Registered number:
03829462
Opus Trust Marketing Limited
Annual report and financial statements
For the year ended
31 March 2018
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Opus Trust Marketing Limited
Company Information
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P Brough
(resigned
31 March 2018
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M Hetem
(resigned
30 November 2018
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K Sangster
(appointed
1 November 2017
, resigned
6 December 2018
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A Macavoy
(appointed
2 May 2018
, resigned
30 August 2018
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R Farmer
(appointed
3 September 2018
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A Strong
(appointed
1 October 2018
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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
Contents
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Directors' responsibilities statement
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Independent auditors' report
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Statement of income and retained earnings
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Notes to the financial statements
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Opus Trust Marketing Limited
Strategic report
For the year ended 31 March 2018
I am pleased to report another year of growth in revenue with strong cash generation in a market that remains highly challenging.
Revenue growth was strong with the company generating £26.4m, an 18% increase over the prior year. The continued high level of price pressure in the market impacted gross margin, falling from 28% to 26% but still produced a 9% increase over last year to £6.5m. Profit before tax was lower this year at £329,000 compared to £657,000 last year after an exceptional cost of £206,000 related to loss of office of a director and increased overheads as part of the investment in people to drive growth.
The company continues to invest to drive efficiency with the purchase of 3 new Epic enclosing machines being part of £2.2m capital expenditure. This investment was funded from cashflow with the business maintaining a strong balance sheet with no debt. The company has also committed to a new 10 year lease for its premises in Leicester.
The executive team has been strengthened since the year end with the appointment of a new Chief Operating Officer and Sales and Marketing Director with significant industry experience as well as a talented Human Resources Director.
Principle 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 products 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.
Key Performance Indicators
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The directors regularly review and analyse a variety 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 and the analysis of the KPI's can be found in the Business Review section.
Page 1
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Opus Trust Marketing Limited
Strategic report (continued)
For the year ended 31 March 2018
Market conditions remain highly competitive and will continue to be challenging in the future. I believe the company is well placed to maintain its positive progress with increasing demand for its services from clients and partners combined with further efficiencies in the production environment and a customer facing team that will only get stronger. We continue to invest in new products and services to support the needs of our existing and new clients with a production facility that can meet the growing capacity requirements.
I would like to thank our employees for their continued hard work and contribution to making this company such a success.
This report was approved by the board on 20 December 2018
and signed on its behalf.
Page 2
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Opus Trust Marketing Limited
Directors' report
For the year ended 31 March 2018
The directors present their report and the financial statements for the year ended 31 March 2018.
The company's principal activity is a technology led communication solutions provider delivering greater control, quality and efficiency to its clients in their communications with their customers.
The profit for the year, after taxation, amounted to £
1,000
(2017 -
£
517,000
)
.
The directors do not recommend the payment of a dividend in respect of the year.
The directors who served during the year were:
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P Brough
(resigned
31 March 2018
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M Hetem
(resigned
30 November 2018
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K Sangster
(appointed
1 November 2017
, resigned
6 December 2018
)
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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
Directors' report (continued)
For the year ended 31 March 2018
Financial management approach
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The company has established a risk and financial management framework whose primary objective is to mitigate the company’s exposure to risk in order to protect the company from events that may hinder its performance.
The company has exposure to three main areas of risk – liquidity risk, customer credit exposure and price risk.
Liquidity risk
Liquidity risk is the risk that the company will encounter difficulty in meeting its financial obligations as they fall due. The company’s objective in managing liquidity risk is to ensure that this does not arise. Having assessed future cash flow requirements the company expects to be able to meet its financial obligations through the cash flows that are generated from its operating activities. The interest rate risk arising from these facilities is considered by the directors to be minimal, and the company has not entered into any derivative instruments designed to mitigate exposure to such risk. With these facilities in place the company is in a position to meets its commitments and obligations as they fall due.
Customer credit exposure
The company regularly offers credit terms to its customers which allow for payment of the debt after delivery of the goods or services. The company is at risk to the extent that a customer may be unable to pay the debt within those terms. This risk is mitigated by the strong on-going customer relationships and by only granting credit to customers who are able to demonstrate an appropriate payment history and satisfy credit worthiness procedures. Details of the company’s trade debtors are shown in note 16.
Price risk
Price risk arises on financial instruments due to fluctuations in commodity prices or equity prices.
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'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's auditors are aware of that information.
Post balance sheet events
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There have been no significant events affecting the company since the year end.
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
20 December 2018
and signed on its behalf.
Page 4
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Opus Trust Marketing Limited
Directors' responsibilities statement
For the year ended 31 March 2018
The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year
. Under that law the directors have elected to prepare the financial statements in accordance with 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 of the profit or loss of the company for that period.
In preparing these financial statements, the directors are required to:
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select suitable accounting policies for the company's financial statements and then apply them consistently;
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make judgments 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 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 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements
and other information included in Directors' reports may differ from legislation in other jurisdictions.
