(
________
5,966,971
________
(1,339,343)
_______
10,407,103
________
123,622
2,194,303
94,403
483,43
________
364,147
514,506
251,333
293,13
________
-
-
338,475
051,6
________
487,769
2,708,809
684,211
629,17
________
Included with the manufacturing division is turnover of £3,614,864 relating to income from a major company
which accounts for more than 10% of the Group’s turnover in the year.
41
Solid State PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2014 (continued)
27.
SEGMENT INFORMATION (continued)
Year ended 31st March 2013
Revenue
lanretxE
ynapmocretnI
Profit/(loss) before tax
Balance sheet
stessA
seitilibaiL
Net (liabilities)/assets
Other
erutidnepxe latipaC
- Tangible fixed assets
- Intangible fixed assets
Depreciation, amortisation and
other non cash expenses
diap tseretnI
Distribution
noisivid
£
Manufacturing
noisivid
£
Head
eciffo
£
latoT
£
500,641,7
-
________
500,641,7
________
105,385
________
155,501,4
)459,993,4(
_________
(294,403)
_________
279,843,42
437,6
_________
-
-
________
779,494,13
437,6
_________
607,553,42
_________
-
________
117,105,13
_________
2,456,104
________
(791,056)
________
1,770,433
________
206,216,11
)405,410,6(
________
)540,970,1(
383,650,2
_______
801,936,41
)570,853,8(
________
5,598,098
________
977,338
_______
6,281,033
________
206,348
11,341
102,549
836,52
________
107,537
3,555
143,183
752,13
________
-
-
78,509
177,61
________
313,885
14,896
324,241
666,37
________
yb eunever lanretxE
remotsuc fo noitacol
2013
£
2014
£
yb stessa latoT
stessa fo noitacol
2013
2014
£
£
28,258,799 25,443,731 21,738,921 14,639,108
-
1,977,575
-
1,051,151
-
671,633
-
10,213
-
51,919
-
64,142
_________ _________ _________ _________
1,099,507
863,688
4,059,015
23,671
5,112
253
-
-
-
-
-
-
Net tangible capital
noitacol yb erutidnepxe
stessa fo
2014
£
487,769
-
-
-
-
-
-
_______
2013
£
313,885
-
-
-
-
-
-
_______
United Kingdom
Rest of Europe
North America
Asia
Africa
Australasia
South America
801,936,41 129,837,12 779,494,13 234,580,23
_________ _________ _________ _________
967,784
_______
588,313
_______
All the above relate to continuing operations.
42
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2014 (continued)
Solid State PLC
28. ACQUISITIONS DURING THE YEAR
Q-Par Angus Limited
On 1st May 2013 the Group acquired 100% of the ordinary shares in Q-Par Angus Limited for a cash
consideration of £1,000,517. 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.
stessa dexif elbignatnI
stessa dexif elbignaT
kcotS
srotbeD
knab ta hsaC
srotiderC
xat derrefeD
Net assets on acquis
noiti
noitisiuqca no lliwdooG
noitaredisnoC
Discharged by:
hsaC
kooB
eulav
£
-
618,841
346,823
885,943
232,331
)321,381(
113,65
_______
764,338
_______
eulav riaF
tnemtsujda
£
435,573
)243,08(
)174,99(
-
-
)000,42(
)300,92(
_______
817,241
_______
eulav riaF
puorg ot
£
435,573
474,86
271,922
885,943
232,331
)321,702(
803,72
_______
581,679
233,42
________
715,000,1
________
715,000,1
________
The intangible fixed assets are in relation to customer contacts and relationships
In addition to the purchase price, the group incurred costs relating to the acquisition of £20,770. These are
included in administrative expenses.
