Company Registration No. 06276900 (England and Wales)
MAMADO INTERNATIONAL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
MAMADO INTERNATIONAL LIMITED
COMPANY INFORMATION
Director
Mr G Nasser
Company number
06276900
Registered office
36 The Metro Centre
Dwight Road
Watford
WD18 9SB
Auditor
FLS Accounting Solutions Limited T/A SP Vinshaw
36 The Metro Centre
Dwight Road
Watford
WD18 9SB
MAMADO INTERNATIONAL LIMITED
CONTENTS
Page
Strategic report
1 - 2
Director's report
3
Director's responsibilities statement
4
Independent auditor's report
5 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11 - 12
Statement of changes in equity
13
Statement of cash flows
14
Notes to the financial statements
15 - 25
MAMADO INTERNATIONAL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2021
- 1 -
The director presents the strategic report for the year ended 31 March 2021.
Fair review of the business
The company has sustained on its strategic objective to ensure high quality service is provided to their customers whilst creating and distributing new innovative and fashionable brands to ensure continued success.
The director is of the opinion that the level of business and the financial position of the company at the year end is pleasing and a comparable level of progress is anticipated in the conceivable future.
Despite continuing concerns over slowdown of global trade as result of Covid-19 pandemic, we have managed, by efficiency and supplier continuity, to control costs. Price negotiation and continuity of supply have been key to our control of costs and quality of products. The company's investment in strategic operational areas of the business meant that the current supply chain issues are effectively and efficiently managed to ensure steady and continued availability of products
The director continues to look for added value products and services. Availability of product is key to the success of the business and its ability to maintain and improve turnover and margins.
Principal risks and uncertainties
With the current level of uncertainties around global slowdown of trade, Covid-19 pandemic, inflation, hike in fuel costs, FX uncertainties and competition, the company is maintaining strong customer relationships and supplier chain relationships to ensure and maintain that any risk is minimised. The global slow down in trade due to Covid-19, Brexit and inflation are the main risk factors the director feels that the company faces during the coming year. The director closely monitors various variables affecting the business and works towards mitigating such risks.
Customer service, added value products, supplier continuity, effective and efficient cost control are all areas that the director feels will minimise any potential future risk, along with controlling the availability of product. These factors will ensure customer relationship to continue and allow business to minimise any risk.
Review of the year
Performance is measured by reference to turnover and also gross margins.
The company's turnover increased in the year by £
6,069,457
to £
17,353,234
(£20
20
: £
11,283,777
) along with
the gross profit increased by £
485,053
to £
2,554,226
(20
20
: £
2,069,173
).
The profit before tax also increased to £
1,218,510
(20
20
: £
717,045
).
Key performance indicators
The Key Performance indicators are:-
MAMADO INTERNATIONAL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 2 -
Mr G Nasser
Director
28 March 2022
MAMADO INTERNATIONAL LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 MARCH 2021
- 3 -
The director presents his annual report and financial statements for the year ended 31 March 2021.
Principal activities
The principal activity of the company continued to be that of wholesale and manufacturing of hair and cosmetics products.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. The director does not recommend payment of a final dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Mr G Nasser
Auditor
The auditor, FLS Accounting Solutions Limited T/A SP Vinshaw, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr G Nasser
Director
28 March 2022
MAMADO INTERNATIONAL LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2021
- 4 -
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
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 them 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.
MAMADO INTERNATIONAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MAMADO INTERNATIONAL LIMITED
- 5 -
Opinion
We have audited the financial statements of Mamado International Limited (the 'company') for the year ended 31 March 2021 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 March 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.
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
In auditing the financial statements, we have concluded that the director's 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 director with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. 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. 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 course of 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.
MAMADO INTERNATIONAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MAMADO INTERNATIONAL LIMITED
- 6 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the director's r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the director's report 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 identifie
d
material misstatements in the strategic report and the director's
r
eport
.
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 director's remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of director
As explained more fully in the director's
r
esponsibilities
s
tatement, the director is 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 director determines is 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 director is 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
Auditor's 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 an auditor's report 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below
.
