Company registration number 04333830 (England and Wales)
OSL CUTTING TECHNOLOGIES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
OSL CUTTING TECHNOLOGIES LIMITED
COMPANY INFORMATION
Directors
D Grey MBE
M Grey
N Berry
R Schofield
(Appointed 24 October 2023)
Secretary
V Richardson
Company number
04333830
Registered office
c/o OSL Cutting Technologies Ltd
Burgess Road
Attercliffe
Sheffield
S9 3WD
Auditor
Hart Shaw LLP
Europa Link
Sheffield Business Park
Sheffield
S9 1XU
OSL CUTTING TECHNOLOGIES LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 25
OSL CUTTING TECHNOLOGIES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

Review of the business

The principal activities of the business are the manufacturing, assembly, and distribution of cutting tools and associated products.

Our products are used in a myriad of applications including pre-fabrication, construction, oil and gas and ship building. We reach the end user via a network of professional distributors both in the U.K. and overseas. Products are exported globally.

The business performed well throughout 2023 despite the ongoing challenges including the consolidation of our business operations from 4 sites, down to 2. We incurred downtime in our manufacturing functions in 2023 as a result of factory moves, but these will benefit the business going forwards. Our underlying business activity is strong across all our key global markets, and this led to revenue remaining similar to 2022 levels. This included continued but softening loss of value as a consequence of the Ukraine and Russian war.

Principal risks and uncertainties

Gross margin has been negatively impacted through raw material cost uplifts & general cost inflation across UK manufacturing activities, it has been difficult to pass on all of these costs to the customer in the face of overseas competition & downtime suffered during our factory consolidation. Energy prices substantially increased through 2022-23 which again impacted manufacturing operations. Management have discussed these factors & have a solid strategy to address the cost base in 2024.

The Company is not dependent upon any single customer or supplier. The Company trades in foreign currencies both Euro and US Exposure; currency fluctuation is managed centrally within the group.

Key performance indicators

Like for like sales revenue were similar to 2022 levels and our market penetration and key customer development activities remain a key business focus through, particularly, new product introductions and existing product line extensions.

Overall turnover remained healthy at £16,376,000 in 2023 vs £16,371,000 in 2022, despite operational disruption which impacted profit for the year. Loss before tax on continuing operations is £84,000 compared with a profit of £613,000 in 2022. Despite the disappointing result, operational changes into 2024 will see significant strengthening of underlying profits.

Other information and explanations

The Company is aware of its impact on the environment, and in all its activities considers the environmental impact of its decisions as it seeks to attain its business objectives.

On behalf of the board

M Grey
Director
25 July 2024
OSL CUTTING TECHNOLOGIES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company is that of manufacturing, assembly and distribution of cutting tools and associated products.

Results and dividends

The results for the year are set out on page 7.

 

Ordinary dividends were paid amounting to £400,000. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

D Grey MBE
M Grey
G Swift
(Resigned 5 April 2023)
N Berry
R Schofield
(Appointed 24 October 2023)
Auditor

The auditor, Hart Shaw LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Strategic report

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
M Grey
Director
25 July 2024
OSL CUTTING TECHNOLOGIES LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

The directors are responsible for preparing the annual report 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:

 

 

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.

OSL CUTTING TECHNOLOGIES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF OSL CUTTING TECHNOLOGIES LIMITED
- 4 -
Opinion

We have audited the financial statements of OSL Cutting Technologies Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including 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:

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 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 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 other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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 our audit:

OSL CUTTING TECHNOLOGIES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF OSL CUTTING TECHNOLOGIES LIMITED
- 5 -
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 directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

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, and for such internal control as the directors determine is 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.

Auditor's 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 an auditor's report 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.

Extent to which the audit was considered capable of detecting irregularities, including fraud and the audit response

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.

