Tiles & Baths Direct Limited
|
Strategic Report |
|
The director presents his strategic report on the company for the year ended 30 April 2018. |
|
Business review |
|
The company's key performance indicators are summarised below. The company achieved a gross profit margin of 44% (2017 - 42%). Trade debtor days has reduced to 11 days (2017 - 13 days). Working captial ratio has decreased to 1.07 to 1 (2017 - 1.09 to 1). |
|
|
|
|
|
2018 |
2017 |
|
|
Gross profit margin |
44% |
42% |
|
Trade debtor days |
11 |
13 |
|
Working captial ratio |
1.07 : 1 |
1.09 : 1 |
|
Turnover has decreased to £8,557,106 (2017 - £8,865,572), the operating profit of the company has decreased to £1,030,774 (2017 - £1,062,667) and the profit after taxation showed an increase to £833,477 (2017 - £831,302). |
|
Principal risks and uncertainties |
|
The company faces a number of risks and uncertainties and the director believes that the key business risks are in respect of competition from both Local and Regional businesses and in ensuring product development and availability. In view of these risks and uncertainties, the director is aware that the development of the company may be affected by factors outside their control. |
|
The director has considered the effect of 'Brexit' on the business specifically. Given that the company currently operates within the UK market and its customers are based in the UK, there is no direct or immediate impact envisaged by the director, on the company. The director does acknowledge that there may be contingent liabilities, such as the potential impact on profitability of non-recoverable VAT for companies which currently incur and recover input VAT in other EU states, the effect upon the availability of EU grants and subsidies and the effect upon available workforce, that may arise from 'Brexit', depending on the dissolution terms to be agreed with the EU. |
|
Future developments |
|
The director anticipates the business environment will remain competitive. He believes that the company is in a good financial position and he remains confident that the company will continue to consolidate its position. |
|
Research and development |
|
The company is continually undertaking research and development by investing in information technology to improve the performance of its sales ordering, purchase ordering and stock control functions in order to preserve and safeguard the company's assets. |
|
Financial instruments |
|
The company has a normal level of exposure to price, credit, liquidity and cash flow risks arising from trading activities which are only conducted in sterling. The company does enter into hedging transactions, such as forward contracts to hedge its currency risk when purchasing from suppliers whom insist on payment to them being made in their functional currency. |
|
This report was approved by the board on 25 January 2019 and signed on its behalf. |
|
|
|
Mr S Joel |
Director |
|
● |
have been prepared in accordance with the requirements of the Companies Act 2006. |
|
Basis of 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 Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
|
Conclusions relating to going concern |
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where: |
● |
the 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 other information comprises the information included in the report and financial statements, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information. 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 directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
● |
the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements. |
|
Matters on which we are required to report by exception |
|
|
Debtors
|
|
Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts.
|
|
|
Creditors
|
|
Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method.
|
|
|
Taxation |
|
A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted.
|
|
|
Provisions |
|
Provisions (i.e. liabilities of uncertain timing or amount) are recognised when there is an obligation at the reporting date as a result of a past event, it is probable that economic benefit will be transferred to settle the obligation and the amount of the obligation can be estimated reliably.
|
|
|
Foreign currency translation |
|
Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss.
|
|
|
Leased assets |
|
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. The rights of use and obligations under finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction in the outstanding liability using the effective interest rate method. The finance charge is allocated to each period during the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability. Leased assets are depreciated in accordance with the company's policy for tangible fixed assets. If there is no reasonable certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the lower of the lease term and its useful life. Operating lease payments are recognised as an expense on a straight line basis over the lease term.