The profit included in the Consolidated Statement of Comprehensive Income arising from Q-Par Angus
Limited was £519,321
43
Solid State PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31st March 2014 (continued)
28. ACQUISITIONS DURING THE YEAR (continued)
2001 Electronic Components Limited
On 31st December 2013 the Group acquired 100% of the ordinary shares in 2001 Electronic Components
Limited for a cash consideration of £1,973,512. 2001 Electronic Components Limited is a distributor of
electronic components.
stessa dexif elbignatnI
stessa dexif elbignaT
kcotS
srotbeD
knab ta hsaC
sgniworrob knaB
srotiderC
xat derrefeD
Net assets/(liabilities) on acquisition
noitisiuqca no lliwdooG
noitaredisnoC
Discharged by:
hsaC
kooB
eulav
£
-
808,51
358,547
123,557,1
268,715
)289,704,1(
)053,826,1(
________
(1,488)
________
eulav riaF
tnemtsujda
£
033,859
-
)000,08(
566,31
)603,82(
)657,661(
_______
696,933
_______
eulav riaF
puorg ot
£
033,859
808,51
358,566
689,867,1
268,715
)289,704,1(
)656,656,1(
)657,661(
________
695,445
760,872,1
________
215,379,1
________
215,379,1
________
The intangible fixed assets are in relation to customer contacts and relationships
In addition to the purchase price the group incurred costs relating to the acquisition of £58,275. These are
included in administrative expenses.
The profit included in the Consolidated Statement of Comprehensive Income arising from 2001 Electronic
Components Limited was £112,867
44
Solid State PLC
Company Number: 00771335
COMPANY BALANCE SHEET
at 31st March 2014
STESSA DEXIF
stnemtsevnI
STESSA TNERRUC
srotbeD
dnah ni dna knab ta hsaC
CREDITORS: Amounts falling due within
raey eno
)SEITILIBAIL( TNERRUC TEN
STESSA TEN
SEVRESER DNA LATIPAC
latipac erahs pu dellaC
tnuocca muimerp erahS
evreser noitpmeder latipaC
tnuocca ssol dna tiforP
SDNUF ’SREDLOHERAHS
setoN
4102
3102
£
£
£
£
4
5
083,937,5
_________
153,567,2
________
153,567,2
879,239,1
-
________
444,308,1
-
________
879,239,1
444,308,1
6
838,341,3
________
365,758,2
________
)068,012,1(
________
025,825,4
________
635,114
847,826,3
476,4
265,384
________
025,825,4
________
)911,450,1(
________
3232,117,1
________
206,843
404,370,1
476,4
255,482
________
232,117,1
________
7
8
8
8
The financial statements were approved by the Board of Directors and authorised for issue on 7th July 2014.
G S Marsh, Director
P Haining, Director
The notes on pages 46 to 49 form part of these financial statements.
45
Solid State PLC
NOTES TO THE COMPANY FINANCIAL STATEMENTS
For the year ended 31st March 2014
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 2014 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)(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.
Share 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 £642,073 (2013: £593,027) and comprised the share based payment expense of
£235,056 (2012: £44,445) provision for employer’s national insurance on exercise of share options of
£32,437 (2013: £Nil) 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.
46
Solid State PLC
NOTES TO THE COMPANY FINANCIAL STATEMENTS
For the year ended 31st March 2014 (continued)
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 of 5p per share. The options in place at 31st March 2014 all have exercise periods of any
time after finalisation of the accounts for the year on which the performance criteria are based. Full details are
set out in Note 5 on pages 25 and 26.
The fair value of the options is based on the market value at the date of grant of the number of shares for
which the performance criteria have been met for the year less the exercise price of 5p per share. The market
value per share at the date of grant was £2.38.
The share based remuneration expenses amount to £235,056 for the year (2013: £44,445)
47
Solid State PLC
4.
