Company Registration No. 00352738 (England and Wales)
SMITH & OUZMAN LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
SMITH & OUZMAN LIMITED
COMPANY INFORMATION
Directors
P R Ouzman
S L Hancock
M R Avery
Secretary
P R Ouzman
Company number
00352738
Registered office
45 Brampton Road
Eastbourne
East Sussex
BN22 9AH
Auditor
Price & Company
30-32 Gildredge Road
Eastbourne
East Sussex
BN21 4SH
Business address
45 Brampton Road
Eastbourne
East Sussex
BN22 9AH
Bankers
Lloyds Bank plc
104 Terminus Road
Eastbourne
East Sussex
BN21 3AH
SMITH & OUZMAN LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Profit and loss account
7
Statement of comprehensive income
8
Balance sheet
9 - 10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 31
SMITH & OUZMAN LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 1 -
The directors present the strategic report for the year ended 31 December 2019.
Fair review of the business
The results for the company show a pre-tax profit of £50,316 (2018: pre-tax loss of £582,339) for the year, and sales of £4.3 million (2018: £4.3 million).
Principal risks and uncertainties
The management of the business and the execution of the company's strategy are subject to a number of risks.
The key business risks and uncertainties affecting the company are considered to relate to increased competition from both national and international competitors, worsening economic conditions at home and abroad.
The external competitive environment is expected to remain competitive with difficult trading conditions for the forthcoming year.
Key performance indicators
Given the straightforward nature of the business, the company's directors are of the opinion that an analysis using only a few simple KPIs is necessary for an understanding of the development, performance or position of the business.
The company's directors consider the following KPIs to be of significance:
31 December
31 December
2019
2018
Gross profit (%)
28.08
12.02
Gross profit percentage is gross profit expressed as a percentage of income. The increase in gross profit percentage is due to a change in the sales mix.
Return on investment (%)
0.96
0.00
This reflects the overall profitability of the assets used in the business. Return on investment is in line with our expectations.
P R Ouzman
Director
20 November 2020
SMITH & OUZMAN LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2019.
Principal activities
The principal activity of the company continued to be that of commercial and security printing.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
P R Ouzman
P J Ellis
(Resigned 1 December 2019)
S L Hancock
M R Avery
Results and dividends
The results for the year are set out on page 7.
The directors recommend no payment of a final dividend.
Auditor
Price & Company were appointed auditors to the company and in accordance with section 487(2) of the Companies Act 2006, a resolution proposing that they be re-appointed was passed at the Annual General Meeting.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually 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 auditor is aware of that information.
On behalf of the board
P R Ouzman
Director
20 November 2020
SMITH & OUZMAN LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 3 -
The directors are responsible for preparing the annual 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;
-
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.
SMITH & OUZMAN LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SMITH & OUZMAN LIMITED
- 4 -
Opinion
We have audited the financial statements of Smith & Ouzman Limited (the 'company') for the year ended 31 December 2019 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the 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).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 December 2019 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.
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
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company’s ability to continue as a going concern for a period of at least 12 months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors' with respect to going concern are described in the relevant sections of this report.
SMITH & OUZMAN LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SMITH & OUZMAN LIMITED
- 5 -
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' r
eport 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.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
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.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, 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 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 company or to cease operations, or have no realistic alternative but to do so.
SMITH & OUZMAN LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SMITH & OUZMAN LIMITED
- 6 -
Auditor's responsibilities for the audit of the financial statements
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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.
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.
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.
