Company Registration No. 01231087 (England and Wales)
HAEMONETICS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
HAEMONETICS LIMITED
COMPANY INFORMATION
Directors
Mr A Casanova
(Appointed 24 October 2016)
Mr C L Graham
(Appointed 24 October 2016)
Mr W P Burke
(Appointed 24 October 2016)
Company number
01231087
Registered office
Lynwood House
373-375 Station Road
Harrow
Middlesex
HA1 2AW
Auditor
RDP Newmans LLP
Lynwood House
373-375 Station Road
Harrow
Middlesex
HA1 2AW
Business address
Business Innovation Centre
Harry Weston Road
Coventry
West Midlands
CV3 2TX
HAEMONETICS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 5
Profit and loss account
6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 24
HAEMONETICS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2016
- 1 -
The directors present the strategic report for the year ended 31 March 2016.
Fair review of the business
The results for the year and the financial position at the year end were considered satisfactory by the directors who expect growth in the foreseeable future.
The company saw
a small increase in
turnover
during the year. Gross profit margin has increased marginally to 37.08% due to better control over direct costs although there has been a decrease in net profit margin largely due to a large one off impairment charge (see note 10).
Principal risks and uncertainties
The principal risks facing the company are:
-anticipation and meeting the needs of the medical field;
-obtaining regulatory approval to market and sell products.
Key performance indicators
The Key Performance Indicators of Haemonetics Limited over the last two years are detailed below:
GBP £'000 201
6
201
5
Turnover
8,137
7
,
990
Gross profit %
37.08
3
5
.
75
Net profit %
4.71
5.10
Mr A Casanova
Director
20 December 2016
HAEMONETICS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2016
- 2 -
The directors present their annual report and financial statements for the year ended 31 March 2016.
Principal activities
The principal activity of the company continued to be that of the marketing of blood processing equipment and disposables with full after sales services.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr C J Lindop
(Resigned 25 May 2016)
Mr D S Weibel
(Resigned 24 October 2016)
Mr A Casanova
(Appointed 24 October 2016)
Mr C L Graham
(Appointed 24 October 2016)
Mr W P Burke
(Appointed 24 October 2016)
Results and dividends
The results for the year are set out on page 6.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Future developments
The results for the year and the financial position at the year end were considered satisfactory by the director who expects growth in the foreseeable future.
Auditor
The
auditors
, RDP Newmans LLP, are deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and accounting estimates that are reasonable and prudent;
- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
HAEMONETICS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2016
- 3 -
Statement of disclosure to auditor
So far as the directors are aware, there is no relevant audit information of which the company's auditor are unaware. Additionally, the directors have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company's auditors are aware of that information.
On behalf of the board
Mr A Casanova
Director
20 December 2016
HAEMONETICS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HAEMONETICS LIMITED
- 4 -
We have audited the financial statements of Haemonetics Limited for the year ended 31 March 2016 set out on pages 6 to 24. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland".
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 auditor
As explained more fully in the Directors' Responsibilities Statement set out on pages 2 - 3, 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
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the company's circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.
Opinion on financial statements
In our opinion the financial statements: • give a true and fair view of the state of the company's affairs as at 31 March 2016 and of its profit for the year then ended; • have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and • have been prepared in accordance with the requirements of the Companies Act 2006.
-
give a true and fair view of the state of the company's affairs as at 31 March 2016 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
true
HAEMONETICS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HAEMONETICS LIMITED
- 5 -
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: • adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or • the financial statements are not in agreement with the accounting records and returns; or • certain disclosures of directors' remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit.
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of directors' remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Lyndon Perez FCA (Senior Statutory Auditor)
for and on behalf of RDP Newmans LLP
20 December 2016
Chartered Accountants
Statutory Auditor
Lynwood House
373-375 Station Road
Harrow
Middlesex
HA1 2AW
HAEMONETICS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2016
- 6 -
2016
2015
Notes
£
£
Turnover
3
8,137,497
7,989,657
Cost of sales
(5,120,446)
(5,134,046)
Gross profit
3,017,051
2,855,611
Administrative expenses
(2,748,753)
(2,524,121)
Other operating income
120,000
120,000
Operating profit
4
388,298
451,490
Interest receivable and similar income
7
-
1,062
Interest payable and similar charges
8
(4,866)
(45,716)
Profit before taxation
383,432
406,836
Taxation
9
(50,690)
(171,208)
Profit for the financial year
332,742
235,628
The profit and loss account has been prepared on the basis that all operations are continuing operations.
