Registered number:
03829462
Opus Trust Marketing Limited trading as Opus Trust Communications
Annual Report and Financial Statements
For the Year Ended
31 March 2020
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Opus Trust Marketing Limited trading as Opus Trust Communications
Company Information
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S Agar
(resigned
18 December 2019
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C Sampson-Hughes
(resigned
2 August 2019
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A Lindsey
(appointed
1 October 2019
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S Howell
(appointed
21 August 2020
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Braunstone Frith Industrial Estate
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Chartered Accountants
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Statutory Auditor
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Opus Trust Marketing Limited trading as Opus Trust Communications
Contents
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Independent Auditors' Report
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Consolidated Statement of Income and Retained Earnings
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Consolidated Balance Sheet
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Consolidated Statement of Changes in Equity
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Company Statement of Changes in Equity
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Notes to the Financial Statements
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Opus Trust Marketing Limited trading as Opus Trust Communications
Group Strategic Report
For the Year Ended 31 March 2020
I am pleased to report another year of growth in revenue generating a strong position in a market that remains highly challenging.
Opus Trust Communications is an integrated business services company with a commitment to drive value for our clients and sustainable profit improvement, through the provision of increasingly digitally enabled solutions for all sectors of the transactional communications market.
A strong year for Opus Trust with revenue growth of 14% rising to £32.8m and a significant Operating Profit improvement from £26,000 to £226,000.
The year was one of major investment. We committed to a significant IT project to improve our capacity and ability to deliver for the business and customers, this is a £1.4m project.
Our significant activity in the acquisition space brought success with the acquisition of Critiqom Limited, a communications company that has increased our coverage of Scotland as a geographic market and increased presence in the local authority sector.
We continue to focus on delivering the best results for our clients and our outstanding level of service has been a major contributor in extending contracts with all customers who were nearing the end of their existing term.
The continued expansion of our digital services saw a new customer signed with delivery of a payment portal as a key element of our digital solution. Subsequent to the year-end we have made a second acquisition. Document Centric Solutions Limited, a well-established Digital Solutions business which further demonstrates our omni-channel growth ambitions, and also our commitment to delivering more digitally enabled services for our clients, providing them with a choice of omni-channel communications for their own customers and to drive improvements to their bottom line.
Principal risks and uncertainties
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Competitive and Pricing Risks
The business-critical mailing activity is exposed to significant competitive and pricing risks which affect the ability to renew contracts and also win new work. The business manages those risks by ensuring that it is both competitive in terms of cost and leading edge in terms of technology, products and solutions that it offers. It has long term relationships with customers and suppliers and a strong client management team.
Credit Risk
Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring for both time and credit limits.
Liquidity Risk
Liquidity is managed through forecasting of future cash flow requirements for the business and maintaining sufficient cash balances to support the operation.
Economic risk
The group is subject to many of the same general economic risks faced by other businesses and especially during periods of economic uncertainty with COVID-19. The group seeks to mitigate this risk by having a diverse customer base together with robust forecasting and planning.
Page 1
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Opus Trust Marketing Limited trading as Opus Trust Communications
Group Strategic Report (continued)
For the Year Ended 31 March 2020
Financial key performance indicators
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The Directors regularly review and analyse a balanced scorecard of KPI’s in order to assess and measure the company’s performance and its financial position. These include turnover, profit margins and cash flow.
Market conditions remain highly competitive and will continue to be challenging in the medium-term. Consolidation of service providers continues at pace and this activity continues to create further opportunities for Opus Trust Communications.
COVID-19 Global Pandemic has impacted the business. However, because of our lack of exposure to Marketing Mail and our activity dedicated to Transactional Communications the impact has been manageable and not caused any impact on our ability to continue to provide our services to our clients.
I believe that the company is well positioned to maintain our positive progress with increasing demand for our customer communication solutions, which play a key role in helping our clients deliver on their digital transformational and mission critical business objectives.
Our key focus is on delivering true customer intimacy, by gaining a deep understanding of our client’s business, identifying our clients’ unique needs and delivering sustainable, robust and compliant solutions.
Along with our acquisitions, we continue to invest in new solutions, products and services to support the needs of our existing and new clients successfully combined with a production facility that can meet the growing capacity requirements. We are well positioned to benefit positively from the changes in our market and have built a strong and capable business to meet the fast-changing needs of our clients.