Page 5
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Opus Trust Marketing Limited
Independent auditors' report to the shareholders of Opus Trust Marketing Limited
We have audited the financial statements of Opus Trust Marketing Limited (the 'company') for the year ended 31 March 2018, which comprise the Statement of income and retained earnings, the Balance sheet
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 company's affairs as at 31 March 2018 and of its 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 company 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.
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.
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 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.
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.
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Opus Trust Marketing Limited
Independent auditors' report to the shareholders of Opus Trust Marketing Limited (continued)
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 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 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 company and its environment obtained in the course of the audit, we have not identified material misstatements in the 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, or returns adequate for our audit have not been received from branches not visited by us; or
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the 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 on page 5, 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.
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Opus Trust Marketing Limited
Independent auditors' report to the shareholders of Opus Trust Marketing Limited (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 financial statements.
As part of an audit in accordance with ISAs (UK), we exercise professional judgment 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.
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.
Peter Manser FCA DChA
(Senior statutory auditor)
for and on behalf of
Kreston Reeves LLP
Chartered Accountants
Statutory Auditor
Canterbury
21 December 2018
Page 8
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Opus Trust Marketing Limited
Statement of income and retained earnings
For the year ended 31 March 2018
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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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Retained earnings at the end of the year
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The notes on pages 11 to 26 form part of these financial statements.
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Page 9
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Opus Trust Marketing Limited
Registered number:
03829462
Balance sheet
As at
31 March 2018
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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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The financial statements were approved and authorised for issue by the board and were signed on its behalf on
20 December 2018
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The notes on pages 11 to 26 form part of these financial statements.
Page 10
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Opus Trust Marketing Limited
Notes to the financial statements
For the year ended 31 March 2018
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, Leicestershire, LE3 1UQ.
The company number is 03829462.
Details of the principal activity of the company 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
.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the company's accounting policies (see note 3).
The company's functional and presentational currency is Pounds Sterling.
The company's financial statements are presented to the nearest thousand.
The following principal accounting policies have been applied:
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Financial reporting standard 102 - reduced disclosure exemptions
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The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
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the requirements of Section 4 Statement of Financial Position paragraph 4.12(a)(iv);
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the requirements of Section 7 Statement of Cash Flows;
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the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
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the requirements of Section 11 Financial Instruments paragraphs 11.41(b), 11.41(c), 11.41(e), 11.41(f), 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
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the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
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the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Opus 107 Limited as at 31 March 2018 and these financial statements may be obtained from Woolyard, 54 Bermondsey Street, London, SE1 3UD.
Page 11
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Opus Trust Marketing Limited
Notes to the financial statements
For the year ended 31 March 2018
2.
Accounting policies (continued)
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company 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 company 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.
Goodwill
Goodwill is the difference between amounts paid on the acquisition of a business and the fair value of the identifiable assets and liabilities. It is amortised to the profit and loss account over its estimated economic life.
The estimated useful lives range as follows:
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.
The company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.
Page 12
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Opus Trust Marketing Limited
Notes to the financial statements
For the year ended 31 March 2018
2.
Accounting policies (continued)
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Tangible fixed assets (continued)
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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.
The estimated useful lives range as follows:
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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 the Statement of income and retained earnings.
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 allowance for obsolete and slow-moving stocks. Cost includes all directs 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
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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.
Page 13
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Opus Trust Marketing Limited
Notes to the financial statements
For the year ended 31 March 2018
2.
Accounting policies (continued)
The company 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 non-puttable 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 financed at a rate of interest that is not a market rate or in the case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.
Investments in non-puttable ordinary shares are measured:
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at fair value with changes recognised in the Statement of income and retained earnings if the shares are publicly traded or their fair value can otherwise be measured reliably;
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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 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 company 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.
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 14
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Opus Trust Marketing Limited
Notes to the financial statements
For the year ended 31 March 2018
2.
Accounting policies (continued)
Finance costs are charged to the profit and loss account 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.
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Operating leases: the company as lessee
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Rentals paid under operating leases are charged to the Statement of income and retained earnings on a straight line basis over the lease term.
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Leasing and hire purchase
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Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of finance charge allocated to future periods. The finance element of the rental payment is charged to the profit and loss account so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.
Defined contribution pension plan
The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.
The contributions are recognised as an expense in the profit and loss account 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 company in independently administered funds.
Page 15
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Opus Trust Marketing Limited
Notes to the financial statements
For the year ended 31 March 2018
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 the profit and loss account, 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 operates and generates 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; and
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Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
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 company but are presented separately due to their size or incidence.