 

At the planning stage we identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience and through discussion with the directors and other management, as required by auditing standards. The potential effect of any laws and regulation on the financial statements can vary considerably. There are laws and regulations that directly affect the financial statements (e.g. the Companies Act) as well as many other operational laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements. Owing to the size, nature and complexity of the organisation and the applicable laws and regulations to which it must adhere, the risk of material misstatement was deemed to be low, therefore the procedures performed by the audit team were limited to:

OSL CUTTING TECHNOLOGIES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF OSL CUTTING TECHNOLOGIES LIMITED
- 6 -

We have assessed the overall susceptibility of the financial statements to material misstatement due to fraud. Management override is the most likely way in which fraud might present itself and is therefore inherently high risk on any audit. Management override, which may cause there to be a material misstatement within the financial statements, may present itself in a number of ways, for example:

In order to reduce the risk of material misstatement to an acceptable level, numerous audit procedures were performed including:

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected material misstatements in the financial statements, even though we have performed our audit in accordance with auditing standards. Furthermore, as with all audits, there is a higher risk of irregularities (especially those relating to fraud) being undetected, as these may involve the override of internal controls, collusion, intentional omissions and misrepresentations etc. We are not responsible for preventing non-compliance or fraud and therefore cannot be expected to detect all instances of such. Our audit was not designed to identify misstatements or other irregularities that would not be considered to be material to the financial statements. The further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's member 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 member those matters we are required to state to the member in an auditor's 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 member, for our audit work, for this report, or for the opinions we have formed.

Adam Shield
Senior Statutory Auditor
For and on behalf of Hart Shaw LLP
13 August 2024
Chartered Accountants
Statutory Auditor
Europa Link
Sheffield Business Park
Sheffield
S9 1XU
OSL CUTTING TECHNOLOGIES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£'000
£'000
Turnover
3
16,376
16,371
Cost of sales
(12,027)
(11,893)
Gross profit
4,349
4,478
Administrative expenses
(3,970)
(4,147)
Other operating income
3
-
0
492
Management charges
(414)
(177)
Operating (loss)/profit
5
(35)
646
Interest receivable and similar income
8
2
-
0
Interest payable and similar expenses
9
(51)
(33)
(Loss)/profit before taxation
(84)
613
Tax on (loss)/profit
10
(51)
(110)
(Loss)/profit for the financial year
(135)
503
Other comprehensive income
Currency translation differences
-
0
(2)
Total comprehensive income for the year
(135)
501

The profit and loss account has been prepared on the basis that all operations are continuing operations.

OSL CUTTING TECHNOLOGIES LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
Notes
£'000
£'000
£'000
£'000
Fixed assets
Tangible assets
14
2,894
1,134
Current assets
Stocks
15
3,808
4,789
Debtors
16
3,318
4,075
Cash at bank and in hand
457
547
7,583
9,411
Creditors: amounts falling due within one year
17
(5,570)
(5,781)
Net current assets
2,013
3,630
Total assets less current liabilities
4,907
4,764
Creditors: amounts falling due after more than one year
18
(929)
(302)
Provisions for liabilities
Deferred tax liability
21
278
227
(278)
(227)
Net assets
3,700
4,235
Capital and reserves
Called up share capital
23
-
0
-
0
Profit and loss reserves
3,700
4,235
Total equity
3,700
4,235

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 25 July 2024 and are signed on its behalf by:
M Grey
Director
Company registration number 04333830 (England and Wales)
OSL CUTTING TECHNOLOGIES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Share capital
Profit and loss reserves
Total
Notes
£'000
£'000
£'000
Balance at 1 January 2022
-
0
3,734
3,734
Year ended 31 December 2022:
Profit
-
503
503
Other comprehensive income:
Currency translation differences
-
(2)
(2)
Total comprehensive income
-
501
501
Balance at 31 December 2022
-
0
4,235
4,235
Year ended 31 December 2023:
Loss and total comprehensive income
-
(135)
(135)
Dividends
11
-
(400)
(400)
Balance at 31 December 2023
-
0
3,700
3,700
OSL CUTTING TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
1
Accounting policies
Company information

OSL Cutting Technologies Limited is a private company, limited by shares and incorporated in England and Wales. The registered office is c/o OSL Cutting Technologies Ltd, Burgess Road, Attercliffe, Sheffield, S9 3WD.

