Omega Signs Limited - Limited company accounts 20.1

REGISTERED NUMBER: 02683286 (England and Wales)

OMEGA SIGNS LIMITED

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST DECEMBER 2021

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

to

4

Report of the Independent Auditors

5

to

8

Statement of 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

21

DIRECTORS:

A R Timmermans

Mrs. M A Chapman

A P Stirling

P Gains

D J Chapman

M R Timmermans

B Dennehy

C Norfolk

SECRETARY:

A P Stirling

REGISTERED OFFICE:

Newmarket Approach

Leeds

LS9 0RJ

REGISTERED NUMBER:

02683286 (England and Wales)

AUDITORS:

Thomas Coombs Limited

Statutory Auditor

Chartered Accountants

3365 The Pentagon

Century Way

Thorpe Park

Leeds

West Yorkshire

LS15 8ZB

BANKERS:

HSBC Bank Plc

7 Prospect Crescent

Harrogate

North Yorkshire

HG1 1RN

The Directors report the financial results for the year ending 31st December 2021.

The Directors are pleased to report another set of solid financial results for our year ending 31st December 2021. We are able to report a satisfactory profit for the financial year resulting in a further increase in the strength of our balance sheet whilst continuing to operate debt free.

The pandemic that hit the UK in the early part of 2020 continued to impact the economy well into 2021. This economic uncertainly also brought soaring material prices and supply issues but despite all these factors the company managed to grow sales by 15% year on year whilst broadly maintaining gross margin and keeping overheads down. The latter is a testament to the restructure, refocus and efficient systems put in place during the last 2 years, the benefits of which are now starting to show their full potential. The business continues to focus on markets where we see strong future growth potential.

We continue to invest in the business and our people to ensure efficiency whilst maintaining our industry leading levels of quality and service. A large part of future business investment is in research and development of new products and technologies. This strategy continues to help us win new long-term contracts and this provides a solid base for future long-term growth. The business retains its inherent strength with a flexible and wide-ranging skill base.

The economy remains challenging and the marketplace proves to be very competitive with capacity outstripping supply but despite this our industry leading levels of customer service and quality products have meant that we have secured several new long-term contracts within the year.

The results are an absolute testament to the strong management team who have performed exceptionally well, demonstrating control on the business and an unparalleled understanding of the markets it operates in.

Once again, we must acknowledge the extraordinary efforts our employees have made this year. They have once again stepped up to the challenges set and have surpassed all expectations. Our sincere thanks and appreciation goes out to them all.

PRINCIPAL RISKS AND UNCERTAINTIES

Price risk

The company mainly uses short term matched contracts with suppliers and customers to manage its exposure to variation in market prices. There are a small number of long term contracts with customers where the majority of costs are incurred at an early stage minimizing the inherent risk in them.

Exchange rates

The company uses a combination of spot purchases and forward contracts to manage its exchange rate risk.

Credit risk

The company mainly trades with long standing customers. The nature of these relationships assists management on controlling credit risk in addition to normal credit management process.

Liquidity risk

Management control and monitor the company's cash flow on a regular basis including forecasting future cash values.

ON BEHALF OF THE BOARD:

D J Chapman - Director

31st May 2022

The directors present their report with the financial statements of the company for the year ended 31st December 2021.

DIVIDENDS

The total distribution of dividends for the period ended 31st December 2021 was £Nil (2020: £Nil)

RESEARCH AND DEVELOPMENT

Research and development costs of £745,865 (2020: £906,088) were incurred during the year.

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 1st January 2021 to the date of this report.

A R Timmermans

Mrs. M A Chapman

A P Stirling

P Gains

D J Chapman

M R Timmermans

B Dennehy

C Norfolk

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, Thomas Coombs Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

D J Chapman - Director

31st May 2022

Opinion

We have audited the financial statements of Omega Signs Limited (the 'company') for the year ended 31st December 2021 which comprise the Statement of 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 31st December 2021 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 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 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 directors with respect to going concern are described in the relevant sections of this report.

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 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 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.

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:

Based on our understanding of the entity and industries in which it operates, we identified the principal risks of non-compliance with laws and regulations related to data protection. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, tax legislation and the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102).

We assessed the susceptibility of the company's financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls, and ensuring these controls operated as intended. We determined the principal risks were related to posting journal entries to manipulate profits, and management bias in accounting estimates, especially bad debts, accruals, and stock provisions.

To address the risk of fraud through management bias and override of controls, we:

- Performed analytical procedures to identify any unusual or unexpected relationships.

- Identified and tested journal entries and identified any significant transactions that were unusual or outside the normal course of business.

