Nova of London Limited - Limited company accounts 20.1

REGISTERED NUMBER: 01497069 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

FOR

NOVA OF LONDON LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

4

Income Statement

7

Other Comprehensive Income

8

Balance Sheet

9

Statement of Changes in Equity

10

Cash Flow Statement

11

Notes to the Cash Flow Statement

12

Notes to the Financial Statements

14

DIRECTORS:

S S Chawla

A S Chawla

D S Chawla

R K Chawla

SECRETARY:

R K Chawla

REGISTERED OFFICE:

191 - 193 Commercial Road

London

E1 2BT

REGISTERED NUMBER:

01497069 (England and Wales)

AUDITORS:

Xeinadin Audit Ltd

Statutory Auditors

12 Conqueror Court

Sittingbourne

Kent

ME10 5BH

The directors present their strategic report for the year ended 30 June 2021.

REVIEW OF BUSINESS

The results for the year and financial position of the company are as shown in the annexed financial statements.

The company's turnover increased by 29.9% from £23,903,075 to £31,050,856. Furthermore, the company's gross profit margin increased to 30.42% this year versus 20.53% last year. The gross profit margin increase was due to the increase in turnover combined with a lack of stock available to competitors and successful control of costs during the year, whilst being in a challenging current climate. The market conditions are expected to continue to be very competitive but the directors are optimistic that the company will be able to maintain its current performance with regard to turnover and possibly improve upon it in 2022. However, the directors do expect the gross profit margins to come under pressure next year possibly returning to levels in 2020.

The directors are continuously monitoring the potential risks and uncertainty to the business in order to take the necessary mitigating steps to maintain the company's competitive edge.

ON BEHALF OF THE BOARD:

S S Chawla - Director

1 July 2022

The directors present their report with the financial statements of the company for the year ended 30 June 2021.

DIVIDENDS

The directors have recommended interim dividends totalling £8,000 per share. No final dividend is proposed.

DIRECTORS

S S Chawla has held office during the whole of the period from 1 July 2020 to the date of this report.

Other changes in directors holding office are as follows:

A P S Chawla - resigned 1 February 2021

A S Chawla - appointed 1 February 2021

D S Chawla - appointed 1 February 2021

R K Chawla - appointed 1 February 2021

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.

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 or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Xeinadin Audit Ltd, are deemed re-appointed under section 487(2) of the Companies Act 2006.

ON BEHALF OF THE BOARD:

S S Chawla - Director

1 July 2022

Opinion

We have audited the financial statements of Nova of London Limited (the 'company') for the year ended 30 June 2021 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, 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 30 June 2021 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

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.

An overview of the scope of our audit

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement whether caused by fraud or other irregularity or error. However, the evidence available to us was limited because we were not appointed auditors of the company until 9 May 2022 and in consequence it was not possible for us to perform the auditing procedures necessary to obtain sufficient appropriate audit evidence as regards to the opening balances and the comparative figures. With respect to stock, having a carrying amount of £3,522,696 the audit evidence available to us was limited because we did not observe the counting of the physical stock as at 30 June 2021, since that date was prior to our appointment as auditors of the company. Due to the fact that we did not attend the physical stock take, we were unable to obtain sufficient appropriate evidence regarding the stock quantity by using other audit procedure

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 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 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 three, 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

- Enquiry of management, those charged with governance and the entity's solicitors around actual and potential litigation and claims.

- Enquiry of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulation..

- Reviewing minutes of meetings of those charged with governance.

- Reviewing internal audit reports.

- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.

- Reviewing licensing laws and ensuring compliance.

- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.

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.

Barry Leibovitch (Senior Statutory Auditor)

