RICHDOMAR LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2022
Company Registration No. 08839158 (England and Wales)
RICHDOMAR LIMITED
COMPANY INFORMATION
Directors
P B Lees
A R Lees
O Lees
L Williams
A R Lees
Company number
08839158
Registered office
Rawfolds One Rawfolds Way
Rawfolds
Cleckheaton
BD19 5LJ
Auditor
Naylor Wintersgill Limited
Carlton House
Grammar School Street
Bradford
BD1 4NS
Bankers
NatWest Bank Plc
Bradford Broadway Branch
1 Market Street
Bradford
BD1 1EG
RICHDOMAR LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 22
RICHDOMAR LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 30 JUNE 2022
The directors present the strategic report for the period ended 30 June 2022.
Fair review of the business
The company continued its principal activity of the online retail of beauty supplies and equipment.
The directors aim to present a balanced and comprehensive review of the development and performance of the business during the year and the position at the period-end. Our review is consistent with the size and non-complex nature of our business and is written in the context of the risks and uncertainties we face.
The directors are pleased with the performance of the company despite the difficult trading conditions impacted due to the Coronavirus pandemic. Strong management and quick decision-making resulted in the company being well placed to take advantage of opportunities going forward.
Principal risks and uncertainties
The principal risks facing the business are those from competitors operating in the same market place who principally compete on price. In addition, the general economic downturn has meant that customers may seek alternative suppliers to reduce costs. The directors mitigate these risks by maintaining excellent customer relationships and ensuring the range of products available to customers is appropriate and priced competitively.
Brexit
The impact of Brexit has been evaluated as being not likely to be significantly detrimental to the business. This is because our market is purely domestic and the sector that we supply is unlikely to see a serious downturn in business because it relates mainly to relatively small amounts of expenditure. In terms of supply, most of our products are UK sourced and we do not operate a 'just in time' system of procurement. We carry sufficient stock to compensate for any short-term interruption to supply.
Coronavirus pandemic
The impact of the Coronavirus pandemic hit the UK and Worldwide economy significantly. However the business, with small adjustments to working routines, has been able to continue to trade due to the supply of goods and services being on a distance selling basis. As the company has been able to continue to trade we have continued to see a significant increase in turnover during the period. The directors believe all reasonable steps have been undertaken to safeguard the future of the business.
Financial position at the reporting date
The balance sheet shows that the company's net assets have increased from £1.36m to £1.68m. The Company's net profit after tax decreased slightly from £925k to £922k.
- 1 -
RICHDOMAR LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
Key performance indicators
Management use a range of performance measures to monitor and manage the business. Some of the key performance measures are set out below.
18 months ended 12 months ended
30 June 2022 31 December 2020
-
Turnover £42,048,655 £18,966,748
-
Gross Profit £10,983,380 £5,204,233
-
Operating Profit £1,154,166 £1,167,308
The company continues to invest in new projects and stock lines for the benefit of the short, medium and long term future of the business. The benefits of these investments are expected to be realised in 2022/23 and beyond. These investments include continuous improvement and development in all areas of the business, such as products and customer service.
Financial risk management
Financial risks are managed through strict internal management controls and accurate and timely management information. Stock levels and margins are also closely monitored by management to identify potential issues and ensure the products are marketed appropriately.
P B Lees
Director
17 March 2023
- 2 -
RICHDOMAR LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 30 JUNE 2022
The directors present their annual report and financial statements for the period ended 30 June 2022.
Principal activities
The principal activity of the company continued to be that of online retailer of hair and beauty products.
Results and dividends
The results for the period are set out on page 8.
Ordinary dividends were paid amounting to £600,000. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
P B Lees
A R Lees
O Lees
L Williams
A R Lees
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.
On behalf of the board
P B Lees
Director
17 March 2023
- 3 -
RICHDOMAR LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE PERIOD ENDED 30 JUNE 2022
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;
-
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.
