Sil-Mid Limited - Limited company accounts 20.1

REGISTERED NUMBER: 01460851 (England and Wales)

SIL-MID LIMITED

Strategic Report, Report of the Directors and

Audited Financial Statements

for the Year Ended 31 December 2019

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

to

4

Report of the Independent Auditors

5

to

7

Income Statement

8

Other Comprehensive Income

9

Balance Sheet

10

Statement of Changes in Equity

11

Cash Flow Statement

12

Notes to the Cash Flow Statement

13

Notes to the Financial Statements

14

to

20

DIRECTORS:

A D Nickson

Mrs J N Jarvis

SECRETARY:

Mrs J N Jarvis

REGISTERED OFFICE:

Unit 1 & 2 Roman Park

Roman Way

Coleshill

Birmingham

West Midlands

B46 1HG

REGISTERED NUMBER:

01460851 (England and Wales)

AUDITORS:

Eden Currie Limited

Chartered Accountants

and Statutory Auditor

2 Highlands Court

Cranmore Avenue

Solihull

West Midlands

B90 4LE

The directors present their strategic report for the year ended 31 December 2019.

REVIEW OF BUSINESS

The company operates as a distributor of sealants and lubricants in the United Kingdom and overseas markets.

The company continued to trade well and achieved a profit after taxation for the financial year of £1,673,221 (2018 : £1,299,441).

PRINCIPAL RISKS AND UNCERTAINTIES

As for many businesses of our size, the aerospace business environment in which we operate continues to be challenging. The company is exposed to risks within the markets it operates in and also the general business environment. Factors such as increased competition or loss of customers or suppliers would all affect the company's future performance and we continue to monitor these factors together with the effects of Covid-19 and Brexit and take action to minimise the risks wherever possible. With these risks and uncertainties in mind, we are aware that any plans for future development of the business may be subject to unforeseen future events outside our control.

DEVELOPMENT AND PERFORMANCE

The directors are pleased with the results achieved during the year. They are happy to report an increase in gross and net profit and will continue to develop all areas of the business.

KEY PERFORMANCE INDICATORS

The key performance indicators help the directors to measure performance against our strategic priorities and business plan.

We consider our financial key performance indicators to be those ratios which communicate the financial performance of the company as a whole:

2019

2018

Increase in operating profit

28.3%

1.0%

Increase in gross profit

13.5%

12.0%

The key performance indicators show the company's continuing positive performance.

ON BEHALF OF THE BOARD:

Mrs J N Jarvis - Secretary

17 November 2020

The directors present their report with the financial statements of the company for the year ended 31 December 2019.

DIVIDENDS

Total dividends paid during the year ended 31 December 2019 were £799,500.

FUTURE DEVELOPMENTS

During March 2020 the rapid spread of Covid-19 severely affected the United Kingdom's economy.

Trading during 2020 has been challenging as the aviation industry has been substantially affected by the Covid-19 pandemic. The directors are confident that the actions they have taken to mitigate the impact of reduced aerospace activity have ensured that the company has continued to make satisfactory progress. The impact of Brexit on imports and export sales at the end of the year is uncertain and management has put in place several initiatives to mitigate any disruption to supply that may occur.

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2019 to the date of this report.

A D Nickson

Mrs J N Jarvis

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors 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;

-	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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Eden Currie Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mrs J N Jarvis - Secretary

17 November 2020

Opinion

We have audited the financial statements of Sil-Mid Limited (the 'company') for the year ended 31 December 2019 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, 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:

-	give a true and fair view of the state of the company's affairs as at 31 December 2019 and of its profit 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.

Basis for opinion

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 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

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.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

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 identified material misstatements in the Strategic Report or the Report of the Directors.

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 directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page three, 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 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.

Auditors' 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 a Report of the Auditors 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 Report of the Auditors.

Use of our 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 a Report of the Auditors 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.

Caroline Webb FCA (Senior Statutory Auditor)

for and on behalf of Eden Currie Limited

Chartered Accountants

and Statutory Auditor

2 Highlands Court

Cranmore Avenue

Solihull

West Midlands

B90 4LE

17 November 2020

TURNOVER

3

19,659,362

17,798,617

Cost of sales

14,150,231

12,943,460

GROSS PROFIT

5,509,131

4,855,157

Distribution costs

20,928

19,667

Administrative expenses

3,438,221

3,237,612

3,459,149

3,257,279

OPERATING PROFIT

5

2,049,982

1,597,878

Interest receivable and similar income

18,486

7,636

2,068,468

1,605,514

Interest payable and similar expenses

6

-

36

PROFIT BEFORE TAXATION

2,068,468

1,605,478

Tax on profit

7

395,247

306,037

PROFIT FOR THE FINANCIAL YEAR

1,673,221

1,299,441

PROFIT FOR THE YEAR

1,673,221

1,299,441

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,673,221

1,299,441

FIXED ASSETS

Tangible assets

9

525,962

379,649

CURRENT ASSETS

Stocks

10

1,995,468

1,850,078

Debtors

11

4,107,302

3,954,571

Cash at bank

3,115,828

2,328,988

9,218,598

8,133,637

CREDITORS

Amounts falling due within one year

12

3,056,344

2,718,206

NET CURRENT ASSETS

6,162,254

5,415,431

TOTAL ASSETS LESS CURRENT LIABILITIES

6,688,216

5,795,080

PROVISIONS FOR LIABILITIES

15

84,152

64,737

NET ASSETS

6,604,064

5,730,343

CAPITAL AND RESERVES

Share capital

16

5,000

5,000

Other reserves

17

5,000

5,000

Retained earnings

17

6,594,064

5,720,343

SHAREHOLDERS' FUNDS

6,604,064

5,730,343

The financial statements were approved by the Board of Directors and authorised for issue on 17 November 2020 and were signed on its behalf by:

