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Registered number: 11204889
SCC AUDIO LIMITED
FINANCIAL STATEMENTS
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE PERIOD ENDED 31 JULY 2019
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SCC AUDIO LIMITED
REGISTERED NUMBER: 11204889
STATEMENT OF FINANCIAL POSITION
AS AT 31 JULY 2019
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The company has opted not to file the statement of income and retained earnings in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 27 March 2020.
The notes on pages 2 to 7 form part of these financial statements.
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SCC AUDIO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 JULY 2019
SCC Audio Limited is a private company limited by shares and registered in England and Wales. The address of its registered office and principal place of business is 1 New Street, Luton, LU15D.
SCC Audio Limited was incorporated on 14 February 2018 and commenced trade on 22 August 2018.
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 Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The following principal accounting policies have been applied:
The company shows net current liabilities at the reporting date of £149,817 and net liabilities of £139,385. The company is currently undergoing a reorganisation that will eliminate any loss making parts of the business in the post balance sheet date period. The company has received formal confirmation from its immediate parent, Studioking Sound & Instrument (Asia) Limited, that the company will receive the financial support it requires to enable it to meet its liabilities as they fall due.
Due to the global outbreak of the COVID-19 virus from January 2020 there is a risk that employees may be unable to attend work and imports may be significantly delayed. There could also be an adverse effect on the global economy which may impact the company's ability to operate as a going concern.
Existing funding facilities, forecasts and projections indicate that the company has adequate resources to continue with some level of activity from a minimal to full levels. Although the potential effects of the global coronavirus outbreak from January 2020 can be modelled, it is very difficult to determine the assumptions that will prove to be most appropriate and therefore there is an element of doubt existing that cannot be quantified.
After reviewing the company's forecasts and projections, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements, but with the proviso that a material uncertainly exists over the company’s future.
In making their assessment of going concern, the director has considered information for a period of at least twelve months from the date the financial statements were authorised for issue.
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SCC AUDIO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 JULY 2019
2.Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The company's functional and presentational currency is GBP, rounded to the nearest £1.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
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.
Sale of audio equipment
Revenue from the sale of audio equipment is recognised when the significant risks and rewards of ownership of the goods transfer to the customer, which is considered to be the point of dispatch.
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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.
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
Interest income is recognised in the Statement of Income and Retained Earnings using the effective interest method.
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SCC AUDIO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 JULY 2019
2.Accounting policies (continued)
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 Statement of Income and Retained Earnings when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the company in independently administered funds.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first outbasis. Work in progress and finished goods include labour and attributable overheads.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Short term debtors are measured at transaction price, 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.
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SCC AUDIO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 JULY 2019
2.Accounting policies (continued)
Short term creditors are measured at the transaction price.
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 and loans to related parties.
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The average monthly number of employees, including directors, during the period was 24.
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Charge for the period on owned assets
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SCC AUDIO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 JULY 2019
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Defined contribution
The company operates a defined contribution scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. At the year end contributions totalling £3,282 were outstanding.
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Related party transactions
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The ultimate parent company is Soundking Electronics and Sound Co, Ltd. The ultimate controlling party is Mr Xianggui Wang.
The company has taken advantage of the exemption in FRS 102 from the requirement to disclose transactions with group companies on the grounds that the company is a wholly owned subsidiary.
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SCC AUDIO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 JULY 2019
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Post balance sheet events
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On 13 February 2020 a shareholder agreement framework was signed that proposed separating one of the company's two divisions into a new company. The new company will have a minority interest with the majority interest retained by the existing parent company.
The auditors' report on the financial statements for the period ended 31 July 2019 was unqualified.
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In their report, the auditors emphasised the following matter without qualifying their report:
The company has net liabilities of £139,385, as stated in note 2.2, these events or conditions, along with the other matters as set forth in note 2.2, indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
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The audit report was signed on 27 March 2020 by Richard Paul (Senior Statutory Auditor) on behalf of Nyman Libson Paul.
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