- 4 -
RICHDOMAR LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF RICHDOMAR LIMITED
Opinion
- 5 -
We have audited the financial statements of Richdomar Limited (the 'company') for the period ended 30 June 2022 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, 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 June 2022 and of its profit for the period 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'
r
eport for the financial period 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.
RICHDOMAR LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF RICHDOMAR LIMITED
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 identifie
d
material misstatements in the strategic report or the directors'
r
eport
.
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'
r
esponsibilities
s
tatement, 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
.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below
.
- 6 -
RICHDOMAR LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF RICHDOMAR LIMITED
Capability of the audit in detecting irregularities, including fraud
Based on our understanding of the Company and its industry, we identified that the principal risks of non-compliance with laws and regulations related to breaches of UK law and we considered the extent to which non-compliance might have a material effect on the financial statements of the Company. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to increase revenue or reduce expenditure or increase the capital position of the Company, and management bias in accounting estimates and judgmental areas of the financial statements
.
Audit procedures performed by the engagement team included:
-
Discussions with directors including consideration of known or suspected instances of non-compliance with laws and regulation and fraud;
-
Reviewing relevant meeting minutes;
-
Reviewing of correspondence in so far as they related to non-compliance with laws and regulations and fraud;
-
Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations, posted on unusual days, posted by infrequent users, posted by senior management or posted with descriptions indicating a higher level of risk;
-
Designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing over immaterial liabilities and assets balances.
There are inherent limitations in the audit procedures described above and 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. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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.
Victoria Wainwright
Senior Statutory Auditor
For and on behalf of Naylor Wintersgill Limited
17 March 2023
Chartered Accountants
Statutory Auditor
Carlton House
Grammar School Street
Bradford
BD1 4NS
- 7 -
RICHDOMAR LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 30 JUNE 2022
Period
Year
ended
ended
30 June
31 December
2022
2020
Notes
£
£
Turnover
3
42,048,655
18,966,748
Cost of sales
(31,065,275)
(13,762,515)
Gross profit
10,983,380
5,204,233
Distribution costs
(4,251,636)
(2,001,648)
Administrative expenses
(5,577,578)
(2,035,277)
Profit before taxation
1,154,166
1,167,308
Tax on profit
6
(232,136)
(242,029)
Profit for the financial period
922,030
925,279
The profit and loss account has been prepared on the basis that all operations are continuing operations.
- 8 -
RICHDOMAR LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 JUNE 2022
Period
Year
ended
ended
30 June
31 December
2022
2020
£
£
Profit for the period
922,030
925,279
Other comprehensive income
-
-
Total comprehensive income for the period
922,030
925,279
- 9 -
RICHDOMAR LIMITED
BALANCE SHEET
AS AT 30 JUNE 2022
30 June 2022
2022
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
8
83,511
5,087
Current assets
Stocks
9
4,117,378
1,999,165
Debtors
10
3,015,677
1,061,266
Cash at bank and in hand
1,194,155
2,562,874
8,327,210
5,623,305
Creditors: amounts falling due within one year
11
(6,716,468)
(4,271,066)
Net current assets
1,610,742
1,352,239
Total assets less current liabilities
1,694,253
1,357,326
Provisions for liabilities
Deferred tax liability
12
15,867
970
(15,867)
(970)
Net assets
1,678,386
1,356,356
Capital and reserves
Called up share capital
13
100
1
Profit and loss reserves
1,678,286
1,356,355
Total equity
1,678,386
1,356,356
The financial statements were approved by the board of directors and authorised for issue on 17 March 2023 and are signed on its behalf by:
P B Lees
Director
Company Registration No. 08839158
- 10 -
RICHDOMAR LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2022
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2020
1
431,076
431,077
Period ended 31 December 2020:
Profit and total comprehensive income for the period
-
925,279
925,279
Balance at 31 December 2020
1
1,356,355
1,356,356
Period ended 30 June 2022:
Profit and total comprehensive income for the period
-
922,030
922,030
Bonus issue of shares
13
99
(99)
Dividends
7
-
(600,000)
(600,000)
Balance at 30 June 2022
100
1,678,286
1,678,386
- 11 -
RICHDOMAR LIMITED
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 JUNE 2022
2022
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
17
(441,875)
2,378,877
Income taxes paid
(239,138)
(64,057)
Net cash (outflow)/inflow from operating activities
(681,013)
2,314,820
Investing activities
Purchase of tangible fixed assets
(87,706)
(4,009)
Net cash used in investing activities
(87,706)
(4,009)
Financing activities
Dividends paid
(600,000)
Net cash used in financing activities
(600,000)
-
Net (decrease)/increase in cash and cash equivalents
(1,368,719)
2,310,811
Cash and cash equivalents at beginning of period
2,562,874
252,063
Cash and cash equivalents at end of period
1,194,155
2,562,874
- 12 -
RICHDOMAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2022
1
Accounting policies
Company information
Richdomar Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
Rawfolds One Rawfolds Way, Rawfolds, Cleckheaton, BD19 5LJ.
