ACCOUNTS - Final Accounts
ACCOUNTS - Final Accounts
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Registered number:
FOR THE YEAR ENDED 30 SEPTEMBER 2019
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ORANGE MUSIC ELECTRONIC COMPANY LIMITED
COMPANY INFORMATION
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ORANGE MUSIC ELECTRONIC COMPANY LIMITED
CONTENTS
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ORANGE MUSIC ELECTRONIC COMPANY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2019
The directors present the strategic report for the year ended 30 September 2019.
The results for the year and the financial position of the company are shown in the attached financial statements.
The company’s sales this year have increased to £10.2m (2018:£9.2m) and the gross profit margin has also increased to 28.3% (2018:24.8%). Overheads have decreased in 2019 to 1.51m (2018:£1.67m) as result of careful control on costs.
Currency rate fluctuations still pose the most significant risk to the company due to the current economic uncertainties we are facing. To help with mitigating the risk, the company regularly monitors exchanges rates and continues to match the currency it charges international customers with that of its major suppliers.
The company has invested in research and development and this will remain a priority in the coming year to ensure innovative and current products are brought to market to increase demand and aim to increase market share within the industry.
Turnover, Gross Margin, Debtor Days, Creditor Days and Stock Turnover are key performance indicators used to manage the business.
2019 2018 Turnover £10.2m £9.2m Gross Margin 28.3% 24.7% Debtor Days 35 25 Creditor Days 18 34 Stock Turnover 61 70
The company carefully monitors market share, brand awareness and social media uptake in all markets. The company measures customer feedback and all quality issues raised.
There is a lot of change in the trading environment causing risk and uncertainty but also providing opportunities. Macroeconomic and political factors are affecting the whole distribution chain; exchange rates also remain very volatile. We will keep a careful eye on all the risk factors and stay focused to reach our goals. Since the Balance Sheet date the company has also had to deal with the coronavirus pandemic and the associated measures that governments, customers, suppliers and finance providers are putting in place to deal with it. Whilst the company has suffered some adverse impact from this in the short term, the directors are confident that we can work through the temporary disruption and that our business plans are robust even in the current situation due to the strong relationships we have with our business partners and our continued investment and enthusiasm to develop new and innovate products whilst keeping with core brand values.
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ORANGE MUSIC ELECTRONIC COMPANY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2019
This report was approved by the board on 23 June 2020 and signed on its behalf.
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ORANGE MUSIC ELECTRONIC COMPANY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2019
The directors present their report and the financial statements for the year ended 30 September 2019.
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:
∙select suitable accounting policies for the company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and 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 profit for the year, after taxation, amounted to £1,109,069 (2018 - £488,665).
Dividends of £2,105 (2018: £18,605) were voted during the year.
The directors who served during the year were:
The company continues to trade profitably and to pursue opportunities to improve its performance and financial position. Since the Balance Sheet date the company has however had to deal with the coronavirus pandemic and the associated measures that governments, customers, suppliers and finance providers are putting in place to deal with it. Whilst the company has suffered some adverse impact from this in the short term, the directors are confident that we can work through the temporary disruption and that our business plans are robust even in the current situation due to the strong relationships we have with our business partners and our continued investment and enthusiasm to develop new and innovate products whilst keeping with core brand values.
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ORANGE MUSIC ELECTRONIC COMPANY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2019
Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
There have been no significant events affecting the company since the year end except as noted in the future developments in relation to the impact of coronavirus on the company.
The auditors, Barnes Roffe LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on
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ORANGE MUSIC ELECTRONIC COMPANY LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ORANGE MUSIC ELECTRONIC COMPANY LIMITED
We have audited the financial statements of Orange Music Electronic Company Limited (the 'company') for the year ended 30 September 2019, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
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.
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:
∙the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
∙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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ORANGE MUSIC ELECTRONIC COMPANY LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ORANGE MUSIC ELECTRONIC COMPANY 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.
