Registration number:
Bentham Limited
for the Year Ended 31 December 2017
Registered Auditors
Church House
Church Street
Yeovil
Somerset
BA20 1HB
Bentham Limited
Contents
Company Information |
|
Strategic Report |
|
Directors' Report |
|
Statement of Directors' Responsibilities |
|
Independent Auditor's Report |
|
Consolidated Profit and Loss Account |
|
Consolidated Balance Sheet |
|
Balance Sheet |
|
Consolidated Statement of Changes in Equity |
|
Statement of Changes in Equity |
|
Consolidated Statement of Cash Flows |
|
Statement of Cash Flows |
|
Notes to the Financial Statements |
Bentham Limited
Company Information
Directors |
Mr I T H Gray Mr P R Sinnett-Thomas Mr M J Shobbrook Mrs J Vine |
Registered office |
|
Auditors |
|
Page 1 |
Bentham Limited
Strategic Report for the Year Ended 31 December 2017
The directors present their strategic report for the year ended 31 December 2017.
Principal activity
The principal activity of the group is mail order business supplies.
Fair review of the business
Trading in the business categories where the group is active continued to be extremely competitive, resulting in a decrease in turnover. Gross margins remain healthy at 21.4%, with an operating margin in excess of £1.3m. Marketing spend has been further reduced, owing to decreasing returns on expensive advertising in the National press. Changes in consumer habits have made this an increasingly difficult expense to recover. The group is looking at investing in internet advertising in the future as a more cost effective way of advertising. A result of the group's stringent credit control procedures was that bad debts were once again negligible. Debtors have stayed at roughly the same level, increasing marginally from £626k to £658k. The group strives to take as many orders as possible on a payment before dispatch basis to maintain liquidity. Group cash reserves have become even stronger, increased from £1.30m to £1.37m. The directors consider the results to be highly satisfactory given the difficult trading conditions. The group continues to be very profitable through efforts made to maintain turnover and rigorously control costs.
The group's key financial and other performance indicators during the year were as follows:
Unit |
2017 |
2016 |
|
Turnover |
£ |
12,787,268 |
13,975,494 |
Gross margin |
£ |
2,732,446 |
3,233,000 |
Operating profit |
£ |
1,329,582 |
1,572,407 |
Cash at bank |
£ |
1,367,770 |
1,300,124 |
Debtors |
£ |
658,440 |
626,746 |
Turnover
Turnover fell by 8.5% from 2016 to 2017. This was again due to a reduction in low margin brands and the competitive market in which the group operates, in particular in the public sector where schools and public bodies have continued to move over to service contracts. The private consumer brand has decreased due to the trend away from printing and towards using paperless technology.
Gross margin
Gross margins have decreased marginally, although the current levels are considered an excellent result given the current trading conditions. The group continues to focus on higher margin products, whilst addressing any obsolete stock issues.
Cash at bank and debtors
The group prides itself in not needing banking facilities. This is achieved by strong credit control and rigorous monitoring of cash flow. We are pleased to report that group cash at bank has remained comfortably over £1m, increasing over £67k. Debtors have increased by 5%.
Page 2 |
Bentham Limited
Strategic Report for the Year Ended 31 December 2017 (continued)
Principal risks and uncertainties
Economic environment
The office consumables industry is intensely competitive and actions of competitors, including manufacturers of products we sell, can negatively affect our business. Competition has been primarily on price, product availability, speed of delivery and credit availability. Generally pricing is aggressive in the industry and we expect pricing pressures to continue.
Staff retention
The success of our business is dependant, to a large extent, on the efforts and abilities of key members of staff, particularly the senior members. The policy of the group is to provide senior members of staff with benefits which are competitive to other leading companies, as well as to provide them with fulfilment opportunities for their future careers. This has been demonstrated by the progression of senior managers to becoming the current owners, and the results prove this strategy to be successful.
Financial instruments
Objectives and policies
Financial
The group's principal financial instruments comprise bank balances, cash and short term deposits, as well as trade creditors and debtors. The main purpose of these financial instruments is to manage the group's funding and liquidity requirements.
Price risk, credit risk, liquidity risk and cash flow risk
The principal financial risks to which the group is exposed are those of price, liquidity, foreign currency and credit. Each of these is managed in accordance with board approved policies, as set out below.