I would like to thank our employees for their continued hard work and contribution to making this company such a growing success.
This report was approved by the board on 10 February 2021
and signed on its behalf.
Page 2
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Opus Trust Marketing Limited trading as Opus Trust Communications
Directors' Report
For the Year Ended 31 March 2020
The directors present their report and the financial statements for the year ended 31 March 2020.
Directors' responsibilities statement
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The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the
consolidated
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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
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select suitable accounting policies for the Group's financial statements and then apply them consistently;
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make judgements and accounting estimates that are reasonable and prudent;
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £172,000 (2019: £51,000).
During the year the directors did not declare a dividend.
The directors who served during the year were:
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S Agar
(resigned
18 December 2019
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C Sampson-Hughes
(resigned
2 August 2019
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A Lindsey
(appointed
1 October 2019
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Matters covered in the Strategic report
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Disclosures in respect of future developments have been included as part of the Strategic report.
Page 3
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Opus Trust Marketing Limited trading as Opus Trust Communications
Directors' Report (continued)
For the Year Ended 31 March 2020
Disclosure of information to auditors
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Each of the persons who are
directors at the time when this Directors' Report is approved has confirmed that:
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so far as the director is aware, there is no relevant audit information of which the company and the Group's auditors are unaware, and
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the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the company and the Group's auditors are aware of that information.
Post balance sheet events
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As mentioned in the Strategic Report, on 21 August 2020, the group purchased a well-established digital solutions business, Document Centric Solutions Limited. This acquisition enables the group to grow the digital services provided to clients.
The auditors, Kreston Reeves LLP, will be proposed for reappointment in accordance with
section 485 of the Companies Act 2006.
This report was approved by the board on
10 February 2021
and signed on its behalf.
Page 4
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Opus Trust Marketing Limited trading as Opus Trust Communications
Independent Auditors' Report to the Members of Opus Trust Marketing Limited trading as Opus Trust Communications
We have audited the financial statements of Opus Trust Marketing Limited trading as Opus Trust Communications (the 'parent company') and its subsidiaries (the 'Group') for the year ended 31 March 2020, which comprise the Group Statement of Income and Retained Earnings, the Group and company Balance Sheets, the Group and company Statement of Changes in Equity
and the related notes, 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 Financial Reporting Standard 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:
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give a true and fair view of the state of the Group's and of the parent company's affairs as at 31 March 2020 and of the Group's profit for the year then ended;
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have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
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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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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
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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:
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the directors
' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
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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.
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Opus Trust Marketing Limited trading as Opus Trust Communications
Independent Auditors' Report to the Members of Opus Trust Marketing Limited trading as Opus Trust Communications (continued)
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 Auditors' 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.
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the audit:
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the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
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the Group 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
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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 Group Strategic Report or the Directors' Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
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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
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the parent company financial statements are not in agreement with the accounting records and returns; or
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certain disclosures of directors
' remuneration specified by law are not made; or
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we have not received all the information and explanations we require for our audit.
Responsibilities of directors
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As explained more fully in the Directors' Responsibilities Statement set out on page 3, 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.
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Opus Trust Marketing Limited trading as Opus Trust Communications
Independent Auditors' Report to the Members of Opus Trust Marketing Limited trading as Opus Trust Communications (continued)
Auditors' responsibilities for the audit of the financial statements
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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 Auditors' 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 Group financial statements.
As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
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Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the company's internal control.
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Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
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Conclude on the appropriateness of the directors
' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors' Report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditors' Report. However, future events or conditions may cause the company to cease to continue as a going concern.
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Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
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Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
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Opus Trust Marketing Limited trading as Opus Trust Communications
Independent Auditors' Report to the Members of Opus Trust Marketing Limited trading as Opus Trust Communications (continued)
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 Auditors' 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.
Peter Manser FCA DChA
(Senior Statutory Auditor)
for and on behalf of
Kreston Reeves LLP
Chartered Accountants
Statutory Auditor
Canterbury
10 February 2021
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Opus Trust Marketing Limited trading as Opus Trust Communications
Consolidated Statement of Income and Retained Earnings
For the Year Ended 31 March 2020
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Exceptional administrative expenses
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Interest payable and expenses
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Retained earnings at the beginning of the year
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Profit for the year attributable to the owners of the parent
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Dividends declared and paid
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Retained earnings at the end of the year
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Non-controlling interest at the end of the year
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The notes on pages 14 to 34 form part of these financial statements.
