Company Registration No. 1307059 (England and Wales)
SUMITOMO ELECTRIC HARDMETAL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
SUMITOMO ELECTRIC HARDMETAL LIMITED
COMPANY INFORMATION
Directors
Mr K Kimura
Mr A Murayama
Mr Y Kagiya
(Appointed 14 July 2020)
Secretary
Mr K Kimura
Company number
1307059
Registered office
3 Paper Mill Drive
Redditch
Worcestershire
United Kingdom
B98 8QJ
Auditor
Azets Audit Services
The Mill House
Boundary Road
Loudwater
High Wycombe
Buckinghamshire
United Kingdom
HP10 9QN
SUMITOMO ELECTRIC HARDMETAL LIMITED
CONTENTS
Page
Directors' report
1
Directors' responsibilities statement
2
Independent auditor's report
3 - 6
Profit and loss account
7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 20
SUMITOMO ELECTRIC HARDMETAL LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2021
- 1 -
The directors present their annual report and financial statements for the year ended 31 March 2021.
Principal activities
The principal activity of the company continued to be that of engineering cutting tool distribution.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £115,125. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr K Kimura
Mr A Murayama
Mr T D Tolley
(Resigned 31 March 2021)
Mr S Uesaka
(Resigned 14 July 2020)
Mr Y Kagiya
(Appointed 14 July 2020)
Auditor
In accordance with the company's articles, a resolution proposing that Azets Audit Services be reappointed as auditor of the company will be put at a General Meeting.
Energy and carbon report
[Amend this as an introductory paragraph or use as an explanation concerning lower user status] As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s
auditor
is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s
auditor
is aware of that information.
On behalf of the board
Mr K Kimura
Director
15 June 2021
SUMITOMO ELECTRIC HARDMETAL LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2021
- 2 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
SUMITOMO ELECTRIC HARDMETAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF SUMITOMO ELECTRIC HARDMETAL LIMITED
- 3 -
Opinion
We have audited the financial statements of Sumitomo Electric Hardmetal Limited (the 'company') for the year ended 31 March 2021 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 March 2021 and of its loss for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the
financial statements
section of our report. We are independent of the
company
in accordance with the ethical requirements that are relevant to our audit of the
financial statements
in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the directors'
r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the directors' report has been prepared in accordance with applicable legal requirements.
SUMITOMO ELECTRIC HARDMETAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF SUMITOMO ELECTRIC HARDMETAL LIMITED
- 4 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the directors'
r
eport
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of
remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit; or
-
the company is not entitled to claim exemption in preparing a strategic report due to it being a member of an ineligible group.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of
financial statements
that are free from material misstatement, whether due to fraud or error. In preparing the
financial statements
, the
directors are
responsible for assessing the company
'
s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors
either
intend
to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor's
report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
ISAs (UK)
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements
.
SUMITOMO ELECTRIC HARDMETAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF SUMITOMO ELECTRIC HARDMETAL LIMITED
- 5 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we 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. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
-
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
-
Reviewing minutes of meetings of those charged with governance;
-
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
-
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
-
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. 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.
[
The auditor’s assessment of the susceptibility of the entity’s financial statements to material misstatement, including how fraud might occur.
] ICAEW guidance relating to reporting on irregularities, November 2020, based on ISA 700 A39-1 to A39-5
[Which laws and regulations the auditor identified as being of significance in the context of the entity.] ICAEW guidance relating to reporting on irregularities, November 2020, based on ISA 700 A39-1 t
o
A39-5
[The auditor’s explanation of its audit response will depend on the risks identified but may include:
- Enquiry of management, those charged with governance and the entity’s solicitors (or in-house legal team) around actual and potential litigation and claims.
- Enquiry of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations.
- Reviewing minutes of meetings of those charged with governance.
- Reviewing internal audit reports.
- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.]