Price risk
Changes in the industry and the economic environment can adversely affect demand for the products we sell. Net sales can be dependant on demand for specific product categories. The increase in computer hardware products means items need to be sold quickly in order to avoid their reducing in value as technology advances rapidly.
Liquidity risk
In respect of bank balances, liquidity risk is managed by closely monitoring movements and maintaining positive balances on accounts. Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and regular monitoring of amounts outstanding for both credit and time limits. Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.
Currency risk
The UK’s ongoing exit from the EU may lead to price increases on purchases by the group. As this pressure should apply to the whole industry, there will most likely be a general increase in prices so margins shouldn’t be greatly affected. The group’s high gross margins also mean there is scope to absorb some of the increase if needed. Sterling began to recover in 2017, which has benefitted the group, although imports in US Dollars are becoming an increasingly small proportion of purchases.
Credit risk
The group's exposure to credit risk is managed by using payment with order, only offering credit to schools and other companies with strong ratings. The group uses credit checks to verify the credit risk of each company on an individual basis.
Page 3 |
Bentham Limited
Strategic Report for the Year Ended 31 December 2017 (continued)
Approved by the Board on
Mr P R Sinnett-Thomas
Director
Page 4 |
Bentham Limited
Directors' Report for the Year Ended 31 December 2017
The directors present their report and the consolidated financial statements for the year ended 31 December 2017.
Directors of the group
The directors who held office during the year were as follows:
Disclosure of information to the auditor
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.
Approved by the Board on
Mr P R Sinnett-Thomas
Director
Page 5 |
Bentham Limited
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities 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 apply them consistently; |
• |
make judgements and accounting estimates that are reasonable and prudent; |
• |
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
• |
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 and in accordance with FRS 102. 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.
Page 6 |
Bentham Limited
Independent Auditor's Report to the Members of Bentham Limited
Opinion
We have audited the financial statements of Bentham Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2017, which comprise the Consolidated Profit and Loss Account, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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.
In our opinion the financial statements:
• |
give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2017 and of the group's profit for the year then ended; |
• |
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
• |
have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
• |
the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or |
• |
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group’s or the parent company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue. |
Page 7 |
Bentham Limited
Independent Auditor's Report to the Members of Bentham Limited (continued)
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• |
the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
• |
the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception
In the light of our knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.
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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
• |
the parent company financial statements are not in agreement with the accounting records and returns; or |
• |
certain disclosures of directors’ remuneration specified by law are not made; or |
• |
we have not received all the information and explanations we require for our audit. |
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities [set out on page 6], 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 group’s and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.
Page 8 |
Bentham Limited
Independent Auditor's Report to the Members of Bentham Limited (continued)
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.
As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
• |
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. |
• |
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group’s internal control. |
• |
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. |
• |
Conclude 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 group’s or the parent 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 group or the parent company to cease to continue as a going concern. |
• |
Evaluate 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. |
• |
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. |
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Page 9 |
Bentham Limited
Independent Auditor's Report to the Members of Bentham Limited (continued)
For and on behalf of
Church House
Church Street
Somerset
BA20 1HB
Page 10 |
Bentham Limited
Consolidated Profit and Loss Account for the Year Ended 31 December 2017
Note |
Total |
Total |
|
Turnover |
|
|
|
Cost of sales |
( |
( |
|
Gross profit |
|
|
|
Administrative expenses |
( |
( |
|
Operating profit |
|
|
|
Other interest receivable and similar income |
|
|
|
344 |
994 |
||
Profit before tax |
|
|
|
Taxation |
( |
( |
|
Profit for the financial year |
|
|
|
Profit/(loss) attributable to: |
|||
Owners of the company |
|
|
The group has no recognised gains or losses for the year other than the results above.
