Company Registration No. 02501973 (England and Wales)
THE SURFACE PRINT COMPANY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 SEPTEMBER 2024
30 September 2024
PM+M Solutions for Business LLP
Chartered Accountants
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
THE SURFACE PRINT COMPANY LIMITED
COMPANY INFORMATION
Directors
J W Watson
J E Watson
J Watson
A Watson
N C Westhead
D Braid
Secretary
J E Watson
Company number
02501973
Registered office
Broadley Mill
Hill Street
Clayton Le Moors
Lancashire
BB5 5EA
Auditor
PM+M Solutions for Business LLP
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
THE SURFACE PRINT COMPANY LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Statement of income and retained earnings
9
Balance sheet
10
Statement of cash flows
11
Notes to the financial statements
12 - 27
THE SURFACE PRINT COMPANY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 1 -
The directors present the strategic report for the year ended 30 September 2024.
Executive Summary:
The Surface Print Company have enjoyed a strong year in challenging conditions through the implementation of innovative strategies, which have involved cost reduction and improved efficiencies to enhance profitability and strengthen its market position and ling-term viability.
Financial performance:
Turnover for the Surface Print Company has increased by 5.9% year on year with Operating Profit up 160%. This growth has been achieved through increased export sales, development of existing customers and expanding product offerings. A commitment to the highest quality product remains at the core of the business.
Market Overview:
This financial performance has been achieved with the backdrop of a difficult UK Market.
Export sales are up 53% year on year, where quality traditional printing techniques such as Surface and Screen are highly sought after.
The Company continues to bring new products to market to satisfy fashion and sustainability in equal measure.
Operational Highlights:
The ever increasing difficulties faced by the manufacturing sector have resulted in the Surface Print Company thinking differently. In April, the business moved to a 4 day manufacturing week. This has resulted in increased efficiencies, cost reductions and a happy, fresh, motivated workforce.
Staff welfare is high on the agenda and the business is constantly looking for ways for sustainable improvements.
Sustainability Initiatives:
During the financial year the Surface Print Company gained ISO14001 accreditation. This standard now drives the green agenda within the business which has recently seen the addition of solar panels covering the factory roof.
Our efforts in this area not only contribute to a greened future but also resonate positively with environmentally conscious customers.
Risk Management:
The Surface Print Company take a proactive approach to identify and mitigate potential threats to the company’s operation. This focuses on assessing industry specific risks but also looks at the wider geopolitical and economic threat which may result in unforeseen challenges.
Future Outlook:
Going forward, the company has taken the decision to split out our Wallcovering brand – 1838 Wallcoverings from the manufacturing business. This will allow the brand to develop a stronger identity in the marketplace and forge strong strategic partnerships in the UK, across Europe and the Rest of the World.
The company will continue to invest in talent and in the latest technologies to stay ahead on an ever - evolving business landscape.
Conclusion:
The Surface Print Company’s performance in the year ending 30th September 2024 reflects an innovative approach to the changing business environment. With a solid financial foundation, operational excellence and a commitment to sustainability, the company is well-positioned for sustained success in the coming years.
THE SURFACE PRINT COMPANY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 2 -
J W Watson
Director
24 December 2024
THE SURFACE PRINT COMPANY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 3 -
The directors present their annual report and financial statements for the year ended 30 September 2024.
Principal activities
The principal activity of the company continued to be that of a contract printing service to wallpaper designers and distributors.
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £70,000. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
J W Watson
J E Watson
J Watson
A Watson
N C Westhead
D Braid
Auditor
PM+M Solutions for Business LLP were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Statement of directors' responsibilities
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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent; and
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 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.
THE SURFACE PRINT COMPANY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 4 -
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
J W Watson
Director
24 December 2024
THE SURFACE PRINT COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THE SURFACE PRINT COMPANY LIMITED
- 5 -
Opinion
We have audited the financial statements of The Surface Print Company Limited (the 'company') for the year ended 30 September 2024 which comprise the statement of income and retained earnings, the balance sheet, the statement of cash flows 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:
give a true and fair view of the state of the company's affairs as at 30 September 2024 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.