|
|
|
2 |
Critical accounting estimates and judgements |
|
|
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
|
|
|
The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below. |
|
|
(i) Useful economic lives of tangible assets The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See note 8 for the carrying amount of the property plant and equipment, and note 1 for the useful economic lives for each class of assets. |
|
|
(ii) Impairment of debtors The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience. See note 10 for the net carrying amount of the debtors and associated impairment provision. |
|
|
3 |
Analysis of turnover |
2018 |
|
2017 |
£ |
£ |
|
|
Sale of goods |
8,557,106 |
|
8,865,572 |
|
|
|
|
|
|
|
|
|
|
By geographical market: |
|
|
UK |
8,557,106 |
|
8,865,572 |
|
|
|
|
|
|
|
|
|
|
4 |
Operating profit |
2018 |
|
2017 |
£ |
£ |
|
This is stated after charging: |
|
|
Depreciation of owned fixed assets |
43,025 |
|
40,471 |
|
Operating lease rentals - plant and machinery |
6,825 |
|
9,100 |
|
Operating lease rentals - land and buildings |
369,119 |
|
369,872 |
|
Auditors' remuneration for audit services |
13,500 |
|
13,500 |
|
Auditors' remuneration for other services |
6,513 |
|
9,026 |
|
Key management personnel compensation (including directors' emoluments) |
|
379,803 |
|
351,950 |
|
Carrying amount of stock sold |
4,628,913 |
|
4,935,153 |
|
|
|
|
|
|
|
|
|
|
5 |
Director's emoluments |
2018 |
|
2017 |
£ |
£ |
|
|
Emoluments |
117,480 |
|
95,979 |
|
|
|
|
|
|
|
|
|
|
|
Highest paid director: |
|
Emoluments |
117,480 |
|
95,979 |
|
|
|
|
|
|
|
|
|
|
|
Number of directors to whom retirement benefits accrued: |
2018 |
|
2017 |
Number |
Number |
|
|
Defined contribution plans |
1 |
|
1 |
|
|
|
|
|
|
|
|
|
|
6 |
Staff costs |
2018 |
|
2017 |
£ |
£ |
|
|
Wages and salaries |
1,434,683 |
|
1,460,354 |
|
Social security costs |
128,674 |
|
117,223 |
|
Other pension costs |
5,343 |
|
5,432 |
|
|
|
|
|
|
1,568,700 |
|
1,583,009 |
|
|
|
|
|
|
|
|
|
|
|
Average number of employees during the year |
Number |
Number |
|
|
Administration |
6 |
|
6 |
|
Sales |
24 |
|
25 |
|
|
|
|
|
|
30 |
|
31 |
|
|
|
|
|
|
|
|
|
|
7 |
Taxation |
2018 |
|
2017 |
£ |
£ |
|
Analysis of charge in period |
|
Current tax: |
|
UK corporation tax on profits of the period |
194,504 |
|
213,887 |
|
Deferred tax: |
|
Origination and reversal of timing differences |
2,793 |
|
8,261 |
|
|
Tax on profit on ordinary activities |
197,297 |
|
222,148 |
|
|
|
|
|
|
|
|
|
|
|
Factors affecting tax charge for period |
|
The differences between the tax assessed for the period and the standard rate of corporation tax are explained as follows: |
|
|
|
|
|
|
|
2018 |
|
2017 |
£ |
£ |
|
Profit on ordinary activities before tax |
1,030,774 |
|
1,053,450 |
|
|
|
|
|
|
|
|
|
|
Standard rate of corporation tax in the UK
|
19.00% |
|
19.91% |
|
£ |
£ |
|
Profit on ordinary activities multiplied by the standard rate of corporation tax |
|
195,847 |
|
209,742 |
|
|
Effects of: |
|
Expenses not deductible for tax purposes |
3,101 |
|
12,516 |
|
Capital allowances for period in excess of depreciation |
(4,444) |
|
(8,371) |
|
Deferred taxation |
2,793 |
|
8,261 |
|
|
Current tax charge for period |
197,297 |
|
222,148 |
|
|
|
|
|
|
|
|
|
|
8 |
Tangible fixed assets |
|
|
|
|
Plant and machinery |
|
Fixtures, fittings, tools and equipment |
|
Total |
|
|
|
|
At cost |
|
At cost |
£ |
£ |
£ |
|
Cost or valuation |
|
At 1 May 2017 |
35,734 |
|
1,604,925 |
|
1,640,659 |
|
Additions |
400 |
|
57,103 |
|
57,503 |
|
At 30 April 2018 |
36,134 |
|
1,662,028 |
|
1,698,162 |
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
At 1 May 2017 |
30,228 |
|
1,381,101 |
|
1,411,329 |
|
Charge for the year |
886 |
|
42,139 |
|
43,025 |
|
At 30 April 2018 |
31,114 |
|
1,423,240 |
|
1,454,354 |
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
At 30 April 2018 |
5,020 |
|
238,788 |
|
243,808 |
|
At 30 April 2017 |
5,506 |
|
223,824 |
|
229,330 |
|
|
|
|
|
|
|
|
|
|
|
9 |
Stocks |
2018 |
|
2017 |
£ |
£ |
|
|
Finished goods and goods for resale |
579,946 |
|
591,252 |
|
Supplier payments on account |
5,277 |
|
110,815 |
|
|
|
|
|
|
585,223 |
|
702,067 |
|
|
|
|
|
|
|
|
|
|
10 |
Debtors |
2018 |
|
2017 |
£ |
£ |
|
|
Trade debtors |
313,596 |
|
360,266 |
|
Amounts owed by group undertaking |
15,285 |
|
12,212 |
|
Loan debtors |
|
|
|
|
833,665 |
|
181,365 |
|
Other debtors |
451,803 |
|
113,326 |
|
Prepayments and accrued income |
20,261 |
|
20,240 |
|
|
|
|
|
|
1,634,610 |
|
687,409 |
|
|
|
|
|
|
|
|
|
|
11 |
Creditors: amounts falling due within one year |
2018 |
|
2017 |
£ |
£ |
|
|
Payments received on account |
1,050,735 |
|
1,515,670 |
|
Trade creditors |
888,387 |
|
849,747 |
|
Corporation tax |
194,512 |
|