Page 11 |
Bentham Limited
(Registration number: 04026676)
Consolidated Balance Sheet as at 31 December 2017
Note |
2017 |
2016 |
|
Fixed assets |
|||
Intangible assets |
|
|
|
Tangible assets |
|
|
|
|
|
||
Current assets |
|||
Stocks |
|
|
|
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Total assets less current liabilities |
|
|
|
Provisions for liabilities |
- |
( |
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
|
|
|
Profit and loss account |
|
|
|
Equity attributable to owners of the company |
|
|
|
Total equity |
|
|
Approved and authorised by the
Mr P R Sinnett-Thomas
Director
Page 12 |
Bentham Limited
(Registration number: 04026676)
Balance Sheet as at 31 December 2017
Note |
2017 |
2016 |
|
Fixed assets |
|||
Tangible assets |
|
|
|
Investments |
|
|
|
|
|
||
Current assets |
|||
Stocks |
|
|
|
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Total assets less current liabilities |
|
|
|
Provisions for liabilities |
- |
( |
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
|
|
|
Profit and loss account |
|
|
|
Total equity |
|
|
The company made a profit after tax for the financial year of £1,264,236 (2016 - profit of £1,295,213).
Approved and authorised by the
Mr P R Sinnett-Thomas
Director
Page 13 |
Bentham Limited
Consolidated Statement of Changes in Equity for the Year Ended 31 December 2017
Equity attributable to the parent company
Share capital |
Profit and loss account |
Total |
Total equity |
|
At 1 January 2017 |
|
|
|
|
Profit for the year |
- |
|
|
|
Total comprehensive income |
- |
|
|
|
Dividends |
- |
( |
( |
( |
At 31 December 2017 |
|
|
|
|
Share capital |
Profit and loss account |
Total |
Total equity |
|
At 1 January 2016 |
|
|
|
|
Profit for the year |
- |
|
|
|
Total comprehensive income |
- |
|
|
|
Dividends |
- |
( |
( |
( |
At 31 December 2016 |
|
|
|
|
Page 14 |
Bentham Limited
Statement of Changes in Equity for the Year Ended 31 December 2017
Share capital |
Profit and loss account |
Total |
|
At 1 January 2017 |
|
|
|
Profit for the year |
- |
|
|
Total comprehensive income |
- |
|
|
Dividends |
- |
( |
( |
At 31 December 2017 |
|
|
|
Share capital |
Profit and loss account |
Total |
|
At 1 January 2016 |
|
|
|
Profit for the year |
- |
|
|
Total comprehensive income |
- |
|
|
Dividends |
- |
( |
( |
At 31 December 2016 |
|
|
|
Page 15 |
Bentham Limited
Consolidated Statement of Cash Flows for the Year Ended 31 December 2017
Note |
2017 |
2016 |
|
Cash flows from operating activities |
|||
Profit for the year |
|
|
|
Adjustments to cash flows from non-cash items |
|||
Depreciation and amortisation |
|
|
|
Finance income |
( |
( |
|
Income tax expense |
|
|
|
|
|
||
Working capital adjustments |
|||
Decrease/(increase) in stocks |
|
( |
|
(Increase)/decrease in trade debtors |
( |
|
|
Decrease in trade creditors |
( |
( |
|
Cash generated from operations |
|
|
|
Income taxes paid |
( |
( |
|
Net cash flow from operating activities |
|
|
|
Cash flows from investing activities |
|||
Interest received |
|
|
|
Acquisitions of tangible assets |
( |
( |
|
Net cash flows from investing activities |
( |
( |
|
Cash flows from financing activities |
|||
Dividends paid |
( |
( |
|
Net increase in cash and cash equivalents |
|
|
|
Cash and cash equivalents at 1 January |
|
|
|
Cash and cash equivalents at 31 December |
1,367,770 |
1,300,124 |
Page 16 |
Bentham Limited
Statement of Cash Flows for the Year Ended 31 December 2017
Note |
2017 |
2016 |
|
Cash flows from operating activities |
|||
Profit for the year |
|
|
|
Adjustments to cash flows from non-cash items |
|||
Depreciation and amortisation |
|
|
|
Finance income |
( |
( |
|
Income tax expense |
|
|
|
|
|
||
Working capital adjustments |
|||
Decrease/(increase) in stocks |
|
( |
|
(Increase)/decrease in trade debtors |
( |
|
|
Decrease in trade creditors |
( |
( |
|
Cash generated from operations |
|
|
|
Income taxes paid |
( |
( |
|
Net cash flow from operating activities |
|
|
|
Cash flows from investing activities |
|||
Interest received |
|
|
|
Acquisitions of tangible assets |
( |
( |
|
Net cash flows from investing activities |
|
|
|
Cash flows from financing activities |
|||
Dividends paid |
( |
( |
|
Net increase in cash and cash equivalents |
|
|
|
Cash and cash equivalents at 1 January |
|
|
|
Cash and cash equivalents at 31 December |
1,330,712 |
1,280,509 |
Page 17 |
Bentham Limited
Notes to the Financial Statements for the Year Ended 31 December 2017
General information |
The company is a private company limited by share capital incorporated in Englancd and Wales.