for and on behalf of Xeinadin Audit Ltd

Statutory Auditors

12 Conqueror Court

Sittingbourne

Kent

ME10 5BH

1 July 2022

TURNOVER

3

31,050,856

23,903,075

Cost of sales

21,604,206

18,995,000

GROSS PROFIT

9,446,650

4,908,075

Administrative expenses

3,670,425

3,690,491

5,776,225

1,217,584

Other operating income

323,474

315,921

OPERATING PROFIT

6

6,099,699

1,533,505

Interest receivable and similar income

271,372

251,762

6,371,071

1,785,267

Interest payable and similar expenses

8

3,995

11,553

PROFIT BEFORE TAXATION

6,367,076

1,773,714

Tax on profit

9

1,212,055

341,669

PROFIT FOR THE FINANCIAL YEAR

5,155,021

1,432,045

PROFIT FOR THE YEAR

5,155,021

1,432,045

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

5,155,021

1,432,045

FIXED ASSETS

Tangible assets

11

304,286

304,845

Investments

12

9,217,613

7,886,613

9,521,899

8,191,458

CURRENT ASSETS

Stocks

13

3,522,696

3,411,858

Debtors

14

12,716,990

6,533,507

Investments

15

221,000

121,000

Cash at bank and in hand

9,372,232

9,781,413

25,832,918

19,847,778

CREDITORS

Amounts falling due within one year

16

6,120,340

3,062,882

NET CURRENT ASSETS

19,712,578

16,784,896

TOTAL ASSETS LESS CURRENT LIABILITIES

29,234,477

24,976,354

CREDITORS

Amounts falling due after more than one year

17

(6,085

)

(108,121

)

PROVISIONS FOR LIABILITIES

20

(17,881

)

(12,743

)

NET ASSETS

29,210,511

24,855,490

CAPITAL AND RESERVES

Called up share capital

21

100

100

Retained earnings

22

29,210,411

24,855,390

SHAREHOLDERS' FUNDS

29,210,511

24,855,490

The financial statements were approved by the Board of Directors and authorised for issue on 1 July 2022 and were signed on its behalf by:

S S Chawla - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 July 2019

100

24,223,345

24,223,445

Changes in equity

Dividends

-

(800,000

)

(800,000

)

Total comprehensive income

-

1,432,045

1,432,045

Balance at 30 June 2020

100

24,855,390

24,855,490

Changes in equity

Dividends

-

(800,000

)

(800,000

)

Total comprehensive income

-

5,155,021

5,155,021

Balance at 30 June 2021

100

29,210,411

29,210,511

Cash flows from operating activities

Cash generated from operations

1

2,101,945

3,446,848

Interest paid

(3,995

)

(11,553

)

Tax paid

(250,000

)

-

Net cash from operating activities

1,847,950

3,435,295

Cash flows from investing activities

Purchase of tangible fixed assets

(110,615

)

(49,636

)

Purchase of fixed asset investments

(1,331,000

)

(819,000

)

Sale of tangible fixed assets

34,503

-

Interest received

271,372

251,762

Net cash from investing activities

(1,135,740

)

(616,874

)

Cash flows from financing activities

Loan repayments in year

(221,342

)

(221,867

)

Equity dividends paid

(800,000

)

(800,000

)

Current asset investment

(100,000

)

(1,000

)

Net cash from financing activities

(1,121,342

)

(1,022,867

)

(Decrease)/increase in cash and cash equivalents

(409,132

)

1,795,554

Cash and cash equivalents at beginning of year

2

9,781,182

7,985,628

Cash and cash equivalents at end of year

2

9,372,050

9,781,182

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2021

2020

£

£

Profit before taxation

6,367,076

1,773,714

Depreciation charges

75,234

69,966

Loss on disposal of fixed assets

1,437

-

Finance costs

3,995

11,553

Finance income

(271,372

)

(251,762

)

6,176,370

1,603,471

(Increase)/decrease in stocks

(110,838

)

19,992

(Increase)/decrease in trade and other debtors

(6,183,483

)

1,734,057

Increase in trade and other creditors

2,219,896

89,328

Cash generated from operations

2,101,945

3,446,848

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 30 June 2021

30.6.21

1.7.20

£

£

Cash and cash equivalents

9,372,232

9,781,413

Bank overdrafts

(182

)

(231

)

9,372,050

9,781,182

Year ended 30 June 2020

30.6.20

1.7.19

£

£

Cash and cash equivalents

9,781,413

7,985,637

Bank overdrafts

(231

)

(9

)

9,781,182

7,985,628

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.7.20

Cash flow

At 30.6.21

£

£

£

Net cash

Cash at bank and in hand

9,781,413

(409,181

)

9,372,232

Bank overdrafts

(231

)

49

(182

)

9,781,182

(409,132

)

