ALPHASENSE_LIMITED - Accounts
ALPHASENSE_LIMITED - Accounts
The directors present the strategic report for the year ended 31 March 2018.
The principal activity of the company and group continued to be that of the manufacture of sensors and provision of sensor solutions to the industrial, safety and air quality markets.
This year’s results further built on those of last year as we capitalised on the reliability of newly developed products recently brought to market, particularly in the air quality sector. Our more refined-sensing products continued to attract new interest worldwide and which has led to us further expanding our customer base.
Continuing strategic focus on providing customers with complete sensing solutions has proved fruitful and has allowed us to initiate knowledge-based stakeholder networks in which participants analyse, evaluate and share air quality data, which has, in turn, consolidated collaborations within the industry and allowed us to fulfil our key objectives of sustaining reputational excellence and market prominence.
Innovation is part of the group’s DNA and continues to remain at the heart of our philosophy as we continue to strive for the highest developmental standards in sensing technology. One of our key assets is the strength in depth of our product development team led by our Technical Director and allows our focus on investing in internal R&D to remain unwavering and facilitates our drive to be one of the market leaders within the sector.
Like all businesses, our group faces risks and uncertainties that could impact the achievement of our strategy. These risks are accepted as being a part of doing business. The Board recognises that the nature and scope of these risks can change and so regularly reviews them as well as the systems and processes to mitigate them.
Operational risk
Our main objective is to grow profits in order to reinvest internally and to maintain a strong business function. We mitigate many risks by ensuring we identify, recruit and train talented people, invest heavily in quality control and assessment, and have a robust sales and marketing function developing and maintaining our customer base. We focus greatly on research and development to enhance and diversify our product base and work with other businesses in joint venture projects to further promote our position, reputation and market presence.
Economic conditions
The potential negative impact of Brexit on the UK economy is considered to be a risk to the group. We export our goods worldwide any disruption to this distribution process would adversely affect performance. In mitigation we are actively talking with our couriers and customers to safeguard continuity of supply.
Laws and regulations
As with other businesses we strive to comply with wide-ranging laws and regulations regarding employment, the environment, business ethics and health and safety legislation. There are also commercial and legal risks relating to product and contractual litigation. To mitigate these risks we provide all employees with a company personnel handbook detailing employment practices, contractual terms and include terms and conditions in compliance with legislative requirements.
Objectives and policies
Currently the group has no need of external debt funding as it is sufficiently internally funded to comfortably meet all its debts and obligations. This remains our objective over the medium term.
This year saw further progress in leading the way in sensor developments for the environmental and air quality market. Sustainable growth opportunities continue to come apace as a result of the worldwide publicity being given to air pollution and the need to clean up our air.
Capitalising on these opportunities is a key objective of the Group, achieved by continued investment in cutting edge research and development, local knowledge-based commercial collaborations and by maximising focus on quality and reliability.
Turnover growth primarily resulted from consolidating demand for our new products in the market. Showcasing these new, as well as, our core portfolio of products is important to us and, with this aim, we attend exhibitions all over the world throughout the year. Product promotion and marketing is a priority, as is keeping in close contact with key customers and, to this end, numerous overseas business trips are made each year by our Sales and Marketing personnel.
The company's key financial and other performance indicators during the year were as follows:
| Unit | 2018 | 2017 |
Gross profit percentage | % | 63.66 | 61.83 |
Net profit percentage Trade debtor days | % Days | 22.69 56 | 31.41 60 |
Employee retention remains enviably strong and we continue to maintain effective trading relationships with many reliable and local suppliers.
We continue to have enviably low warranty return rates and strive to ensure those we do have are concluded within a 30 day term.
We continue to embrace the advantages gained from securing the ISO 9001: 2015 quality standard accreditation last year. This is a renowned commercial benchmark and has given us the tools necessary to develop robust internal systems and procedures.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 March 2018.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £10,016,183. The directors do not recommend payment of a dividend.
The group's principal financial instruments comprise trade debtor, trade creditor and intercompany balances. The group does not enter into derivative transactions. The main risks arising from the group's financial instruments are foreign currency risk, credit risk and liquidity risk.
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The group maintains a very healthy current asset ratio with robust cash balances such that liquidity risk is minimal
Foreign currency risk arises as a result of the time delay between entering a transaction denominated in foreign currency and settling it. The group mitigates this risk by matching purchase and sales transactions in foreign currency through the utilisation of foreign currency bank accounts.
Credit risk is the risk that one party will cause financial loss to the other party by failing to discharge an obligation. Credit risk for the group relates to the recoverability of trade debtors; on the whole our customers adhere to our standard payment terms.
The company has a core of key personnel dedicated to working both internally and in collaboration with third parties to innovate, research and develop new sensors and sensing technologies, with the input of operational colleagues in the design of complementary production systems, production engineering and product testing and validation.
There have been no significant events since the balance sheet date to report.
As worldwide legislation drives the fight against air pollution future opportunities for the group to continue to grow and flourish are self evident. Being at the forefront of developing new sensing technology will allow us to harness the innovation and commercial opportunities arising from this tide of sentiment to improve air quality. Our recently developed air quality sensing products have been well-received and will enable us to consolidate our reputation for reliability and performance as we grow the market and bring further new products on stream.
In accordance with the company's articles, a resolution proposing that CKLG Limited be reappointed as auditor of the group will be put at a General Meeting.
After making enquiries, the directors have a reasonable expectation that the company and the group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the annual report and accounts.
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.
