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Registered number: 04490565
PROFITABILITY BUSINESS SIMULATIONS LIMITED
UNAUDITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
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PROFITABILITY BUSINESS SIMULATIONS LIMITED
REGISTERED NUMBER: 04490565
BALANCE SHEET
AS AT 31 MARCH 2020
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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The directors consider that the Company is entitled to exemption from audit under section 477 of the Companies Act 2006 and members have not required the Company to obtain an audit for the year in question in accordance with section 476 of the Companies Act 2006.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
The Company's financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
Page 1
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PROFITABILITY BUSINESS SIMULATIONS LIMITED
REGISTERED NUMBER: 04490565
BALANCE SHEET (CONTINUED)
AS AT 31 MARCH 2020
The Company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.
Page 2
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PROFITABILITY BUSINESS SIMULATIONS LIMITED
REGISTERED NUMBER: 04490565
BALANCE SHEET (CONTINUED)
AS AT 31 MARCH 2020
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
................................................
Dr N Downing
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The notes on pages 4 to 14 form part of these financial statements.
Page 3
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PROFITABILITY BUSINESS SIMULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
Profitability Business Simulations Limited is a private company, limited by share capital and registered in England and Wales.
The company's registered office address is Stables 1, Howbery Park, Wallingford, Oxfordshire, OX10 8BA.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The following principal accounting policies have been applied:
Turnover represents net invoiced sales of service excluding value added tax.
Goodwill, being the amount paid in connection with the acquisition of business in 2002, has been amortised evenly over its estimated useful life of ten years.
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Exemption from preparing consolidated financial statements
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The Company, and the group headed by it, qualify as small as set out in section 383 of the Companies Act 2006 and the parent and group are considered eligible for the exemption to prepare consolidated accounts.
Page 4
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PROFITABILITY BUSINESS SIMULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
2.Accounting policies (continued)
The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern.
Whilst it is too early to estimate what the full impact from COVID-19 will be on the company’s performance for the foreseeable future, the directors expect that COVID-19 will cause significant disruption to its business.
The company has prepared forecasts and projections using what the directors to be reasonable assumptions relating to the company's financial performance, current financial position and existing financial resources for a period of at least 12 months from signing of the financial statements which show the company to be a going concern.
The company has also considered worst-case alternative scenarios based on what they consider to be a significant but unrealistic reduction in revenue because of COVID-19 and what impact it would have on the company’s performance for a period of at least 12 months from signing of the financial statements. These forecasts and projections show the company be a going concern based on current cash and agreed borrowings available, without any consideration of reducing operational overheads to reduce the impact of an unrealistic reduction in turnover.
The company is also undertaking proactive measures to optimise working capital and preserve cash, including making use of the Government schemes available regarding business rates, HMRC time to pay arrangements, VAT deferment, and other support which will provide a material working capital benefit to the company over the next 12 months.
Based on the above, the directors are of the opinion that the going concern principle is applicable and that the company has the necessary resources to continue as a going concern for the foreseeable future.
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.
Page 5
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PROFITABILITY BUSINESS SIMULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
2.Accounting policies (continued)
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Page 6
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PROFITABILITY BUSINESS SIMULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
2.Accounting policies (continued)
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Tangible fixed assets (continued)
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Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Investments in subsidiaries are measured at cost less accumulated impairment.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted averagebasis. Work in progress and finished goods include labour and attributable overheads.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Page 7
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PROFITABILITY BUSINESS SIMULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
2.Accounting policies (continued)
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Provisions for liabilities
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Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance sheet.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
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The average monthly number of employees, including the directors, during the year was as follows:
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Average number of employee
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Page 8
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PROFITABILITY BUSINESS SIMULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
Page 9
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PROFITABILITY BUSINESS SIMULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
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Charge for the year on financed assets
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Page 10
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PROFITABILITY BUSINESS SIMULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
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Investments in subsidiary companies
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The following was a subsidiary undertaking of the Company:
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Profitability Business Simulations Inc
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The aggregate of the share capital and reserves as at 31 March 2020 and the profit or loss for the year ended on that date for the subsidiary undertaking was as follows:
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Profitability Business Simulations Inc
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Prepayments and accrued income
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Page 11
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PROFITABILITY BUSINESS SIMULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Other taxation and social security
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Accruals and deferred income
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Creditors: Amounts falling due after more than one year
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Page 12
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PROFITABILITY BUSINESS SIMULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
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The Funding Circle loan of £350,000, which is due for repayment by 15 April 2024, has interest charged at 7.10%.
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Amounts falling due within one year
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Amounts falling due 1-2 years
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Amounts falling due 2-5 years
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Charged to profit or loss
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The deferred taxation balance is made up as follows:
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Accelerated capital allowances
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Tax losses carried forward
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Page 13
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PROFITABILITY BUSINESS SIMULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
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Allotted, called up and fully paid
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99,999 (2019 - 99,999) A Class Ordinary shares of £0.01 each
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1 (2019 - 1) B Class Ordinary share of £0.01
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99,999 (2019 - 99,999) C Class Ordinary shares of £0.01 each
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1 (2019 - 1) D Class Ordinary share of £0.01
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The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £17,768 (2019 - £15,154). Contributions totalling £1,802 (2019 - £1,255) were payable to the fund at the balance sheet date and are included in creditors.
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Commitments under operating leases
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At 31 March 2020 the Company had future minimum lease payments under non-cancellable operating leases as follows:
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Later than 1 year and not later than 5 years
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Related party transactions
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The company has taken advantage of FRS 102 Section 33.1A and not disclosed transactions with 100% owned members of the Group.
At the year end, the company owed the directors £29,133 (2019: £63,933). The amounts were non-interest bearing and repayable on demand.
During the year, the company paid dividends of £nil (2019: £176,733) to the directors, who are also shareholders.
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Page 14
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