HAEMONETICS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2016
- 7 -
2016
2015
£
£
Profit for the year
332,742
235,628
Other comprehensive income
-
-
Total comprehensive income for the year
332,742
235,628
HAEMONETICS LIMITED
BALANCE SHEET
AS AT
31 MARCH 2016
31 March 2016
- 8 -
2016
2015
Notes
£
£
£
£
Fixed assets
Goodwill
11
433,525
924,067
Tangible assets
12
1,593,428
1,809,240
2,026,953
2,733,307
Current assets
Stocks
14
135,018
315,532
Debtors
15
1,935,441
1,552,383
Cash at bank and in hand
592,667
989,423
2,663,126
2,857,338
Creditors: amounts falling due within one year
16
(2,110,958)
(1,812,782)
Net current assets
552,168
1,044,556
Total assets less current liabilities
2,579,121
3,777,863
Creditors: amounts falling due after more than one year
17
-
(1,463,283)
Provisions for liabilities
20
(133,882)
(202,083)
Net assets
2,445,239
2,112,497
Capital and reserves
Called up share capital
23
50,000
50,000
Profit and loss reserves
2,395,239
2,062,497
Total equity
2,445,239
2,112,497
The financial statements were approved by the board of directors and authorised for issue on 20 December 2016 and are signed on its behalf by:
Mr A Casanova
Director
Company Registration No. 01231087
HAEMONETICS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2016
- 9 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 April 2014
50,000
1,826,869
1,876,869
Year ended 31 March 2015:
Profit and total comprehensive income for the year
-
235,628
235,628
Balance at 31 March 2015
50,000
2,062,497
2,112,497
Year ended 31 March 2016:
Profit and total comprehensive income for the year
-
332,742
332,742
Balance at 31 March 2016
50,000
2,395,239
2,445,239
HAEMONETICS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2016
- 10 -
2016
2015
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
1,084,603
1,233,565
Interest paid
(4,866)
(45,716)
Income taxes refunded/(paid)
142,447
(92,286)
Net cash inflow from operating activities
1,222,183
1,095,563
Investing activities
Purchase of tangible fixed assets
(235,557)
(682,177)
Proceeds on disposal of tangible fixed assets
79,901
136,797
Interest received
-
1,060
Net cash used in investing activities
(155,656)
(544,320)
Financing activities
Repayment of borrowings
(1,463,283)
(500,002)
Net cash used in financing activities
(1,463,283)
(500,002)
Net (decrease)/increase in cash and cash equivalents
(396,756)
51,241
Cash and cash equivalents at beginning of year
989,423
938,182
Cash and cash equivalents at end of year
592,667
989,423
HAEMONETICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2016
- 11 -
1
Accounting policies
Company information
Haemonetics Limited is a
company
limited by shares
incorporated in England and Wales.
The registered office is
Lynwood House, 373-375 Station Road, Harrow, Middlesex, HA1 2AW.
1.1
Accounting convention
The financial statements are prepared under the historical cost convention.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared on the historical cost convention. The principal accounting policies adopted are set out below.
These financial statements for the year ended 31 March 2016
are the
first
financial statements of Haemonetics Limited prepared in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland. The date of transition to FRS 102 was 1 April 2014. The reported financial position and financial performance for the previous period are not affected by the transition to FRS 102.
1.2
Going concern
A
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business , and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates. When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods and acceptance from customer ), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.
and services
provided in the normal course of business , and is shown net of VAT and other sales related taxes. The fair
value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration
is the present value of the future receipts. The difference between the fair value of the consideration and
the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the
goods have passed to the buyer (usually on dispatch of the goods
and acceptance from customer
), the amount of revenue can be
measured reliably, it is probable that the economic benefits associated with the transaction will flow to the
entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the provision of professional services is recognised by reference to the stage
of completion when the stage of completion, costs incurred and costs to complete can be estimated
reliably. Where the outcome cannot be estimated
reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.
1.4
Intangible fixed assets - goodwill
Acquired goodwill is written off in equal annual instalments over its estimated useful economic life of 9-11 years. It is reviewed for impairment at the end of the first financial year following acquisition and in other periods if events or changes in circumstances indicate that the carrying value may not be recoverable.
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
HAEMONETICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2016
1
Accounting policies
(Continued)
- 12 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Land and buildings freehold
Straight line over 30 to 50 years
Land and buildings leasehold
Straight line over 4 years
Plant & machinery
Straight line over 3 to 5 years
Fixtures, fittings & equipment
Straight line over 5 years
Computer equipment
Straight line over 5 years
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.6
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the
company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. Stocks held for distribution at no or nominal consideration are measured at cost, adjusted where applicable for any loss of service potential.
are stated at the lower of cost and
estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks
held for distribution at no or nominal consideration are measured at cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
HAEMONETICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2016
1
Accounting policies
(Continued)
- 13 -
1.8
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments. Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets and liabilities are offset , with the net amounts presented in the financial statements , when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publically traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss , are assessed for indicators of impairment at each reporting end date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss. If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
HAEMONETICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2016
1
Accounting policies
(Continued)
- 14 -
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future receipts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities. Trade creditors are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value though profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
HAEMONETICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2016
1
Accounting policies
(Continued)
- 15 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets. The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received. Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
The company operates a defined contribution scheme for the benefit of its employees. Contributions payable are charged to the profit and loss account in the year they are payable. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in the b alance s heet.
b
alance
s
heet.