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.
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:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
THE SURFACE PRINT COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THE SURFACE PRINT COMPANY LIMITED (CONTINUED)
- 6 -
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:
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 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 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
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.
We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
THE SURFACE PRINT COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THE SURFACE PRINT COMPANY LIMITED (CONTINUED)
- 7 -
Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we have considered the following:
the nature of the industry and sector, control environment and business performance including the design of the Company's remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets;
results of our enquiries of management about their own identification and assessment of the risks of irregularities;
the matters discussed among the audit engagement team and relevant specialists regarding how and where fraud might occur in the financial statements and any potential indicators of fraud;
any matters we identified having obtained and reviewed the Company's documentation of their policies and procedures relating to:
identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: timing of recognition of commercial income, posting of unusual journals and complex transactions; and manipulating the Company's performance profit measures and other key performance indicators to meet remuneration targets and externally communicated targets. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included UK Companies Act, employment law, health and safety regulations, pensions legislation and tax legislation.
Audit response to risks identified
Our procedures to respond to risks identified included the following:
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
enquiring of management concerning actual and potential litigation and claims;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC; and
in addressing the identified risks of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
THE SURFACE PRINT COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THE SURFACE PRINT COMPANY LIMITED (CONTINUED)
- 8 -
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.
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 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 members as a body, for our audit work, for this report, or for the opinions we have formed.
Christopher Johnson FCA
Senior Statutory Auditor
For and on behalf of PM+M Solutions for Business LLP
24 December 2024
Chartered Accountants
Statutory Auditor
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
THE SURFACE PRINT COMPANY LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
8,220,343
7,762,599
Cost of sales
(5,494,860)
(5,464,073)
Gross profit
2,725,483
2,298,526
Distribution costs
(218,724)
(175,640)
Administrative expenses
(1,824,928)
(1,856,320)
Operating profit
4
681,831
266,566
Interest receivable and similar income
7
35
35
Interest payable and similar expenses
8
(248,722)
(252,772)
Other gains and losses
(285)
95
Profit before taxation
432,859
13,924
Tax on profit
9
(118,131)
(119,839)
Profit/(loss) for the financial year
314,728
(105,915)
Retained earnings brought forward
2,877,344
3,033,259
Dividends
(70,000)
(50,000)
Retained earnings carried forward
3,122,072
2,877,344
The profit and loss account has been prepared on the basis that all operations are continuing operations.
THE SURFACE PRINT COMPANY LIMITED
BALANCE SHEET
AS AT
30 SEPTEMBER 2024
30 September 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
4,610,060
4,787,533
Investments
11
760
1,045
4,610,820
4,788,578
Current assets
Stocks
12
1,063,447
1,105,796
Debtors
13
1,286,157
1,519,663
Cash at bank and in hand
24,447
51,782
2,374,051
2,677,241
Creditors: amounts falling due within one year
14
(1,695,680)
(2,333,484)
Net current assets
678,371
343,757
Total assets less current liabilities
5,289,191
5,132,335
Creditors: amounts falling due after more than one year
15
(1,621,737)
(1,901,850)
Provisions for liabilities
Deferred tax liability
18
526,398
334,157
(526,398)
(334,157)
Net assets
3,141,056
2,896,328
Capital and reserves
Called up share capital
20
1,377
1,377
Capital redemption reserve
17,607
17,607
Profit and loss reserves
3,122,072
2,877,344
Total equity
3,141,056
2,896,328
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 24 December 2024 and are signed on its behalf by:
J W Watson
Director
Company registration number 02501973 (England and Wales)
THE SURFACE PRINT COMPANY LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 11 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
25
1,324,705
929,346
Interest paid
(248,722)
(252,772)
Income taxes refunded
36,025
6,966
Net cash inflow from operating activities
1,112,008
683,540
Investing activities
Purchase of tangible fixed assets
(130,242)
(591,839)
Proceeds from disposal of tangible fixed assets
10,000
Repayment of loans
(38,509)
-
Interest received
35
35
Net cash used in investing activities
(168,716)
(581,804)
Financing activities
Movement of trade finance obligations
(458,016)
165,238
Repayment of bank loans
(55,250)
(67,232)
Payment of finance leases obligations
(413,611)
(130,168)
Dividends paid
(43,750)
(50,000)
Net cash used in financing activities
(970,627)
(82,162)
Net (decrease)/increase in cash and cash equivalents
(27,335)
19,574
Cash and cash equivalents at beginning of year
51,782
32,208
Cash and cash equivalents at end of year
24,447
51,782
THE SURFACE PRINT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 12 -
1
Accounting policies
Company information
The Surface Print Company Limited is a private company limited by shares incorporated in England and Wales. The registered office is Broadley Mill, Hill Street, Clayton Le Moors, Lancashire, BB5 5EA.