1.1
Reporting period
The directors have opted to extend the period from 31 December to 30 June. This decision was taken as November and December are considered to be the peak trading period for the company. Due to this the comparative figures included in these financial statements represent the year to 31 December 2020 and as such are not wholly comparative with the 18 months ended 30 June 2022.
1.2
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 a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.
1.3
Going concern
A
true
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.4
Turnover
- 13 -
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.
1.5
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:
Fixtures and fittings
3 years straight line
Computers
3 years 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
.
RICHDOMAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
1
Accounting policies
(Continued)
1.6
Impairment of fixed assets
- 14 -
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.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
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.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
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.
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.
RICHDOMAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
1
Accounting policies
(Continued)
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, 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
paymen
ts 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. A
m
ounts 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.
- 15 -
RICHDOMAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
1
Accounting policies
(Continued)
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
s
ubsequently 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 th
r
ough 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.
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.
- 16 -
RICHDOMAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
1
Accounting policies
(Continued)
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.
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.
1.13
Leases
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 lease
s
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.
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.
3
Turnover
2022
2020
£
£
Turnover analysed by class of business
Sales of hair and beauty products
42,048,655
18,966,748
4
Operating profit
2022
2020
Operating profit for the period is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
Depreciation of owned tangible fixed assets
9,282
4,353
Operating lease charges
219,325
- 17 -
RICHDOMAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
5
Employees
The average monthly number of persons (including directors) employed by the company during the period was:
2022
2020
Number
Number
4
4
Total employee costs as shown below are comprised of recharged employment costs from Dennis Williams Limited, a company under the common control of a director.
2022
2020
£
£
Wages and salaries
1,693,817
569,316
6
Taxation
2022
2020
£
£
Current tax
UK corporation tax on profits for the current period
199,955
221,854
Deferred tax
Origination and reversal of timing differences
14,897
(62)
Foreign exchange differences
17,284
20,237
Total deferred tax
32,181
20,175
Total tax charge
232,136
242,029
- 18 -
RICHDOMAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
6
Taxation
(Continued)
The actual charge for the period can be reconciled to the expected charge for the period based on the profit or loss and the standard rate of tax as follows:
2022
2020
£
£
Profit before taxation
1,154,166
1,167,308
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
219,292
221,789
Permanent capital allowances in excess of depreciation
(19,337)
(762)
Depreciation on assets not qualifying for tax allowances
827
Foreign exchange differences
17,284
20,237
Deferred tax movement
14,897
(62)
Taxation charge for the period
232,136
242,029
7
Dividends
2022
2020
£
£
Interim paid
600,000
8
Tangible fixed assets
Fixtures and fittings