9,372,050

Liquid resources

Current asset investments

121,000

100,000

221,000

121,000

100,000

221,000

Debt

Debts falling due within 1 year

(224,111

)

119,306

(104,805

)

Debts falling due after 1 year

(108,121

)

102,036

(6,085

)

(332,232

)

221,342

(110,890

)

Total

9,569,950

(87,790

)

9,482,160

1.	STATUTORY INFORMATION

Nova of London 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.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

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

-

Straight line over 10 years

Plant and machinery

-

25% on reducing balance

Fixtures and fittings

-

15% on reducing balance

Motor vehicles

-

25% on reducing balance

Stocks

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

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, 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 tax

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

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

3.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

2021

2020

£

£

UK Sales

27,577,457

20,397,491

EU Sales

2,243,310

2,820,483

Non EU Sales

1,230,089

685,101

31,050,856

23,903,075

4.	EMPLOYEES AND DIRECTORS

2021

2020

£

£

Wages and salaries

1,761,524

1,594,986

Social security costs

129,521

132,359

Other pension costs

33,232

30,476

1,924,277

1,757,821

The average number of employees during the year was as follows:

2021

2020

Selling and distribution

68

62

Administration

11

7

79

69

5.	DIRECTORS' EMOLUMENTS

2021

2020

£

£

Directors' remuneration

109,986

55,900

Directors' pension contributions to money purchase schemes

2,551

751

The total benefits in kind received by the directors during the year was £43,792 (2020: £26,564).

6.	OPERATING PROFIT

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

2021

2020

£

£

Depreciation - owned assets

75,234

69,965

Loss on disposal of fixed assets

1,437

-

Auditors' remuneration

8,000

5,115

Foreign exchange differences

42,624

(39,425

)

Operating lease rentals - land & buildings

524,000

524,000

7.	EXCEPTIONAL ITEMS

2021

2020

£

£

Bad debts

(29,354

)

(82,207

)

8.

INTEREST PAYABLE AND SIMILAR EXPENSES

2021

2020

£

£

Bank loan interest

3,995

11,553

9.

TAXATION

Analysis of the tax charge

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

2021

2020

£

£

Current tax:

UK corporation tax

1,203,600

339,160

Corporation tax interest

3,317

651

Total current tax

1,206,917

339,811

Deferred tax

5,138

1,858

Tax on profit

1,212,055

341,669

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:

2021

2020

£

£

Profit before tax

6,367,076

1,773,714

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2020 - 19%)

1,209,744

337,006

Effects of:

Expenses not deductible for tax purposes

6,258

-

Capital allowances in excess of depreciation

(12,402

)

-

Depreciation in excess of capital allowances

-

2,805

capital allowance

Deferred tax

5,138

1,858

Interest

3,317

-

Total tax charge

1,212,055

341,669

10.

DIVIDENDS

2021

2020

£

£

Ordinary shares of £1 each

Interim

800,000

800,000

11.	TANGIBLE FIXED ASSETS

Improvements

Short

to

Plant and

leasehold

property

machinery

£

£

£

COST

At 1 July 2020

679,635

220,634

18,500

Additions

23,385

-

-

Disposals

-

-

-

At 30 June 2021

703,020

220,634

18,500

DEPRECIATION

At 1 July 2020

679,635

142,519

15,378

Charge for year

4,676

22,063

780

Eliminated on disposal

-

-

-

At 30 June 2021

684,311

164,582

16,158

NET BOOK VALUE

At 30 June 2021

18,709

56,052

2,342

At 30 June 2020

-

78,115

3,122

Fixtures

and

Motor

fittings

vehicles

Totals

£

£

£

COST

At 1 July 2020

371,076

204,764

1,494,609

Additions

56,235

30,995

110,615

Disposals

-

(115,580

)

(115,580

)

At 30 June 2021

427,311

120,179

1,489,644

DEPRECIATION

At 1 July 2020

216,146

136,086

1,189,764

Charge for year

31,781

15,934

75,234

Eliminated on disposal

-

(79,640

)

(79,640

)

At 30 June 2021

247,927

72,380

1,185,358

NET BOOK VALUE

At 30 June 2021

179,384

47,799

304,286

At 30 June 2020

154,930

68,678

304,845