- Investigated the rationale behind significant or unusual transactions.

- Challenged assumptions and judgements made by management in determining significant accounting estimates, in particular in relation to bad debts, accruals, and stock provisions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed audit procedures which included, but were not limited to:

- Agreeing financial statements disclosures to underlying supporting documentation.

- Discussions with management of known or suspected instances of non-compliance with laws and regulations.

- Reviewing correspondence with HMRC, relevant regulators and the company's legal advisors.

At the completion stage of the audit, the engagement partner's review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.

There are inherent limitations in the audit procedures described above and the further removed non-compliance of laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement relating to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment.

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.

Stuart Adam FCA (Senior Statutory Auditor)

for and on behalf of Thomas Coombs Limited

Statutory Auditor

Chartered Accountants

3365 The Pentagon

Century Way

Thorpe Park

Leeds

West Yorkshire

LS15 8ZB

31st May 2022

TURNOVER

11,318,105

9,891,518

Cost of sales

7,805,147

6,717,587

GROSS PROFIT

3,512,958

3,173,931

Administrative expenses

3,376,414

3,446,115

136,544

(272,184

)

Other operating income

86,732

485,259

OPERATING PROFIT

4

223,276

213,075

Interest payable and similar expenses

5

6,637

827

PROFIT BEFORE TAXATION

216,639

212,248

Tax on profit

6

(116,303

)

(105,548

)

PROFIT FOR THE FINANCIAL YEAR

332,942

317,796

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

332,942

317,796

FIXED ASSETS

Tangible assets

7

360,136

227,061

Investments

8

10,000

10,000

370,136

237,061

CURRENT ASSETS

Stocks

9

821,718

732,106

Debtors

10

4,580,339

4,023,632

Cash at bank

40,978

379,965

5,443,035

5,135,703

CREDITORS

Amounts falling due within one year

11

2,939,996

2,965,544

NET CURRENT ASSETS

2,503,039

2,170,159

TOTAL ASSETS LESS CURRENT LIABILITIES

2,873,175

2,407,220

CREDITORS

Amounts falling due after more than one year

12

(101,247

)

-

PROVISIONS FOR LIABILITIES

14

(64,279

)

(32,513

)

NET ASSETS

2,707,649

2,374,707

CAPITAL AND RESERVES

Called up share capital

15

30,400

30,400

Retained earnings

16

2,677,249

2,344,307

SHAREHOLDERS' FUNDS

2,707,649

2,374,707

The financial statements were approved by the Board of Directors and authorised for issue on 31st May 2022 and were signed on its behalf by:

D J Chapman - Director

A P Stirling - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1st January 2020

30,400

2,026,511

2,056,911

Changes in equity

Total comprehensive income

-

317,796

317,796

Balance at 31st December 2020

30,400

2,344,307

2,374,707

Changes in equity

Total comprehensive income

-

332,942

332,942

Balance at 31st December 2021

30,400

2,677,249

2,707,649

Cash flows from operating activities

Cash generated from operations

1

(431,656

)

(470,534

)

Interest paid

(4,422

)

(827

)

Interest element of hire purchase payments paid

(2,215

)

-

Government grants

86,750

484,297

Taxation refund

125,344

240,184

Net cash from operating activities

(226,199

)

253,120

Cash flows from investing activities

Purchase of tangible fixed assets

(29,884

)

(112,853

)

Sale of tangible fixed assets

10,843

2,083

Net cash from investing activities

(19,041

)

(110,770

)

Cash flows from financing activities

HP repayments in the year

(93,747

)

-

Net cash from financing activities

(93,747

)

-

(Decrease)/increase in cash and cash equivalents

(338,987

)

142,350

Cash and cash equivalents at beginning of year

2

379,965

237,615

Cash and cash equivalents at end of year

2

40,978

379,965

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

2021

2020

£

£

Profit before taxation

216,639

212,248

Depreciation charges

125,244

110,710

Loss on disposal of fixed assets

716

2,158

Government grants

(86,750

)

(484,297

)

Finance costs

6,637

827

262,486

(158,354

)

Increase in stocks

(89,612

)

(29,462

)

Increase in trade and other debtors

(533,983

)

(912,334

)

(Decrease)/increase in trade and other creditors

(70,547

)

629,616

Cash generated from operations

(431,656

)

(470,534

)

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 31st December 2021

31/12/21

1/1/21

£

£

Cash and cash equivalents

40,978

379,965

Year ended 31st December 2020

31/12/20

1/1/20

£

£

Cash and cash equivalents

379,965

237,615

3.	ANALYSIS OF CHANGES IN NET FUNDS/(DEBT)

At 1/1/21

Cash flow

At 31/12/21

£

£

£

Net cash

Cash at bank

379,965

(338,987

)

40,978

379,965

(338,987

)

40,978

Debt

Finance leases

-

(146,246

)

(146,246

)

-

(146,246

)

(146,246

)

Total

379,965

(485,233

)

(105,268

)

1.	STATUTORY INFORMATION

Omega Signs 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.