We have audited the financial statements of Alphasense Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2018 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
give a true and fair view of the state of the group's and the parent company's affairs as at 31 March 2018 and of the group's 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.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group's or the parent company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.
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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company 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.
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group's and the parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £4,216,537 (2017 - £4,169,018 profit).
Alphasense Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Sensor Technology House, 300 Avenue West, Skyline 120, Great Notley, Braintree, Essex, CM77 7AA.
The group consists of Alphasense Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value. The principal accounting policies adopted are set out below.
The consolidated financial statements incorporate those of Alphasense Limited and all of its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits).
All financial statements are made up to 31 March 2018. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates. In the group financial statements, associates are accounted for using the equity method.
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods 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.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
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 recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries and associates are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
At each reporting period end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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 is estimated to be less than its carrying amount, the carrying amount of the asset 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.
Cost is determined using the first-in, first-out (FIFO) method.
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.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, 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, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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.
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 group after deducting all of its 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 payments 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. Amounts 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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 if, and only if, there is 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 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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
The Group operates an equity-settled, share-based compensation plan, under which the entity receives services from employees as consideration for equity instruments (options) of the entity. Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted; the estimated fair value of the option granted is based on the value of services resulting from the bonus at the date of grant. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.
Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.
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.
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.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.
Company
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the profit and loss account for the period.
Group
For the purposes of preparing consolidated financial statements, the group's share of the net assets of foreign entities in which it has a participating interest are translated at the balance sheet date. The group's share of profit or loss from these entities is translated at the closing rate for the period. Exchange differences are taken directly to reserves.
In the application of the group’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.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
The annual depreciation charges for tangible assets is sensitive to changes in the estimated useful lives and residual values of the assets. The useful lives and residual values are re-assessed annually.
An analysis of the group's turnover is as follows:
Government grants are revenue in nature and awarded to cover expenses associated with the furtherance of research and development work by the company.
The amount of grants recognised in the financial statements was £NIL (2017: £143,796).
Exchange differences recognised in profit or loss during the year, except for those arising on financial instruments measured at fair value through profit or loss, amounted to £675,096 (2017 - £1,870,865).
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2017 - 4).
The number of directors who exercised share options during the year was 2 (2017 - 2).
The number of directors who are entitled to receive shares under long term incentive schemes during the year was 3 (2017 - 3).
A reduction in the rate of UK corporation tax from 20% to 19% took effect from 1 April 2017.
The actual charge for the year can be reconciled to the expected charge based on the profit or loss and the standard rate of tax as follows:
The carrying value of land and buildings comprises:
Details of the company's subsidiaries at 31 March 2018 are as follows:
The principal activity of Alphasense SV Limited is a holding company.
Details of associates at 31 March 2018 are as follows:
The principal undertaking of Spec Sensors LLC is the production and sale of gas sensors. The group's share of the loss for the financial period of Spec Sensors LLC was £385,969 (2017: £226,389) and the carrying value of the investment in the entity is £9,378 (2017: £444,807).
The principal activity of Atmospheric Sensors Limited is the manufacture of gas detecting systems. The group's share of the profit for the financial period of Atmospheric Sensors Limited was £295 (2017: £9,523) and the carrying value of the investment in the entity is £19,673 (2017: £19,378).
The principal activity of South Coast Science Limited is the production and sale of environmental monitoring devices, circuits and open-source software. The group's share of the profit for the financial period of South Coast Science Limited was £16,169 (2017: £8,013) and the carrying value of the investment in the entity is £24,206 (2017: £8,038).
Group
Debt instruments measured at amortised cost comprise trade debtors, other debtors, and amounts due from participating interests.
Financial liabilities measured at amortised cost comprise trade creditors, other creditors, accruals and deferred income.
Company
Debt instruments measured at amortised cost comprise trade debtors, other debtors, amounts due from group undertakings and amounts due from participating interests.
Financial liabilities measured at amortised cost comprise trade creditors, other creditors, accruals and deferred income.
Stocks recognised as an expense in the period were £4,444,234 (2017: £3,476,555) for the group and the company.
The difference between the purchase price of stocks and their replacement value is not material.
A provision of £15,000 (2017: £15,000) is recognised for warranty claims on products sold in the last 1 to 3 years.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
The company has a share option scheme where certain directors and staff are granted options by reference to an annual bonus scheme. Valuation of options is based on open market value as agreed with HM Revenue & Customs for the purpose of the option scheme.
The options, which carry an exercise price of £nil, can be exercised at any time at the discretion of the directors only, or on the occasion of a sale or listing of the company.
The options will lapse in the event of an employee leaving although the directors have the discretion to allow the employee to exercise their option on leaving. Options also lapse on the 10th anniversary of the grant.
The movements in the number of share options during the year were as follows:
The options outstanding at 31 March 2018 had an exercise price ranging from £0.75 to £6.50, and a remaining contractual life of 10 years from the date of grant.
During the year, 17,881 (2017: 12,186) ordinary shares having a nominal value of £1 each were allotted for an aggregated consideration of £107,286 (2017: £73,116). These were issued on exercise of EMI share options.
Other reserves comprise a gift of funds from a third party and exchange movements arising upon annual restatement of associate holdings.
The profit and loss account consists of accumulated profits and losses of the group. Only the element which constitutes profits of the parent company are available for reinvestment and distribution.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
All directors and certain senior employees who have authority and responsibility for planning,directing and controlling the activities of the Group are considered to be key management personnel. Total remuneration is respect of these individuals is £2,364,566 (2017: £1,966,653)
The ultimate controlling party is Mrs R Gotley.