ICAEW guidance relating to reporting on irregularities, November 2020, based on ISA 700 A39-1 to A39-5
SUMITOMO ELECTRIC HARDMETAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF SUMITOMO ELECTRIC HARDMETAL LIMITED
- 6 -
[The auditor’s explanation of its audit response will depend on the risks identified but may include:
- Enquiry of management, those charged with governance and the entity’s solicitors (or in-house legal team) around actual and potential litigation and claims.
- Enquiry of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations.
- Reviewing minutes of meetings of those charged with governance.
- Reviewing internal audit reports.
- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.]
ICAEW guidance relating to reporting on irregularities, November 2020, based on ISA 700 A39-1 to A39-5
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's member 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 member those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's member for our audit work, for this report, or for the opinions we have formed.
Malcolm Benham (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
15 June 2021
Accountants
Statutory Auditor
The Mill House
Boundary Road
Loudwater
High Wycombe
Buckinghamshire
United Kingdom
HP10 9QN
SUMITOMO ELECTRIC HARDMETAL LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2021
- 7 -
2021
2020
Notes
£
£
Turnover
3
3,389,122
4,601,423
Cost of sales
(2,089,969)
(2,828,929)
Gross profit
1,299,153
1,772,494
Administrative expenses
(1,928,146)
(1,622,098)
Other operating income
136,763
Operating (loss)/profit
4
(492,230)
150,396
Interest receivable and similar income
8
667
3,778
Interest payable and similar expenses
9
(26,689)
(2,585)
(Loss)/profit before taxation
(518,252)
151,589
Tax on (loss)/profit
10
23,672
(23,672)
(Loss)/profit for the financial year
(494,580)
127,917
The profit and loss account has been prepared on the basis that all operations are continuing operations.
SUMITOMO ELECTRIC HARDMETAL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2021
- 8 -
2021
2020
£
£
(Loss)/profit for the year
(494,580)
127,917
Other comprehensive income
-
-
Total comprehensive income for the year
(494,580)
127,917
SUMITOMO ELECTRIC HARDMETAL LIMITED
BALANCE SHEET
AS AT
31 MARCH 2021
31 March 2021
- 9 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
12
859,137
357,466
Current assets
Stocks
13
664,951
918,130
Debtors
14
1,289,265
1,952,268
Cash at bank and in hand
349,902
468,656
2,304,118
3,339,054
Creditors: amounts falling due within one year
15
(950,848)
(1,188,111)
Net current assets
1,353,270
2,150,943
Total assets less current liabilities
2,212,407
2,508,409
Creditors: amounts falling due after more than one year
16
(352,357)
(38,654)
Net assets
1,860,050
2,469,755
Capital and reserves
Called up share capital
19
600,000
600,000
Profit and loss reserves
1,260,050
1,869,755
Total equity
1,860,050
2,469,755
The financial statements were approved by the board of directors and authorised for issue on 15 June 2021 and are signed on its behalf by:
Mr K Kimura
Director
Company Registration No. 1307059
SUMITOMO ELECTRIC HARDMETAL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2021
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 2019
600,000
1,842,449
2,442,449
Year ended 31 March 2020:
Profit and total comprehensive income for the year
-
127,917
127,917
Dividends
11
-
(100,611)
(100,611)
Balance at 31 March 2020
600,000
1,869,755
2,469,755
Year ended 31 March 2021:
Loss and total comprehensive income for the year
-
(494,580)
(494,580)
Dividends
11
-
(115,125)
(115,125)
Balance at 31 March 2021
600,000
1,260,050
1,860,050
SUMITOMO ELECTRIC HARDMETAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
- 11 -
1
Accounting policies
Company information
Sumitomo Electric Hardmetal Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
3 Paper Mill Drive, Redditch, Worcestershire, United Kingdom, B98 8QJ.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares
publicly available consolidated financial statements
, including this company,
which are
intended to give a true and fair view of the assets, liabilities,
financial position and profit or loss
of the group
.