The address of its registered office is:
These financial statements were authorised for issue by the
Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
Basis of preparation
These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.
These 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 £1.
Basis of consolidation
The consolidated financial statements consolidate the financial statements of the Company and its subsidiary undertakings drawn up to 31 December 2017.
No profit and loss account is presented for Bentham Limited as permitted by section 408 of the Companies Act 2006.
Inter-company transactions, balances and unrealised gains on transactions between the Company and its subsidiaries, which are related parties, are eliminated in full.
Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
Page 18 |
Bentham Limited
Notes to the Financial Statements for the Year Ended 31 December 2017 (continued)
2 |
Accounting policies (continued) |
Revenue recognition
Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the group’s activities. Turnover is shown net of Value Added Tax, returns, rebates and discounts and after eliminating sales within the company.
The group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the group's activities.
Foreign currency transactions and balances
Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.
Tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements and on unused tax losses or tax credits in the group. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
Tangible assets
Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
Asset class |
Depreciation method and rate |
Leasehold improvements |
Over the period of the lease |
Equipment, fixtures and fittings |
15% per annum, straight line basis |
Computer equipment |
33% per annum, straight line basis |
Plant and machinery |
20% per annum, straight line basis |
Page 19 |
Bentham Limited
Notes to the Financial Statements for the Year Ended 31 December 2017 (continued)
2 |
Accounting policies (continued) |
Goodwill and other intangibles
Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.
Intellectual property is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Amortisation is based on the expected useful life of the asset.
Amortisation
Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:
Asset class |
Amortisation method and rate |
Goodwill |
20% per annum, straight line basis |
Intellectual property |
20% per annum, straight line basis |
Inventories
Stocks are stated at the lower of cost and estimated selling price. Cost is determined using the first-in, first-out (FIFO) method.
The cost of finished goods comprises costs that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its estimated selling price; the impairment loss is recognised immediately in profit or loss.
Defined contribution pension obligation
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
Financial instruments
Classification
Basic financial instruments are defined as one of the following:
- cash
- a debt instrument (such as accounts receivable and payable)
- commitment to receive a loan that satisfy certain criteria
- investments in non-convertible preference shares, and non puttable ordinary shares.
All other financial instruments are classed as other financial instruments and treated accordingly.
Recognition and measurement
Page 20 |
Bentham Limited
Notes to the Financial Statements for the Year Ended 31 December 2017 (continued)
2 |
Accounting policies (continued) |
Research and development
Expenditure on research and development is written off against profits in the year in which it is incurred.
