SYNERTEC_LIMITED - Accounts
SYNERTEC_LIMITED - Accounts
Company Registration No. 03717583 (England and Wales)
FOR THE YEAR ENDED 31 MARCH 2014
COMPANY INFORMATION
Directors
Company number
Registered office
United Kingdom
Auditors
Business address
2 Chelston Business Park
Castle Road
Wellington
Somerset
United Kingdom
TA21 9JQ
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditors' report
5 - 6
Profit and loss account
7
Balance sheet
8
Cash flow statement
9
Notes to the financial statements
10 - 20
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2014
- 1 -
Review of the business
Although the prevailing economic conditions continue to hamper business development, the directors are pleased with the results generated by the company, which has continued to show year-on-year growth in revenue.
While much of the year was spent consolidating the sales team and ensuring future growth is attained from a strategic plan, gains in turnover have been achieved through a net increase in customers as well as organic growth of the business undertaken with existing customers.
Direct and indirect costs are regularly monitored and measured against set targets and both are considered to have been kept within acceptable variances during the year.
Principal risks and uncertainties
Synertec is reliant upon key members of the management team and understands the importance of retaining the skills and experience of these individuals. Measures have been put into place to increase staff numbers in critical management areas and thus dilute any exposure.
The business has a high proportion of customers in a relatively small spread of sectors; although the immediate risk of this is minimised by these consisting of a large number of individual organisations. The management team have recognised the longer term risks of being heavily invested in these business sectors and have introduced plans to ensure the range of these is increased as new business opportunities are sought. As with most products, the management team recognises that those currently offered may have a limited lifespan.
Trends in the use of each product line are therefore monitored; updates are issued where it is considered necessary to keep these fresh and viable; and new products are considered and developed where a market can be identified.
Analysis of development and performance
Substantial internal resources have been allocated during the year for development of our core products to ensure they remain fresh and competitive. Where management consider the business model requires adjustment, this is undertaken only after careful consideration of the needs of our customers.
The company has invested heavily this year in property and personnel, ensuring its capability to promote, and cope with, future growth. Despite these investments, profits have again shown a healthy increase over the previous year and cash balances remain healthy.
Key performance indicators
Key performance indicators are employed by the management team to monitor all aspects of the business. These are reviewed regularly and commercial decision making is based in part on the information provided by them.
The details of KPI’s employed and the trends they indicate are considered commercially sensitive, but the results consistently support the management team’s understanding that performance is at least within acceptable tolerances in all areas.
Trends are recorded and analysed in various aspects of the business and these generally confirm that the business is continuing to enjoy controlled and sustainable growth in those products that are being targeted.
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2014
- 2 -
Additional information and explanation
In addition to the planned organic growth in business, the management team remain committed to increasing profitability by improving productivity and reducing waste. Synertec Limited has invested significantly in both personnel and equipment this year to achieve these goals.
Forward forecasts of revenue and profitability are considered to be healthy and the management team are satisfied that these are based on sound business predictions.
Director
21 October 2014
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2014
- 3 -
The directors present their report and financial statements for the year ended 31 March 2014.
Principal activities
Results and dividends
The results for the year are set out on page 7.
Directors
The following directors have held office since 1 April 2013:
Auditors
The auditors, Lentells Limited, are deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
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.
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2014
- 4 -
Statement of disclosure to auditors
(b) they have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information.
On behalf of the board
Director
INDEPENDENT AUDITORS' REPORT
TO THE MEMBERS OF SYNERTEC LIMITED
- 5 -
We have audited the financial statements of Synertec Limited for the year ended 31 March 2014 which comprise the Profit and Loss Account, the Balance Sheet, the Cash Flow Statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
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.
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.