 

The company's registration number is 04333830.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £'000.

The financial statements have been prepared on the historical cost convention, modified to include the revaluation of investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

- Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

- Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

- Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

 

OSL Cutting Technologies Limited is a wholly owned subsidiary of OSL Group Holdings Limited and the results of OSL Cutting Technologies Limited are included in the consolidated financial statements of OSL Group Holdings Limited which are available from c/o OSL Cutting Technologies Ltd, Burgess Road, Attercliffe, Sheffield, S9 3WD.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

OSL CUTTING TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 11 -

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses. Cost includes costs directly attributable to making the asset capable of operating as intended.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Leasehold improvements
over the term of the lease
Plant and machinery
10 - 50% straight line
Fixtures, fittings & equipment
10 - 50% straight line
Motor vehicles
33% straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.5
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

1.6
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

1.7
Cash at bank and in hand

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.8
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

OSL CUTTING TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

OSL CUTTING TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.9
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

1.10
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

1.11
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

OSL CUTTING TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.12
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.13
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

1.14
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

 

Transactions in overseas operations that are denominated in foreign currencies are retranslated on the reporting date using the closing rate for assets and liabilities and an average annual rate for income and expenses, gains and losses are recognised in other comprehensive income.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

OSL CUTTING TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 15 -
Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Stock provision

The company provides for stock in full when the stock levels held exceed 12 months usage. Actual outcomes could vary significantly from these estimates.

Other areas of estimation uncertainty

The following estimates also have an increased degree of estimation uncertainty, but are not expected to have a significant risk of of causing a material adjustment.

Labour overhead absorption

The company uses various labour and overhead absorption rates when calculating the standard cost for stock. The calculation is based on historical experiences and management estimates/assumptions. Actual outcomes could vary from these estimates.

3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2023
2022
£'000
£'000
Turnover analysed by class of business
Supply of goods
16,376
16,371
2023
2022
£'000
£'000
Turnover analysed by geographical market
United Kingdom
5,456
5,392
Europe
3,985
3,398
Rest of World
6,935
7,581
16,376
16,371
2023
2022
£'000
£'000
Other revenue
Interest income
2
-
Management charges
-
492
OSL CUTTING TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
5
Operating (loss)/profit
2023
2022
Operating (loss)/profit for the year is stated after charging/(crediting):
£'000
£'000
Exchange losses/(gains)
30
(67)
Fees payable to the company's auditor for the audit of the company's financial statements
23
23
Depreciation of owned tangible fixed assets
241
233
Depreciation of tangible fixed assets held under finance leases
141
17
Profit on disposal of tangible fixed assets
-
(2)
Impairment of intangible assets
26
-
0
Operating lease charges
219
218
6
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Office and management
29
41
Production
68
67
Total
97
108

Their aggregate remuneration comprised:

2023
2022
£'000
£'000
Wages and salaries
3,227
3,792
Social security costs
282
353
Pension costs
92
135
3,601
4,280
7
Directors' remuneration
2023
2022
£'000
£'000
Remuneration for qualifying services
37
140
Company pension contributions to defined contribution schemes
3
13
40
153

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).

 

OSL CUTTING TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
8
Interest receivable and similar income
2023
2022
£'000
£'000
Interest income
Other interest income
2
-
0
9
Interest payable and similar expenses
2023
2022
£'000
£'000
Interest on bank overdrafts and loans
17
27
Interest on finance leases and hire purchase contracts
34
6
51
33
10
Taxation
2023
2022
£'000
£'000
Current tax
UK corporation tax on profits for the current period
-
0
(48)
Deferred tax
Origination and reversal of timing differences
51
158
Total tax charge
51
110

The UK corporation tax rate increased from 19% to 25% on the 1 April 2023. Therefore the applicable tax rate for the year is a hybrid rate of 23.5% for the year ended 31 December 2023.

