66_BOOKS_LIMITED - Accounts
66_BOOKS_LIMITED - Accounts
Company Registration No. 06479293 (England and Wales)
FOR THE YEAR ENDED 31 MARCH 2015
Victoria Street
Chartered Accountants
Herts
AL1 3SE
COMPANY INFORMATION
Director
Secretary
Company number
Registered office
Auditors
CONTENTS
Page
Strategic report
1
Director's report
2 - 3
Independent auditors' report
4 - 5
Profit and loss account
6
Balance sheet
7
Cash flow statement
8
Notes to the cash flow statement
9
Notes to the financial statements
10 - 18
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2015
- 1 -
The director presents the strategic report and financial statements for the year ended 31 March 2015.
Review of the business
The results for the year and the financial position at the year end were considered satisfactory by the director who expects continued growth in the foreseeable future.
In the view of the director the principal risks and uncertainties faced by the company are as follows:
Credit risk
Many of the company's customers are in the retail sector and credit control is an important consideration. The company uses credit rating procedures and regular review of its debtor ageing to assess recoverability, as a result the company has experienced low levels of debtor default.
Gross profit
The director regularly monitors the company's gross profit using management accounting reporting techniques.
The key performance indicators (KPI) of the company reviewed by the board are in the main the following:-
monthly management accounts;
detailed stock reporting and rolling stocktakes;
review and reconciliation of debtor balances.
On behalf of the board
Director
19 November 2015
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 MARCH 2015
- 2 -
The director presents his report and financial statements for the year ended 31 March 2015.
Principal activities and review of the business
Results and dividends
The results for the year are set out on page 6.
No dividends were paid during the year. The director does not recommend a dividend.
Director
The following director has held office since 1 April 2014:
Financial instruments
Treasury operations and financial instruments
The company has various other financial assets and liabilities such as trade debtors and trade creditors arising directly from its operations. The director's objective is to ensure that the company has ready access to the funds deemed necessary to its operations at any time during the year.
Liquidity risk
The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the businesses.
Interest rate risk
The company is exposed to fair value interest rate risk on its fixed rate borrowings and cash flow interest rate risk on floating rate deposits, bank overdrafts and loans. The company uses interest rate derivatives to manage the mix of fixed and variable rate debt so as to reduce its exposure to changes in interest rates.
Foreign currency risk
The company's principal foreign currency exposures arise from trading with overseas companies. Company policy permits but does not demand that these exposures may be hedged in order to fix the cost in sterling. This hedging activity involves the use of foreign exchange forward contracts.
Credit risk
Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
Auditors
The auditors, Rayner Essex LLP, are deemed to be reappointed under section 487(2) of the Companies Act 2006.
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2015
- 3 -
Statement of director's responsibilities
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;
- 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 him 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.
Statement of disclosure to auditors
On behalf of the board
Director
INDEPENDENT AUDITORS' REPORT
TO THE MEMBERS OF 66 BOOKS LIMITED
- 4 -
We have audited the financial statements of 66 Books Limited for the year ended 31 March 2015 set out on pages 6 to 18. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditors' 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.
Respective responsibilities of director and auditors
As explained more fully in the Director's Responsibilities Statement set out on pages 2 - 3, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the director; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements
-
give a true and fair view of the state of the company's affairs as at 31 March 2015 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.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
INDEPENDENT AUDITORS' REPORT (CONTINUED)
TO THE MEMBERS OF 66 BOOKS LIMITED
- 5 -
Matters on which we are required to report by exception
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.
for and on behalf of Rayner Essex LLP
Chartered Accountants
Statutory Auditor
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2015
- 6 -
2015
2014
Notes
£
£
Turnover
2
Cost of sales
(8,350,802 )
(8,079,249 )
Gross profit
Administrative expenses
(2,878,600 )
(3,042,493 )
Other operating income
Operating profit
3
Interest payable and similar charges
4
(106,266 )
(71,098 )
Profit on ordinary activities before taxation
Tax on profit on ordinary activities
5
(371,064 )
(458,455 )
Profit for the year
13
The profit and loss account has been prepared on the basis that all operations are continuing operations.
There are no recognised gains and losses other than those passing through the profit and loss account.
