|
| Basis of 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 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 entity'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. |
|
| In our evaluation of the directors' conclusions, we considered the risks associated with the company's business model, including effects arising from macro-economic uncertainties such as Covid-19 and Brexit, and considered how those risks might affect the company's financial resources or ability to continue operations over the period of at least twelve months from the date when the financial statements are authorised for issue. In accordance with the above, we have nothing to report in these respects. |
|
| However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the absence of reference to a material uncertainty in this auditor's report is not a guarantee that the company will continue in operation. |
|
| Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
|
| Other information |
| The other information comprises the information included in the report and financial statements, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information. 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 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. |
| Matters on which we are required to report by exception |
|
| Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
| The following laws and regulations were identified as being of significance to the entity: |
| ● |
Those laws and regulations considered to have a direct effect on the financial statements include UK financial reporting standards, Company Law, Tax and Pensions legislation and distributable profits legislation. |
| ● |
It is considered that there are no laws and regulations for which non-compliance may be fundamental to the operating aspects of the business |
| Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; review of board minutes; testing the appropriateness of entries in the nominal ledger, including journal entries; reviewing transactions around the end of the reporting period; and the performance of analytical procedures to identify unexpected movements in account balances which may be indicative of fraud. |
| No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK). |
| LUSO ELECTRONIC PRODUCTS LIMITED |
| Statement of Cash Flows |
| for the year ended 31 December 2021 |
|
| Notes |
|
2021 |
|
2020 |
| £ |
£ |
| Operating activities |
| Profit for the financial year |
585,332 |
|
843,322 |
|
| Adjustments for: |
| Interest receivable |
- |
|
(5,266) |
| Interest payable |
284 |
|
271 |
| Tax on profit on ordinary activities |
132,457 |
|
198,622 |
| Depreciation |
21,979 |
|
20,640 |
| (Increase)/decrease in stocks |
(620,365) |
|
135,654 |
| (Increase)/decrease in debtors |
(1,434,736) |
|
567,914 |
| Decrease in creditors |
(252,944) |
|
(178,348) |
|
|
|
(1,567,993) |
|
1,582,809 |
|
| Interest received |
- |
|
5,266 |
| Interest paid |
|
|
(284) |
|
(271) |
| Corporation tax paid |
(198,622) |
|
(160,061) |
|
| Cash (used in)/generated by operating activities |
(1,766,899) |
|
1,427,743 |
|
|
|
|
|
|
| Investing activities |
| Payments to acquire tangible fixed assets |
(29,294) |
|
(9,808) |
|
| Cash used in investing activities |
(29,294) |
|
(9,808) |
|
|
|
|
|
|
| Financing activities |
| Equity dividends paid |
(100,000) |
|
- |
| Receipts of loans |
77,416 |
|
- |
|
| Cash used in financing activities |
(22,584) |
|
- |
|
|
|
|
|
|
| Net cash (used)/generated |
| Cash (used in)/generated by operating activities |
(1,766,899) |
|
1,427,743 |
| Cash used in investing activities |
(29,294) |
|
(9,808) |
| Cash used in financing activities |
(22,584) |
|
- |
|
| Net cash (used)/generated |
(1,818,777) |
|
1,417,935 |
|
| Cash and cash equivalents at 1 January |
1,959,681 |
|
541,746 |
| Cash and cash equivalents at 31 December |
140,904 |
|
1,959,681 |
|
|
|
|
|
|
| Cash and cash equivalents comprise: |
| Cash at bank |
451,205 |
|
1,959,681 |
| Bank overdrafts |
11 |
|
(310,301) |
|
- |
|
|
|
140,904 |
|
1,959,681 |
|
|
|
|
|
|
|
| The notes on pages 11 to 17 form part of these financial statements. |
|
| LUSO ELECTRONIC PRODUCTS LIMITED |
| Notes to the Accounts |
| for the year ended 31 December 2021 |
|
| 1 |
Summary of significant accounting policies |
|
|
Basis of preparation |
|
The financial statements have been prepared under the historical cost convention and in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland. |
|
|
Turnover |
|
Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the sale of goods and from the rendering of services. Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer. |
|
|
Going concern |
|
Though the company's post year end operations were impacted by Covid 19, the company has been able to restore its operations gradually and expects to operate in full capacity towards the end of 2021 as laid out in directors' report. The company is confident of overcoming the difficult times with the continued support of its customers and other stakeholders. |
|
Accordingly, there is a reasonable expectation that the company has resources to continue in operational existence for the foreseeable future. The directors have assured their continued support thus, they continue to adopt the going concern basis of accounting in preparing the financial statements. |
|
|
Tangible fixed assets and Depreciation |
|
|
Stocks |
|
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first in first out method. The carrying amount of stock sold is recognised as an expense in the period in which the related revenue is recognised. |
|
|
Debtors |
|
Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts. |
|
|
Creditors |
|
Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. |
|
|
Taxation |
|
A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted. |
|
|
Provisions |
|
Provisions (ie liabilities of uncertain timing or amount) are recognised when there is an obligation at the reporting date as a result of a past event, it is probable that economic benefit will be transferred to settle the obligation and the amount of the obligation can be estimated reliably. |
|
|
Foreign currency translation |
|
Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction.