Respective responsibilities of directors and auditors
As explained more fully in the Directors' Responsibilities Statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements
-
give a true and fair view of the state of the company's affairs as at 31 March 2014 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.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
INDEPENDENT AUDITORS' REPORT (CONTINUED)
TO THE MEMBERS OF SYNERTEC LIMITED
- 6 -
Matters on which we are required to report by exception
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.
for and on behalf of Lentells Limited
Chartered Accountants
Statutory Auditor
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2014
- 7 -
2014
2013
Notes
£
£
Turnover
2
Cost of sales
(11,946,225 )
(10,811,683 )
Gross profit
Administrative expenses
(6,391,746 )
(5,470,504 )
Other operating income
Operating profit
3
Other interest receivable and similar income
4
Interest payable and similar charges
5
(45,272 )
(38,497 )
Profit on ordinary activities before taxation
Tax on profit on ordinary activities
6
(401,037 )
(303,815 )
Profit for the year
17
The profit and loss account has been prepared on the basis that all operations are continuing operations.
There are no recognised gains and losses other than those passing through the profit and loss account.
BALANCE SHEET
AS AT
31 MARCH 2014
- 8 -
2014
2013
Notes
£
£
£
£
Fixed assets
Tangible assets
8
Current assets
Stocks
9
Debtors
10
Cash at bank and in hand
Creditors: amounts falling due within one year
11
(3,911,500 )
(3,653,160 )
Net current assets/(liabilities)
(367,268 )
Total assets less current liabilities
Creditors: amounts falling due after more than one year
12
(464,030 )
(612,922 )
Provisions for liabilities
13
(68,458 )
(121,391 )
Accruals and deferred income
14
(259,458 )
(272,064 )
Capital and reserves
Called up share capital
16
Profit and loss account
17
Shareholders' funds
18
Approved by the Board and authorised for issue on 20 October 2014
Director
Company Registration No. 03717583
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2014
- 9 -
2014
2013
Notes
£
£
£
£
Net cash inflow from operating activities
23
2,930,683
2,092,743
Returns on investments and servicing of finance
Interest received
8,033
10,374
Interest paid
(45,272)
(38,497)
Net cash outflow for returns on investments and servicing of finance
(37,239)
(28,123)
Taxation
(309,640 )
(137,100 )
Capital expenditure
Payments to acquire tangible assets
(1,542,159)
(2,031,559)
Receipts from sales of tangible assets
377
54,122
Net cash outflow for capital expenditure
(1,541,782)
(1,977,437)
Equity dividends paid
(250,000)
(250,000)
Net cash inflow/(outflow) before management of liquid resources and financing
(299,917 )
Financing
New long term bank loan
157,500
-
(Decrease)/Increase in deferred income
(12,606)
(7,566)
Repayment of long term bank loan
(169,950)
(15,089)
Capital element of hire purchase contracts
(191,791)
575,194
Net cash (outflow)/inflow from financing
(216,847)
552,539
Increase in cash in the year
24, 25
252,622
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2014
- 10 -
1
Accounting policies
1.1
Accounting convention
1.2
Turnover
1.3
Research and development
Research expenditure is written off to the profit and loss account in the year in which it is incurred. Development expenditure is written off in the same way unless the directors are satisfied as to the technical, commercial and financial viability of individual projects. In this situation, the expenditure is deferred and amortised over the period during which the company is expected to benefit.
1.4
Tangible fixed assets and depreciation
Freehold land and buildings
Leasehold improvements
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
1.5
Leasing and hire purchase commitments
Assets obtained under hire purchase contracts and finance leases are capitalised as tangible assets and depreciated over the shorter of the lease term and their useful lives. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the profit and loss account so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.
Rentals payable under operating leases are charged against income on a straight line basis over the lease term.
1.6
Stock
Stock is valued at the lower of cost and net realisable value.
1.7
Pensions
The company operates a defined contribution scheme for the benefit of its employees. Contributions payable are charged to the profit and loss account in the year they are payable.