Mr Michael Neilan BSc FCA CTA (Senior Statutory Auditor)
for and on behalf of Price & Company
20 November 2020
Chartered Accountants
Statutory Auditor
30-32 Gildredge Road
Eastbourne
East Sussex
BN21 4SH
SMITH & OUZMAN LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 7 -
2019
2018
Notes
£
£
Turnover
3
4,264,915
4,253,612
Cost of sales
(3,067,182)
(3,742,361)
Gross profit
1,197,733
511,251
Distribution costs
(405,248)
(344,069)
Administrative expenses
(819,231)
(900,317)
Other operating income
76,220
144,329
Operating profit/(loss)
4
49,474
(588,806)
Interest receivable and similar income
7
842
7,207
Interest payable and similar expenses
8
-
(740)
Profit/(loss) before taxation
50,316
(582,339)
Tax on profit/(loss)
9
24,520
(7,560)
Profit/(loss) for the financial year
74,836
(589,899)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
SMITH & OUZMAN LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2019
- 8 -
2019
2018
£
£
Profit/(loss) for the year
74,836
(589,899)
Other comprehensive income
Revaluation of tangible fixed assets
-
2,160,792
Total comprehensive income for the year
74,836
1,570,893
SMITH & OUZMAN LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2019
31 December 2019
- 9 -
2019
2018
Notes
£
£
£
£
Fixed assets
Tangible assets
11
3,823,027
4,020,798
Investments
12
7
7
3,823,034
4,020,805
Current assets
Stocks
14
625,672
843,847
Debtors
15
2,058,657
2,299,849
Cash at bank and in hand
389,652
142,421
3,073,981
3,286,117
Creditors: amounts falling due within one year
16
(856,024)
(1,304,247)
Net current assets
2,217,957
1,981,870
Total assets less current liabilities
6,040,991
6,002,675
Creditors: amounts falling due after more than one year
17
(717,239)
(729,239)
Provisions for liabilities
19
(42,622)
(67,142)
Net assets
5,281,130
5,206,294
SMITH & OUZMAN LIMITED
BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2019
31 December 2019
2019
2018
Notes
£
£
£
£
- 10 -
Capital and reserves
Called up share capital
21
574,004
574,004
Revaluation reserve
22
2,342,441
2,342,441
Capital redemption reserve
23
5,634
5,634
Profit and loss reserves
24
2,359,051
2,284,215
Total equity
5,281,130
5,206,294
The financial statements were approved by the board of directors and authorised for issue on 20 November 2020 and are signed on its behalf by:
P R Ouzman
Director
Company Registration No. 00352738
SMITH & OUZMAN LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019
- 11 -
Share capital
Revaluation reserve
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2018
574,004
220,574
5,634
2,895,243
3,695,455
Year ended 31 December 2018:
Loss for the year
-
-
-
(589,899)
(589,899)
Other comprehensive income:
Revaluation of tangible fixed assets
-
2,160,792
-
-
2,160,792
Total comprehensive income for the year
-
2,160,792
-
(589,899)
1,570,893
Dividends
10
-
-
-
(60,054)
(60,054)
Transfers
-
(38,925)
-
38,925
-
Balance at 31 December 2018
574,004
2,342,441
5,634
2,284,215
5,206,294
Year ended 31 December 2019:
Profit and total comprehensive income for the year
-
-
-
74,836
74,836
Balance at 31 December 2019
574,004
2,342,441
5,634
2,359,051
5,281,130
SMITH & OUZMAN LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2019
- 12 -
2019
2018
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
26
239,676
(809,675)
Interest paid
-
(740)
Income taxes paid
-
(97,540)
Net cash inflow/(outflow) from operating activities
239,676
(907,955)
Investing activities
Purchase of tangible fixed assets
-
(161,979)
Proceeds on disposal of tangible fixed assets
6,713
10,225
Interest received
842
7,207
Net cash generated from/(used in) investing activities
7,555
(144,547)
Financing activities
Payment of finance leases obligations
-
(10,998)
Dividends paid
-
(60,054)
Net cash used in financing activities
-
(71,052)
Net increase/(decrease) in cash and cash equivalents
247,231
(1,123,554)
Cash and cash equivalents at beginning of year
142,421
1,265,975
Cash and cash equivalents at end of year
389,652
142,421
SMITH & OUZMAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
- 13 -
1
Accounting policies
Company information
Smith & Ouzman Limited is a
company
limited by shares
incorporated in England and Wales.