At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss. |
|
|
Financial instruments |
|
Financial instruments are classified and accounted for,according to the substance of the contractual arrangement, as eithier financial assets, financial liabilities or equity instuments. An equity instrument is any contract that evidences a residual interest in assets of the company after deducting all of its liabilities. |
|
Cash and cash equivalents are classified as basic financial instruments and comprise cash in hand and at bank,which are an integral part of the company's cash management. |
|
|
Leased assets |
|
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. The rights of use and obligations under finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction in the outstanding liability using the effective interest rate method. The finance charge is allocated to each period during the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability. Leased assets are depreciated in accordance with the company's policy for tangible fixed assets. If there is no reasonable certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the lower of the lease term and its useful life. Operating lease payments are recognised as an expense on a straight line basis over the lease term. |
|
|
Pensions |
|
Contributions to defined contribution plans are expensed in the period to which they relate. |
|
|
| 2 |
Analysis of turnover |
2021 |
|
2020 |
| £ |
£ |
|
|
Sale of goods |
16,321,910 |
|
14,309,159 |
|
|
|
|
|
|
|
|
|
|
By geographical market: |
|
|
UK |
5,223,011 |
|
2,776,925 |
|
Europe |
8,160,955 |
|
8,479,584 |
|
Rest of world |
2,937,944 |
|
3,052,650 |
|
|
|
|
|
|
16,321,910 |
|
14,309,159 |
|
|
|
|
|
|
|
|
|
|
| 3 |
Operating profit |
2021 |
|
2020 |
| £ |
£ |
|
This is stated after charging: |
|
|
Depreciation of owned fixed assets |
21,979 |
|
20,640 |
|
Operating lease rentals - land and buildings |
104,196 |
|
103,299 |
|
Auditors' remuneration for audit services |
11,000 |
|
11,000 |
|
Contributions to defined contribution pension plans |
42,120 |
|
46,287 |
|
Key management personnel compensation (including directors' emoluments) |
|
242,610 |
|
144,865 |
|
Carrying amount of stock sold |
13,405,994 |
|
11,235,804 |
|
|
|
|
|
|
|
|
|
|
| 4 |
Directors' emoluments |
2021 |
|
2020 |
| £ |
£ |
|
|
Emoluments |
242,610 |
|
144,865 |
|
|
|
|
|
|
|
|
|
|
|
Highest paid director: |
|
Emoluments |
122,945 |
|
89,865 |
|
|
|
|
|
|
|
|
|
|
|
Number of directors to whom retirement benefits accrued: |
2021 |
|
2020 |
| Number |
Number |
|
|
Defined contribution plans |
1 |
|
1 |
|
|
|
|
|
|
|
|
|
|
| 5 |
Staff costs |
2021 |
|
2020 |
| £ |
£ |
|
|
Wages and salaries |
1,372,733 |
|
1,424,090 |
|
Social security costs |
106,349 |
|
88,616 |
|
Other pension costs |
42,120 |
|
46,287 |
|
|
|
|
|
|
1,521,202 |
|
1,558,993 |
|
|
|
|
|
|
|
|
|
|
|
Average number of employees during the year |
Number |
Number |
|
|
Administration |
15 |
|
16 |
|
Sales |
9 |
|
9 |
|
|
|
|
|
|
24 |
|
25 |
|
|
|
|
|
|
|
|
|
|
| 6 |
Interest payable |
2021 |
|
2020 |
| £ |
£ |
|
|
Bank loans and overdrafts |
284 |
|
271 |
|
|
|
|
|
|
|
|
|
|
| 7 |
Taxation |
2021 |
|
2020 |
| £ |
£ |
|
Analysis of charge in period |
|
Current tax: |
|
UK corporation tax on profits of the period |
132,457 |
|
198,622 |
|
|
|
|
|
|
|
|
|
|
|
Tax on profit on ordinary activities |
132,457 |
|
198,622 |
|
|
|
|
|
|
|
|
|
|
|
Factors affecting tax charge for period |
|
The differences between the tax assessed for the period and the standard rate of corporation tax are explained as follows: |
|
|
|
|
|
|
|
2021 |
|
2020 |
| £ |
£ |
|
Profit on ordinary activities before tax |