1.14
Share-based payments
The company operates a group share based payment scheme to all employees.
1.15
Leases
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term. Rentals payable under operating leases, including any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed.
Rentals payable under operating leases,
including
any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed.
1.16
Foreign exchange
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to the profit and loss account.
HAEMONETICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2016
- 16 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2016
2015
£
£
Turnover
8,137,497
7,989,657
Other significant revenue
Interest income
-
1,062
Turnover analysed by geographical market
2016
2015
£
£
United Kingdom
7,958,155
7,901,504
Rest of Europe
179,342
88,153
8,137,497
7,989,657
4
Operating profit
2016
2015
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains/(losses)
(8,676)
19,855
Depreciation of owned tangible fixed assets
373,815
349,963
Profit/(loss) on disposal of tangible fixed assets
(2,346)
12,560
Amortisation of intangible assets
88,443
156,404
Impairment of intangible assets
402,099
-
Cost of stocks recognised as an expense
4,790,657
4,844,738
Operating lease charges
206,103
178,629
HAEMONETICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2016
- 17 -
5
Auditor's remuneration
2016
2015
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the company's financial statements
14,000
14,000
For other services
Taxation compliance services
2,900
5,450
All other non-audit services
14,000
17,000
16,900
22,450
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2016
2015
Number
Number
Selling and distribution
33
34
Administration
1
1
34
35
Their aggregate remuneration comprised:
2016
2015
£
£
Wages and salaries
913,214
1,061,332
Social security costs
219,369
217,746
Pension costs
98,132
85,290
1,230,715
1,364,368
7
Interest receivable and similar income
2016
2015
£
£
Interest income
Other interest income
-
1,062
HAEMONETICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2016
- 18 -
8
Interest payable and similar charges
2016
2015
£
£
Other finance costs:
Other interest
4,866
45,716
4,866
45,716
9
Taxation
2016
2015
£
£
Current tax
UK corporation tax on profits for the current period
118,891
25,200
Deferred tax
Origination and reversal of timing differences
(68,201)
146,008
Total tax charge
50,690
171,208
The charge for the year can be reconciled to the profit per the profit and loss account as follows:
2016
2015
£
£
Profit before taxation
383,432
406,836
Expected tax charge based on the standard rate of corporation tax in the UK of 20.00% (2015: 21.00%)
76,686
85,436
Tax effect of expenses that are not deductible in determining taxable profit
945
4,914
Permanent capital allowances in excess of depreciation
(70,584)
(138,032)
Depreciation on assets not qualifying for tax allowances
74,763
101,639
Tax effect of utilisation of tax losses
(43,339)
(28,757)
Deferred tax
(68,201)
146,008
Impairment on intangible assets not qualifying for allowances
80,420
-
Tax expense for the year
50,690
171,208
HAEMONETICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2016
- 19 -
10
Impairments
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
2016
2015
£
£
In respect of:
Goodwill
402,099
-
Recognised in:
Administrative expenses
402,099
-
11
Intangible fixed assets
Goodwill
£
Cost
At 1 April 2015 and 31 March 2016
3,169,582
Amortisation and impairment
At 1 April 2015
2,245,515
Amortisation charged for the year
88,443
Impairment losses
402,099
At 31 March 2016
2,736,057
Carrying amount
At 31 March 2016
433,525
At 31 March 2015
924,067
During the year the company made a decision to write off all goodwill relating to Medicell Limited across the entire Haemonetics group as performance did not meet the expected targets.
HAEMONETICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2016
- 20 -
12
Tangible fixed assets
Land and buildings freehold
Land and buildings leasehold
Plant & machinery
Fixtures, fittings & equipment
Computer equipment
Total
£
£
£
£
£
£
Cost
At 1 April 2015
1,859,677
11,766
2,642,024
58,059
27,822
4,599,348
Additions
-
-
222,669
12,888
-
235,557
Disposals
-
-
(237,408)
-
-
(237,408)
At 31 March 2016
1,859,677
11,766
2,627,285
70,947
27,822
4,597,497
Depreciation and impairment
At 1 April 2015
1,431,133
4,412
1,274,586
55,118
24,858
2,790,107
Depreciation charged in the year
32,841
2,942
329,789
5,279
2,964
373,815
Eliminated in respect of disposals
-
-
(159,853)
-
-
(159,853)
At 31 March 2016
1,463,974
7,354
1,444,522
60,397
27,822
3,004,069
Carrying amount
At 31 March 2016
395,703
4,412
1,182,763
10,550
-
1,593,428
At 31 March 2015
428,544
7,353
1,367,439
2,940
2,964
1,809,240
HAEMONETICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2016
- 21 -
13
Financial instruments
2016
2015
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
1,776,222
1,257,620
Carrying amount of financial liabilities
Measured at amortised cost
517,765
1,857,479
14
Stocks
2016
2015
£
£
Finished goods and goods for resale
135,018
315,532
15
Debtors
2016
2015
Amounts falling due within one year:
£
£
Trade debtors
1,715,485
1,253,344
Corporation tax recoverable
-
167,512
Amounts due from subsidiary undertakings
55,538
-
Other debtors
5,199
4,276
Prepayments and accrued income
159,219
127,251
1,935,441
1,552,383
16
Creditors: amounts falling due within one year
2016
2015
£
£
Trade creditors
108,640
41,980
Amounts due to group undertakings
391,389
339,857
Corporation tax
119,026
25,200
Other taxation and social security
367,646
314,865
Other creditors
17,736
12,359
Accruals and deferred income
1,106,521
1,078,521
2,110,958
1,812,782
17
Creditors: amounts falling due after more than one year
2016
2015
Notes
£
£
Other borrowings
18
-
1,463,283
HAEMONETICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2016
- 22 -
18
Loans and overdrafts
2016
2015
£
£
Other loans
-
1,463,283
Payable after one year
-
1,463,283
19
Provisions for liabilities
2016
2015
£
£
Deferred tax liabilities
20
133,882
202,083
133,882
202,083
20
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2016
2015
Balances:
£
£
Accelerated capital allowances
133,882
247,589
Tax losses
-
(45,506)
133,882
202,083
2016
Movements in the year:
£
Liability at 1 April 2015
202,083
Credit to profit and loss
(68,201)
Liability at 31 March 2016
133,882
The deferred tax liability set out above is expected to reverse within 24 months and relates to accelerated capital allowances that are expected to mature within the same period.
HAEMONETICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2016
- 23 -
21
Retirement benefit schemes
Defined contribution schemes
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
The charge to profit and loss in respect of defined contribution schemes was £98,132 (2015: £85,290).
22
Share-based payment transactions
The
c
ompany
operates
a
group
Employee Stock Purchase Plan
(the "purchased plan") u
nder which common
stock of Haemonetics Corporation, the parent company,
may be purchased by
all full-time e
mployees.
The Purchase Plan provides for two “purchase periods” within each of our fiscal years, the first commencing on
N
ovember 1 of
each year and continuing through April 30 of the next calendar year, and the second commencing on May 1 of each year and
continuing through October 31 of such year. Shares are purchased through an accumulation of payroll deductions (of not less
than 2% or more than 15% of compensation, as defined) for the number of whole shares determined by dividing the balance in
the employee’s account on the last day of the purchase period by the purchase price per share for the stock determined under
the Purchase Plan. The purchase price for shares is the lower of 85% of the fair market value of the common stock at the
beginning of the purchase period, or 85% of such value at the end of the purchase period.
Although the company is part of this scheme, it is the parent company, Haemonetics Corporation, which operates the scheme. Therefore, the fair values of share options are calculated in their financial statements.
23
Share capital
2016
2015
£
£
Ordinary share capital
Issued and fully paid
50,000 Ordinary shares of £1 each
50,000
50,000
24
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2016
2015
£
£
Within one year
106,652
25,398
Between two and five years
33,480
69,336
140,132
94,734
HAEMONETICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2016
- 24 -
25
Controlling party
The company is a subsidiary undertaking of Haemonetics Corporation incorporated in USA. The shares of Haemonetics Corporation are publicly traded on the New York Stock Exchange.
The largest and smallest group in which the results of Haemonetics Limited are consolidated is headed by Haemonetics Corporation. The consolidated financial statements are available to the public and may be obtained from Haemonetics Corporation, 400 Wood Road, Braintree, Massachusetts, USA.
26
Related party transactions
Transactions with related parties
The company has taken advantage of the exemption available in accordance with FRS 102 para 33.1A not to disclose transactions entered into between two or more members of a group, as the company is a wholly owned subsidiary undertaking of the group.
27
Cash generated from operations
2016
2015
£
£
Profit for the year after tax
332,742
235,628
Adjustments for:
Taxation charged
50,690
171,208
Finance costs
4,866
45,716
Investment income
-
(1,062)
(Gain)/loss on disposal of tangible fixed assets
(2,346)
12,560
Amortisation and impairment of intangible assets
490,542
156,404
Depreciation and impairment of tangible fixed assets
373,815
349,963
Movements in working capital:
Decrease/(increase) in stocks
180,514
(10,314)
(Increase)/decrease in debtors
(550,570)
273,154
Increase in creditors
204,350
308
Cash generated from operations
1,084,603
1,233,565
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