Sil-Mid Limited - Limited company accounts 20.1

REGISTERED NUMBER: 01460851 (England and Wales)

SIL-MID LIMITED

Strategic Report, Report of the Director and

Audited Financial Statements

for the Year Ended 31 December 2020

Page

Company Information

1

Strategic Report

2

Report of the Director

3

to

4

Report of the Independent Auditors

5

to

8

Income Statement

9

Other Comprehensive Income

10

Balance Sheet

11

Statement of Changes in Equity

12

Cash Flow Statement

13

Notes to the Cash Flow Statement

14

Notes to the Financial Statements

15

to

22

DIRECTOR:

A D Nickson

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 director presents his strategic report for the year ended 31 December 2020.

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 £1,472,274 (2019 : £1,673,221).

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 director is pleased with the profit achieved during the year despite the difficulties due to Covid-19 and will continue to develop all areas of the business.

KEY PERFORMANCE INDICATORS

The key performance indicators help the company 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:

2020

2019

(Decrease)/Increase in turnover

(3.1%)

10.5%

(Decrease)/Increase in operating profit

(11.5%)

28.3%

(Decrease)/Increase in gross profit

(7.3%)

13.5%

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

ON BEHALF OF THE BOARD:

A D Nickson - Director

21 September 2021

The director presents his report with the financial statements of the company for the year ended 31 December 2020.

DIVIDENDS

Total dividends paid during the year ended 31 December 2020 were £1,247,700.

FUTURE DEVELOPMENTS

The global Covid-19 pandemic and the associated quarantines put in place by the UK and other governments present significant challenges to the aviation sector.

The director is confident that the actions taken to mitigate the impact of reduced aerospace activity have ensured that the company has continued to make satisfactory progress based on its results to date. The on-going impact of Brexit on imports and export sales 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

A D Nickson has held office during the whole of the period from 1 January 2020 to the date of this report.

Other changes in directors holding office are as follows:

Mrs J N Jarvis ceased to be a director after 31 December 2020 but prior to the date of this report.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is 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 director is 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 him to ensure that the financial statements comply with the Companies Act 2006. He is 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 director is 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 he has taken all the steps that he ought to have taken as a director in order to make himself 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:

A D Nickson - Director

21 September 2021

Opinion

We have audited the financial statements of Sil-Mid Limited (the 'company') for the year ended 31 December 2020 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 2020 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

In auditing the financial statements, we have concluded that the director's 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 director with respect to going concern are described in the relevant sections of this report.

Other information

The director is responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Director, 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 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 the audit:

-	the information given in the Strategic Report and the Report of the Director 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 Director 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 Director.

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 director's remuneration specified by law are not made; or

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

Responsibilities of director

As explained more fully in the Statement of Director's Responsibilities set out on page three, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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.

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:

-Enquiry of management, those charged with governance around actual and potential litigation and claims;

-Enquiry of entity staff to identify any instances of non-compliance with laws and regulations;

- 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 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 bias.

-Performing audit work over the risk of understatement of turnover including analytical review and obtaining corroborated explanations from Management.

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 is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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

21 September 2021

TURNOVER

4

19,058,017

19,659,362

Cost of sales

13,952,072

14,150,231

GROSS PROFIT

5,105,945

5,509,131

Distribution costs

16,790

20,928

Administrative expenses

3,293,714

3,438,221

3,310,504

3,459,149

1,795,441

2,049,982

Other operating income

18,808

-

OPERATING PROFIT

6

1,814,249

2,049,982

Interest receivable and similar income

7,205

18,486

PROFIT BEFORE TAXATION

1,821,454

2,068,468

Tax on profit

7

349,180

395,247

PROFIT FOR THE FINANCIAL YEAR

1,472,274

1,673,221

PROFIT FOR THE YEAR

1,472,274

1,673,221

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,472,274

1,673,221

FIXED ASSETS

Tangible assets

9

416,979

525,962

CURRENT ASSETS

Stocks

10

1,963,257

1,995,468

Debtors

11

4,096,465

4,107,302

Cash at bank

3,531,642

3,115,828

9,591,364

9,218,598

CREDITORS

Amounts falling due within one year

12

3,114,534

3,056,344

NET CURRENT ASSETS

6,476,830

6,162,254

TOTAL ASSETS LESS CURRENT LIABILITIES

6,893,809

6,688,216

PROVISIONS FOR LIABILITIES

15

65,171

84,152

NET ASSETS

6,828,638

6,604,064

CAPITAL AND RESERVES

Share capital

16

5,000

5,000

Other reserves

17

5,000

5,000

Retained earnings

17

6,818,638

6,594,064

SHAREHOLDERS' FUNDS

6,828,638

6,604,064

The financial statements were approved by the director and authorised for issue on 21 September 2021 and were signed by:

A D Nickson - Director

Share

Retained

Other

Total

capital

earnings

reserves

equity

£

£

£

£

Balance at 1 January 2019

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

Changes in equity

Dividends

-

(1,247,700

)

