Company Registration Number 00330823 (England and Wales)
TEKZONE SOUND AND VISION LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
TEKZONE SOUND AND VISION LIMITED
COMPANY INFORMATION
Directors
Mr JR Gardner
Mr C Gardner
Ms MD Russell-Vick
Secretary
Mr C Gardner
Company number
00330823
Registered office
Unit 5 Glebelands Centre
Vincent Lane
Dorking
Surrey
UK
RH4 3HW
Auditor
Cottons Accountants LLP
The Stables
Church Walk
Daventry
Northamptonshire
UK
NN11 4BL
TEKZONE SOUND AND VISION LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 24
TEKZONE SOUND AND VISION LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -
The directors present the strategic report for the year ended 31 March 2023.
Fair review of the business
Tekzone Sound and Vision Ltd is a company specializing in electronics concessions within major department stores and the online marketplace. Our mission is to provide high-quality electronics products and services to our customers while ensuring financial stability and growth in a dynamic industry.
The company is pleased to report a positive performance during the reporting period, with an optimistic outlook for the future. The company will continue to leverage its extensive experience in operating electronics concessions both within major department stores and the online marketplace.
Business Strategy:
Product Diversification: Expand our product range to include innovative and trending electronics, meeting market demands.
Online Presence: Invest in online marketing, e-commerce platforms, and user-friendly websites to enhance the online shopping experience.
Financial Prudence: Continue reducing borrowing and focus on efficient financial management.
Client Focused Approach: Provide exceptional customer service, warranties, and post-purchase support to build customer loyalty.
Principal risks and uncertainties
The company acknowledges several principal risks and uncertainties that impact its operations:
1. Fluctuating Foreign Currency Exchange Rates.
2. Competitive Dynamics within the Electronics Industry, particularly in the online sphere.
3. Global Supply Chain Challenges.
4. Interest Rate Fluctuations and their potential adverse effects on consumer spending.
Development and performance
The company has taken several strategic steps to enhance its financial stability and operational efficiency:
1. Increased Stock Levels and Reduced Borrowing: Since 2020, the company has successfully increased its stock levels while reducing overall borrowing, demonstrating a commitment to financial prudence. Notably, 75% of CBILs have been cleared to date.
2. Key Performance Indicators (KPIs): The company's directors closely monitor essential KPIs to gauge the company's performance, including:
· A 17.5% increase in Company Turnover in FY22.
· A remarkable 109% rise in Company Profit Before Tax during FY22.
· Vigilant monitoring of section managers, focusing on both sales and profit.
· Setting and tracking individual sales targets to ensure the attainment of overarching sales and profitability objectives.
The Future
These achievements reflect the company's dedication to growth, financial stability, and maintaining a competitive edge in the dynamic electronics industry. Tekzone Sound and Vision Ltd aim to continue with their current concession contracts and web sites, continuing to build on the already impressive results since the pandemic.
TEKZONE SOUND AND VISION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -
Mr JR Gardner
Director
2 October 2023
TEKZONE SOUND AND VISION LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 March 2023.
Principal activities
The principal activity of the company continued to be that of the retail of IT, photographic, video, television and audio equipment.
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £114,000. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr JR Gardner
Mr C Gardner
Ms MD Russell-Vick
Auditor
The auditors, Cottons Accountants LLP, are deemed to be reappointed under section 487 (2) of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report 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 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.
TEKZONE SOUND AND VISION LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 4 -
On behalf of the board
Mr JR Gardner
Director
2 October 2023
TEKZONE SOUND AND VISION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TEKZONE SOUND AND VISION LIMITED
- 5 -
Opinion
We have audited the financial statements of Tekzone Sound and Vision Limited (the 'company') for the year ended 31 March 2023 which comprise 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 Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 March 2023 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 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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are 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.
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 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.
TEKZONE SOUND AND VISION LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF TEKZONE SOUND AND VISION LIMITED
- 6 -
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 directors' report.
We have nothing to report in respect of the following matters in relation to which 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 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 directors' responsibilities statement, 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 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 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.
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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
TEKZONE SOUND AND VISION LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF TEKZONE SOUND AND VISION 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 computer component manufacturing and supply 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 Companies Act 2006 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;
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations;
To address the risk of fraud through management bias and override of controls, we:
- 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 were indicative of potential bias;
- investigated the rationale behind significant or unusual transactions;
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
- agreeing financial statement disclosures to underlying supporting documentation;
- 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, relevant regulators and the company’s legal advisors;
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 deliberate concealment or collusion.
TEKZONE SOUND AND VISION LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF TEKZONE SOUND AND VISION LIMITED
- 8 -
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.