Computers
Total
£
£
£
Cost
At 1 January 2021
15,321
16,884
32,205
Additions
75,183
12,523
87,706
At 30 June 2022
90,504
29,407
119,911
Depreciation and impairment
At 1 January 2021
13,423
13,695
27,118
Depreciation charged in the period
2,484
6,798
9,282
At 30 June 2022
15,907
20,493
36,400
Carrying amount
At 30 June 2022
74,597
8,914
83,511
At 31 December 2020
1,898
3,189
5,087
- 19 -
RICHDOMAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
9
Stocks
2022
2020
£
£
Finished goods and goods for resale
4,117,378
1,999,165
10
Debtors
2022
2020
Amounts falling due within one year:
£
£
Trade debtors
2,367,273
862,344
Other debtors
45,783
Prepayments and accrued income
602,621
198,922
3,015,677
1,061,266
11
Creditors: amounts falling due within one year
2022
2020
£
£
Trade creditors
4,344,213
2,366,884
Corporation tax
199,955
221,854
Other taxation and social security
251,955
663,882
Other creditors
1,019,826
543,650
Accruals and deferred income
900,519
474,796
6,716,468
4,271,066
12
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2022
2020
Balances:
£
£
Accelerated capital allowances
15,867
970
2022
Movements in the period:
£
Liability at 1 January 2021
970
Charge to profit or loss
14,897
Liability at 30 June 2022
15,867
- 20 -
RICHDOMAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
13
Share capital
2022
2020
2022
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
52
1
52
1
'A' Ordinary shares of £1 each
24
-
24
-
'B' Ordinary shares of £1 each
24
-
24
-
100
1
100
1
On 29 June 2021 the company issued 99 shares under a bonus issue. These shares rank pari passu with the shares already issued.
On 29 June 2021 48 Ordinary shares were re-designated to 24 'A' Ordinary shares and 24 'B' Ordinary shares. No changes have been affected to any rights attached to these shares.
14
Related party transactions
Transactions with related parties
During the period, the company sold goods to, and purchased goods and services from, Dennis Williams Limited, a company under the common control of a director. The total amount invoiced to Dennis Williams Limited amounted to £949,450 (12 months to 31 December 2020 - £Nil). The total amount of goods and services invoiced by Dennis Williams Limited to Richdomar Limited amounted to £16,948,046 (12 months to 31 December 2020 - £7,315,432). As at the balance sheet date the total amount included in trade debtors in respect of the above amounts was £1,247,816 (31 December 2020 - £298,366) and the total amount included in trade creditors amounted to £2,226,843 (31 December 2020 - £430,312)
During the period the company also entered into loans with Dennis Williams Limited. These loans are interest free and repayable on demand. At the balance sheet date the total amount outstanding from Richdomar Limited amounted to £1,019,726 (31 December 2020 - £543,550).
15
Directors' transactions
Dividends totalling £600,000 (2020 - £0) were paid in the period in respect of shares held by the company's directors.
Interest free loans have been granted by the
directors to the company
as follows:
Description
% Rate
Opening balance
Closing balance
£
£
Directors loan
-
100
100
100
100
16
Ultimate controlling party
The ultimate controlling party is considered to be P B Lees due to their majority shareholding in the company.
- 21 -
RICHDOMAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2022
17
Cash (absorbed by)/generated from operations
2022
2020
£
£
Profit for the period after tax
922,030
925,279
Adjustments for:
Taxation charged
232,136
242,029
Depreciation and impairment of tangible fixed assets
9,282
4,353
Movements in working capital:
Increase in stocks
(2,118,213)
(819,356)
Increase in debtors
(1,954,411)
(858,838)
Increase in creditors
2,467,301
2,885,410
Cash (absorbed by)/generated from operations
(441,875)
2,378,877
18
Analysis of changes in net funds
1 January 2021
Cash flows
30 June 2022
£
£
£
Cash at bank and in hand
2,562,874
(1,368,719)
1,194,155
- 22 -
2022-06-30
2021-01-01
false
CCH Software
CCH Accounts Production 2022.300
P B Lees
A R Lees
O Lees
L Williams
A R Lees
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