Morplan Limited - Limited company accounts 20.1

REGISTERED NUMBER: 03801026 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019

FOR

MORPLAN LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Statement of Comprehensive Income

8

Balance Sheet

9

Statement of Changes in Equity

10

Notes to the Financial Statements

11

DIRECTORS:

V Terradot

D Cohen

D Marcovici

SECRETARY:

D Cohen

REGISTERED OFFICE:

Unit 1

Temple Bank

Harlow

Essex

CM20 2DY

REGISTERED NUMBER:

03801026 (England and Wales)

AUDITORS:

BSR Bespoke Chartered Accountants

Chartered Accountants & Statutory Auditors

Linden House

Linden Close

Tunbridge Wells

Kent

TN4 8HH

The directors present their strategic report for the year ended 31 December 2019.

PRINCIPAL PLACE OF BUSINESS

Morplan Limited is incorporated in the United Kingdom and is part of the Raja group of companies.

The company is a long established trade supplier to the retail industry and operates as an integrated distance selling operation complemented by retail outlets in London, Bristol, Glasgow and Birmingham and is supported by a nationwide distribution network.

REVIEW OF BUSINESS

2019 saw UK retail report it's worst year on record, resulting in job losses, shop closures and many companies forced to restructure. Overall demand remained weak, with the High Street most affected, as consumers continued to show a preference for on-line shopping. This was set in the context of an overall economy that continued to suffer uncertainty and the threat of a no-deal Brexit. Although the reduced demand resulted in our turnover and subsequent profitability falling from the previous year, we demonstrated good control over our overhead costs. The overall result, when set in the context of the marketplace and our competition, remained strong. During, what was clearly challenging times for our customers, Morplan continued to deliver unrivalled stock availability, exciting new product ranges and inventive solutions. Our new web platform, which went live in the final quarter of the year, has been well received by our customers. It offers them a fresh and exciting shopping experience, enhanced personalisation and innovative opportunities for us to transact with them.

Next year sees our 175 year anniversary! We remain the proud holder of a Royal Warrant and the No.1 supplier to the UK's retail & fashion industries. 2020 will see the company implement newly developed strategies to help build turnover and profitability. Whilst the Directors recognise the extreme difficulties caused by the current Covid-19 pandemic, beyond that they remain enthusiastic and optimistic for the continued success of the business.

Covid-19

There was no impact from Covid-19 on the financial statements for the year ended 31 December 2019. The 2020 accounting period started with a strong balance sheet including bank balances of £1,336,280 and we have focused on the following measures in order to reduce the impact of Covid-19:

-

We have commenced sourcing and selling Personal Protective Equipment (PPE) for resale to new customers in addition to our existing extensive customer base.

-

Immediate cost mitigation measures included placing staff on furlough where appropriate.

-

Where our shops have been forced to close, we have adapted by introducing a click and collect service which is proving successful.

-

We have introduced innovative measures to encourage new and existing customers to place orders.

An impact will be seen in the 31 December 2020 financial statements but, despite difficult trading conditions, as a result of the measures taken above we remain confident that Morplan will continue to trade for many years. On that basis, we conclude that Morplan remains a going concern.

PRINCIPAL RISKS AND UNCERTAINTIES

The management of the business and the execution of the company's strategy are subject to a number of risks.

The key business risks affecting the company are considered to relate to the heightened uncertainty in the UK economy, from the competition faced by both national and independent retailers and product availability.

The company's operations expose it to a variety of financial risks that include the effects of credit risk, liquidity risk and currency risk.

Credit risk

The company has implemented policies that require appropriate credit checks on potential customers before sales over a certain credit limit are made. This is combined with careful profiling and ageing of the trade debtors and with a regular formal debtors review procedure.

The company takes what it deems to be appropriate checks on any financial institution which holds company cash and deposits and conducts formal reviews of the risks and competitiveness of the facilities under use.

Liquidity risk

The company utilises funding facilities from its bankers and parent company to meet its obligations and management uses a process of cash forecast modelling to monitor the company's ability to meet those obligations.

Currency risk

The company procures supplies from across the globe and pays for the goods in a variety of currencies and manages this risk by hedging in the form of forward contracts.

ON BEHALF OF THE BOARD:

D Cohen - Director

15 September 2020

The directors present their report with the financial statements of the company for the year ended 31 December 2019.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of a trade supplier to the retail industry.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2019.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2019 to the date of this report.

V Terradot

D Cohen

D Marcovici

DISCLOSURE IN THE STRATEGIC REPORT

The company has chosen to set out in the strategic report the following information that is required to be stated in the directors' report:

An indication of the likely future developments of the business of the company.

The principal risks and uncertainties faced by the company.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors 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.