The registered office is
45 Brampton Road, Eastbourne, East Sussex, BN22 9AH.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
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 under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The company has taken advantage of the exemption under section 40
5(2)
of the
Companies Act 2006
which states that a subsidiary undertaking may be excluded from consolidation if its inclusion is not material for the purpose of giving a true and fair view, and on that basis have decided not to include the results of its subsidiaries.
The financial statements present information about the company as an individual entity and not about its group
.
1.2
Going concern
A
true
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)
, 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.
SMITH & OUZMAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies (Continued)
- 14 -
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. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.
Interest income is recognised when it is probable that the economic benefits will flow to the company and the amount of revenue can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate applicable.
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
- Land nil, buildings straight line over 50 years
Leasehold land and buildings
- Straight line over 50 years
Plant and machinery
- 15% on reducing balance
Fixtures, fittings and equipment
- 15% on reducing balance
Motor vehicles
- 25% on reducing balance
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
.
1.5
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
The investments are assessed for impairment at each reporting date
and
any
impairment
losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company
. Control is
the power to govern the financial and operating policies of
the
entity so as to obtain benefits from its activities.
1.6
Impairment of fixed assets
At each reporting
period
end date, the
company
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.
SMITH & OUZMAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies (Continued)
- 15 -
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 the lower of replacement cost and 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.
1.8
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
SMITH & OUZMAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies (Continued)
- 16 -
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 balance sheet 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 publicly 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.
SMITH & OUZMAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies (Continued)
- 17 -
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.
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
paymen
ts 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 th
r
ough 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.
SMITH & OUZMAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies (Continued)
- 18 -
1.10
Equity instruments
Equity instruments issued by the company 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 company.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
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.
Deferred tax
Deferred tax is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes.
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
SMITH & OUZMAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies (Continued)
- 19 -
1.14
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair
value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
1.15
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.
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:
2019
2018
£
£
Turnover
Sales
4,264,915
4,253,612
Other significant revenue
Interest income
842
7,207
Rental income
76,220
81,055
SMITH & OUZMAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
3
Turnover and other revenue (Continued)
- 20 -
Turnover analysed by geographical market
2019
2018
£
£
U.K.
2,309,274
1,896,934
Overseas
1,955,641
2,356,678
4,264,915
4,253,612
4
Operating profit/(loss)
2019
2018
Operating profit/(loss) for the year is stated after charging/(crediting):
£
£
Exchange losses
41,259
49,468
Fees payable to the company's auditor for the audit of the company's financial statements
22,050
16,750
Depreciation of owned tangible fixed assets
199,124
180,157
(Profit)/loss on disposal of tangible fixed assets
(8,066)
3,633
Cost of stocks recognised as an expense
986,521
1,563,040
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2019
2018
Number
Number
57
60
SMITH & OUZMAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
5
Employees (Continued)
- 21 -
Their aggregate remuneration comprised:
2019
2018
£
£
Wages and salaries
1,724,464
1,709,045
Social security costs
173,149
164,195
Pension costs
109,903
129,920
2,007,516
2,003,160
Redundancy payments made or committed
-
-
6
Directors' remuneration
2019
2018
£
£
Remuneration for qualifying services
306,643
184,662
Company pension contributions to defined contribution schemes
23,666
30,506
330,309
215,168
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2018 - 2).