The financial statements have been prepared on a going concern basis. The directors have considered how the company will meet the challenge presented by the current economic climate and have carried out a detailed review of the company's resources including the adequacy of working capital for the next twelve months. The directors are satisfied that the company has sufficient cash flows to meet its liabilities as they fall due for at least one year from the date of approval of the financial statements.

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

Tangible fixed assets are stated at cost (or deemed cost) or valuation less accumulated depreciation and accumulated impairment losses. Cost includes costs directly attributable to making the asset capable of operating as intended.

Depreciation is provided to write off the cost less the estimated residual of tangible fixed assets by equal instalments over their estimated useful economic lives as follows:

Short leasehold

- 5% on cost

Plant and machinery, fixtures and fittings, computer equipment, motor vehicles

25%-33% on cost

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 and the grants will be received using the performance model.

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Stocks

Stocks and work in progress are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Cost is calculated using the first-in, first-out method and includes all purchase, transport, and handling costs in bringing stocks to their present location and condition.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, 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

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

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.

Debtors and creditors receivable/payable within one year

Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account in other administrative expenses.

3.	EMPLOYEES AND DIRECTORS

2021

2020

£

£

Wages and salaries

2,942,986

3,037,645

Other pension costs

177,000

182,142

3,119,986

3,219,787

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

2021

2020

Management

7

7

Administration

71

73

78

80

2021

2020

£

£

Directors' remuneration

645,878

639,890

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

Money purchase schemes

6

6

Information regarding the highest paid director is as follows:

2021

2020

£

£

Emoluments etc

151,520

145,224

4.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2021

2020

£

£

Other operating leases

130,000

130,000

Depreciation - owned assets

88,532

100,085

Depreciation - assets on hire purchase contracts

36,712

10,625

Loss on disposal of fixed assets

716

2,158

Auditors' remuneration

11,700

12,455

Foreign exchange differences

18

(962

)

5.

INTEREST PAYABLE AND SIMILAR EXPENSES

2021

2020

£

£

Bank interest

4,422

827

Hire purchase

2,215

-

6,637

827

6.

TAXATION

Analysis of the tax credit

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

2021

2020

£

£

Current tax:

UK corporation tax

(130,250

)

(115,000

)

Prior year tax over provision

(17,819

)

-

Total current tax

(148,069

)

(115,000

)

Deferred tax

31,766

9,452

Tax on profit

(116,303

)

(105,548

)

Reconciliation of total tax credit included in profit and loss

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

2021

2020

£

£

Profit before tax

216,639

212,248

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2020 - 19%)

41,161

40,327

Effects of:

Expenses not deductible for tax purposes

2,603

2,101

Adjustments to tax charge in respect of previous periods

(17,819

)

-

Under provision of current year tax debtor

-

17,819

Enhanced reliefs

(184,228

)

(210,435

)

Effect of changes in tax rate

40,422

43,932

Reversal of prior year timing differences

-

(4,700

)

Super deduction claimed

(2,132

)

-

Depreciation of non qualifying assets

3,690

5,408

Total tax credit

(116,303

)

(105,548

)

7.	TANGIBLE FIXED ASSETS

Fixtures

Short

Plant and

and

Motor

leasehold

machinery

fittings

vehicles

Totals

£

£

£

£

£

COST

At 1st January 2021

553,172

549,363

478,995

40,380

1,621,910

Additions

-

233,182

15,896

20,800

269,878

Disposals

-

(74,649

)

(98,704

)

(40,380

)

(213,733

)

At 31st December 2021

553,172

707,896

396,187

20,800

1,678,055

DEPRECIATION

At 1st January 2021

532,558

435,186

386,725

40,380

1,394,849

Charge for year

20,614

72,038

31,725

867

125,244

Eliminated on disposal

-

(65,590

)

(96,204

)

(40,380

)

(202,174

)

At 31st December 2021

553,172

441,634

322,246

867

1,317,919

NET BOOK VALUE

At 31st December 2021

-

266,262

73,941

19,933

360,136

At 31st December 2020

20,614

114,177

92,270

-

227,061