OSL CUTTING TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Taxation
(Continued)
- 18 -

The actual charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£'000
£'000
(Loss)/profit before taxation
(84)
613
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
(20)
116
Tax effect of expenses that are not deductible in determining taxable profit
1
1
Effect of change in corporation tax rate
-
0
54
Group relief
70
-
0
Permanent capital allowances in excess of depreciation
-
0
(35)
Depreciation on assets not qualifying for tax allowances
-
0
1
Deferred tax adjustments in respect of prior years
-
0
(8)
Enhanced deductions for research and development
-
0
(19)
Taxation charge for the year
51
110
11
Dividends
2023
2022
£'000
£'000
Interim paid
400
-
0
12
Impairments

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:

2023
2022
Notes
£'000
£'000
In respect of:
Intangible assets
13
26
-
0
Recognised in:
Administrative expenses
26
-
OSL CUTTING TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
13
Intangible fixed assets
Software
£'000
Cost
At 1 January 2023
-
0
Additions
26
At 31 December 2023
26
Amortisation and impairment
At 1 January 2023
-
0
Impairment losses
26
At 31 December 2023
26
Carrying amount
At 31 December 2023
-
0
At 31 December 2022
-
0

More information on impairment movements in the year is given in note 12.

14
Tangible fixed assets
Leasehold improvements
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£'000
£'000
£'000
£'000
£'000
Cost
At 1 January 2023
-
0
3,438
1,454
9
4,901
Additions
43
1,886
213
-
0
2,142
At 31 December 2023
43
5,324
1,667
9
7,043
Depreciation and impairment
At 1 January 2023
-
0
2,693
1,072
2
3,767
Depreciation charged in the year
-
0
237
142
3
382
At 31 December 2023
-
0
2,930
1,214
5
4,149
Carrying amount
At 31 December 2023
43
2,394
453
4
2,894
At 31 December 2022
-
0
745
382
7
1,134
OSL CUTTING TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
14
Tangible fixed assets
(Continued)
- 20 -

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2023
2022
£'000
£'000
Plant and machinery
2,048
485
Depreciation charge for the year in respect of leased assets
141
17
15
Stocks
2023
2022
£'000
£'000
Raw materials and consumables
329
1,065
Work in progress
701
475
Finished goods and goods for resale
2,584
2,856
Stock in transit
194
393
3,808
4,789

Included in stock is a stock provision of £585,000 (2022 - £825,000) to bring the value of stock to the lower of cost and estimated net realisable value.

16
Debtors
2023
2022
Amounts falling due within one year:
£'000
£'000
Trade debtors
3,054
3,499
Corporation tax recoverable
-
0
97
Amounts due from subsidiary undertakings
10
204
Other debtors
100
27
Prepayments and accrued income
154
248
3,318
4,075

All amounts due from group undertakings are unsecured, non interest bearing and repayable on demand.

 

Included within trade debtors is an amount of £1,729,000 (2022 - £2,006,000) which is subject to an invoice discount agreement.

OSL CUTTING TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
17
Creditors: amounts falling due within one year
2023
2022
Notes
£'000
£'000
Loans and overdrafts
1,093
1,424
Obligations under finance leases
19
416
116
Trade creditors
1,664
1,197
Amount due to parent undertaking
1,445
2,264
Amounts due to fellow group undertakings
409
2
Other taxation and social security
89
209
Other creditors
18
41
Accruals and deferred income
436
528
5,570
5,781

All amounts due to group undertakings are unsecured, non interest bearing and repayable on demand.

 

Included in loans and overdrafts is £1,093,000 (2022 - £1,424,000) which has been advanced under invoice discounting and is secured over the debts to which the finance relates.

 

The obligations under finance leases are secured on the fixed assets to which the finance relates.

18
Creditors: amounts falling due after more than one year
2023
2022
Notes
£'000
£'000
Obligations under finance leases
19
929
302

The obligations under finance leases are secured on the fixed assets to which the finance relates.