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 auditor's 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.
Richard Wilch FCCA
Senior Statutory Auditor
For and on behalf of Cottons Accountants LLP
5 October 2023
Chartered Accountants
Statutory Auditor
The Stables
Church Walk
Daventry
Northamptonshire
UK
NN11 4BL
TEKZONE SOUND AND VISION LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
14,385,016
12,247,139
Cost of sales
(10,143,202)
(8,845,656)
Gross profit
4,241,814
3,401,483
Administrative expenses
(3,815,923)
(3,645,482)
Other operating income
430,790
707,203
Operating profit
4
856,681
463,204
Interest receivable and similar income
7
8
Interest payable and similar expenses
8
(52,863)
(69,913)
Profit before taxation
803,826
393,291
Tax on profit
9
(170,603)
(99,260)
Profit for the financial year
633,223
294,031
The profit and loss account has been prepared on the basis that all operations are continuing operations.
TEKZONE SOUND AND VISION LIMITED
BALANCE SHEET
AS AT 31 MARCH 2023
31 March 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
452,577
603,436
Current assets
Stocks
13
2,379,666
2,458,595
Debtors
14
706,194
896,687
Cash at bank and in hand
612,368
87,110
3,698,228
3,442,392
Creditors: amounts falling due within one year
15
(1,815,507)
(2,163,003)
Net current assets
1,882,721
1,279,389
Total assets less current liabilities
2,335,298
1,882,825
Creditors: amounts falling due after more than one year
16
(250,917)
(313,288)
Provisions for liabilities
Deferred tax liability
18
73,910
78,289
(73,910)
(78,289)
Net assets
2,010,471
1,491,248
Capital and reserves
Called up share capital
21
208
208
Share premium account
22
39,914
39,914
Capital redemption reserve
23
138
138
Profit and loss reserves
24
1,970,211
1,450,988
Total equity
2,010,471
1,491,248
The financial statements were approved by the board of directors and authorised for issue on 2 October 2023 and are signed on its behalf by:
Mr JR Gardner
Director
Company Registration No. 00330823
TEKZONE SOUND AND VISION LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 11 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 April 2021
208
39,914
138
1,270,957
1,311,217
Year ended 31 March 2022:
Profit and total comprehensive income for the year
-
-
-
294,031
294,031
Dividends
10
-
-
-
(114,000)
(114,000)
Balance at 31 March 2022
208
39,914
138
1,450,988
1,491,248
Year ended 31 March 2023:
Profit and total comprehensive income for the year
-
-
-
633,223
633,223
Dividends
10
-
-
-
(114,000)
(114,000)
Balance at 31 March 2023
208
39,914
138
1,970,211
2,010,471
TEKZONE SOUND AND VISION LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
859,238
759,731
Interest paid
(52,863)
(69,913)
Income taxes paid
(56,745)
(16)
Net cash inflow from operating activities
749,630
689,802
Investing activities
Purchase of tangible fixed assets
(58,484)
Interest received
8
Net cash generated from/(used in) investing activities
8
(58,484)
Financing activities
Repayment of bank loans
(110,380)
113,395
Payment of finance leases obligations
(213,567)
Dividends paid
(114,000)
(114,000)
Net cash used in financing activities
(224,380)
(214,172)
Net increase in cash and cash equivalents
525,258
417,146
Cash and cash equivalents at beginning of year
87,110
(330,036)
Cash and cash equivalents at end of year
612,368
87,110
The notes on pages 13 to 24 form part of these financial statements.
TEKZONE SOUND AND VISION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 13 -
1
Accounting policies
Company information
Tekzone Sound and Vision Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 5 Glebelands Centre, Vincent Lane, Dorking, Surrey, UK, RH4 3HW.
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 amounts 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.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
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:
Fixtures and fittings
25% on reducing balance
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.
TEKZONE SOUND AND VISION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 14 -
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
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.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
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.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
TEKZONE SOUND AND VISION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 15 -
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
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.
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.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
TEKZONE SOUND AND VISION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 16 -
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 subsequently 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 through 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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
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.
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.
TEKZONE SOUND AND VISION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 17 -
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.14
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.15
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.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
TEKZONE SOUND AND VISION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 18 -
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sales of goods
14,123,538
12,042,866
Sales out manufacturer claims
261,478
204,273
14,385,016
12,247,139
2023
2022
£
£
Other revenue
Interest income
8
-
Grants received
60,729
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(60,729)
Fees payable to the company's auditor for the audit of the company's financial statements
8,000
6,300
Depreciation of owned tangible fixed assets
150,859
186,524
Operating lease charges
63,248
66,286
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Administrative & operational staff
55
63
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,568,555
1,561,149
Social security costs
161,286
138,993
Pension costs
29,576
27,157
1,759,417
1,727,299
TEKZONE SOUND AND VISION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 19 -
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
169,933
166,744
Company pension contributions to defined contribution schemes
1,321
1,321
171,254
168,065
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 3).
