Company Registration No. 09119960 (England and Wales)
THE LOVELY DISTRIBUTION COMPANY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2019
THE LOVELY DISTRIBUTION COMPANY LIMITED
COMPANY INFORMATION
Director
Mr A Frenkel
Company number
09119960
Registered office
Unit 3
Woking8
Forsyth Road
WOKING
GU21 5SB
Auditor
Lopian Gross Barnett & Co
1st Floor, Cloister House
Riverside
New Bailey Street
Manchester
M3 5FS
Business address
Unit 3
Woking8
Forsyth Road
WOKING
GU21 5SB
THE LOVELY DISTRIBUTION COMPANY LIMITED
CONTENTS
Page
Strategic report
1
Director's report
2 - 3
Director's 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 - 20
THE LOVELY DISTRIBUTION COMPANY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2019
- 1 -
The director presents the strategic report for the year ended 31 July 2019.
Fair review of the business
The company continues to supply
goods
to retailers and wholesalers and
also continues
developing its own brands
.
The director is satisfied with the results, turnover has increased by 14.57% in the year, which has mitigated the 2.74% decrease in gross profit margin.
Principal risks and uncertainties
The company's principal financial risks comprise the management of its banking facilities, trade creditors, trade debtors, loans to the company and finance leases.
Key performance indicators
The results for the year and the financial position at the year end were considered satisfactory by the directors who expect to
see
increased profits in the foreseeable future.
Other performance indicators
The key financial highlights are as follows:-
2019 2018
£ £
Turnover 11,930,819 10,413,771
Gross profit 19.08% 21.82%
Return on capital employed 14.41% 32.23%
Mr A Frenkel
Director
29 April 2020
THE LOVELY DISTRIBUTION COMPANY LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 JULY 2019
- 2 -
The director presents his annual report and financial statements for the year ended 31 July 2019.
Principal activities
T
he
company's principal activity during the year continued to that of the wholesale of perfumery goods and accessories.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Mr A Frenkel
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £699,333. The director does not recommend payment of a final dividend.
Financial instruments
Liquidity risk
In respect of bank facility liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of invoice financing and trade line for payments to suppliers.
Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.
Interest rate risk
In respect of loans from trading partners and directors, no interest is charged and repayment is postponed to benefit cash flow where appropriate.
Foreign currency risk
Foreign currency risk is considered to be limited to foreign contracts. This is managed by using forward contracts and option contracts to limit the effects of movements in exchange rates on contract prices and on cash flow.
Credit risk
Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring, through a dedicated credit controller of amounts outstanding for both time and credit limits, and for many customers credit insurance.
Other risk
The director
s
consider that the principal risks for the company, other than financial, are those of protection of the company's assets when in transit and retention of staff as much of the business arises from personal relationships regarding procurement and sales.
Assets are protected by ensuring that insurance cover is adequate, warehouse security is continually updated to limit the potential risk of theft or robbery and systems have been put in place to minimise the risk by requiring all deliveries to be checked on receipt and monitoring entry onto site and to the warehouse.
Auditor
The auditor, Lopian Gross Barnett & Co, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
THE LOVELY DISTRIBUTION COMPANY LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
- 3 -
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
Mr A Frenkel
Director
29 April 2020
THE LOVELY DISTRIBUTION COMPANY LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 JULY 2019
- 4 -
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is 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. He is 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.
THE LOVELY DISTRIBUTION COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THE LOVELY DISTRIBUTION COMPANY LIMITED
- 5 -
Opinion
We have audited the financial statements of The Lovely Distribution Company Limited (the 'company') for the year ended 31 July 2019 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 a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 31 July 2019 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
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the director's use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the director has not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue
.
The director is responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the
financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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 director's r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
THE LOVELY DISTRIBUTION COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THE LOVELY DISTRIBUTION COMPANY LIMITED
- 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 identifie
d
material misstatements in the strategic report and the director's
r
eport
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of director's remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of director
As explained more fully in the director's
r
esponsibilities
s
tatement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities
.
This description forms part of our auditor’s report.
THE LOVELY DISTRIBUTION COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THE LOVELY DISTRIBUTION COMPANY LIMITED
- 7 -
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 him 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.