In preparing the financial statements the directors are required to state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, BSR Bespoke Chartered Accountants, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

D Cohen - Director

15 September 2020

Opinion

We have audited the financial statements of Morplan Limited (the 'company') for the year ended 31 December 2019 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity 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 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 31 December 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.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' 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 directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have 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.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors 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 the audit:

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

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 directors' 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 Statement of Directors' Responsibilities set out on page four, 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 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.

Auditors' 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 a Report of the Auditors 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 www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our 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 a Report of the Auditors 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.

Stephen Pocock (Senior Statutory Auditor)

for and on behalf of BSR Bespoke Chartered Accountants

Chartered Accountants & Statutory Auditors

Linden House

Linden Close

Tunbridge Wells

Kent

TN4 8HH

27 November 2020

TURNOVER

3

18,965,344

20,333,358

Cost of sales

9,067,075

9,462,303

GROSS PROFIT

9,898,269

10,871,055

Distribution costs

5,853,754

5,968,053

Administrative expenses

3,871,027

3,828,671

9,724,781

9,796,724

OPERATING PROFIT

5

173,488

1,074,331

Interest receivable and similar income

5,104

2,145

178,592

1,076,476

(Loss)/profit on derivatives

(36,587

)

47,240

PROFIT BEFORE TAXATION

142,005

1,123,716

Tax on profit

6

40,485

226,433

PROFIT FOR THE FINANCIAL YEAR

101,520

897,283

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

101,520

897,283

FIXED ASSETS

Intangible assets

7

-

-

Tangible assets

8

1,845,791

965,734

1,845,791

965,734

CURRENT ASSETS

Stocks

9

3,994,490

3,954,964

Debtors

10

4,041,746

3,238,528

Cash at bank and in hand

1,336,280

1,646,180

9,372,516

8,839,672

CREDITORS

Amounts falling due within one year

11

4,106,113

2,905,123

NET CURRENT ASSETS

5,266,403

5,934,549

TOTAL ASSETS LESS CURRENT LIABILITIES

7,112,194

6,900,283

PROVISIONS FOR LIABILITIES

14

362,640

252,249

NET ASSETS

6,749,554

6,648,034

CAPITAL AND RESERVES

Called up share capital

15

1,000,000

1,000,000

Retained earnings

16

5,749,554

5,648,034

SHAREHOLDERS' FUNDS

6,749,554

6,648,034

The financial statements were approved by the Board of Directors and authorised for issue on 15 September 2020 and were signed on its behalf by:

D Marcovici - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2018

1,000,000

4,750,751

5,750,751

Changes in equity

Total comprehensive income

-

897,283

897,283

Balance at 31 December 2018

1,000,000

5,648,034

6,648,034

Changes in equity

Total comprehensive income

-

101,520

101,520

Balance at 31 December 2019

1,000,000

5,749,554

6,749,554

1.	STATUTORY INFORMATION

Morplan Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The financial statements are presented in Sterling (£).

Going concern

The Company's business activities, together with the factors likely to affect its future development, performance and position, including a detailed Covid-19 assessment, are set out in the Strategic Report. After reviewing the company's forecasts and projections, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exceptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

- the requirements of Section 7 Statement of Cash Flows,

- the requirements of Section 33 Related Party Disclosures paragraph 33.7.

Turnover

Turnover is recognised when it is probable that future economic benefits will flow to the company from the sale of goods and services and is measured as the fair value of consideration which the company expects to receive from those transactions. Sales of goods are recognised at the point of sale or on delivery of the goods and when the risks and rewards of ownership have passed to the customer. Turnover from services is recognised when the services are provided.

Turnover from internet sales is recognised at the point when the goods are despatched to the customer.

Turnover is recognised net of returns and of trade discounts and is shown exclusive of value added tax.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Short leasehold

-

10% on cost

Plant and machinery

-

at varying rates on cost

Fixtures and fittings

-

at varying rates on cost

Computer equipment

-

at varying rates on cost

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Cost is determined on a weighted average basis.

Financial instruments

The company enters into basic financial instruments that give rise to financial assets and financial liabilities including trade and other debtors, trade and other creditors, bank account balances, bank loans and other loans and borrowings and investments in certain non puttable and non convertible equity instruments.

Debt instruments which are not payable or receivable within one year are initially accounted for at the transaction price and are subsequently accounted for at amortised cost using the effective interest method. Debt instruments payable and receivable within one year are measured at their undiscounted cash amounts. Where the debt instruments are treated as a financing transaction, then the financial asset or liability is measured at the present value of future cash flows based on a market rate of interest. Debt instruments which are treated as financial assets and accounted for at amortised cost are also assessed for impairment.

Equity instruments are initially accounted for at transaction price. They are subsequently accounted for at cost unless they can be accounted for at fair value based on a readily available market price in an active market. Equity instruments which are treated as financial assets and accounted for at cost are also assessed for impairment.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred taxation

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

The financial statements are presented in Sterling, which is also the functional currency of the Company. Transactions in currencies other than the functional currency of the Company are recorded at the rate of exchange on the date the transaction occurred. Monetary items denominated in other currencies are translated at the rate prevailing at the end of the reporting period. All differences are taken to the statement of comprehensive income. Non-monetary items that are measured at historic cost in a foreign currency are not retranslated.