7
Interest receivable and similar income
2019
2018
£
£
Interest income
Interest on bank deposits
842
7,207
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
842
7,207
SMITH & OUZMAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 22 -
8
Interest payable and similar expenses
2019
2018
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
-
740
9
Taxation
2019
2018
£
£
Current tax
Adjustments in respect of prior periods
-
(12,685)
Deferred tax
Origination and reversal of timing differences
(24,520)
20,245
Total tax (credit)/charge
(24,520)
7,560
SMITH & OUZMAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
9
Taxation (Continued)
- 23 -
The actual (credit)/charge for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
2019
2018
£
£
Profit/(loss) before taxation
50,316
(582,339)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 19.00% (2018: 19.00%)
9,560
(110,644)
Tax effect of expenses that are not deductible in determining taxable profit
-
1,463
Tax effect of income not taxable in determining taxable profit
(1,532)
-
Tax effect of utilisation of tax losses not previously recognised
(45,862)
12,523
Unutilised tax losses carried forward
-
62,428
Adjustments in respect of prior years
-
(12,685)
Permanent capital allowances in excess of depreciation
(24,520)
20,245
Depreciation add back
37,834
34,230
Taxation (credit)/charge for the year
(24,520)
7,560
10
Dividends
2019
2018
£
£
Final paid
-
60,054
SMITH & OUZMAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 24 -
11
Tangible fixed assets
Freehold land and buildings
Leasehold land and buildings
Plant and machinery
Fixtures, fittings and equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost or valuation
At 1 January 2019
1,150,000
2,090,000
5,306,709
458,335
107,751
9,112,795
Disposals
-
-
-
-
(46,070)
(46,070)
At 31 December 2019
1,150,000
2,090,000
5,306,709
458,335
61,681
9,066,725
Depreciation and impairment
At 1 January 2019
-
-
4,612,417
384,514
95,066
5,091,997
Depreciation charged in the year
20,204
41,800
94,194
39,417
3,509
199,124
Eliminated in respect of disposals
-
-
-
-
(47,423)
(47,423)
At 31 December 2019
20,204
41,800
4,706,611
423,931
51,152
5,243,698
Carrying amount
At 31 December 2019
1,129,796
2,048,200
600,098
34,404
10,529
3,823,027
At 31 December 2018
1,150,000
2,090,000
694,292
73,821
12,685
4,020,798
If revalued assets were stated on an historical cost basis rather than a fair value basis, the total amounts included would have been as follows:
2019
2018
£
£
Cost
2,043,273
2,043,273
Accumulated depreciation
(1,004,930)
(964,065)
Carrying value
1,038,343
1,079,208
Freehold land and buildings have been pledged to secure borrowings of the company.
SMITH & OUZMAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 25 -
12
Fixed asset investments
2019
2018
Notes
£
£
Investments in subsidiaries
13
7
7
Movements in fixed asset investments
Shares in group undertakings
£
Cost or valuation
At 1 January 2019 & 31 December 2019
7
Carrying amount
At 31 December 2019
7
At 31 December 2018
7
13
Subsidiaries
Details of the company's subsidiaries at 31 December 2019 are as follows:
Name of undertaking and country of
Nature of business
Class of
% Held
incorporation or residency
shareholding
Direct
Indirect
Smith & Ouzman Printers (Namibia) (Pty) Limited
Namibia
Printers
Ordinary
100.00
The aggregate capital and reserves and the result for the year of the subsidiaries noted above was as follows:
Name of undertaking
Profit/(Loss)
Capital and Reserves
£
£
Smith & Ouzman Printers (Namibia) (Pty) Limited
(2,779)
(12,058)
The investments in subsidiaries are all stated at cost.
SMITH & OUZMAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 26 -
14
Stocks
2019
2018
£
£
Raw materials and consumables
527,190
604,769
Work in progress
98,482
239,078
625,672
843,847
15
Debtors
2019
2018
Amounts falling due within one year:
£
£
Trade debtors
1,804,784
1,993,448
Gross amounts owed by contract customers
13,542
27,841
Corporation tax recoverable
12,685
12,685
Amounts owed by group undertakings
13,055
13,055
Other debtors
184,951
194,170
Prepayments and accrued income
29,640
58,650
2,058,657
2,299,849
16
Creditors: amounts falling due within one year
2019
2018
£
£
Trade creditors
618,578
1,098,729
Taxation and social security
112,611
101,371
Other creditors
124,835
104,147
856,024
1,304,247
17
Creditors: amounts falling due after more than one year
2019
2018
£
£
Other creditors
717,239
729,239
SMITH & OUZMAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 27 -
18
Provisions for liabilities
2019
2018
Notes
£
£
Deferred tax liabilities
19
42,622
67,142
19
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
2019
2018
Balances:
£
£
Accelerated capital allowances
42,622
67,142
Deferred tax is not recognised in respect of
tax
losses of £937,739 as it is not probable that they will be recovered
in the foreseeable future
against the reversal of deferred tax liabilities or future taxable profits.