BALANCE SHEET
AS AT
31 MARCH 2015
- 7 -
2015
2014
Notes
£
£
£
£
Fixed assets
Tangible assets
6
Current assets
Stocks
7
Debtors
8
Cash at bank and in hand
Creditors: amounts falling due within one year
9
(3,255,247 )
(3,671,655 )
Net current assets
Total assets less current liabilities
Creditors: amounts falling due after more than one year
10
(3,584,248 )
(4,303,538 )
Provisions for liabilities
11
(13,320 )
(10,098 )
Capital and reserves
Called up share capital
12
Profit and loss account
13
Shareholders' funds
14
Approved by the Board and authorised for issue on 19 November 2015
Director
Company Registration No. 06479293
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2015
- 8 -
2015
2014
£
£
£
£
Net cash inflow from operating activities
1,024,446
1,726,104
Returns on investments and servicing of finance
Interest paid
(106,266)
(71,098)
Net cash outflow for returns on investments and servicing of finance
(106,266)
(71,098)
Taxation
(332,861 )
(425,643 )
Capital expenditure
Payments to acquire tangible assets
(42,142)
(4,720,386)
Net cash outflow for capital expenditure
(42,142)
(4,720,386)
Net cash inflow/(outflow) before management of liquid resources and financing
(3,491,023 )
Financing
New long term bank loan
-
3,665,417
Other new long term loans
-
1,092,500
Repayment of long term bank loan
(571,667)
-
Repayment of other long term loans
(437,000)
-
Capital element of hire purchase contracts
(4,752)
(4,755)
Net cash (outflow)/inflow from financing
(1,013,419)
4,753,162
(Decrease)/increase in cash in the year
(470,242 )
1,262,139
NOTES TO THE CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2015
- 9 -
1
Reconciliation of operating profit to net cash inflow from operating activities
2015
2014
£
£
Operating profit
Depreciation of tangible assets
264,036
63,809
Increase in stocks
(443,075)
(71,513)
Increase in debtors
(258,168)
(1,149,360)
(Decrease)/Increase in creditors within one year
(157,260)
959,621
Net cash inflow from operating activities
1,024,446
1,726,104
2
Analysis of net debt
1 April 2014
Cash flow
Other non-cash changes
£
£
£
£
Net cash:
Cash at bank and in hand
(470,242)
-
Bank deposits
-
-
-
-
Debt:
Finance leases
(8,703)
4,750
-
(3,953)
Debts falling due within one year
(458,332)
293,332
-
(165,000)
Debts falling due after one year
(4,299,585)
715,337
-
(3,584,248)
(4,766,620)
1,013,419
-
(3,753,201)
Net debt
(3,025,852 )
543,177
-
(2,482,675 )
3
Reconciliation of net cash flow to movement in net debt
2015
2014
£
£
(Decrease)/increase in cash in the year
(470,242 )
Cash outflow/(inflow) from decrease/(increase) in debt and lease financing
1,013,419
(4,753,162)
Movement in net debt in the year
543,177
(3,491,023)
Opening net (debt)/funds
(3,025,852 )
465,171
Closing net debt
(2,482,675 )
(3,025,852 )
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2015
- 10 -
1
Accounting policies
1.1
Accounting convention
1.2
Compliance with accounting standards
The financial statements are prepared in accordance with applicable United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), which have been applied consistently (except as otherwise stated).
1.3
Turnover
1.4
Tangible fixed assets and depreciation
Land and buildings Freehold
Plant and machinery
Fixtures, fittings and equipment
Motor vehicles
1.5
Leasing and hire purchase commitments
Assets obtained under hire purchase contracts and finance leases are capitalised as tangible assets and depreciated over the shorter of the lease term and their useful lives. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the profit and loss account so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.
Rentals payable under operating leases are charged against income on a straight line basis over the lease term.
1.6
Stock
Stock is valued at the lower of cost and net realisable value.
1.7
Deferred taxation
Deferred taxation is provided at appropriate rates on all timing differences using the liability method only to the extent that, in the opinion of the director, there is a reasonable probability that a liability or asset will crystallise in the foreseeable future.
1.8
Foreign currency translation
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to profit and loss account.