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Page 9
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Opus Trust Marketing Limited trading as Opus Trust Communications
Registered number:
03829462
Consolidated Balance Sheet
As at
31 March 2020
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Debtors: amounts falling due after more than one year
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Provisions for liabilities
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on 10 February 2021
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The notes on pages 14 to 34 form part of these financial statements.
Page 10
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Opus Trust Marketing Limited trading as Opus Trust Communications
Registered number:
03829462
Company Balance Sheet
As at
31 March 2020
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Debtors: amounts falling due after more than one year
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Provisions for liabilities
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on
10 February 2021
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The notes on pages 14 to 34 form part of these financial statements.
Page 11
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Opus Trust Marketing Limited trading as Opus Trust Communications
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Consolidated Statement of Changes in Equity
For the Year Ended
31 March 2020
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Equity attributable to owners of parent company
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Dividends: Equity capital
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The notes on pages 14 to 34 form part of these financial statements.
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Page 12
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Opus Trust Marketing Limited trading as Opus Trust Communications
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Company Statement of Changes in Equity
For the Year Ended
31 March 2020
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Dividends: Equity capital
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The notes on pages 14 to 34 form part of these financial statements.
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Page 13
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Opus Trust Marketing Limited trading as Opus Trust Communications
Notes to the Financial Statements
For the Year Ended 31 March 2020
Opus Trust Marketing Limited is a limited liability company incorporated in England.
The address of the registered office is 133 Scudamore Road, Braunstone Frith Industrial Estate, Leicester, LE3 1UQ.
The registered number is 03829462.
Details of the principal activities of the group are included in the directors' report.
2.
Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in
the UK and the Republic of Ireland and the Companies Act 2006
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The group's functional and presentational currency is Pounds Sterling.
The group's financial statements are presented to the nearest thousand.
For accounting periods on or after 1 January 2019 the amendments to FRS 102, as set out in the triennial review published in December 2017, are mandatory to adopt. The adoption of these amendments has no material impact on the financial statements of the company.
The group has voluntarily opted to prepare consolidated financial statements and therefore has taken the exemption under the reduced disclosure framework to not include a consolidated cashflow statement or to disclose key management personnel as these are included in the consolidated financial statements of Opus 107 Limited as at 31 March 2020. These financial statements may be obtained from Unit 328/9 Metalbox Factory, 30 Great Guilford Street, London, SE1 0HS.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).
The company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Income and Retained Earnings in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Income and Retained Earnings from the date on which control is obtained. They are deconsolidated from the date control ceases.
In accordance with the transitional exemption available in FRS 102, the group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 01 April 2014.
Page 14
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Opus Trust Marketing Limited trading as Opus Trust Communications
Notes to the Financial Statements
For the Year Ended 31 March 2020
2.
Accounting policies (continued)
The financial statements have been prepared on a going concern basis. While the impact of the Covid-19 virus has been assessed by the directors, so far as reasonably possible, due to its unprecedented impact on the wider economy, it is difficult to evaluate with any certainty the potential outcomes on the group’s trade, its customers and suppliers. However, taking into consideration the UK Government’s response and the group’s planning the directors have a reasonable expectation that the group will continue in operational existence for the foreseeable future.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
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the amount of revenue can be measured reliably;
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it is probable that the Group will receive the consideration due under the contract;
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the stage of completion of the contract at the end of the reporting period can be measured reliably; and
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the costs incurred and the costs to complete the contract can be measured reliably.
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Operating leases: the Group as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Group in independently administered funds.
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Opus Trust Marketing Limited trading as Opus Trust Communications
Notes to the Financial Statements
For the Year Ended 31 March 2020
2.
Accounting policies (continued)
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company and the Group operate and generate income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance Sheet date, except that:
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The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
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Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
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Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Consolidated Statement of Income and Retained Earnings over its useful economic life.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
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Opus Trust Marketing Limited trading as Opus Trust Communications
Notes to the Financial Statements
For the Year Ended 31 March 2020
2.
Accounting policies (continued)
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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Short-term leasehold property
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over the minimum lease duration
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Investments in subsidiaries are measured at cost less accumulated impairment.
Stocks are valued at the lower of cost and net realisable value after making due allowances for obsolete and slow-loving stocks. Cost includes all direct costs and an appropriate proportion of fixed and variable overheads.