19
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£'000
£'000
Within one year
468
129
In two to five years
1,055
336
1,523
465
Less: future finance charges
(178)
(47)
1,345
418
OSL CUTTING TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
19
Finance lease obligations
(Continued)
- 22 -

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. No restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

 

The parent company, OSL Group Holdings Limited, has entered into a group asset finance agreement as a lessee for assets that are used within the company. The company is bearing the costs of the leased assets, therefore in order to show a true and fair view, the finance lease has been included within the financial statements of the company. The year end lease liability included within obligations under finance leases is £1,305,000 (2022 - £352,000).

20
Provisions for liabilities
2023
2022
Notes
£'000
£'000
Deferred tax liabilities
21
278
227
278
227
21
Deferred taxation

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Liabilities
Liabilities
2023
2022
Balances:
£'000
£'000
Accelerated capital allowances
665
227
Tax losses
(387)
-
278
227
2023
Movements in the year:
£'000
Liability at 1 January 2023
227
Charge to profit or loss
51
Liability at 31 December 2023
278

The deferred tax liability set out above is expected to reverse within 10 years.

OSL CUTTING TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
22
Retirement benefit schemes
2023
2022
Defined contribution schemes
£'000
£'000
Charge to profit or loss in respect of defined contribution schemes
92
135

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

23
Share capital
2023
2022
£
£
Allotted, issued and fully paid
2 Ordinary shares of £1 each
2
2
24
Operating lease commitments

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Land and Buildings
2023
2022
£'000
£'000
Within one year
105
201
Between two and five years
-
384
In over five years
-
272
105
857
Other
2023
2022
£'000
£'000
Within one year
18
11
Between two and five years
27
12
In over five years
-
0
-
0
45
23
During the year the company vacated one of its premises with no further obligations due under the lease.

 

25
Financial commitments, guarantees and contingent liabilities

The company has given an unlimited cross guarantee in favour of Barclays in respect of bank borrowings of fellow group undertakings. The outstanding borrowings of these companies at 31 December 2023 were £3,740,000 (2022 - £5,259,000).

OSL CUTTING TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
26
Capital commitments

Amounts contracted for but not provided in the financial statements:

2023
2022
£'000
£'000
Acquisition of tangible fixed assets
-
875

A group wide asset finance facility is in place to assist with the purchase of the above.

27
Related party transactions
Transactions with related parties
Sales
Purchases
2023
2022
2023
2022
£'000
£'000
£'000
£'000
Transactions with entities under common control
-
-
-
4
Pension fund of which a director of the company is also a trustee
-
57
170
213
2023
2022
Amounts due to related parties
£'000
£'000
Pension fund of which a director of the company is also a trustee
5
41
Other information

The company has taken advantage of the exemptions allowed by FRS 102 section 33.1A and has not disclosed transactions with fellow group companies. The company's accounts are consolidated into the accounts of the parent company as a wholly owned subsidiary.

28
Ultimate controlling party

The immediate and ultimate parent company is OSL Group Holdings Limited, a company registered in England & Wales, who prepare group consolidated accounts. Their registered office is c/o OSL Cutting Technologies Ltd, Burgess Road, Attercliffe, Sheffield, S9 3WD

The ultimate controlling party is D Grey MBE, who is a director and majority shareholder of OSL Group Holdings Limited.

OSL CUTTING TECHNOLOGIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
29
Subsidiaries

These financial statements are separate company financial statements for OSL Cutting Technologies Limited.

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking and country of
Nature of business
Class of
% Held
incorporation or residency
shareholding
Direct
Indirect
Universal Drilling & Cutting Equipment, Inc
USA
Distributor of magnetic drills and accessories
Ordinary
100
0
United Industries Operations Limited
UK
Dormant
Ordinary
100
0

The investment in Universal Drilling & Cutting Equipment, Inc has been included in the company's balance sheet at cost. The results of the subsidiary are not consolidated as the company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

 

OSL Cutting Technologies Ltd is a wholly owned subsidiary of OSL Group Holdings Limited and the results of both OSL Cutting Technologies Ltd and Universal Drilling & Cutting Equipment, Inc are included in the consolidated financial statements of OSL Group Holdings Limited which are available from c/o OSL Cutting Technologies Ltd, Burgess Road, Attercliffe, Sheffield, S9 3WD

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