1.8
Deferred taxation
Deferred taxation is provided at appropriate rates on all timing differences using the liability method only to the extent that, in the opinion of the directors, there is a reasonable probability that a liability or asset will crystallise in the foreseeable future.
1.9
Foreign currency translation
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to profit and loss account.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2014
1
Accounting policies
(Continued)
- 11 -
1.10
Deferred Income
Income from maintenance contracts is recognised in the profit and loss account over the period of the contract.
1.11
Provisions for liabilities and charges
Where a contract for maintenance or rental spans the year end, the future amount of income arising is deferred and included with provisions for liabilities and charges.
2
Turnover
The total turnover of the company for the year has been derived from its principal activity wholly undertaken in the United Kingdom.
3
Operating profit
2014
2013
£
£
Operating profit is stated after charging:
Depreciation of tangible assets
Loss on disposal of tangible assets
415,171
74,365
Loss on foreign exchange transactions
-
Research and development
Operating lease rentals
- Plant and machinery
10,283
14,297
- Other assets
657,914
683,983
Auditors' remuneration (including expenses and benefits in kind)
4
Investment income
2014
2013
£
£
Bank interest
Other interest
-
8,039
10,374
5
Interest payable
2014
2013
£
£
On bank loans and overdrafts
Hire purchase interest
40,305
34,408
On overdue tax
-
(1,877)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2014
- 12 -
6
Taxation
2014
2013
£
£
Domestic current year tax
U.K. corporation tax
Total current tax
Deferred tax
Origination and reversal of timing differences
(52,933)
(5,826)
Factors affecting the tax charge for the year
Profit on ordinary activities before taxation
Profit on ordinary activities before taxation multiplied by standard rate of UK corporation tax of 23.00%.
Effects of:
Non deductible expenses
Depreciation add back
315,948
175,156
Capital allowances
(231,215)
(159,931)
Other tax adjustments
-
(66)
97,358
31,470
Current tax charge for the year
7
Dividends
2014
2013
£
£
Ordinary interim paid
250,000
250,000
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2014
- 13 -
8
Tangible fixed assets
Freehold land and buildings
Leasehold improvements
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 April 2013
Additions
Disposals
-
(215,259 )
(706,262 )
(83,960 )
(2,500 )
(1,007,981 )
At 31 March 2014
Depreciation
At 1 April 2013
On disposals
-
(166,111 )
(340,245 )
(83,577 )
(2,500 )
(592,433 )
Charge for the year
At 31 March 2014
Net book value
At 31 March 2014
At 31 March 2013
Included above are assets held under finance leases or hire purchase contracts as follows:
Plant and machinery
£
Net book values
At 31 March 2014
At 31 March 2013
Depreciation charge for the year
At 31 March 2014
At 31 March 2013
9
Stocks
2014
2013
£
£
Finished goods and goods for resale
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2014
- 14 -
10
Debtors
2014
2013
£
£
Trade debtors
Prepayments and accrued income
11
Creditors: amounts falling due within one year
2014
2013
£
£
Bank loans and overdrafts
Net obligations under hire purchase contracts
Trade creditors
Corporation tax
Other taxes and social security costs
Other creditors
Accruals and deferred income
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2014
- 15 -
12
Creditors: amounts falling due after more than one year
2014
2013
£
£
Bank loans
-
Net obligations under hire purchase contracts
Analysis of loans
Wholly repayable within five years
142,347
154,797
142,347
154,797
Included in current liabilities
(16,352)
(154,797)
125,995
-
Loan maturity analysis
In more than one year but not more than two years
-
In more than two years but not more than five years
-
Net obligations under hire purchase contracts
Repayable within one year
557,468
474,372
Repayable between one and five years
338,035
612,922
895,503
1,087,294
Included in liabilities falling due within one year
(557,468 )
(474,372 )
338,035
612,922