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
|
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Page 17
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Opus Trust Marketing Limited trading as Opus Trust Communications
Notes to the Financial Statements
For the Year Ended 31 March 2020
2.
Accounting policies (continued)
|
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Provisions for liabilities
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Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the Balance Sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance Sheet.
The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Investments in non-derivative instruments that are equity to the issuer are measured:
∙
at fair value with changes recognised in the Consolidated Statement of Income and Retained Earnings if the shares are publicly traded or their fair value can otherwise be measured reliably;
∙
at cost less impairment for all other investments.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated Statement of Income and Retained Earnings.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Group would receive for the asset if it were to be sold at the balance sheet date.
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an 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.
Page 18
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Opus Trust Marketing Limited trading as Opus Trust Communications
Notes to the Financial Statements
For the Year Ended 31 March 2020
2.
Accounting policies (continued)
The group uses Invoice Financing through the Royal Bank of Scotland plc to accelerate the receipt of funds due from debtors. No rights are transferred to the finance provider, all benefits and risks remain with the company and all finance is potentially repayable therefore linked presentation is not appropriate. Accordingly debtors disclosed in full within the Balance Sheet and the associated finance is disclosed within creditors due within one year.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
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Judgements in applying accounting policies and key sources of estimation uncertainty
|
The preparation of the financial statements requires the directors to make judgements, estimates and assumptions that can affect the amounts reported for assets and liabilities, and the results for the year. The nature of estimation is such though that actual outcomes could differ significantly from those estimates.
The following are the group's key sources of estimation uncertainty:
Lease Commitments
The group has entered into a range of lease commitments in respect of property, plant and equipment. The classification of these leases as either financial or operating leases requires the directors to consider whether the terms and conditions of each lease are such that the group has acquired the risks and rewards associated with the ownership of the underlying assets.
The following are the group's key sources of estimation uncertainty:
Goodwill and intangible assets
The group has recognised goodwill and other intangible assets arising from business combinations with a carrying value of £1,542,000 (2019 - £176,000) at the reporting date (see note 13). On acquisition the group determines a reliable estimate of the useful life of goodwill and intangible assets based upon factors such as the expected use of the acquired business, forecasts of expected future results and cash flows, and any legal, regulatory or contractual provisions that can limit useful life. At each subsequent reporting date the directors consider whether there are any factors such as technological advancements or changes in market conditions that indicate a need to reconsider the useful life of goodwill and intangible assets.
Page 19
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Opus Trust Marketing Limited trading as Opus Trust Communications
Notes to the Financial Statements
For the Year Ended 31 March 2020
3.
Judgements in applying accounting policies (continued)
Tangible fixed assets
The group has recognised tangible fixed assets with a carrying value of £2,709,000 (2019 - £2,816,000) at the reporting date (see note 14). These assets are stated at their cost less provision for depreciation and impairment. The group’s accounting policy sets out the approach to calculating depreciation for immaterial assets acquired. For material assets such as land and buildings the group determines at acquisition reliable estimates for the useful life of the asset, its residual value and decommissioning costs. These estimates are based upon such factors as the expected use of the acquired asset and market conditions. At subsequent reporting dates the directors consider whether there are any factors such as technological advancements or changes in market conditions that indicate a need to reconsider the estimates used.
Where there are indicators that the carrying value of tangible assets may be impaired the group undertakes tests to determine the recoverable amount of assets. These tests require estimates of the fair value of assets less cost to sell and of their value in use. Wherever possible the estimate of the fair value of assets is based upon observable market prices less incremental cost for disposing of the asset. The value in use calculation is based upon a discounted cash flow model, based upon the group’s forecasts for the foreseeable future which do not include any restructuring activities that the group is not yet committed to or significant future investments that will enhance the asset’s performance. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well expected future cash flows and the growth rate used for extrapolation purposes.
Taxation
Provision has been made in the financial statements for a deferred tax asset amounting to £600,000 (2019 - £524,000) at the reporting date (see note 20). This provision is based upon estimates of the availability of future taxable profits, the timing of the reversal of timing differences upon which the provision is based and the tax rates that will be in force at that time together with an assessment of the impact of future tax planning strategies.
Turnover represents amounts derived from the provision of goods and services which fall within the group's ordinary activities after deduction of trade discounts and value added tax.
|
All turnover arose within the United Kingdom.