Provisions

Provisions are recognised when the Company has a present legal or constructive obligation arising as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation.

Pension costs

The company operates a defined contribution pension scheme. Contributions are charged to the profit and loss account as they become payable in accordance with the rules of the scheme. The assets of the scheme are held separately from those of the company and operated independently by Aegon Scottish Equitable.

Critical accounting judgements and key sources of estimation uncertainty

In the application of the Company's accounting policies, which are described above, management is required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

3.

TURNOVER

Of the company's total turnover 93% (2018: 93%) is attributable to the UK market and 7% (2018: 7%) to Non-UK markets. All turnover is originated in the UK.

4.	EMPLOYEES AND DIRECTORS

31.12.19

31.12.18

£

£

Directors' remuneration

-

-

5.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

31.12.19

31.12.18

£

£

Depreciation - owned assets

272,383

240,751

Profit on disposal of fixed assets

(3,000

)

-

Fees payable for the audit

35,776

21,400

Foreign exchange (gain)/loss

28,859

12,624

Other operating leases

948,701

868,986

6.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

31.12.19

31.12.18

£

£

Current tax:

UK corporation tax

(66,331

)

225,046

Prior year corporation tax

-

15,782

Total current tax

(66,331

)

240,828

Deferred tax

106,816

(14,395

)

Tax on profit

40,485

226,433

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

31.12.19

31.12.18

£

£

Profit before tax

142,005

1,123,716

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2018 - 19%)

26,981

213,506

Effects of:

Expenses not deductible for tax purposes

1,068

16

Income not taxable for tax purposes

(970

)

-

Capital allowances in excess of depreciation

(93,410

)

-

Depreciation in excess of capital allowances

-

11,524

Adjustments to tax charge in respect of previous periods

-

15,782

differences

Deferred tax

106,816

(14,395

)

Total tax charge

40,485

226,433

7.	INTANGIBLE FIXED ASSETS

Goodwill

£

COST

At 1 January 2019

and 31 December 2019

10,530,953

AMORTISATION

At 1 January 2019

and 31 December 2019

10,530,953

NET BOOK VALUE

At 31 December 2019

-

At 31 December 2018

-

8.	TANGIBLE FIXED ASSETS

Fixtures

Short

Plant and

and

Computer

leasehold

machinery

fittings

equipment

Totals

£

£

£

£

£

COST

At 1 January 2019

689,941

381,350

237,794

522,737

1,831,822

Additions

17,994

109,918

8,859

1,015,669

1,152,440

Disposals

-

(48,411

)

-

(74,384

)

(122,795

)

At 31 December 2019

707,935

442,857

246,653

1,464,022

2,861,467

DEPRECIATION

At 1 January 2019

282,626

219,343

112,991

251,128

866,088

Charge for year

70,551

45,256

34,698

121,878

272,383

Eliminated on disposal

-

(48,411

)

-

(74,384

)

(122,795

)

At 31 December 2019

353,177

216,188

147,689

298,622

1,015,676

NET BOOK VALUE

At 31 December 2019

354,758

226,669

98,964

1,165,400

1,845,791

At 31 December 2018

407,315

162,007

124,803

271,609

965,734

9.

STOCKS

31.12.19

31.12.18

£

£

Raw materials

100,222

102,442

Finished goods

3,894,268

3,852,522

3,994,490

3,954,964

10.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.19

31.12.18

£

£

Trade debtors

1,720,483

1,482,370

Other debtors

2,241,735

1,756,158

Corporation tax recoverable

79,528

-

4,041,746

3,238,528

11.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.19

31.12.18

£

£

Trade creditors

2,659,196

1,135,650

Tax

-

240,817

Social security and other taxes

263,850

160,954

Other creditors

291,605

818,555

Accruals

891,462

549,147

4,106,113

2,905,123

12.	LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:

31.12.19

31.12.18

£

£

Within one year

708,610

740,036

Between one and five years

815,289

1,463,899

In more than five years

30,000

90,000

1,553,899

2,293,935

13.	FINANCIAL INSTRUMENTS

31.12.19

31.12.18

£

£

Financial Assets

Debt instruments measured at amortised cost

3,051,566

3,267,170

Financial Assets

Measured at fair value through profit or loss

-

28,490

Financial Liabilities

Measured at amortised cost

2,659,197

1,313,181

Financial Liabilities

Measured at fair value through profit or loss

8,097

-

A loss on derivative of £36,587 (2018: £47,240 profit) has been recognised in the profit or loss relating to financial liabilities measured at fair value through profit or loss.