213,887 |
|
Other taxes and social security costs |
224,386 |
|
273,129 |
|
Other creditors |
163,874 |
|
135,445 |
|
Accruals and deferred income |
104,157 |
|
103,273 |
|
|
|
|
|
|
2,626,051 |
|
3,091,151 |
|
|
|
|
|
|
|
|
|
|
12 |
Deferred taxation |
2018 |
|
2017 |
£ |
£ |
|
|
Accelerated capital allowances |
38,613 |
|
35,820 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
2017 |
£ |
£ |
|
|
At 1 May |
35,820 |
|
27,559 |
|
Charged to the profit and loss account |
2,793 |
|
8,261 |
|
|
At 30 April |
38,613 |
|
35,820 |
|
|
|
|
|
|
|
|
|
|
The net deferred tax liability expected to reverse in 2019 is £7,899. This relates only to the reversal of timing differences on capital allowances as no further reversals are anticipated in respect of any other timing differences. |
|
|
13 |
Share capital |
Nominal |
|
2018 |
|
2018 |
|
2017 |
value |
Number |
£ |
£ |
|
Allotted, called up and fully paid: |
|
Ordinary shares
|
£1 each |
|
100 |
|
2 |
|
2 |
|
|
|
|
|
|
|
|
|
|
14 |
Dividends |
2018 |
|
2017 |
£ |
£ |
|
|
Dividends on ordinary shares |
920,000 |
|
523,500 |
|
|
|
|
|
|
|
|
|
|
|
15 |
Other financial commitments |
|
|
Total future minimum lease payments under non-cancellable operating leases: |
|
|
|
Land and buildings |
|
Land and buildings |
Other |
Other |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
£ |
£ |
£ |
£ |
|
Falling due: |
|
within one year |
365,000 |
|
365,000 |
|
1,224 |
|
12,791 |
|
within two to five years |
- |
|
- |
|
2,142 |
|
- |
|
|
365,000 |
|
365,000 |
|
3,366 |
|
12,791 |
|
|
|
|
|
|
|
|
|
|
16 |
Loans to directors |
|
Description and conditions |
B/fwd |
Paid |
Repaid |
C/fwd |
£ |
£ |
£ |
£ |
|
Mr S Joel
|
|
Director's current account
|
- |
|
920,000 |
|
(920,000) |
|
- |
|
|
|
- |
|
920,000 |
|
(920,000) |
|
- |
|
|
|
|
|
|
|
|
|
|
17 |
Related party transactions |
|
|
The company (a wholly owned subsidiary) has taken adantage of the exemption under FRS 102, Section 33.1A, in that, disclosures need not be given of transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member. See note 5 for disclosure of the directors’ remuneration. Key management compensation for the year amounted to £262,323 (2017 - £255,971).
|
|
|
At the Balance Sheet date, the Company was owed an amount in the sum of £22,080 (2017 - £8,197) included within Trade Debtors from Prima Marble & Granite Ltd, a Company in which Mr S Joel is a Director and Non-Controlling Shareholder and which is interest free and repayable on demand, as detailed in Note 10. |
|
|
At the Balance Sheet date, the Company was owed an amount in the sum of £15,285 (2017 - £12,212) from TB Direct (Holdings) Ltd, the Company's ultimate parent undertaking which has a common director and which is interest free and repayable on demand, as detailed in Note 10. |
|
|
At the Balance Sheet date, included in Loan Debtors, the Company was owed an amount in the sum of £1,261 (2017 - £166,194) from Topsy Turvy Designs Ltd, a Company in which Mr S Joel is a Director and Shareholder and which is interest free and repayable on demand, as detailed in Note 10. |
|
|
At the Balance Sheet date, included in Loan Debtors, the Company was owed an amount in the sum of £18,211 (2017 - £15,171) from Villa Estates Ltd, a Company in which Mr S Joel is a Director and Shareholder and which is interest free and repayable on demand, as detailed in Note 10. |
|
|
At the Balance Sheet date, included in Loan Debtors, the Company was owed an amount in the sum of £814,193 (2017 - £Nil) from TBK Tiles Factory Outlet Ltd, a Company in which Mr S Joel is a Director and Shareholder and which is interest free and repayable on demand, as detailed in Note 10. |
|
|
At the Balance Sheet date, the Company owed an amount in the sum of £7,242 (2017 - £8,490) included within Other Creditors to Prima Marble & Granite Ltd, a Company in which Mr S Joel is a Director and Non-Controlling Shareholder and which is interest free and repayable on demand, as detailed in Note 11. |
|
|
During the year the Company leased the business premises in the sum of £300,000 (2017 - £300,000) from Topsy Turvy Designs Ltd, a company in which Mr S Joel is also a director and shareholder. |
|
|
|
18 |
Controlling party |
|
|
The immediate parent undertaking is TB Direct (Holdings) Limited. The ultimate controlling party is Mr S Joel.
|
|
|
19 |
Presentation currency |
|
|
The financial statements are presented in Sterling.
|
|
|
20 |
Legal form of entity and country of incorporation |
|
|
Tiles & Baths Direct Limited is a private company limited by shares and incorporated in England. |
|
|
21 |
Principal place of business |
|
|
The address of the company's principal place of business is: |
|
|
60 The Broadway |
|
West Hendon |
|
London |
|
NW9 7AE |