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The operating profit is stated after charging:
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Depreciation of tangible fixed assets
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Amortisation of intangibles, including goodwill
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Operating lease rentals
- land and buildings
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Defined contribution pension costs
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Page 20
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Opus Trust Marketing Limited trading as Opus Trust Communications
Notes to the Financial Statements
For the Year Ended 31 March 2020
|
Fees payable to the Group's auditor and its associates for the audit of the Group's annual financial statements
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the year was as follows:
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Page 21
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Opus Trust Marketing Limited trading as Opus Trust Communications
Notes to the Financial Statements
For the Year Ended 31 March 2020
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Company contributions to defined contribution pension schemes
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Compensation for loss of office
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During the year retirement benefits were accruing to
4
directors
(2019 -
8
)
in respect of defined contribution pension schemes.
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The highest paid director received remuneration of £
214,000
(2019 - £
247,000
).
|
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The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £
16,000
(2019 - £
12,000
).
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Interest payable and similar expenses
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Finance leases and hire purchase contracts
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Origination and reversal of timing differences
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Taxation on profit/(loss) on ordinary activities
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Page 22
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Opus Trust Marketing Limited trading as Opus Trust Communications
Notes to the Financial Statements
For the Year Ended 31 March 2020
10.
Taxation (continued)
|
Factors affecting tax charge for the year
|
|
The tax assessed for the year is lower than
(2019 - lower than)
the standard rate of corporation tax in the UK of 19%
(2019 -
19
%)
. The differences are explained below:
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2019 - 19%)
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
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Capital allowances for year in excess of depreciation
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Utilisation of tax losses
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Deferred tax movement leading to a (decrease) increase in taxation
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Total tax charge for the year
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Page 23
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Opus Trust Marketing Limited trading as Opus Trust Communications
Notes to the Financial Statements
For the Year Ended 31 March 2020
10.
Taxation (continued)
|
Factors that may affect future tax charges
|
The group has unutilised losses of approximately £3,421k being carried forward for offset against future taxable income. A deferred tax asset has been recognised in respect of these losses which the directors are confident will be utilised within the foreseeable future based upon their projections of the company's future profitability. As a consequence a deferred tax asset of £650,000 (2019: £548,000) has been recognised in respect of unutilised losses, which forms part of the total recognised deferred tax asset of £600,000 (2019: £524,000).
|
The group incurred exceptional costs during the year relating to termination costs. The cost of this totalled £130,000 (2019: £539,000).
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Page 24
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Opus Trust Marketing Limited trading as Opus Trust Communications
Notes to the Financial Statements
For the Year Ended 31 March 2020
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Charge for the year on owned assets
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Page 25
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Opus Trust Marketing Limited trading as Opus Trust Communications
Notes to the Financial Statements
For the Year Ended 31 March 2020
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Short-term leasehold improvements
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Fixtures, fittings and equipment
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Acquisition of subsidiary
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Charge for the year on owned assets
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Page 26
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Opus Trust Marketing Limited trading as Opus Trust Communications
Notes to the Financial Statements
For the Year Ended 31 March 2020
14.
Tangible fixed assets (continued)
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|
Short-term leasehold property
|
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Charge for the year on owned assets
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Investments in subsidiary companies
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Page 27
|
Opus Trust Marketing Limited trading as Opus Trust Communications
Notes to the Financial Statements
For the Year Ended 31 March 2020
|
Direct subsidiary undertaking
|
|
The following was a direct subsidiary undertaking of the company:
|
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|
Document Outsourcing Group Limited
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|
The aggregate of the share capital and reserves as at 31 March 2020 and the profit or loss for the year ended on that date for the subsidiary undertaking was as follows:
|
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|
Aggregate of share capital and reserves
|
|
Document Outsourcing Group Limited
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Indirect subsidiary undertakings
|
|
The following were indirect subsidiary undertakings of the company:
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|
Document Outsourcing Limited
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The difference between purchase price or production cost of stocks and their replacement cost is not material.
|
Page 28
|
Opus Trust Marketing Limited trading as Opus Trust Communications
Notes to the Financial Statements
For the Year Ended 31 March 2020
|
Due after more than one year
|
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Prepayments and accrued income
|
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Cash and cash equivalents
|
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Page 29
|
Opus Trust Marketing Limited trading as Opus Trust Communications
Notes to the Financial Statements
For the Year Ended 31 March 2020
|
Creditors: Amounts falling due within one year
|
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Amounts owed to group undertakings
|
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Other taxation and social security
|
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|
Obligations under finance lease and hire purchase contracts
|
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Accruals and deferred income
|
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|
The amounts shown as owed to group undertakings relates to the parent company which is outside of this consolidated group.