Revenue |
The analysis of the group's revenue for the year from continuing operations is as follows:
2017 |
2016 |
|
Sale of goods |
|
|
Operating profit |
Arrived at after charging/(crediting)
2017 |
2016 |
|
Depreciation expense |
|
|
Amortisation expense |
|
|
Foreign exchange gains |
( |
( |
Operating lease expense - property |
|
|
Operating lease expense - other |
19,000 |
23,000 |
Other interest receivable and similar income |
2017 |
2016 |
|
Interest income on bank deposits |
|
|
Other finance income |
|
- |
|
|
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
2017 |
2016 |
|
Wages and salaries |
|
|
Social security costs |
|
|
Pension costs, defined contribution scheme |
|
|
Other employee expense |
|
|
|
|
Page 21 |
Bentham Limited
Notes to the Financial Statements for the Year Ended 31 December 2017 (continued)
6 |
Staff costs (continued) |
The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:
2017 |
2016 |
|
Administration and support |
|
|
Sales |
|
|
Distribution |
|
|
|
|
Directors' remuneration |
The directors' remuneration for the year was as follows:
2017 |
2016 |
|
Remuneration |
|
|
Contributions paid to money purchase schemes |
|
|
211,965 |
395,204 |
During the year the number of directors who were receiving benefits and share incentives was as follows:
2017 |
2016 |
|
Accruing benefits under money purchase pension scheme |
|
|
Auditors' remuneration |
2017 |
2016 |
|
Audit of these financial statements |
12,027 |
12,027 |
Audit of the financial statements of subsidiaries of the company pursuant to legislation |
6,030 |
6,000 |
|
|
|
Other fees to auditors |
||
All other non-audit services |
|
|
Page 22 |
Bentham Limited
Notes to the Financial Statements for the Year Ended 31 December 2017 (continued)
Taxation |
Tax charged/(credited) in the income statement
2017 |
2016 |
|
Current taxation |
||
UK corporation tax |
|
|
UK corporation tax adjustment to prior periods |
( |
( |
251,387 |
275,754 |
|
Deferred taxation |
||
Arising from origination and reversal of timing differences |
( |
|
Tax expense in the income statement |
|
|
The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2016 - the same as the standard rate of corporation tax in the UK) of
The differences are reconciled below:
2017 |
2016 |
|
Profit before tax |
|
|
Corporation tax at standard rate |
|
|
Effect of revenues exempt from taxation |
( |
( |
Effect of expense not deductible in determining taxable profit (tax loss) |
|
- |
Tax increase from effect of capital allowances and depreciation |
|
|
Tax decrease from effect of adjustment in research and development tax credit |
( |
- |
Other tax effects for reconciliation between accounting profit and tax expense (income) |
|
( |
Total tax charge |
|
|
Page 23 |
Bentham Limited
Notes to the Financial Statements for the Year Ended 31 December 2017 (continued)
9 |
Taxation (continued) |
Deferred tax
Group
Deferred tax assets and liabilities
2016 |
Liability |
Accelerated capital allowances |
|
Company
Deferred tax assets and liabilities
2016 |
Liability |
Accelerated capital allowances |
|
Page 24 |
Bentham Limited
Notes to the Financial Statements for the Year Ended 31 December 2017 (continued)
Intangible assets |
Group
Goodwill |
Intellectual property |
Total |
|
Cost or valuation |
|||
At 1 January 2017 |
|
|
|
At 31 December 2017 |
|
|
|
Amortisation |
|||
At 1 January 2017 |
|
|
|
Amortisation charge |
- |
|
|
At 31 December 2017 |
|
|
|
Carrying amount |
|||
At 31 December 2017 |
- |
|
|
At 31 December 2016 |
- |
|
|
The aggregate amount of research and development expenditure recognised as an expense during the period is £Nil (2016 - £Nil).
Company
Goodwill |
Intellectual property |
Total |
|
Cost or valuation |
|||
At 1 January 2017 |
|
|
|
At 31 December 2017 |
|
|
|
Amortisation |
|||
At 1 January 2017 |
|
|
|
At 31 December 2017 |
|
|
|
Carrying amount |
|||
At 31 December 2017 |
- |
- |
- |
At 31 December 2016 |
- |
- |
- |
The aggregate amount of research and development expenditure recognised as an expense during the period is £Nil (2016 - £Nil).
Page 25 |
Bentham Limited
Notes to the Financial Statements for the Year Ended 31 December 2017 (continued)
Tangible assets |
Group
Land and buildings |
Furniture, fittings and equipment |
Other property, plant and equipment |
Total |
|
Cost or valuation |
||||
At 1 January 2017 |
|
|
|
|
Additions |
- |
|
- |
|
Disposals |
- |
( |
- |
( |
At 31 December 2017 |
|
|
|
|
Depreciation |
||||
At 1 January 2017 |
|
|
|
|
Charge for the year |
- |
|
|
|
Eliminated on disposal |
- |
( |
- |
( |
At 31 December 2017 |
|
|
|
|
Carrying amount |
||||
At 31 December 2017 |
- |
|
|
|
At 31 December 2016 |
- |
|
|
|
Included within the net book value of land and buildings above is £Nil (2016 - £Nil) in respect of short leasehold land and buildings.