-

(1,247,700

)

Total comprehensive income

-

1,472,274

-

1,472,274

Balance at 31 December 2020

5,000

6,818,638

5,000

6,828,638

Cash flows from operating activities

Cash generated from operations

1

2,207,053

2,143,203

Tax paid

(554,844

)

(307,749

)

Net cash from operating activities

1,652,209

1,835,454

Cash flows from investing activities

Purchase of tangible fixed assets

(14,708

)

(267,600

)

Interest received

7,205

18,486

Net cash from investing activities

(7,503

)

(249,114

)

Cash flows from financing activities

Equity dividends paid

(1,247,700

)

(799,500

)

Grant from government

18,808

-

Net cash from financing activities

(1,228,892

)

(799,500

)

Increase in cash and cash equivalents

415,814

786,840

Cash and cash equivalents at beginning of year

2

3,115,828

2,328,988

Cash and cash equivalents at end of year

2

3,531,642

3,115,828

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

2020

2019

£

£

Profit before taxation

1,821,454

2,068,468

Depreciation charges

121,425

121,287

Loss on disposal of fixed assets

2,266

-

Government grants

(18,808

)

-

Finance income

(7,205

)

(18,486

)

1,919,132

2,171,269

Decrease/(increase) in stocks

32,211

(145,390

)

Decrease/(increase) in trade and other debtors

10,837

(152,731

)

Increase in trade and other creditors

244,873

270,055

Cash generated from operations

2,207,053

2,143,203

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 2020

31/12/20

1/1/20

£

£

Cash and cash equivalents

3,531,642

3,115,828

Year ended 31 December 2019

31/12/19

1/1/19

£

£

Cash and cash equivalents

3,115,828

2,328,988

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1/1/20

Cash flow

At 31/12/20

£

£

£

Net cash

Cash at bank

3,115,828

415,814

3,531,642

3,115,828

415,814

3,531,642

Total

3,115,828

415,814

3,531,642

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.

The presentation currency of the financial statements is the Pound Sterling (£).

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 recognised to the extent that it is probable that the economic benefits will flow to the company and the turnover can be reliably measured. All turnover of the company is from sales of products at a point in time with the delivery of the product seen as the only performance obligation under the contract.

Turnover is recognised on delivery when control of the goods has passed to the buyer.Turnover is recorded net of value added tax.

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

Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the company will comply with conditions attaching to them. Revenue grants will be recognised using the accrual model and will be recognised in income on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate.

Stocks

Stock is valued at the lower of cost and net realisable value after due regard for obsolete and slow moving stocks. Cost is determined on a first in, first out basis.Net realisable value is based on the selling price less anticipated 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.

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.	CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATION UNCERTAINTY

In the application of the company's accounting policies, the director is required to make judgements, estimates and assumptions about the value of assets and liabilities that are not readily apparent from other sources. Estimates and judgements are continually evaluated and are based on historical experience and other factors that are considered to be relevant.

Stock provision - judgement

Due to the nature of the stock, the company writes off stock only once the expiry date is reached hence no provision is made at the year end based on the ageing of the stock held.

4.

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:

2020

2019

£

£

United Kingdom

12,791,915

13,255,010

Foreign markets

6,266,102

6,404,352

19,058,017

19,659,362

5.	EMPLOYEES AND DIRECTORS

2020

2019

£

£

Wages and salaries

1,809,038

1,853,553

Social security costs

177,929

182,567

Other pension costs

67,590

61,731

2,054,557

2,097,851

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

2020

2019

Office and administrative

44

46

Warehouse operatives

12

12

56

58

2020

2019

£

£

Directors' remuneration

293,604

303,625

Directors' pension contributions to money purchase schemes

14,520

14,520

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:

2020

2019

£

£

Emoluments etc

157,021

160,487

Pension contributions to money purchase schemes

7,260

7,260

6.	OPERATING PROFIT

The operating profit is stated after charging:

2020

2019

£

£

Hire of plant and machinery

3,614

3,614

Depreciation - owned assets

121,425

121,287

Loss on disposal of fixed assets

2,266

-

Auditors' remuneration

14,420

16,480

Auditors' remuneration for non audit work

500

500

Foreign currency losses

60,844

50,240

Rent on property

143,878

143,878

Grant received

18,808

-

7.

TAXATION

Analysis of the tax charge

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

2020

2019

£

£

Current tax:

UK corporation tax

368,161

375,832

Deferred tax

(18,981

)

19,415

Tax on profit

349,180

395,247

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:

2020

2019

£

£

Profit before tax

1,821,454

2,068,468

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2019 - 19%)

346,076

393,009

Effects of:

Expenses not deductible for tax purposes

3,104

2,238

Total tax charge

349,180

395,247

8.

DIVIDENDS

2020

2019

£

£

Interim

1,247,700

799,500