In our opinion, based on the work undertaken in the course of the audit:
∙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
∙the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
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:
As explained more fully in the Directors' responsibilities statement on page 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the 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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ORANGE MUSIC ELECTRONIC COMPANY LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ORANGE MUSIC ELECTRONIC COMPANY LIMITED (CONTINUED)
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.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an 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.
for and on behalf of
Chartered Accountants & Statutory Auditor
Charles Lake House
Claire Causeway
Crossways Business Park
Kent
DA2 6QA
Date:
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ORANGE MUSIC ELECTRONIC COMPANY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2019
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ORANGE MUSIC ELECTRONIC COMPANY LIMITED
REGISTERED NUMBER: 01289884
BALANCE SHEET
AS AT 30 SEPTEMBER 2019
The financial statements were approved and authorised for issue by the board and were signed on its behalf
on
The notes on pages 11 to 24 form part of these financial statements.
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ORANGE MUSIC ELECTRONIC COMPANY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2019
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2018
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ORANGE MUSIC ELECTRONIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
Orange Music Electronic Company Limited is a private company limited by shares and incorporated in England and Wales. The address of the registered office is 108 Ripon Way, Borehamwood, Hertfordshire, England, WD6 2JA. The principal activity of the company during the year has been that of the wholesaling of music equipment.
2.Accounting policies
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 following principal accounting policies have been applied:
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":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d).
This information is included in the consolidated financial statements of OMEC Holdings Limited as at 30 September 2019 and these financial statements may be obtained from Companies House, Crown Way, Cardiff, CF14 3UZ.
Since the Balance Sheet date the company has also had to deal with the coronavirus pandemic and the associated measures that governments, customers, suppliers and finance providers are putting in place to deal with it. Whilst the company has suffered some adverse impact from this in the short term, the directors are confident that we can work through the temporary disruption and that our business plans are robust even in the current situation due to the strong relationships we have with our business partners and our continued investment and enthusiasm to develop new and innovate products whilst keeping with core brand values. On the basis of the above the accounts have been prepared on the going concern basis.
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ORANGE MUSIC ELECTRONIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
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:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
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 bases:
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 comprehensive income.
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ORANGE MUSIC ELECTRONIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
2.Accounting policies (continued)
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 out basis. Finished goods are valued to include all direct costs.
At each balance sheet 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. 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.
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
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ORANGE MUSIC ELECTRONIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
2.Accounting policies (continued)
Functional and presentation currency
The company's functional and presentational currency is GBP.
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.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income.
Finance costs are charged to the Statement of comprehensive income 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.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
Rentals paid under operating leases are charged to the Statement of comprehensive income on a straight line basis over the lease term.
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 comprehensive income 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.
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ORANGE MUSIC ELECTRONIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
2.Accounting policies (continued)
Interest income is recognised in the Statement of comprehensive income using the effective interest method.
Provision is made for claims under warranties given by the company for some of its products. The provision is based on an assessment of future claims with reference to past experience. Such costs are generally incurred within two years post sale and are included within other creditors.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance sheet date, except that:
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.
Research and development expenditure is written off in the year in which it is incurred.
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ORANGE MUSIC ELECTRONIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
a) Critical judgements in applying the company's accounting policies:
There were no significant judgments exercised by management in the preparation of the financial statements. b) Key accounting estimates and assumptions: The company made key assumptions regarding the useful economic life of tangible fixed assets and this is further described in note 2.4 of accounting policies.
The whole of the turnover is attributable to the company's principal activity.
Analysis of turnover by country of destination:
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ORANGE MUSIC ELECTRONIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
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ORANGE MUSIC ELECTRONIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
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ORANGE MUSIC ELECTRONIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
11.Taxation (continued)
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ORANGE MUSIC ELECTRONIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
11.Taxation (continued)
There were no factors that may affect future tax charges.
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ORANGE MUSIC ELECTRONIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
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ORANGE MUSIC ELECTRONIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
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ORANGE MUSIC ELECTRONIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
A guarantee exists in favour of the group's bankers to cover bank borrowings of certain group companies. At 30 September 2019 the total potential exposure in respect of this guarantee was £599,778 (2018: £734,748). The directors consider the possibility of the company having to settle any liability under the terms of the guarantee to be remote, and no provision is required.
The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. Contributions totalling £3,799 (2018: £3,189) were payable to the fund at the balance sheet date.
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ORANGE MUSIC ELECTRONIC COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
The ultimate parent company is OMEC Holdings Limited, a company registered in England and Wales.
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