1.9
Rental income
Rental income represents amounts receivable on an accruals basis.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2015
- 11 -
2
Turnover
Geographical market
Turnover
2015
2014
£
£
UK and EU
6,810,610
7,202,889
Outside the UK and EU
5,321,452
5,500,216
3
Operating profit
2015
2014
£
£
Operating profit is stated after charging:
Depreciation of tangible assets
Loss on foreign exchange transactions
-
Operating lease rentals
- Plant and machinery
36,958
47,667
- Other assets
384,418
348,098
Auditors' remuneration (including expenses and benefits in kind)
and after crediting:
Profit on foreign exchange transactions
(25,671 )
-
4
Interest payable
2015
2014
£
£
On bank loans and overdrafts
Hire purchase interest
529
529
On overdue tax
-
4,659
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2015
- 12 -
5
Taxation
2015
2014
£
£
Domestic current year tax
U.K. corporation tax
Total current tax
Deferred tax
Origination and reversal of timing differences
3,222
10,098
Factors affecting the tax charge for the year
Profit on ordinary activities before taxation
Profit on ordinary activities before taxation multiplied by standard rate of UK corporation tax of 21.00% (2014 - 23.00%)
Effects of:
Non deductible expenses
Depreciation add back
55,460
14,677
Capital allowances
(8,859)
(2,093)
50,186
22,294
Current tax charge for the year
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2015
- 13 -
6
Tangible fixed assets
Land and buildings Freehold
Plant and machinery
Fixtures, fittings and equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 April 2014
Additions
-
-
At 31 March 2015
Depreciation
At 1 April 2014
Charge for the year
At 31 March 2015
Net book value
At 31 March 2015
At 31 March 2014
Included above are assets held under finance leases or hire purchase contracts as follows:
Plant and machinery
£
Net book values
At 31 March 2015
At 31 March 2014
Depreciation charge for the year
At 31 March 2015
At 31 March 2014
7
Stocks
2015
2014
£
£
Finished goods and goods for resale
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2015
- 14 -
8
Debtors
2015
2014
£
£
Trade debtors
Other debtors
Prepayments and accrued income
Amounts falling due after more than one year and included in the debtors above are:
2015
2014
£
£
Other debtors
410,316
687,916
Included in other debtors are deferred rental payments due over the life of the lease of the company's trading premises in Hemel Hempstead which expires in December 2017.
9
Creditors: amounts falling due within one year
2015
2014
£
£
Bank loans and overdrafts
Net obligations under hire purchase contracts
Trade creditors
Corporation tax
Other taxes and social security costs
Director's current accounts
Other creditors
Accruals and deferred income
The company's bank borrowings are secured by a debenture dated 21 January 2010 over all the assets of the company.
Monies due to Birch Sites Limited, the lessors of one of the company's premises are secured by a legal charge dated 30 September 2011.
Loans taken out to fund the purchase of the company's freehold property in October 2013 are secured on the property.
CBRE UK Property Income (General Partner) Limited have a security dated October 2013 over part of the company's land at Maylands Avenue, Hemel Hempstead.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2015
- 15 -
10
Creditors: amounts falling due after more than one year
2015
2014
£
£
Bank loans
Other loans
Net obligations under hire purchase contracts
-
Analysis of loans
Wholly repayable within five years
3,749,248
4,757,917
3,749,248
4,757,917
Included in current liabilities
(165,000)
(458,332)
3,584,248
4,299,585
Loan maturity analysis
In more than two years but not more than five years
National Westminster bank borrowings are secured by a debenture dated 21 January 2010 over all the assets of the company.
Monies due to Birch Sites Limited, the lessors of one of the company's premises are secured by a legal charge dated 30 September 2011.
Loans from National Westminster Bank, taken out to fund the purchase of the company's freehold property in October 2013 are secured on the property.
CBRE UK Property Income (General Partner) Limited have a security dated October 2013 over the company's land at Maylands Avenue, Hemel Hempstead.
Net obligations under hire purchase contracts
Repayable within one year
3,953
4,750
Repayable between one and five years
-
3,953
3,953
8,703
Included in liabilities falling due within one year
(3,953 )
(4,750 )
-
3,953
Included in loans repayable is rent deferred that relates to future periods over the term of the lease of the company's trading premises in Hemel Hempstead which expires in December 2017.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2015
- 16 -
11
Provisions for liabilities
Deferred tax liability
£
Profit and loss account
Balance at 31 March 2015
The deferred tax liability is made up as follows:
2015
2014
£
£
Accelerated capital allowances
12
Share capital
2015
2014
£
£
Allotted, called up and fully paid
13
Statement of movements on profit and loss account
Profit and loss
account
account
£
Balance at 1 April 2014
Profit for the year
Balance at 31 March 2015
14
Reconciliation of movements in Shareholders' funds
2015
2014
£
£
Profit for the financial year
Opening Shareholders' funds
Closing Shareholders' funds
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2015
- 17 -
15
Financial commitments
At 31 March 2015 the company was committed to making the following payments under non-cancellable operating leases in the year to 31 March 2016:
Land and buildings
Other
2015
2014
2015
2014
£
£
£
£
Operating leases which expire:
Within one year
Between two and five years
-
16
Director's remuneration
2015
2014
£
£
Remuneration for qualifying services
17
Employees
Number of employees
The average monthly number of employees (including directors) during the year was:
2015
2014
Number
Number
Office staff
11
11
Warehouse staff
27
27
38
38
Employment costs
2015
2014
£
£
Wages and salaries
Social security costs
18
Control
The ultimate controlling party is A Boxer by virtue of his shareholding.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2015
- 18 -
19
Related party relationships and transactions
At the balance sheet date the company owed 66 Storage & Distribution Limited, a company with a shared director, an amount of £115,305 (2014: £115,305).