Page 26 |
Bentham Limited
Notes to the Financial Statements for the Year Ended 31 December 2017 (continued)
11 |
Tangible assets (continued) |
Company
Land and buildings |
Furniture, fittings and equipment |
Other property, plant and equipment |
Total |
|
Cost or valuation |
||||
At 1 January 2017 |
|
|
|
|
Additions |
- |
|
- |
|
Disposals |
- |
( |
- |
( |
At 31 December 2017 |
|
|
|
|
Depreciation |
||||
At 1 January 2017 |
|
|
|
|
Charge for the year |
- |
|
|
|
Eliminated on disposal |
- |
( |
- |
( |
At 31 December 2017 |
|
|
|
|
Carrying amount |
||||
At 31 December 2017 |
- |
|
|
|
At 31 December 2016 |
- |
|
|
|
Included within the net book value of land and buildings above is £Nil (2016 - £Nil) in respect of short leasehold land and buildings.
Investments |
Company
2017 |
2016 |
|
Investments in subsidiaries |
|
|
Subsidiaries |
£ |
Cost or valuation |
|
At 1 January 2017 |
|
Carrying amount |
|
At 31 December 2017 |
|
At 31 December 2016 |
|
Page 27 |
Bentham Limited
Notes to the Financial Statements for the Year Ended 31 December 2017 (continued)
12 |
Investments (continued) |
Details of undertakings
Details of the investments (including principal place of business of unincorporated entities) in which the company holds 20% or more of the nominal value of any class of share capital are as follows:
Undertaking |
Registered office |
Holding |
Proportion of voting rights and shares held |
|
2017 |
2016 |
|||
Subsidiary undertakings |
||||
|
Jersey |
Ordinary shares |
|
|
|
England and Wales |
Ordinary shares |
|
|
The principal activity of IJT Direct Limited, based in Jersey, is the mail sale of office consumables. IJT Direct Limited, based in England and Wales is dormant.
Stocks |
Group |
Company |
|||
2017 |
2016 |
2017 |
2016 |
|
Other inventories |
|
|
|
|
Debtors |
Group |
Company |
|||
2017 |
2016 |
2017 |
2016 |
|
Trade debtors |
|
|
|
|
Amounts owed by related parties |
- |
- |
|
|
Prepayments |
|
|
|
|
Total current trade and other debtors |
|
|
|
|
Page 28 |
Bentham Limited
Notes to the Financial Statements for the Year Ended 31 December 2017 (continued)
Cash and cash equivalents |
Group |
Company |
|||
2017 |
2016 |
2017 |
2016 |
|
Cash on hand |
|
|
|
|
Cash at bank |
|
|
|
|
Short-term deposits |
|
|
|
|
|
|
|
|
Creditors |
Group |
Company |
|||
2017 |
2016 |
2017 |
2016 |
|
Due within one year |
||||
Trade creditors |
|
|
|
|
Amounts due to related parties |
- |
- |
|
|
Social security and other taxes |
|
|
|
|
Outstanding defined contribution pension costs |
|
|
|
|
Other payables |
|
|
|
|
Accrued expenses |
|
|
|
|
Income tax liability |
105,788 |
129,469 |
105,788 |
129,469 |
|
|
|
|
Pension and other schemes |
Defined contribution pension scheme
The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to
£
Contributions totalling
£
Page 29 |
Bentham Limited
Notes to the Financial Statements for the Year Ended 31 December 2017 (continued)
Share capital |
Allotted, called up and fully paid shares
2017 |
2016 |
|||
No. |
£ |
No. |
£ |
|
|
|
1,000 |
|
1,000 |
Obligations under leases and hire purchase contracts |
Group
Operating leases
The total of future minimum lease payments is as follows:
2017 |
2016 |
|
Not later than one year |
|
|
Later than one year and not later than five years |
|
|
|
|
The amount of non-cancellable operating lease payments recognised as an expense during the year was £
Company
Operating leases
The total of future minimum lease payments is as follows:
2017 |
2016 |
|
Not later than one year |
|