MAMADO INTERNATIONAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MAMADO INTERNATIONAL LIMITED
- 7 -
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
-
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
-
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the
beauty and cosmetic
sector;
-
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation including compliance with customs regulations, data protection, anti-bribery, employment, and health and safety legislation;
-
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
- identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
-
obtaining an understanding of the policies and procedures including internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations in order to design audit procedures that are appropriate in the circumstances (but not not for the purpose of expressing an opinion on the effectiveness of the company's internal control).
To address the risk of fraud through management bias and override of controls, we:
- identified and assessed the risks of material misstatement of the financial statements, whether due to fraud or error, design and performed audit procedures responsive to those risks, and obtained audit evidence that is sufficient and appropriate to provide a basis for our opinion
-
performed analytical procedures to identify any unusual or unexpected relationships;
- tested journal entries to identify unusual transactions;
- assessed whether judgements and assumptions made in determining the accounting estimates in relation to income recognition, collectability of debtors, impairment of tangible and intangible assets and valuation of stock were indicative of potential bias; and
- investigated the rationale behind significant or unusual transactions.
MAMADO INTERNATIONAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MAMADO INTERNATIONAL LIMITED
- 8 -
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
- evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors;
-evaluating the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation (i.e. gives a true and fair view);
-reading the minutes of meetings of those charged with governance;
-enquiring of management as to actual and potential litigation and claims;
-reviewing correspondence with HMRC and the company's legal advisors; and
- Concluding on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the company to cease to continue as a going concern.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve collusion, forgery, deliberate concealment and omissions, misrepresentations, or the override of internal control.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Sadikali Gulamabas Premji FCCA (Senior Statutory Auditor)
For and on behalf of FLS Accounting Solutions Limited T/A SP Vinshaw
28 March 2022
Chartered Certified Accountants
Statutory Auditor
36 The Metro Centre
Dwight Road
Watford
WD18 9SB
MAMADO INTERNATIONAL LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2021
- 9 -
2021
2020
Notes
£
£
Turnover
3
17,353,234
11,283,777
Cost of sales
(14,799,008)
(9,214,604)
Gross profit
2,554,226
2,069,173
Administrative expenses
(1,500,102)
(1,352,128)
Other operating income
164,454
Operating profit
4
1,218,578
717,045
Interest payable and similar expenses
7
(68)
Profit before taxation
1,218,510
717,045
Tax on profit
8
(247,208)
(58,932)
Profit for the financial year
971,302
658,113
The profit and loss account has been prepared on the basis that all operations are continuing operations.
MAMADO INTERNATIONAL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2021
- 10 -
2021
2020
£
£
Profit for the year
971,302
658,113
Other comprehensive income
-
-
Total comprehensive income for the year
971,302
658,113
MAMADO INTERNATIONAL LIMITED
BALANCE SHEET
AS AT
31 MARCH 2021
31 March 2021
- 11 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
10
1,642,587
1,041,977
Current assets
Stocks
11
2,384,156
2,938,041
Debtors
12
4,633,508
1,465,493
Cash at bank and in hand
1,844,863
424,962
8,862,527
4,828,496
Creditors: amounts falling due within one year
13
(5,879,405)
(4,190,319)
Net current assets
2,983,122
638,177
Total assets less current liabilities
4,625,709
1,680,154
Creditors: amounts falling due after more than one year
14
(1,800,000)
Provisions for liabilities
(271,458)
(97,205)
Net assets
2,554,251
1,582,949
Capital and reserves
Called up share capital
18
1
1
Profit and loss reserves
19
2,554,250
1,582,948
Total equity
2,554,251
1,582,949
MAMADO INTERNATIONAL LIMITED
BALANCE SHEET (CONTINUED)
AS AT
31 MARCH 2021
31 March 2021
- 12 -
The financial statements were approved and signed by the director and authorised for issue on 28 March 2022
Mr G Nasser
Director
Company Registration No. 06276900
MAMADO INTERNATIONAL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2021
- 13 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 April 2019
1
924,835
924,836
Year ended 31 March 2020:
Profit and total comprehensive income for the year
-
658,113
658,113
Balance at 31 March 2020
1
1,582,948
1,582,949
Year ended 31 March 2021:
Profit and total comprehensive income for the year
-
971,302
971,302
Balance at 31 March 2021
1
2,554,250
2,554,251
MAMADO INTERNATIONAL LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2021
- 14 -
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
23
407,504
139,008
Interest paid
(68)
Income taxes paid
(963)
(12,335)
Net cash inflow from operating activities
406,473
126,673
Investing activities
Purchase of tangible fixed assets
(786,572)
(616,744)
Net cash used in investing activities
(786,572)
(616,744)
Financing activities
Borrowing of bank loans
1,800,000
Net cash generated from/(used in) financing activities
1,800,000
-
Net increase/(decrease) in cash and cash equivalents
1,419,901
(490,071)
Cash and cash equivalents at beginning of year
424,962
915,033
Cash and cash equivalents at end of year
1,844,863
424,962
MAMADO INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
- 15 -
1
Accounting policies
Company information
Mamado International Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
36 The Metro Centre, Dwight Road, Watford, WD18 9SB.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 (The Financial Reporting Standard applicable in the UK and Republic of Ireland).