Included within bank overdrafts is £495,000 of finance provided in respect of Confidential Invoice Discounting by the Royal Bank of Scotland plc.
The bank overdraft is secured by a bond and floating charge over the whole assets of the group and cross guarantees within the group.
Amounts due under hire purchase and finance lease creditors are secured on the assets financed under these agreements.
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Charged to profit or loss
|
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|
Arising on business combinations
|
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Page 30
|
Opus Trust Marketing Limited trading as Opus Trust Communications
Notes to the Financial Statements
For the Year Ended 31 March 2020
20.
Deferred taxation (continued)
|
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|
Charged to profit or loss
|
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|
Accelerated capital allowances
|
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Asset - due after one year
|
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Asset - due within one year
|
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Page 31
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Opus Trust Marketing Limited trading as Opus Trust Communications
Notes to the Financial Statements
For the Year Ended 31 March 2020
|
|
Allotted, called up and fully paid
|
|
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|
|
|
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|
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|
1,893,165
(2019 -
1,893,165
)
Ordinary shares
shares of £
1.00
each
|
|
|
Profit and loss account
This reserve comprises all current and prior period retained profits and losses after deducting any distributions made to the company’s shareholders.
|
|
|
Acquisition of Document Outsourcing Group Limited
On 30 November 2019, Opus Trust Marketing Limited acquired 100% of the share capital of Document Outsourcing Group Limited and as such Document Outsourcing Group Limited became a subsidiary.
|
|
Acquisition of Document Outsourcing Group Limited and its subsidiaries
|
|
Recognised amounts of identifiable assets acquired and liabilities assumed
|
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Deferred tax on differences between fair value and tax bases
|
|
|
|
|
Total identifiable net assets
|
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|
Total purchase consideration
|
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Page 32
|
Opus Trust Marketing Limited trading as Opus Trust Communications
Notes to the Financial Statements
For the Year Ended 31 March 2020
23.
Business combinations (continued)
|
|
|
|
Directly attributable costs
|
|
|
Total purchase consideration
|
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|
Cash outflow on acquisition
|
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|
|
|
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|
|
Purchase consideration settled in cash, as above
|
|
|
Directly attributable costs
|
|
|
|
|
|
Add: Cash and cash equivalents acquired - Invoice discounting and overdraft facility
|
|
|
Net cash outflow on acquisition
|
|
The group operates three (2019: two) defined contributions pension schemes. The assets of the schemes are held separately from those of the group in independently administered funds. The pension cost charge represents contributions payable by the group to the funds and amounted to £510,000 (2019: £323,000). Contributions totalling £NIL (2019: £27,000) were payable to the fund at the balance sheet date and were included within creditors.
|
Commitments under operating leases
|
|
At 31 March 2020 the Group had future minimum lease payments under non-cancellable operating leases as follows:
|
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|
Later than 1 year and not later than 5 years
|
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Page 33
|
Opus Trust Marketing Limited trading as Opus Trust Communications
Notes to the Financial Statements
For the Year Ended 31 March 2020
26.
Other financial commitments
Confidential Invoice Discounting is provided by arrangement with Royal Bank of Scotland plc. All of the group's trade debtors have been financed in such a manner with the corresponding liability disclosed within creditors as part of the bank overdraft figure.
|
Related party transactions
|
|
During the year the group entered into transactions, in the ordinary course of business, with related parties. Transactions entered into, and trading balances outstanding at 31 March 2020, are as follows:
|
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Purchases from companies under common control
|
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Sales to companies under common control
|
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Post balance sheet events
|
On 21 August 2020, the group purchased a well-established digital solutions business, Document Centric Solutions Limited. This acquisition enables the group to grow the digital services provided to clients.
The group's ultimate parent undertaking is Opus 107 Limited, a company incorporated in England and Wales.
The financial statements of Opus 107 Limited are consolidated, copies of which can be obtained from the registered office.
Page 34
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