Registration number:
for the Period from 1 April 2018 to
Secret Sales Limited
Contents
Company Information |
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Strategic Report |
|
Directors' Report |
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Statement of Directors' Responsibilities |
|
Independent Auditor's Report |
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Profit and Loss Account |
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Balance Sheet |
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Statement of Changes in Equity |
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Statement of Cash Flows |
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Notes to the Financial Statements |
Secret Sales Limited
Company Information
Directors |
N Kukadia S Kukadia S Gray R Howard C Griffin M Purt |
Registered office |
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Auditors |
|
Secret Sales Limited
Strategic Report for the Period from 1 April 2018 to 30 June 2018
The directors present their strategic report for the period from 1 April 2018 to 30 June 2018.
Fair review of the business
On 27 March 2018 the business completed a fundraising exercise with the Lifestyle Retail Group Ltd (formerly Secret Bidco Ltd). Since this period the business has undergone a restructure to enable future growth. This has included significant investment into the IT platform, marketing strategy and supply chain logistics. The business is now positioned to transform from a campaign-led flash sale business to a multichannel off-price retailer, comprising a new marketplace, individual brand digital storefronts, consignment, wholesale, and physical pop-up shops across the European Union.
As shown in the Company's statement of comprehensive income, the Company's turnover for the 3 month period was £4,443,000 (March 2018: £13,010,000 for a 9 month period), operating loss before exceptional items was £154,000 (2018: £1,347,000 for a 9 month period), and the loss before taxation for the 3 month period was £156,000 (March 2018: £5,073,000 profit for a 9 month period).
The total Shareholders' deficit as at 30 June 2018 was £5,002,000 (March 2018: £4,846,000).
The company's key financial and other performance indicators during the period were as follows:
Unit |
3 months ended 30 June 2018 |
9 months ended 31 March 2018 |
|
Turnover |
£000 |
4,443 |
13,010 |
Operating loss before exceptional income |
£000 |
(154) |
(1,347) |
Operating loss before exceptional income margin |
% of turnover |
(4) |
(10) |
Employees (average number) |
FTE |
52 |
52 |
Turnover per employee (per annum pro-rated) |
£000 |
342 |
334 |
Shareholders' deficit |
£000 |
5,002 |
4,846 |
Principal risks and uncertainties
Demand risk
The principle risk to the Company is a downturn in demand in daily activity, caused by economic uncertainty and a change in consumer spending habits. In addition, the online flash sales market remains competitive. The internet provides both a threat to online flash sales and an opportunity for the Company to develop new areas. This necessitates investment in new technologies and the people required to develop the Company's business.
Cash flow risk
Management is responsible for managing the Company's liquidity and ensuring that the Company has sufficient available funds for operations as they arise.
Future developments
The objective of management is to retain and develop the Company's position as a leading online designer sales platform for fashion, accessories, footwear and lifestyle products. The directors expect to continue to invest in the website, customer acquisition as well supporting the platform to improve the experience and service for customers.
Employment of disabled persons
Applications for employment by disabled persons are always fully considered, bearing in mind the respective aptitudes and abilities of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment with the Company continues and the appropriate training, career development and promotion of a disabled person should, as far as possible, be identical to that of a person who does not suffer from disability.
Secret Sales Limited
Strategic Report for the Period from 1 April 2018 to 30 June 2018
Employee involvement
Consultation with employees or their representatives has continued at all levels, with the aim of ensuring that their views are taken into account when decisions are made that are likely to affect their interests and that employees are aware of the performances of their business units and of the Company as a whole. Communication with employees continues through newsletters and briefing groups.
Approved by the
Director
Secret Sales Limited
Directors' Report for the Period from 1 April 2018 to 30 June 2018
The directors present their report and the financial statements for the period from 1 April 2018 to 30 June 2018.
Principal activity
The principal activity of the company is retail flash sales for fashion, accessories, footwear and lifestyle products.
Directors of the company
The directors who held office during the period were as follows:
The following directors were appointed after the period end:
Results in dividends
The results for the period are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Qualifying third party indemnity provisions
The company has made qualifying third party indemnity provisions for the benefit of its directors during the period. These provisions remain in force at the reporting date.
Disclosure of information to the auditors
Each director has taken the 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 auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.
Going concern
In accordance with Financial Reporting Council's 'Going Concern and Liquidity Risk: Guidance for Directors of UK Companies 2006' the directors of all companies are now required to provide disclosures regarding the adoption of the going concern basis of accounting.