1.2
Going concern
The director has a reasonable expectation that the Company has adequate resources to continue in operational existence for the forseeable future. The director regards the forseeable future as no less than twelve months following the publication of the company's annual financial statements. The director has considered the company's balance sheet position as at the year end, its working capital forecasts and projections, and the impact of the current COVID 19 crisis, taking account of reasonably possible changes in trading performance and the current state of its operating market and is satisfied that the company has sufficient resources to remain in operational existence. Accordingly, the director has adopted the going concern basis in preparing these financial statements.
true
1.3
Turnover
Re
v
enue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Revenue from sale of goods is recognised when all of the following conditions are satisfied:
-
the company has transferred the significant risks and rewards of ownership to the buyer;
-
the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
-
the amount of revenue can be measured reliably;
-
the costs incurred or to be incurred in respect of the transaction can be measured reliably.
MAMADO INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 16 -
1.4
Tangible fixed assets
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
The company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred
.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and machinery
10% straight line
Fixtures, fittings & equipment
20% straight line
Motor vehicles
20% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date
1.5
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
1.6
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
MAMADO INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 17 -
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.7
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
MAMADO INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 18 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.8
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.9
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
Government grants relating to turnover are recognised as income over the periods when the related costs are incurred
. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.
1.10
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
MAMADO INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 19 -
2
Judgements and key sources of estimation uncertainty
In preparing these financial statements the directors have made the following judgements:
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant
effect on amounts recognised in the financial statements.
Tangible fixed assets
Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.
Stock
Stocks are valued at the lower of cost or net realisable value. In order to establish an appropriate cost of the stock, the cumulative value of the last purchase price, the cost of duty, commission and shipping are taken into account. These costs are re-assessed on an annual basis. Net realisable value is resale price less any further sales costs and discounts.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2021
2020
£
£
Turnover analysed by class of business
Sale of goods
17,353,234
11,283,777
2021
2020
£
£
Other significant revenue
Grants received
164,454
4
Operating profit
2021
2020
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
(37,507)
Government grants
(164,454)
Fees payable to the company's auditor for the audit of the company's financial statements
15,000
15,000
Depreciation of owned tangible fixed assets
185,962
105,137
MAMADO INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 20 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was 3 (2020 - 3).