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 £.
The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.
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.
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.
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:
Freehold land and buildings
2 - 10% Straight line
Plant and equipment
10 - 33% Straight line
Freehold land is not depreciated.
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
Fixed asset investments
Investments in unlisted company shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the statement of income and retained earnings for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.
THE SURFACE PRINT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 13 -
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible 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.
1.7
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.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash and cash equivalents
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.
1.9
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.
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.
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.
THE SURFACE PRINT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 14 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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.
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.
1.10
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.
1.11
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.
THE SURFACE PRINT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 15 -
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.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
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.
1.15
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.
THE SURFACE PRINT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 16 -
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.
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.
Depreciation of Fixed assets
The directors have applied their knowledge of the operations of the business when determining the depreciation rate to be used and therefore the residual value of fixed assets.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Wallpaper printing
8,220,343
7,762,599
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
3,504,463
4,683,844
Rest of Europe
1,018,964
2,109,801
Rest of the World
3,696,916
968,954
8,220,343
7,762,599
2024
2023
£
£
Other revenue
Interest income
35
35
THE SURFACE PRINT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 17 -
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(12,713)
(7,303)
Fees payable to the company's auditor for the audit of the company's financial statements
14,250
14,425
Depreciation of owned tangible fixed assets
263,355
271,889
Depreciation of tangible fixed assets held under finance leases
150,064
145,595
Profit on disposal of tangible fixed assets
(10,000)
Operating lease charges
61,724
258,974
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Management and administration
16
19
Production
49
50
Total
65
69
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
2,168,401
2,044,206
Social security costs
208,718
213,850
Pension costs
116,606
88,209
2,493,725
2,346,265
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
345,453
314,797
Company pension contributions to defined contribution schemes
85,604
47,016
431,057
361,813
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2023 - 4).
THE SURFACE PRINT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
6
Directors' remuneration
(Continued)
- 18 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
90,675
84,475
Company pension contributions to defined contribution schemes
20,867
39,118
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
35
35
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
35
35
8
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
29,717
13,104
Dividends on redeemable preference shares not classified as equity
70,000
70,000
Invoice discounting
55,926
48,238
155,643
131,342
Other finance costs:
Interest on finance leases and hire purchase contracts
93,079
121,430
248,722
252,772
THE SURFACE PRINT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 19 -
9
Taxation
2024
2023
£
£
Current tax
Adjustments in respect of prior periods
(38,085)
6,966
Research and development tax credit
(36,025)
Total current tax
(74,110)
6,966
Deferred tax
Origination and reversal of timing differences
144,580
22,519
Adjustment in respect of prior periods
47,661
90,354
Total deferred tax
192,241
112,873
Total tax charge
118,131
119,839
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit before taxation
432,859
13,924
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 22.01%)
108,215
3,065
Tax effect of expenses that are not deductible in determining taxable profit
22,630
15,747
Adjustments in respect of prior years
(38,085)
Effect of change in corporation tax rate
2,695
Permanent capital allowances in excess of depreciation
(11,345)
Depreciation on assets not qualifying for tax allowances
13,682
12,281
Research and development tax credit
(36,025)
Other permanent differences
53
Under/(over) provided in prior years
6,966
Deferred tax adjustments in respect of prior years
47,661
90,354
Wasted charitable donations
76
Taxation charge for the year
118,131
119,839
THE SURFACE PRINT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 20 -
10
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Total
£
£
£
Cost
At 1 October 2023
1,945,999
7,165,921
9,111,920
Additions
28,226
250,598
278,824
Disposals
(4,549)
(38,329)
(42,878)
At 30 September 2024
1,969,676
7,378,190
9,347,866
Depreciation and impairment
At 1 October 2023
572,474
3,751,913
4,324,387
Depreciation charged in the year
60,079
353,340
413,419
At 30 September 2024
632,553
4,105,253
4,737,806
Carrying amount
At 30 September 2024
1,337,123
3,272,937
4,610,060
At 30 September 2023
1,373,525
3,414,008
4,787,533
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2024
2023
£
£
Plant and equipment
2,555,982
2,542,664
Freehold land is included within land and buildings at a cost of £150,000 (2023: £150,000). This is not depreciated.