Jonathan Brodie ACA (Senior Statutory Auditor)
for and on behalf of Lopian Gross Barnett & Co
30 April 2020
Chartered Accountants
Statutory Auditor
1st Floor, Cloister House
Riverside
New Bailey Street
Manchester
M3 5FS
THE LOVELY DISTRIBUTION COMPANY LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 JULY 2019
- 8 -
2019
2018
Notes
£
£
Turnover
3
11,930,819
10,413,771
Cost of sales
(9,654,460)
(8,141,768)
Gross profit
2,276,359
2,272,003
Distribution costs
(192,748)
(196,881)
Administrative expenses
(1,614,803)
(901,116)
Operating profit
4
468,808
1,174,006
Interest payable and similar expenses
6
(4,267)
(6,437)
Profit before taxation
464,541
1,167,569
Tax on profit
7
(88,307)
(221,838)
Profit for the financial year
376,234
945,731
The profit and loss account has been prepared on the basis that all operations are continuing operations.
THE LOVELY DISTRIBUTION COMPANY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JULY 2019
- 9 -
2019
2018
£
£
Profit for the year
376,234
945,731
Other comprehensive income
-
-
Total comprehensive income for the year
376,234
945,731
THE LOVELY DISTRIBUTION COMPANY LIMITED
BALANCE SHEET
AS AT
31 JULY 2019
31 July 2019
- 10 -
2019
2018
Notes
£
£
£
£
Current assets
Stocks
10
2,402,125
2,605,989
Debtors
11
3,176,751
3,002,432
Cash at bank and in hand
171,809
4,887
5,750,685
5,613,308
Creditors: amounts falling due within one year
12
(3,139,780)
(2,679,304)
Net current assets
2,610,905
2,934,004
Capital and reserves
Called up share capital
13
200
200
Profit and loss reserves
2,610,705
2,933,804
Total equity
2,610,905
2,934,004
The financial statements were approved and signed by the director and authorised for issue on 29 April 2020
Mr A Frenkel
Director
Company Registration No. 09119960
THE LOVELY DISTRIBUTION COMPANY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2019
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 August 2017
200
2,563,073
2,563,273
Year ended 31 July 2018:
Profit and total comprehensive income for the year
-
945,731
945,731
Dividends
8
-
(575,000)
(575,000)
Balance at 31 July 2018
200
2,933,804
2,934,004
Year ended 31 July 2019:
Profit and total comprehensive income for the year
-
376,234
376,234
Dividends
8
-
(699,333)
(699,333)
Balance at 31 July 2019
200
2,610,705
2,610,905
THE LOVELY DISTRIBUTION COMPANY LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JULY 2019
- 12 -
2019
2018
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
16
1,659,552
1,987,732
Interest paid
(4,267)
(6,437)
Income taxes paid
(352,958)
(384,499)
Net cash inflow from operating activities
1,302,327
1,596,796
Investing activities
Proceeds from other investments and loans
(436,072)
(1,025,303)
Net cash used in investing activities
(436,072)
(1,025,303)
Financing activities
Dividends paid
(699,333)
(575,000)
Net cash used in financing activities
(699,333)
(575,000)
Net increase/(decrease) in cash and cash equivalents
166,922
(3,507)
Cash and cash equivalents at beginning of year
4,887
8,394
Cash and cash equivalents at end of year
171,809
4,887
THE LOVELY DISTRIBUTION COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2019
- 13 -
1
Accounting policies
Company information
The Lovely Distribution Company Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Unit 3, Woking8, Forsyth Road, WOKING, GU21 5SB.
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 a
mounts
in these financial statements are
rounded to the nearest £.
1.2
Going concern
The accounts have been prepared on a going concern basis.
true
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.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
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.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that
it is probable will be
recover
ed
.
1.4
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 replacement cost and 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.
THE LOVELY DISTRIBUTION COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
1
Accounting policies
(Continued)
- 14 -
1.5
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.
1.6
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.
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.
THE LOVELY DISTRIBUTION COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
1
Accounting policies
(Continued)
- 15 -
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.
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 though 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.
1.7
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.8
Taxation
The tax expense represents the sum of the tax currently payable
.