T
he company has
therefore
taken advantage of
e
xemptions from the following disclosure requirements:
- Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
- Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
-
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’
:
Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument;
basis
of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income
;
-
Section 33 ‘Related Party Disclosures’
:
Compensation for key management personnel
.
The financial statements of the company are consolidated in the financial statements of
Sumitomo Electric Industries Limited, incorporated in Japan
. These consolidated financial statements are available from its registered office,
1.2
Going concern
A
true
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer
, usually on dispatch of the goods
, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
SUMITOMO ELECTRIC HARDMETAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 12 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
Straight line over 25 years
Leasehold improvements
Straight line over the period of the lease arrangement
Fixtures and fittings
25% on cost
Right-of-use assets
Straight line over the period of the lease arrangement
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.5
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the
company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include
debtors
and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
SUMITOMO ELECTRIC HARDMETAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 13 -
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including
creditors
, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities.
Trade creditors
are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in
profit
or
loss
in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
SUMITOMO ELECTRIC HARDMETAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 14 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.8
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.9
Leases
Where a tangible asset is acquired through a lease, the
company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of
-
use
assets are included within tangible fixed assets, apart from those that meet the definition of investment
property.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability
adjusted for any lease payments made at or before the commencement date plus any initial direct costs
and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset
and the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement
date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The
estimated useful lives of right-of-use assets are determined on the same basis as those of other tangible
fixed assets. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for
certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are unpaid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the company's incremental borrowing rate. Lease payments included in the measurement of
the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate,
amounts expected to be payable under a residual value guarantee, and the cost of any options that the
company is reasonably certain to exercise, such as the exercise price under a purchase option, lease
payments in an optional renewal period, or penalties for early termination of a lease.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when
there is a change in : future lease payments arising from a change in an index or rate; the company's
estimate of the amount expected to be payable under a residual value guarantee; or the company's
assessment of whether it will exercise a purchase, extension or termination option. When the lease liability
is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use
asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to
zero.
The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of
plant and
machinery that have a lease term of 12 months or less, or for leases of low-value assets. The payments associated with these leases are recognised in profit or loss on a straight-line
basis over the lease term.
SUMITOMO ELECTRIC HARDMETAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 15 -
1.10
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met
. Where a
grant does not specify performance conditions
it
is recognised in income when the proceeds are received or receivable
. A grant received before the recognition criteria are satisfied is recognised as a liability.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover and other revenue
2021
2020
£
£
Other significant revenue
Interest income
667
3,778
Grants received
136,763
2021
2020
£
£
Turnover analysed by geographical market
United Kingdom
3,139,113
4,304,962
Europe
250,009
296,461
3,389,122
4,601,423
4
Operating (loss)/profit
2021
2020
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Government grants
(136,763)
Depreciation of owned tangible fixed assets
67,117
51,663
Depreciation of tangible fixed assets under right-of-use asset leases
83,948
28,276
SUMITOMO ELECTRIC HARDMETAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 16 -
5
Auditor's remuneration
2021
2020
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
20,000
19,000
For other services
Taxation compliance services
6,015
8,390
All other non-audit services
18,940
9,935
24,955
18,325
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Number of production staff
8
8
Number of administrative staff
13
12
Total
21
20
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
916,971
908,434
Social security costs
110,131
97,006
Pension costs
83,673
86,071
1,110,775
1,091,511
7
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
99,227
107,730
Company pension contributions to defined contribution schemes
7,883
16,400
107,110
124,130
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2020 - 1).