THE SURFACE PRINT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 21 -
11
Fixed asset investments
2024
2023
£
£
Listed investments
760
1,045
Listed investments are financial instruments measured at fair value through profit or loss.
Movements in fixed asset investments
Investments
£
Cost or valuation
At 1 October 2023
1,045
Valuation changes
(285)
At 30 September 2024
760
Carrying amount
At 30 September 2024
760
At 30 September 2023
1,045
12
Stocks
2024
2023
£
£
Raw materials and consumables
641,359
711,410
Work in progress
43,468
29,262
Finished goods and goods for resale
378,620
365,124
1,063,447
1,105,796
At the year end an amount of £12,659 (2023: Nil) was provided for against slow moving stock.
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,045,241
1,201,821
Corporation tax recoverable
31,119
Other debtors
138,576
207,471
Prepayments and accrued income
71,221
110,371
1,286,157
1,519,663
THE SURFACE PRINT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 22 -
14
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
16
426,725
897,346
Obligations under finance leases
17
383,037
410,598
Trade creditors
659,370
810,143
Corporation tax
6,966
Other taxation and social security
77,849
89,251
Other creditors
33,569
9,101
Accruals and deferred income
115,130
110,079
1,695,680
2,333,484
Bank loans of £72,300 (2023: £68,915) are secured by way of a legal charge over the company's freehold property and a fixed and floating charge over all the undertakings and assets of the company.
Obligations under finance leases are secured against the assets to which they relate to.
Within bank loans, the invoice discounting facility of £354,425 (2023: 812,441) is secured against trade debtors and accrues interest at a rate of 1.75% above the base rate.
15
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
16
324,984
367,629
Obligations under finance leases
17
1,284,360
1,521,828
Preference shares
16
12,393
12,393
1,621,737
1,901,850
Disclosure of the terms and conditions attached to the bank loans and overdrafts is made in the borrowings note.
Disclosure of the terms and conditions attached to the preference shares is made in the Share capital note.
Obligations under finance leases are secured against the assets to which they relate.
Amounts included above which fall due after five years are as follows:
Payable by instalments
16,456
40,390
THE SURFACE PRINT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 23 -
16
Loans and overdrafts
2024
2023
£
£
Bank loans
751,709
1,264,975
Preference shares
12,393
12,393
764,102
1,277,368
Payable within one year
426,725
897,346
Payable after one year
337,377
380,022
A factory mortgage is repayable in monthly instalments, including interest at 2.1% over the base rate, until August 2028. The loan is secured by way of a legal charge over the company's freehold property and a fixed and floating charge over all the undertakings and assets of the company. The amount outstanding at the balance sheet date was £264,226 (2023: £314,009).
A Covid loan is repayable in monthly instalments, including interest at 3.64% over the base rate, until May 2030. The loan is secured on the company's freehold property plus an unlimited debenture The amount outstanding at the balance sheet date was £133,058 (2023: £147,528).
Within bank loans, the invoice discounting facility of £354,425 (2023: £812,441) is secured against trade debtors.