The bank loan is secured by a legal charge over Unit 2A, Chelston Business Park.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2014
- 16 -
13
Provisions for liabilities
Deferred tax liability
£
Balance at 1 April 2013
121,391
Profit and loss account
(52,933 )
Balance at 31 March 2014
The deferred tax liability is made up as follows:
2014
2013
£
£
Accelerated capital allowances
14
Accruals and deferred income
Deferred income
£
Balance at 1 April 2013
272,064
Decrease in income deferred in year
(12,606)
Balance at 31 March 2014
15
Pension and other post-retirement benefit commitments
Defined contribution
2014
2013
£
£
Contributions payable by the company for the year
-
16
Share capital
2014
2013
£
£
Allotted, called up and fully paid
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2014
- 17 -
17
Statement of movements on profit and loss account
Profit
and loss
account
and loss
account
£
Balance at 1 April 2013
Profit for the year
Dividends paid
(250,000 )
Balance at 31 March 2014
18
Reconciliation of movements in shareholders' funds
2014
2013
£
£
Profit for the financial year
Dividends
(250,000 )
(250,000 )
Net addition to shareholders' funds
Opening shareholders' funds
Closing shareholders' funds
19
Financial commitments
At 31 March 2014 the company was committed to making the following payments under non-cancellable operating leases in the year to 31 March 2015:
Land and buildings
Other
2014
2013
2014
2013
£
£
£
£
Operating leases which expire:
Within one year
-
-
In over five years
-
-
-
20
Capital commitments
2014
2013
£
£
At 31 March 2014 the company had capital commitments as follows:
Contracted for but not provided in the financial statements
27,613
-
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2014
- 18 -
21
Directors' remuneration
2014
2013
£
£
Remuneration for qualifying services
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2013 - 0).
Remuneration disclosed above include the following amounts paid to the highest paid director:
Remuneration for qualifying services
Company pension contributions to defined contribution schemes
-
22
Employees
Number of employees
The average monthly number of employees (including directors) during the year was:
2014
2013
Number
Number
117
106
Employment costs
2014
2013
£
£
Wages and salaries
Social security costs
Other pension costs
-
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2014
- 19 -
23
Reconciliation of operating profit to net cash outflow from operating activities
2014
2013
£
£
Operating profit
Depreciation of tangible assets
958,520
660,043
Loss on disposal of tangible assets
(Increase)/decrease in stocks
(36,670)
7,214
Increase in debtors
(163,415)
(290,136)
Increase in creditors within one year
169,359
446,797
Net cash inflow from operating activities
2,930,683
2,092,743
24
Analysis of net funds/(debt)
1 April 2013
Cash flow
Other non- cash changes
£
£
£
£
Net cash:
Cash at bank and in hand
575,175
-
Debt:
Finance leases
(1,087,294)
191,791
-
(895,503)
Debts falling due within one year
(154,797)
138,445
-
(16,352)
Debts falling due after one year
-
(125,995)
-
(125,995)
(1,242,091)
204,241
-
(1,037,850)
Net (debt)/funds
(293,573 )
779,416
-
25
Reconciliation of net cash flow to movement in net funds/(debt)
2014
2013
£
£
Increase in cash in the year
Cash outflow/(inflow) from decrease/(increase) in debt and lease financing
204,241
(560,104)
Movement in net funds/(debt) in the year
779,416
(307,482)
Opening net (debt)/funds
(293,573 )
13,909
Closing net funds/(debt)
(293,573 )
26
Related party relationships and transactions
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2014
26
Related party relationships and transactions
(Continued)
- 20 -
Dividends to Directors
The following directors were paid dividends during the year as outlined in the table below:
2014
2013
£
£
M Baldock
50,000
50,000
M Cleave
19,200
19,200
M Hasnip
50,000
50,000
G Jordan
50,000
50,000
S Nester
30,800
30,800
200,000
200,000
The company rents premises owned by a pension fund of which G Jordan and M Baldock are members. The company has entered into a 15 year lease with the pension fund at an annual rental of £55,000.