20
Retirement benefit schemes
2019
2018
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
109,903
129,920
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.
SMITH & OUZMAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 28 -
21
Share capital
2019
2018
£
£
Ordinary share capital
Authorised
1,000,000 Ordinary shares of £1 each
1,000,000
1,000,000
Issued and fully paid
574,000 Ordinary shares of £1 each
574,000
574,000
4 Ordinary 'B' shares of £1 each
4
4
574,004
574,004
The company has two classes of ordinary shares. Ordinary shares have full voting rights, rights to dividends and rights to participate in a distribution of capital on winding up.
The ordinary 'B' shares do not carry voting rights.
22
Revaluation reserve
2019
2018
£
£
At the beginning of the year
2,342,441
220,574
Revaluation surplus arising in the year
-
2,160,792
Transfer to retained earnings
-
(38,925)
At the end of the year
2,342,441
2,342,441
23
Capital redemption reserve
2019
2018
£
£
At beginning and end of year
5,634
5,634
SMITH & OUZMAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 29 -
24
Profit and loss reserves
2019
2018
£
£
At the beginning of the year
2,284,215
2,895,243
Profit/(loss) for the year
74,836
(589,899)
Dividends
-
(60,054)
Transfer from revaluation reserve
-
38,925
At the end of the year
2,359,051
2,284,215
25
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2019
2018
£
£
Aggregate compensation
338,257
237,189
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Management fees
2019
2018
£
£
Other related parties
-
63,274
SMITH & OUZMAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
25
Related party transactions (Continued)
- 30 -
The following amounts were outstanding at the reporting end date:
2019
Balance
Amounts owed by related parties
£
Entities over which the entity has control, joint control or significant influence
13,055
Other related parties
174,410
187,465
2018
Balance
Amounts owed in previous period
£
Entities over which the entity has control, joint control or significant influence
13,055
Other related parties
193,920
206,975
SMITH & OUZMAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 31 -
26
Cash generated from operations
2019
2018
£
£
Profit/(loss) for the year after tax
74,836
(589,899)
Adjustments for:
Taxation (credited)/charged
(24,520)
7,560
Finance costs
-
740
Investment income
(842)
(7,207)
(Gain)/loss on disposal of tangible fixed assets
(8,066)
3,633
Depreciation and impairment of tangible fixed assets
199,124
180,157
Movements in working capital:
Decrease in stocks
218,175
89,037
Decrease/(increase) in debtors
241,192
(238,743)
(Decrease) in creditors
(460,223)
(254,953)
Cash generated from/(absorbed by) operations
239,676
(809,675)
27
Analysis of changes in net funds
1 January 2019
Cash flows
31 December 2019
£
£
£
Cash at bank and in hand
142,421
247,231
389,652
2019-12-31
2019-01-01
false
CCH Software
CCH Accounts Production 2020.200
P R Ouzman
P R Ouzman
P J Ellis
M R Avery
P R Ouzman
00352738
2019-01-01
2019-12-31
00352738
bus:Director2
2019-01-01
2019-12-31
00352738
bus:Director6
2019-01-01
2019-12-31
00352738
bus:Director7
2019-01-01
2019-12-31
00352738
bus:CompanySecretary1
2019-01-01
2019-12-31
00352738
bus:Director3
2019-01-01
2019-12-31
00352738