Page 16
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Opus Trust Marketing Limited
Notes to the financial statements
For the year ended 31 March 2018
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Judgements in applying accounting policies and key sources of estimation uncertainty
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The preparation of the financial statements requires the directors to make judgemental, 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 company's key sources of estimation uncertainty:
Goodwill and intangible assets
The company has recognised goodwill and other intangible assets arising from business combinations with a carrying value of £267,000 (2017 - £359,000) at the reporting date (see note 12). On acquisition the company 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.
Tangible fixed assets
The company has recognised tangible fixed assets with a carrying value of £3,927,000 (2017 - £2,730,000) at the reporting date (see note 13). These assets are stated at their cost less provision for depreciation and impairment. The company’s accounting policy sets out the approach to calculating depreciation for immaterial assets acquired. For material assets such as land and buildings the company 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 company 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 company’s forecasts for the foreseeable future which do not include any restructuring activities that the company 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 £499,000 (2017 - £827,000) at the reporting date (see note 19). 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 company's ordinary activities after deduction of trade discounts and value added tax.
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All turnover arose within the United Kingdom.
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Page 17
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Opus Trust Marketing Limited
Notes to the financial statements
For the year ended 31 March 2018
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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 intangible assets, including goodwill
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Defined contribution pension cost
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Operating lease rentals
- land and buildings
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Fees payable to the company's auditor for the audit of the company's annual accounts
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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 18
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Opus Trust Marketing Limited
Notes to the financial statements
For the year ended 31 March 2018
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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
(2017 -
5
)
in respect of defined contribution pension schemes.
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The highest paid director received remuneration of £
315,000
(2017 - £
168,000
)
.
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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 £
34,000
(2017 - £
29,000
)
.
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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 on ordinary activities
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Page 19
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Opus Trust Marketing Limited
Notes to the financial statements
For the year ended 31 March 2018
10.
Taxation (continued)
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Factors affecting tax charge for the year
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The tax assessed for the year is lower than
(2017 - lower than)
the standard rate of corporation tax in the UK of
19
%
(2017 -
20
%)
. 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% (2017 - 20%)
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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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Short term timing difference leading to an increase (decrease) in taxation
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Deferred tax movement leading to an increase (decrease) in taxation
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Total tax charge for the year
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Factors that may affect future tax charges
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The group has unutilised losses of approximately £3.2m being carried forward for offset against future taxable income. A deferred tax asset has been recognised in respect of a proportion 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 £532,000 (2017: £693,000) has been recognised in respect of unutilised losses, which forms part of the total recognised deferred tax asset of £499,000 (2017: £827,000).
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The company incurred exceptional costs during the year relating to the termination of a director. The cost of this totalled £206,000.
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Page 20
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Opus Trust Marketing Limited
Notes to the financial statements
For the year ended 31 March 2018
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Short term leasehold improvements
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Furniture, fittings and equipment
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Charge for the year on owned assets
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Page 21
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Opus Trust Marketing Limited
Notes to the financial statements
For the year ended 31 March 2018
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Investments in subsidiary companies
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Page 22
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Opus Trust Marketing Limited
Notes to the financial statements
For the year ended 31 March 2018
14.
Fixed asset investments (continued)
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Direct subsidiary undertakings
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The following were subsidiary undertakings of the company:
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ADM Group Mailing Services Limited
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Indirect Subsidiary undertakings
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The following were subsidiary undertakings of the company:
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The above four companies were all dissolved during the year and there are no investments at the year end.
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Page 23
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Opus Trust Marketing Limited
Notes to the financial statements
For the year ended 31 March 2018
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Due after more than one year
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Amounts owed by group undertakings
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Taxation and social security
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Accruals and deferred income
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Page 24
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Opus Trust Marketing Limited
Notes to the financial statements
For the year ended 31 March 2018
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Charged to profit or loss
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The deferred tax asset is made up as follows:
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Accelerated capital allowances
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Allotted, called up and fully paid
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1,893,165
Ordinary shares
shares of £
1
each
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Profit & loss account
This reserve comprises all current and prior period retained profits and losses after deducting any distributions made to the company’s shareholders.
Opus Trust Marketing Limited guarantees facilities of Opus Trust Group Limited and its subsidiaries, a company under common control. The company had no exposure under this liability at the balance sheet date or in the previous year.
The company operates two defined contributions pension schemes. The assets of the schemes are held separately from those of the company in independently administered funds. The pension cost charge represents contributions payable by the company to the funds and amounted to £201,000 (2017: £187,000). Contributions totalling £8,612 (2017: £8,410) were payable to the fund at the balance sheet date and were included within creditors.
Page 25
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Opus Trust Marketing Limited
Notes to the financial statements
For the year ended 31 March 2018
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Commitments under operating leases
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At 31 March 2018 the company 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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Related party transactions
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During the year the company entered into transactions, in the ordinary course of business, with other related parties. Transactions entered into, and trading balances outstanding at 31 March 2018, are as follows:
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Purchases from companies under common control
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The company'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 26
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