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
8
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
8
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
53,475
57,454
Other finance costs:
Interest on finance leases and hire purchase contracts
12,459
Other interest
(612)
52,863
69,913
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
174,982
91,697
Adjustments in respect of prior periods
23,909
Total current tax
174,982
115,606
Deferred tax
Origination and reversal of timing differences
(4,379)
(16,346)
Total tax charge
170,603
99,260
TEKZONE SOUND AND VISION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
9
Taxation
(Continued)
- 20 -
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:
2023
2022
£
£
Profit before taxation
803,826
393,291
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
152,727
74,725
Tax effect of expenses that are not deductible in determining taxable profit
24,422
35,440
Permanent capital allowances in excess of depreciation
(6,546)
(19,094)
Under/(over) provided in prior years
23,909
Deferred tax adjustments in respect of prior years
(16,346)
Movement in pension creditor
626
Taxation charge for the year
170,603
99,260
10
Dividends
2023
2022
2023
2022
Per share
Per share
Total
Total
£
£
£
£
Ordinary
Interim paid
548.08
548.08
114,000
114,000
11
Tangible fixed assets
Fixtures and fittings
£
Cost
At 1 April 2022 and 31 March 2023
2,252,210
Depreciation and impairment
At 1 April 2022
1,648,774
Depreciation charged in the year
150,859
At 31 March 2023
1,799,633
Carrying amount
At 31 March 2023
452,577
At 31 March 2022
603,436
TEKZONE SOUND AND VISION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 21 -
12
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
634,580
794,041
Carrying amount of financial liabilities
Measured at amortised cost
1,600,537
2,020,208
13
Stocks
2023
2022
£
£
Finished goods and goods for resale
2,379,666
2,458,595
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
384,772
409,935
Corporation tax recoverable
34,952
Other debtors
161,916
140,397
Prepayments and accrued income
159,506
311,403
706,194
896,687
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
17
252,098
300,107
Trade creditors
1,072,140
1,386,012
Corporation tax
174,982
91,697
Other taxation and social security
218,286
156,302
Deferred income
19
72,619
208,084
Other creditors
3,709
7,753
Accruals and deferred income
21,673
13,048
1,815,507
2,163,003
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
17
250,917
313,288
A Fixed and floating charge over all assets both present and future is held by HSBC for the bank overdraft and loan.
TEKZONE SOUND AND VISION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 22 -
17
Loans and overdrafts
2023
2022
£
£
Bank loans
503,015
613,395
Payable within one year
252,098
300,107
Payable after one year
250,917
313,288
The long-term loans are secured by fixed charges over 5 years.
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
73,910
78,289
2023
Movements in the year:
£
Liability at 1 April 2022
78,289
Credit to profit or loss
(23,279)
Effect of change in tax rate - profit or loss
18,900
Liability at 31 March 2023
73,910
19
Deferred income
2023
2022
£
£
Other deferred income
72,619
208,084
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
29,576
27,157
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.
TEKZONE SOUND AND VISION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
20
Retirement benefit schemes
(Continued)
- 23 -
The amount outstanding at the year end was £5,889 (2022: £5,167)
21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
208
208
208
208
22
Share premium account
2023
2022
£
£
At the beginning and end of the year
39,914
39,914
23
Capital redemption reserve
2023
2022
£
£
At the beginning and end of the year
138
138
24
Profit and loss reserves
2023
2022
£
£
At the beginning of the year
1,450,988
1,270,957
Profit for the year
633,223
294,031
Dividends declared and paid in the year
(114,000)
(114,000)
At the end of the year
1,970,211
1,450,988
25
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
857,699
89,621
Between two and five years
1,148,068
1,725,245
In over five years
247,050
2,252,817
1,814,866
TEKZONE SOUND AND VISION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 24 -
26
Ultimate controlling party
There is no ultimate controlling party of Tekzone Sound and Vision Limited as there is no majority shareholder of the company.