717,789 |
|
1,041,944 |
|
|
|
|
|
|
|
|
|
|
Standard rate of corporation tax in the UK |
19% |
|
19% |
|
| £ |
£ |
|
Profit on ordinary activities multiplied by the standard rate of corporation tax |
|
136,380 |
|
197,969 |
|
|
Effects of: |
|
Expenses not deductible for tax purposes |
21,979 |
|
653 |
|
Capital allowances for period in excess of depreciation |
(44,167) |
|
- |
|
|
Current tax charge for period |
132,457 |
|
198,622 |
|
|
|
|
|
|
|
|
|
|
| 8 |
Tangible fixed assets |
|
|
|
|
Plant and machinery |
|
Motor Vehicle |
|
Total |
|
|
|
|
At cost |
|
At cost |
| £ |
£ |
£ |
|
Cost or valuation |
|
At 1 January 2021 |
434,834 |
|
16,991 |
|
451,825 |
|
Additions |
29,294 |
|
- |
|
29,294 |
|
At 31 December 2021 |
464,128 |
|
16,991 |
|
481,119 |
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
At 1 January 2021 |
416,439 |
|
8,495 |
|
424,934 |
|
Charge for the year |
17,731 |
|
4,248 |
|
21,979 |
|
At 31 December 2021 |
434,170 |
|
12,743 |
|
446,913 |
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
At 31 December 2021 |
29,958 |
|
4,248 |
|
34,206 |
|
At 31 December 2020 |
18,395 |
|
8,496 |
|
26,891 |
|
|
|
|
|
|
|
|
|
|
|
| 9 |
Stocks |
2021 |
|
2020 |
| £ |
£ |
|
|
Finished goods and goods for resale |
1,785,854 |
|
1,165,489 |
|
|
|
|
|
|
|
|
|
|
| 10 |
Debtors |
2021 |
|
2020 |
| £ |
£ |
|
|
Trade debtors |
6,440,542 |
|
4,842,048 |
|
Other debtors |
98,678 |
|
262,436 |
|
|
|
|
|
|
6,539,220 |
|
5,104,484 |
|
|
|
|
|
|
|
|
|
|
| 11 |
Creditors: amounts falling due within one year |
2021 |
|
2020 |
| £ |
£ |
|
|
Bank overdrafts |
310,301 |
|
- |
|
Bank loans |
77,416 |
|
- |
|
Trade creditors |
1,421,577 |
|
1,792,674 |
|
Corporation tax |
132,457 |
|
198,622 |
|
Other taxes and social security costs |
26,252 |
|
44,671 |
|
Other creditors |
1,313,474 |
|
1,290,224 |
|
Accruals and deferred income |
465,415 |
|
352,093 |
|
|
|
|
|
|
3,746,892 |
|
3,678,284 |
|
|
|
|
|
|
|
|
|
|
The bank loans falling due within one year are secured by way a debenture provided over the assets of the company. |
|
|
| 12 |
Share capital |
Nominal |
|
2021 |
|
2021 |
|
2020 |
| value |
Number |
£ |
£ |
|
Allotted, called up and fully paid: |
|
Ordinary shares |
£1 each |
|
2,000 |
|
2,000 |
|
2,000 |
|
|
|
|
|
|
|
|
|
|
| 13 |
Profit and loss account |
2021 |
|
2020 |
| £ |
£ |
|
|
At 1 January |
4,576,261 |
|
3,732,939 |
|
Profit for the financial year |
585,332 |
|
843,322 |
|
Dividends |
(100,000) |
|
- |
|
|
At 31 December |
5,061,593 |
|
4,576,261 |
|
|
|
|
|
|
|
|
|
|
| 14 |
Dividends |
2021 |
|
2020 |
| £ |
£ |
|
|
Dividends on ordinary shares (note 13) |
100,000 |
|
- |
|
|
|
|
|
|
|
|
|
|
| 15 |
Other financial commitments |
|
|
Total future minimum lease payments under non-cancellable operating leases: |
|
|
|
Land and buildings |
|
Land and buildings |
Other |
Other |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
| £ |
£ |
£ |
£ |
|
Falling due: |
|
within one year |
43,840 |
|
66,520 |
|
- |
|
2,271 |
|
within two to five years |
- |
|
43,840 |
|
- |
|
- |
|
|
43,840 |
|
110,360 |
|
- |
|
2,271 |
|
|
|
|
|
|
|
|
|
|
| 16 |
Controlling party |
|
|
The ultimate controlling party is Mr David Zelkha. |
|
|
| 17 |
Presentation currency |
|
|
The financial statements are presented in Sterling which is also the functional currency. |
|
|
| 18 |
Legal form of entity and country of incorporation |
|
|
LUSO ELECTRONIC PRODUCTS LIMITED is a private company limited by shares and incorporated in England. |
|
|
| 19 |
Principal place of business |
|
|
The address of the company's principal place of business and registered office is: |
|
595 Salisbury House |
|
London Wall |
|
London |
|
EC2M 5QQ |