Disclosure of the terms and conditions attached to the preference shares is made in the Share capital note.
17
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
465,442
481,994
In two to five years
1,430,921
1,376,934
In over five years
383,050
1,896,363
2,241,978
Less: future finance charges
(228,966)
(309,552)
1,667,397
1,932,426
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is five years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
THE SURFACE PRINT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 24 -
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
944,785
960,359
Tax losses
(411,663)
(625,287)
Short term timing differences
(6,724)
(915)
526,398
334,157
2024
Movements in the year:
£
Liability at 1 October 2023
334,157
Charge to profit or loss
192,241
Liability at 30 September 2024
526,398
The deferred tax liability set out above is expected to reverse within 5 years and relates to accelerated capital allowances that are expected to mature within the same period.
19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
116,606
88,209
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. The amount owed to those funds at the year was £33,545 (2023: £9,101).
20
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary C shares of 10p each
13,770
13,770
1,377
1,377
THE SURFACE PRINT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
20
Share capital
(Continued)
- 25 -
2024
2023
2024
2023
Preference share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of 10p each
41,310
41,310
4,131
4,131
Ordinary B shares of 10p each
82,620
82,620
8,262
8,262
123,930
123,930
12,393
12,393
Preference shares classified as liabilities
12,393
12,393
The Ordinary 'C' shares are classified as equity. In addition, the company has 41,310 Ordinary 'A' shares of £0.10 each and 82,620 Ordinary 'B' shares of £0.10 each, which are classified as debt.
The holders of the Ordinary 'A' and 'B' shares are entitled to receive fixed cumulative preference dividends, unless they choose to waive those rights, at an annual rate of £50,000 ('A') and £20,000 ('B'). All classes of shares carry equal voting rights of one vote per share.
In the event of a sale or winding up, the holders of the Ordinary 'A' and 'B' shares are entitled to a return of capital together with the payment of a fixed sum, as defined in the articles and resolutions, ahead of the Ordinary 'C' Shareholders.
21
Operating lease commitments
Lessee
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:
2024
2023
£
£
Within one year
33,026
15,514
Between two and five years
83,699
38,928
In over five years
19,058
23,095
135,783
77,537
22
Related party transactions
During the year, the company made sales on an arms length basis to companies associated with directors. These sales amounted to £496,291 (2023: £622,414). At the balance sheet date, the company was owed £119,602 (2023: £196,155) by companies associated with directors.
THE SURFACE PRINT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 26 -
23
Directors' transactions
No interest has been charged on any of the balances set out below:
Description
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Loan 1
688
4,499
(562)
4,625
Loan 2
688
16,636
(8,313)
9,011
1,376
21,135
(8,875)
13,636
24
Ultimate controlling party
At the current and preceding year ends the company was under the control of J W Watson by virtue of his control of the majority of the voting rights across all classes of shares.
On the 1st of October 2024, the company's immediate parent became Ritzema Group Limited. J W Watson remains the ultimate controlling party.
25
Cash generated from operations
2024
2023
£
£
Profit/(loss) after taxation
314,728
(105,915)
Adjustments for:
Taxation charged
118,131
119,839
Finance costs
248,722
252,772
Investment income
(35)
(35)
Gain on disposal of tangible fixed assets
(10,000)
Depreciation and impairment of tangible fixed assets
413,419
417,484
Other gains and losses
285
(95)
Movements in working capital:
Decrease/(increase) in stocks
42,349
(84,601)
Decrease in debtors
319,762
313,704
(Decrease)/increase in creditors
(132,656)
26,193
Cash generated from operations
1,324,705
929,346
THE SURFACE PRINT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 27 -
26
Analysis of changes in net debt
1 October 2023
Cash flows
New finance leases
30 September 2024
£
£
£
£
Cash at bank and in hand
51,782
(27,335)
-
24,447
Borrowings excluding overdrafts
(1,277,368)
513,266
-
(764,102)
Obligations under finance leases
(1,932,426)
413,611
(148,582)
(1,667,397)
(3,158,012)
899,542
(148,582)
(2,407,052)
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