SUMITOMO ELECTRIC HARDMETAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 17 -
8
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
667
3,778
9
Interest payable and similar expenses
2021
2020
£
£
Interest on lease liabilities
26,689
2,585
10
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
23,672
Adjustments in respect of prior periods
(23,672)
Total current tax
(23,672)
23,672
The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
£
£
(Loss)/profit before taxation
(518,252)
151,589
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
(98,468)
28,802
Tax effect of expenses that are not deductible in determining taxable profit
(972)
(8,482)
Unutilised tax losses carried forward
72,746
Permanent capital allowances in excess of depreciation
3,022
3,352
Taxation (credit)/charge for the year
(23,672)
23,672
11
Dividends
2021
2020
£
£
Interim paid
115,125
100,611
SUMITOMO ELECTRIC HARDMETAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 18 -
12
Tangible fixed assets
Freehold land and buildings
Leasehold improvements
Fixtures and fittings
Right-of-use assets
Total
£
£
£
£
£
Cost
At 1 April 2020
619,916
342,671
106,112
1,068,699
Additions
81,203
149,145
422,388
652,736
Disposals
(36,060)
(36,060)
At 31 March 2021
619,916
81,203
491,816
492,440
1,685,375
Depreciation and impairment
At 1 April 2020
407,369
275,588
28,276
711,233
Depreciation charged in the year
4,896
7,633
54,588
83,948
151,065
Eliminated in respect of disposals
(36,060)
(36,060)
At 31 March 2021
412,265
7,633
330,176
76,164
826,238
Carrying amount
At 31 March 2021
207,651
73,570
161,640
416,276
859,137
At 31 March 2020
212,547
67,083
77,836
357,466
Tangible fixed assets includes right-of-use assets, as follows:
Right-of-use assets
2021
2020
£
£
Net values
Motor vehicles
74,385
77,836
Leasehold properties
341,891
-
416,276
77,836
Depreciation charge for the year
Motor vehicles
45,961
28,276
Leasehold properties
37,987
-
83,948
28,276
13
Stocks
2021
2020
£
£
Finished goods and goods for resale
664,951
918,130
SUMITOMO ELECTRIC HARDMETAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 19 -
14
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
931,607
1,028,801
Corporation tax recoverable
23,672
Amounts owed by group undertakings
185,361
806,161
Other debtors
9,202
32,283
Prepayments and accrued income
139,423
85,023
1,289,265
1,952,268
15
Creditors: amounts falling due within one year
2021
2020
Notes
£
£
Lease liabilities
17
81,693
33,062
Trade creditors
129,646
134,369
Amounts owed to group undertakings
541,819
817,853
Corporation tax
2,970
Other taxation and social security
131,165
127,582
Accruals and deferred income
66,525
72,275
950,848
1,188,111
16
Creditors: amounts falling due after more than one year
2021
2020
Notes
£
£
Lease liabilities
17
352,357
38,654
17
Lease liabilities
Lease liabilities are based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
2021
2020
£
£
Within one year
81,693
33,062
In two to five years
224,385
38,654
In over five years
127,972
434,050
71,716
SUMITOMO ELECTRIC HARDMETAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 20 -
18
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
83,673
86,071
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
19
Share capital
2021
2020
£
£
Ordinary share capital
Issued and fully paid
600,000 Ordinary shares of £1 each
600,000
600,000
600,000
600,000
20
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2021
2020
£
£
Within one year
2,340
2,340
Between two and five years
4,955
7,295
7,295
9,635
21
Related party transactions
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.
22
Ultimate controlling party
The ultimate parent company of Sumitomo Electric Hardmetal Limited is Sumitomo Electric Industries Limited, incorporated in Japan.
The largest and smallest group in which Sumitomo Electric Hardmetal Limited is a member and for which consolidated accounts are drawn up is that headed by Sumitomo Electric Industries Limited.
The consolidated accounts of this group are available to the public and may be obtained from Sumitomo Electric Industries Limited, 5-33, Kitahama 4-chrome, Chuo-ku, Osaka, Japan.
2021-03-31
2020-04-01
false
CCH Software
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Mr A Murayama
Mr T D Tolley
Mr S Uesaka
Mr Y Kagiya
Mr Y Kagiya
Mr K Kimura
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