|
Later than one year and not later than five years |
|
|
|
|
The amount of non-cancellable operating lease payments recognised as an expense during the year was £
Page 30 |
Bentham Limited
Notes to the Financial Statements for the Year Ended 31 December 2017 (continued)
Dividends |
2017 |
2016 |
|
£ |
£ |
|
Interim dividend of £
|
827,900 |
973,500 |
Parent and ultimate parent undertaking |
The company's immediate parent is
These financial statements are available upon request from
Polham Lane
Somerton
Somerset
TA11 6SP
Page 31 |
Bentham Limited
Detailed Consolidated Profit and Loss Account for the Year Ended 31 December 2017
2017 |
2016 |
|
Turnover (analysed below) |
12,787,268 |
13,975,494 |
Cost of sales (analysed below) |
10,054,822 |
10,742,494 |
Gross profit |
2,732,446 |
3,233,000 |
Gross profit (%) |
21.37% |
23.13% |
Administrative expenses |
||
Employment costs (analysed below) |
562,673 |
722,572 |
Establishment costs (analysed below) |
125,269 |
139,646 |
General administrative expenses (analysed below) |
557,645 |
586,065 |
Finance charges (analysed below) |
125,090 |
164,044 |
Depreciation costs (analysed below) |
32,187 |
49,260 |
1,402,864 |
1,661,587 |
|
Operating profit |
1,329,582 |
1,571,413 |
Other interest receivable and similar income (analysed below) |
344 |
994 |
Profit before tax |
1,329,926 |
1,572,407 |
Page 32 |
Bentham Limited
Detailed Consolidated Profit and Loss Account for the Year Ended 31 December 2017 (continued)
2017 |
2016 |
Turnover |
||
Sales, UK |
12,787,268 |
13,975,494 |
Cost of sales |
||
Opening stock |
1,644,780 |
1,560,728 |
Purchases |
6,607,540 |
7,488,166 |
Fulfilment costs |
43,713 |
50,422 |
Closing stock |
(1,361,066) |
(1,644,780) |
Wages and salaries |
1,866,890 |
1,887,006 |
Freight and carriage |
1,258,384 |
1,420,997 |
(Profit)/loss on foreign currency |
(5,419) |
(20,045) |
10,054,822 |
10,742,494 |
Employment costs |
||
Wages and salaries |
230,490 |
197,421 |
Staff NIC (Employers) |
33,744 |
34,974 |
Directors' remuneration |
157,737 |
197,385 |
Staff pensions (Defined contribution) |
70,136 |
73,790 |
Directors pensions (Defined contribution) |
54,228 |
197,819 |
Staff training |
16,338 |
21,183 |
562,673 |
722,572 |
Establishment costs |
||
Rent |
49,929 |
49,929 |
Rates |
22,315 |
21,450 |
Light, heat and power |
13,700 |
14,250 |
Insurance |
20,830 |
22,751 |
Repairs and renewals |
18,495 |
31,266 |
125,269 |
139,646 |
Page 33 |
Bentham Limited
Detailed Consolidated Profit and Loss Account for the Year Ended 31 December 2017 (continued)
General administrative expenses |
||
Telephone and fax |
42,003 |
40,094 |
Computer software and maintenance costs |
37,437 |
36,858 |
Printing, postage and stationery |
19,213 |
22,800 |
Charitable donations |
1,022 |
4,182 |
Sundry expenses |
19,714 |
25,180 |
Cleaning |
12,066 |
12,090 |
Travel and subsistence |
1,857 |
1,316 |
Advertising |
309,668 |
329,910 |
Leasing charges |
19,000 |
23,000 |
Auditor's remuneration - The audit of the company's annual accounts |
12,027 |
12,027 |
Auditor's remuneration - The audit of the company's subsidiaries' annual accounts |
6,030 |
6,000 |
Auditors' remuneration - non audit work |
3,000 |
3,000 |
Legal and professional fees |
48,356 |
26,745 |
Website development |
22,830 |
39,882 |
Bad debts written off |
3,422 |
2,981 |
557,645 |
586,065 |
Finance charges |
||
Bank charges |
125,090 |
164,044 |
Depreciation costs |
||
Amortisation of development costs |
77 |
76 |
Depreciation of short leasehold property |