INVESTMENTS
Company
NOTES TO THE COMPANY FINANCIAL STATEMENTS
For the year ended 31st March 2014 (continued)
Cost
1st April 2013
Additions
Disposals
4102 hcraM ts13
Net book value
4102 hcraM ts13
3102 hcraM ts13
Subsidiary undertakings
Group
undertakings
£
2,765,351
2,974,029
-
________
083,937,5
________
083,937,5
________
153,567,2
________
The principal undertakings in which the Company’s interest at the year end is 20% or more are as follows:
sgnikatrednu yraidisbuS
detimiL seilppuS etatS diloS
detimiL etitaetS
Q-Par Angus Limited
2001 Electronic Components Limited
gnitov fo noitroporP
rights and Ordinary
share capital held
Nature of business
%001
%001
100%
100%
stnenopmoc cinortcele fo noitubirtsiD
dna stnenopmoc cinortcele fo noitubirtsiD
manufacture of electronic equipment
Manufacture of microwave and RF equipment
Distribution of electronic components
In all cases the country of operation and of incorporation or registration is England.
With effect from 1st April 2014 the business and relevant assets and liabilities of 2001 Electronic Components
Limited have been transferred to Solid State Supplies Limited and this company has thus become dormant.
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
Other taxes and social se
srotiderc rehtO
slaurccA
stsoc ytiruc
48
2014
£
2013
£
835,788,1
625,44
419
_________
617,467,1
417,8
410,03
_________
879,239,1
_________
444,308,1
________
086,703,1
550,957,1
734,23
666,83
000,6
________
838,341,3
________
371,357
382,770,2
-
601,12
100,6
________
365,758,2
________
NOTES TO THE COMPANY FINANCIAL STATEMENTS
For the year ended 31st March 2014 (continued)
Solid State PLC
6.
CREDITORS: Amounts falling due within one year (continued)
The Company has guaranteed bank borrowings of its subsidiary undertakings, Solid State Supplies Limited,
Steatite Limited, Q-Par Angus Limited and 2001 Electronic Components Limited. At the year end the
liabilities covered by those guarantees amounted to £575,246 (2013: £505,374). 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
8,230,722 (2013: 6,972,0.34) ordinary shares of 5p each
2014
£
411,536
_______
2013
£
348,602
_______
On 27th June 2013, Mr J L Macmichael exercised share options over 88,085 ordinary shares which were
issued at an exercise price of 94p.
On 27th June 2013, Mr G S Marsh exercised share options over 120,603 ordinary shares which were issued at
an exercise price of 99.5p.
On 23rd December 2013 the company issued 1,050,000 ordinary shares at £2.42 per share and incurred costs
of issue of £125,521
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 2014 the number of shares covered by option
agreements amounted to 330,000 (2012: 208,688).
8.
RESERVES
3102 lirpA ts1
serahs fo eussI
raey eht rof tiforP
esnepxe desab erahS :ddA
diap dnediviD
4102 hcraM ts13
Share premium Capital redemption Profit & loss
tnuocca
evreser
tnuocca
404,370,1
443,555,2
-
_______
847,826,3
-
_______
847,826,3
-
________
847,826,3
________
476,4
-
-
_____
476,4
-
_____
476,4
-
_____
476,4
_____
255,482
782,765
-
_______
938,158
650,532
_______
598,680,1
)333,306(
_______
265,384
_______
The cumulative amount of goodwill which has been eliminated against reserves at 31st March 2014 is
£30,000 (2013: £30,000).
49
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 20th August 2014 at 11am 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 2014, together with the reports of the
Directors and auditors thereon. (Resolution 1)
To declare a final dividend of 5.75p per share. (Resolution 2)
To reappoint Peter Haining, who retires by rotation, as a Director of the Company in accordance with the
Company’s Articles of Association. (Resolution 3)
To reappoint John Lawford Macmichael, 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 £137,178.50 (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 £82,307.20 (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 £82,307.20, 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)
50
NOTICE OF ANNUAL GENERAL MEETING (continued)
SPECIAL RESOLUTIONS (continued)
Solid State PLC
(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)
vi)
iv)
v)
BY ORDER OF THE BOARD
P Haining FCA
Director
7th July 2014
Registered office: 2 Ravensbank 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.
51
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www.solidstateplc.com