A D Nickson - Director

Share

Retained

Other

Total

capital

earnings

reserves

equity

£

£

£

£

Balance at 1 January 2018

5,000

4,522,377

5,000

4,532,377

Changes in equity

Dividends

-

(101,475

)

-

(101,475

)

Total comprehensive income

-

1,299,441

-

1,299,441

Balance at 31 December 2018

5,000

5,720,343

5,000

5,730,343

Changes in equity

Dividends

-

(799,500

)

-

(799,500

)

Total comprehensive income

-

1,673,221

-

1,673,221

Balance at 31 December 2019

5,000

6,594,064

5,000

6,604,064

Cash flows from operating activities

Cash generated from operations

1

2,143,203

1,406,980

Interest paid

-

(36

)

Tax paid

(307,749

)

(297,980

)

Net cash from operating activities

1,835,454

1,108,964

Cash flows from investing activities

Purchase of tangible fixed assets

(267,600

)

(75,401

)

Interest received

18,486

7,636

Net cash from investing activities

(249,114

)

(67,765

)

Cash flows from financing activities

Capital repayments on HP financing

-

(829

)

Equity dividends paid

(799,500

)

(101,475

)

Net cash from financing activities

(799,500

)

(102,304

)

Increase in cash and cash equivalents

786,840

938,895

Cash and cash equivalents at beginning of year

2

2,328,988

1,390,093

Cash and cash equivalents at end of year

2

3,115,828

2,328,988

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2019

2018

£

£

Profit before taxation

2,068,468

1,605,478

Depreciation charges

121,287

92,533

Loss on disposal of fixed assets

-

81

Finance costs

-

36

Finance income

(18,486

)

(7,636

)

2,171,269

1,690,492

Increase in stocks

(145,390

)

(197,813

)

Increase in trade and other debtors

(152,731

)

(354,493

)

Increase in trade and other creditors

270,055

268,794

Cash generated from operations

2,143,203

1,406,980

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2019

31/12/19

1/1/19

£

£

Cash and cash equivalents

3,115,828

2,328,988

Year ended 31 December 2018

31/12/18

1/1/18

£

£

Cash and cash equivalents

2,328,988

1,390,093

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1/1/19

Cash flow

At 31/12/19

£

£

£

Net cash

Cash at bank

2,328,988

786,840

3,115,828

2,328,988

786,840

3,115,828

Total

2,328,988

786,840

3,115,828

1.	STATUTORY INFORMATION

Sil-Mid Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Related party exemption

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 its parent undertaking.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Leasehold property alterations

-

straight line over the life of the lease

Plant and machinery

-

20% on reducing balance

Fixtures and fittings

-

33% on cost, 20% on cost and 15% on reducing balance

Stocks

Stock is valued at the lower of cost and net realisable value, after due regard for obsolete and slow moving stocks. Net realisable value is based on selling price less anticipated costs to completion and selling costs.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Profit and loss account transactions in foreign currencies are translated into sterling at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the closing rates at the balance sheet date and the exchange differences are included in the profit and loss account.

Hire purchase and finance lease contracts

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Operating leases

Rentals payable under operating leases are charged in the profit and loss account on a straight line basis over the lease term.

3.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

2019

2018

£

£

United Kingdom

13,255,010

12,213,275

Foreign markets

6,404,352

5,585,342

19,659,362

17,798,617

4.	EMPLOYEES AND DIRECTORS

2019

2018

£

£

Wages and salaries

1,853,553

1,757,106

Social security costs

182,567

169,268

Other pension costs

61,731

59,359

2,097,851

1,985,733

The average number of employees during the year was as follows:

2019

2018

Office and administrative

46

44

Warehouse operatives

12

14

58

58

2019

2018

£

£

Directors' remuneration

303,625

204,958

Directors' pension contributions to money purchase schemes

14,520

14,490

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

2

2

Information regarding the highest paid director is as follows:

2019

2018

£

£

Emoluments etc

160,487

109,045

Pension contributions to money purchase schemes

7,260

7,245

5.	OPERATING PROFIT

The operating profit is stated after charging:

2019

2018

£

£

Hire of plant and machinery

3,614

3,410

Depreciation - owned assets

121,287

92,028

Depreciation - assets on hire purchase contracts or finance leases

-

505

Loss on disposal of fixed assets

-

81

Auditors' remuneration

16,480

16,780

Auditors' remuneration for non audit work

500

500

Foreign currency losses

50,240

9,396

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

2019

2018

£

£

HP interest

-

36

7.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2019

2018

£

£

Current tax:

UK corporation tax

375,832

307,761

Deferred tax

19,415

(1,724

)

Tax on profit

395,247

306,037

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2019

2018

£

£

Profit before tax

2,068,468

1,605,478

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2018 - 19%)

393,009

305,041

Effects of:

Expenses not deductible for tax purposes

2,238

996

Total tax charge

395,247

306,037

8.

DIVIDENDS

2019

2018

£

£

Interim

799,500

101,475