2021
2020
Number
Number
Management and Finance
3
3
Admin, Distribution and Sales
27
24
Total
30
27
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
427,795
385,099
Social security costs
25,039
25,027
Pension costs
6,498
6,192
459,332
416,318
6
Director's remuneration
2021
2020
£
£
Remuneration for qualifying services
42,000
42,000
7
Interest payable and similar expenses
2021
2020
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
68
8
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
70,334
(38,273)
Adjustments in respect of prior periods
2,621
Total current tax
72,955
(38,273)
MAMADO INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
8
Taxation
2021
2020
£
£
(Continued)
- 21 -
Deferred tax
Origination and reversal of timing differences
174,253
97,205
Total tax charge
247,208
58,932
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
£
£
Profit before taxation
1,218,510
717,045
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
231,517
136,239
Tax effect of expenses that are not deductible in determining taxable profit
192
2,458
Other permanent differences
(70,985)
Under/(over) provided in prior years
2,620
Depreciation
35,333
19,976
Group relief
(42,729)
(26,220)
Capital allowances
(153,978)
(99,741)
Deferred tax
174,253
97,205
Taxation charge for the year
247,208
58,932
9
Intangible fixed assets
Patents
£
Cost
At 1 April 2020 and 31 March 2021
57,202
Amortisation and impairment
At 1 April 2020 and 31 March 2021
57,202
Carrying amount
At 31 March 2021
At 31 March 2020
MAMADO INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 22 -
10
Tangible fixed assets
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 April 2020
1,142,121
19,823
68,050
1,229,994
Additions
718,400
68,172
786,572
At 31 March 2021
1,860,521
87,995
68,050
2,016,566
Depreciation and impairment
At 1 April 2020
156,829
3,965
27,223
188,017
Depreciation charged in the year
154,752
17,600
13,610
185,962
At 31 March 2021
311,581
21,565
40,833
373,979
Carrying amount
At 31 March 2021
1,548,940
66,430
27,217
1,642,587
At 31 March 2020
985,292
15,858
40,827
1,041,977
11
Stocks
2021
2020
£
£
Finished goods and goods for resale
2,384,156
2,938,041
12
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
4,571,987
1,413,835
Corporation tax recoverable
1,658
Other debtors
61,521
50,000
4,633,508
1,465,493
MAMADO INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 23 -
13
Creditors: amounts falling due within one year
2021
2020
£
£
Trade creditors
3,152,100
2,450,723
Amounts owed to group undertakings
1,897,187
1,591,911
Corporation tax
70,334
Other taxation and social security
145,503
Other creditors
573,531
103,185
Accruals and deferred income
40,750
44,500
5,879,405
4,190,319
14
Creditors: amounts falling due after more than one year
2021
2020
Notes
£
£
Bank loans and overdrafts
15
1,800,000
15
Loans and overdrafts
2021
2020
£
£
Bank loans
1,800,000
Payable after one year
1,800,000
The long-term loans are secured by fixed and floating charges over all property or undertaking of the company.
16
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2021
2020
Balances:
£
£
Accelerated capital allowances
271,458
97,205
MAMADO INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
16
Deferred taxation
(Continued)
- 24 -
2021
Movements in the year:
£
Liability at 1 April 2020
97,205
Charge to profit or loss
174,253
Liability at 31 March 2021
271,458
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
17
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
6,498
6,192
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
18
Share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1
1
1
1
19
Profit and loss reserves
2021
2020
£
£
At the beginning of the year
1,582,948
924,835
Profit for the year
971,302
658,113
At the end of the year
2,554,250
1,582,948
20
Events after the reporting date
The current COVID-19 Pandemic occurred
during the year and continues to date
. The director has carefully considered the likely effect of the COVID-19 pandemic on the future performance of the company and considers that the company has adequate resources and plans to minimise any adverse impact and remain in operational existence.
MAMADO INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 25 -
21
Related party transactions
The company has taken advantage of exemption under section 33.1A of FRS 102, from the requirement to disclose transactions with wholly owned members of the group.
Included within other creditors is an amount of £92,036 (2020: £
100,388
) owed to G Nasser, a director of the company.
22
Ultimate controlling party
The company's parent undertaking is KMS Holdings Limited, a company incorporated in England and Wales under company registration number 06276544.
The ultimate controlling party is Mr G Nasser, by the virtue of holding the entire issued share capital of KMS Holdings Limited.
23
Cash generated from operations
2021
2020
£
£
Profit for the year after tax
971,302
658,113
Adjustments for:
Taxation charged
247,208
58,932
Finance costs
68
Depreciation and impairment of tangible fixed assets
185,962
105,137
Movements in working capital:
Decrease/(increase) in stocks
553,885
(1,306,518)
Increase in debtors
(3,169,673)
(391,891)
Increase in creditors
1,618,752
1,015,235
Cash generated from operations
407,504
139,008
24
Analysis of changes in net funds
1 April 2020
Cash flows
31 March 2021
£
£
£
Cash at bank and in hand
424,962
1,419,901
1,844,863
Borrowings excluding overdrafts
-
(1,800,000)
(1,800,000)
424,962
(380,099)
44,863
2021-03-31
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