THE LOVELY DISTRIBUTION COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
1
Accounting policies
(Continued)
- 16 -
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.
1.9
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.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is 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 and other revenue
2019
2018
£
£
Turnover analysed by class of business
Derived from principal business activity
11,930,819
10,413,771
2019
2018
£
£
Turnover analysed by geographical market
UK
11,860,088
10,404,800
Overseas
70,731
8,971
11,930,819
10,413,771
THE LOVELY DISTRIBUTION COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
- 17 -
4
Operating profit
2019
2018
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
12,000
6,000
Cost of stocks recognised as an expense
9,645,693
8,125,478
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was 1 (2017 - 1).
2019
2018
Number
Number
Directors
1
1
2019
2018
£
£
Social security costs
6,542
2,376
6
Interest payable and similar expenses
2019
2018
£
£
Other finance costs:
Other interest
4,267
6,437
7
Taxation
2019
2018
£
£
Current tax
UK corporation tax on profits for the current period
88,307
221,838
THE LOVELY DISTRIBUTION COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
7
Taxation
(Continued)
- 18 -
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:
2019
2018
£
£
Profit before taxation
464,541
1,167,569
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2018: 19.00%)
88,263
221,838
Tax effect of expenses that are not deductible in determining taxable profit
44
-
Taxation charge for the year
88,307
221,838
8
Dividends
2019
2018
£
£
Interim paid
699,333
575,000
9
Financial instruments
2019
2018
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
3,176,751
3,002,432
Carrying amount of financial liabilities
Measured at amortised cost
2,660,692
1,998,470
10
Stocks
2019
2018
£
£
Finished goods and goods for resale
2,402,125
2,605,989
11
Debtors
2019
2018
Amounts falling due within one year:
£
£
Trade debtors
1,044,148
1,305,901
Other debtors
2,132,603
1,696,531
3,176,751
3,002,432
THE LOVELY DISTRIBUTION COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
- 19 -
12
Creditors: amounts falling due within one year
2019
2018
£
£
Trade creditors
2,315,083
800,349
Corporation tax
147,029
411,680
Other taxation and social security
332,059
269,154
Other creditors
100,323
64,610
Accruals and deferred income
245,286
1,133,511
3,139,780
2,679,304
13
Share capital
2019
2018
£
£
Ordinary share capital
Issued and fully paid
85 Ordinary A shares of £1 each
85
85
85 Ordinary B shares of £1 each
85
85
30 Ordinary C shares of £1 each
30
30
200
200
THE LOVELY DISTRIBUTION COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2019
- 20 -
14
Related party transactions
The turnover figure includes goods to the value of £11,860,088 (2018 - £10,404,800) relating to transactions with CRM Trading Limited, a company in which Mr A Frenkel is a shareholder.
The company accrued management and administrative services from CRM Trading Limited to the value of £360,000 (2018 - £360,000) during the period. There were also expenses paid for by CRM Trading Limited on behalf of the company, these amounts were not material.
At the balance sheet date the company owed £1,430,516 to CRM Trading Limited.(2018 - £42,856).
At the balance sheet date the company was owed £816,488 (2018 - £673,265) by a shareholder, Charles Rodney Mathers, which was repaid in full on 27 March 2020.
At the balance sheet date the company was owed £NIL (2018- £25,000) by a shareholder,
15
Directors' transactions
Dividends totalling £0 (2018 - £0) were paid in the year in respect of shares held by the company's directors.
Advances or credits have been granted by the company to its directors as follows:
Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Mr A Frenkel - Directors loan
-
998,265
750,000
(432,150)
1,316,115
998,265
750,000
(432,150)
1,316,115
16
Cash generated from operations
2019
2018
£
£
Profit for the year after tax
376,234
945,731
Adjustments for:
Taxation charged
88,307
221,838
Finance costs
4,267
6,437
Movements in working capital:
Decrease/(increase) in stocks
203,864
(1,328,879)
Decrease in debtors
261,753
1,920,588
Increase in creditors
725,127
222,017
Cash generated from operations
1,659,552
1,987,732
2019-07-31
2018-08-01
false
CCH Software
CCH Accounts Production 2020.100
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