27
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
633,223
294,031
Adjustments for:
Taxation charged
170,603
99,260
Finance costs
52,863
69,913
Investment income
(8)
Depreciation and impairment of tangible fixed assets
150,859
186,524
Movements in working capital:
Decrease in stocks
78,929
76,408
Decrease/(increase) in debtors
155,541
(508,681)
(Decrease)/increase in creditors
(247,307)
526,030
(Decrease)/increase in deferred income
(135,465)
16,246
Cash generated from operations
859,238
759,731
28
Analysis of changes in net funds/(debt)
1 April 2022
Cash flows
31 March 2023
£
£
£
Cash at bank and in hand
87,110
525,258
612,368
Borrowings excluding overdrafts
(613,395)
110,380
(503,015)
(526,285)
635,638
109,353
29
Auditor's liability limitation agreement
Upon appointment of Cottons Accountants LLP as auditors, the company entered into a limitation liability agreement with the auditors and this was approved by resolution on 23rd June 2023. Liability is limited to the lesser of 20 times the audit fee or £160,000. In accordance with section 537 of CA06, the effect of the liability limitation agreement is to limit the auditor's liability to less than such amount as is fair and reasonable, as determined by that section, the agreement shall have effect as if it limited the liability to such amount as is fair and reasonable, as so determined.
The agreement limits the liability owed to the company by the auditors in respect of any negligence, default or breach of duty, or breach of trust, occurring in the course of the audit of the accounts for the year ending 31st March 2023.
The agreement does not limit liability for any instance of fraud or dishonesty on behalf of the auditor or any other liability that cannot be excluded or restricted by applicable laws or regulations.
2023-03-312022-04-01falseCCH SoftwareCCH Accounts Production 2023.100Mr JR GardnerMs MD Russell-VickMs M D Russell-VickMr C Gardner003308232022-04-012023-03-3100330823bus:Director12022-04-012023-03-3100330823bus:CompanySecretaryDirector12022-04-012023-03-3100330823bus:Director22022-04-012023-03-3100330823bus:CompanySecretary12022-04-012023-03-3100330823bus:Director32022-04-012023-03-3100330823bus:RegisteredOffice2022-04-012023-03-31003308232023-03-31003308232021-04-012022-03-3100330823core:RetainedEarningsAccumulatedLosses2021-04-012022-03-3100330823core:RetainedEarningsAccumulatedLosses2022-04-012023-03-31003308232022-03-3100330823core:FurnitureFittings2023-03-3100330823core:FurnitureFittings2022-03-3100330823core:CurrentFinancialInstrumentscore:WithinOneYear2023-03-3100330823core:CurrentFinancialInstrumentscore:WithinOneYear2022-03-3100330823core:Non-currentFinancialInstrumentscore:AfterOneYear2023-03-3100330823core:Non-currentFinancialInstrumentscore:AfterOneYear2022-03-3100330823core:CurrentFinancialInstruments2023-03-3100330823core:CurrentFinancialInstruments2022-03-3100330823core:ShareCapital2023-03-3100330823core:ShareCapital2022-03-3100330823core:SharePremium2023-03-3100330823core:SharePremium2022-03-3100330823core:CapitalRedemptionReserve2023-03-3100330823core:CapitalRedemptionReserve2022-03-3100330823core:RetainedEarningsAccumulatedLosses2023-03-3100330823core:RetainedEarningsAccumulatedLosses2022-03-3100330823core:ShareCapital2021-03-3100330823core:SharePremium2021-03-3100330823core:CapitalRedemptionReservecore:RestatedAmount2021-03-3100330823core:RetainedEarningsAccumulatedLosses2021-03-31003308232021-03-3100330823core:RetainedEarningsAccumulatedLosses2022-03-310033082312022-04-012023-03-310033082312021-04-012022-03-31003308232022-03-3100330823core:FurnitureFittings2022-04-012023-03-3100330823core:UKTax2022-04-012023-03-3100330823core:UKTax2021-04-012022-03-310033082322022-04-012023-03-310033082322021-04-012022-03-3100330823bus:OrdinaryShareClass12022-04-012023-03-3100330823bus:OrdinaryShareClass12021-04-012022-03-3100330823core:FurnitureFittings2022-03-3100330823core:Non-currentFinancialInstruments2023-03-3100330823core:Non-currentFinancialInstruments2022-03-3100330823core:WithinOneYear2023-03-3100330823core:WithinOneYear2022-03-3100330823core:BetweenTwoFiveYears2023-03-3100330823core:BetweenTwoFiveYears2022-03-3100330823core:MoreThanFiveYears2023-03-3100330823core:MoreThanFiveYears2022-03-3100330823bus:PrivateLimitedCompanyLtd2022-04-012023-03-3100330823bus:FRS1022022-04-012023-03-3100330823bus:Audited2022-04-012023-03-3100330823bus:FullAccounts2022-04-012023-03-31xbrli:purexbrli:sharesiso4217:GBP