- |
372 |
Depreciation of plant and machinery (owned) |
2,747 |
3,076 |
Depreciation of fixtures and fittings (owned) |
29,363 |
45,736 |
32,187 |
49,260 |
Other interest receivable and similar income |
||
Bank interest receivable |
297 |
994 |
Other interest receivable |
47 |
- |
344 |
994 |
Page 34 |
Bentham Limited
Detailed Company Profit and Loss Account for the Year Ended 31 December 2017
2017 |
2016 |
|
Turnover (analysed below) |
12,365,270 |
13,390,478 |
Cost of sales (analysed below) |
9,832,539 |
10,422,447 |
Gross profit |
2,532,731 |
2,968,031 |
Gross profit (%) |
20.48% |
22.17% |
Administrative expenses |
||
Employment costs (analysed below) |
562,673 |
722,572 |
Establishment costs (analysed below) |
125,269 |
139,646 |
General administrative expenses (analysed below) |
377,621 |
502,359 |
Finance charges (analysed below) |
112,582 |
146,249 |
Depreciation costs (analysed below) |
32,110 |
49,184 |
1,210,255 |
1,560,010 |
|
Operating profit |
1,322,476 |
1,408,021 |
Income from shares in group undertakings (analysed below) |
190,000 |
163,000 |
Other interest receivable and similar income (analysed below) |
337 |
978 |
190,337 |
163,978 |
|
Profit before tax |
1,512,813 |
1,571,999 |
Page 35 |
Bentham Limited
Detailed Company Profit and Loss Account for the Year Ended 31 December 2017 (continued)
2017 |
2016 |
Turnover |
||
Sales, UK |
12,365,270 |
13,390,478 |
Cost of sales |
||
Opening stock |
1,547,129 |
1,404,242 |
Purchases |
6,594,571 |
7,488,042 |
Closing stock |
(1,269,731) |
(1,547,129) |
Wages and salaries |
1,866,890 |
1,887,006 |
Freight and carriage |
1,099,099 |
1,210,331 |
(Profit)/loss on foreign currency |
(5,419) |
(20,045) |
9,832,539 |
10,422,447 |
Employment costs |
||
Wages and salaries |
230,490 |
197,421 |
Staff NIC (Employers) |
33,744 |
34,974 |
Directors' remuneration |
157,737 |
197,385 |
Staff pensions (Defined contribution) |
70,136 |
73,790 |
Directors pensions (Defined contribution) |
54,228 |
197,819 |
Staff training |
16,338 |
21,183 |
562,673 |
722,572 |
Establishment costs |
||
Rent |
49,929 |
49,929 |
Rates |
22,315 |
21,450 |
Light, heat and power |
13,700 |
14,250 |
Insurance |
20,830 |
22,751 |
Repairs and renewals |
18,495 |
31,266 |
125,269 |
139,646 |
Page 36 |
Bentham Limited
Detailed Company Profit and Loss Account for the Year Ended 31 December 2017 (continued)
General administrative expenses |
||
Telephone and fax |
42,003 |
40,094 |
Printing, postage and stationery |
19,213 |
22,800 |
Charitable donations |
1,022 |
4,182 |
Sundry expenses |
19,714 |
25,164 |
Cleaning |
12,066 |
12,090 |
Travel and subsistence |
1,857 |
1,316 |
Advertising |
227,715 |
329,910 |
Leasing charges |
19,000 |
23,000 |
Auditor's remuneration - The audit of the company's annual accounts |
12,027 |
12,027 |
Auditors' remuneration - non audit work |
3,000 |
3,000 |
Legal and professional fees |
16,582 |
25,795 |
Bad debts written off |
3,422 |
2,981 |
377,621 |
502,359 |
Finance charges |
||
Bank charges |
112,582 |
146,249 |
Depreciation costs |
||
Depreciation of short leasehold property |
- |
372 |
Depreciation of plant and machinery (owned) |
2,747 |
3,076 |
Depreciation of fixtures and fittings (owned) |
29,363 |
45,736 |
32,110 |
49,184 |
Income from shares in group undertakings |
||
Dividends from shares in group undertakings |
190,000 |
163,000 |
Other interest receivable and similar income |
||
Bank interest receivable |
290 |
978 |
Other interest receivable |
47 |
- |
337 |
978 |
Page 37 |