bus:Director1
2019-01-01
2019-12-31
00352738
bus:Director4
2019-01-01
2019-12-31
00352738
bus:RegisteredOffice
2019-01-01
2019-12-31
00352738
bus:Agent1
2019-01-01
2019-12-31
00352738
2019-12-31
00352738
2018-01-01
2018-12-31
00352738
core:RetainedEarningsAccumulatedLosses
2018-01-01
2018-12-31
00352738
core:RetainedEarningsAccumulatedLosses
2019-01-01
2019-12-31
00352738
core:RevaluationReserve
2018-01-01
2018-12-31
00352738
2018-12-31
00352738
core:LandBuildings
core:OwnedOrFreeholdAssets
2019-12-31
00352738
core:LandBuildings
core:LeasedAssetsHeldAsLessee
2019-12-31
00352738
core:PlantMachinery
2019-12-31
00352738
core:FurnitureFittings
2019-12-31
00352738
core:MotorVehicles
2019-12-31
00352738
core:LandBuildings
core:OwnedOrFreeholdAssets
2018-12-31
00352738
core:LandBuildings
core:LeasedAssetsHeldAsLessee
2018-12-31
00352738
core:PlantMachinery
2018-12-31
00352738
core:FurnitureFittings
2018-12-31
00352738
core:MotorVehicles
2018-12-31
00352738
core:CurrentFinancialInstruments
core:WithinOneYear
2019-12-31
00352738
core:CurrentFinancialInstruments
core:WithinOneYear
2018-12-31
00352738
core:CurrentFinancialInstruments
2019-12-31
00352738
core:CurrentFinancialInstruments
2018-12-31
00352738
core:Non-currentFinancialInstruments
2019-12-31
00352738
core:Non-currentFinancialInstruments
2018-12-31
00352738
core:ShareCapital
2019-12-31
00352738
core:ShareCapital
2018-12-31
00352738
core:RevaluationReserve
2019-12-31
00352738
core:RevaluationReserve
2018-12-31
00352738
core:CapitalRedemptionReserve
2019-12-31
00352738
core:CapitalRedemptionReserve
2018-12-31
00352738
core:RetainedEarningsAccumulatedLosses
2019-12-31
00352738
core:RetainedEarningsAccumulatedLosses
2018-12-31
00352738
core:ShareCapital
2017-12-31
00352738
core:RevaluationReserve
2017-12-31
00352738
core:CapitalRedemptionReserve
core:RestatedAmount
2017-12-31
00352738
core:RetainedEarningsAccumulatedLosses
2017-12-31
00352738
2017-12-31
00352738
core:ShareCapitalOrdinaryShares
2019-12-31
00352738
core:ShareCapitalOrdinaryShares
2018-12-31
00352738
core:RevaluationReserve
2018-12-31
00352738
2018-12-31
00352738
core:LandBuildings
core:OwnedOrFreeholdAssets
2019-01-01
2019-12-31
00352738
core:LandBuildings
core:LeasedAssetsHeldAsLessee
2019-01-01
2019-12-31
00352738
core:PlantMachinery
2019-01-01
2019-12-31
00352738
core:FurnitureFittings
2019-01-01
2019-12-31
00352738
core:MotorVehicles
2019-01-01
2019-12-31
00352738
core:OwnedAssets
2019-01-01
2019-12-31
00352738
core:OwnedAssets
2018-01-01
2018-12-31
00352738
core:UKTax
2018-01-01
2018-12-31
00352738
core:UKTax
2019-01-01
2019-12-31
00352738
1
2019-01-01
2019-12-31
00352738
1
2018-01-01
2018-12-31
00352738
core:LandBuildings
core:OwnedOrFreeholdAssets
2018-12-31
00352738
core:LandBuildings
core:LeasedAssetsHeldAsLessee
2018-12-31
00352738
core:PlantMachinery
2018-12-31
00352738
core:FurnitureFittings
2018-12-31
00352738
core:MotorVehicles
2018-12-31
00352738
core:Non-currentFinancialInstruments
1
2019-12-31
00352738
core:Non-currentFinancialInstruments
1
2018-12-31
00352738
bus:PrivateLimitedCompanyLtd
2019-01-01
2019-12-31
00352738
bus:FRS102
2019-01-01
2019-12-31
00352738
bus:Audited
2019-01-01
2019-12-31
00352738
bus:FullAccounts
2019-01-01
2019-12-31
xbrli:pure
xbrli:shares
iso4217:GBP