The directors have considered the ability of the Company to continue in operational existence for the foreseeable future as well as the relevant business and financial risks. In doing this, they have considered the Company's business activities, together with the factors likely to affect its future development, performance and position.
The financial statements have been prepared on a going concern basis. Whilst the Company has net liabilities of £5,002,000 (March 2018: £4,846,000) at the statement on financial position date the loss before taxation for the 3 month period was £156,000 (March 2018: profit for the 9 month period of £5,073,000), and the directors continue to have full support from the Company's parent company.
After making enquiries, the directors therefore have a reasonable expectation that the Company will have access to adequate resources to continue in operational existence for the foreseeable future and have therefore continued to adopt the going concern basis in preparing the financial statements.
Secret Sales Limited
Directors' Report for the Period from 1 April 2018 to 30 June 2018
Approved by the
Director
Secret Sales Limited
Statement of Directors' Responsibilities
The directors are responsible for preparing the Strategic Report, Directors' 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 has 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. 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.
Secret Sales Limited
Independent Auditor's Report to the Members of Secret Sales Limited
Opinion
We have audited the financial statements of Secret Sales Limited (the 'company') for the period from 1 April 2018 to 30 June 2018, which comprise the Profit and Loss Account, Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, 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).
In our opinion the financial statements:
• |
give a true and fair view of the state of the company's affairs as at 30 June 2018 and of its loss for the period 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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
• |
the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or |
• |
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue. |
Other information
The 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 period 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. |
Secret Sales Limited
Independent Auditor's Report to the Members of Secret Sales Limited
Matters on which we are required to report by exception
In the light of our 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 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, or returns adequate for our audit have not been received from branches not visited by us; or |
• |
the financial statements are not in agreement with the accounting records and returns; or |
• |
certain disclosures of directors’ remuneration specified by law are not made; or |
• |
we have not received all the information and explanations we require for our audit. |
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 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.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of this 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.
For and on behalf of
Staverton Court
Staverton
GL51 0UX
Secret Sales Limited
Profit and Loss Account for the Period from 1 April 2018 to 30 June 2018
Note |
3 months to |
9 months to |
|
Turnover |
|
|
|
Cost of sales |
( |
( |
|
Gross profit |
|
|
|
Administrative expenses |
( |
( |
|
5 |
71 |
||
Exceptional income |
- |
|
|
Operating (loss)/profit |
( |
|
|
Other interest receivable and similar income |
- |
|
|
Interest payable and similar charges |
( |
( |
|
(Loss)/profit before tax |
( |
|
|
Taxation |
- |
( |
|
(Loss)/profit for the financial period |
( |
|
The income statement has been prepared on the basis that all operations are continuing operations
The company has no other comprehensive income for the period.
Secret Sales Limited
(Registration number: 05996763)
Balance Sheet as at 30 June 2018
Note |
30 June 2018 |
31 March 2018 |
|
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 |
|
|
|
Creditors: Amounts falling due after more than one year |
( |
( |
|
Net liabilities |
( |
( |
|
Capital and reserves |
|||
Called up share capital |
|
|
|
Share premium reserve |
|
|
|
Profit and loss account |
( |
( |
|
Total equity |
( |
( |
Approved and authorised by the
Director
Secret Sales Limited
Statement of Changes in Equity for the Period from 1 April 2018 to 30 June 2018
Share capital |
Share premium |
Other reserves |
Profit and loss account |
Total |
|
At 1 July 2017 |
|
|
|
( |
( |
Profit for the period |
- |
- |
- |
|
|
Other equity reserve movements |
- |
- |
( |
- |
( |
At 31 March 2018 |
|
|
- |
( |
( |
Share capital |
Share premium |
Other reserves |
Profit and loss account |
Total |
|
At 1 April 2018 |
|
|
- |
( |
( |
Loss for the period |
- |
- |
- |
( |
( |
At 30 June 2018 |
|
|
- |
( |
( |
Secret Sales Limited
Statement of Cash Flows for the Period from 1 April 2018 to 30 June 2018
Note |
3 months to |
9 months to |
|
Cash flows from operating activities |
|||
(Loss)/profit for the period |
( |
|
|
Adjustments to cash flows from non-cash items |
|||
Depreciation and amortisation |
|
|
|
Finance income |
- |
( |
|
Finance costs |
|
|
|
Income tax expense |
- |
|
|
Foreign exchange losses |
|
|
|
( |
|
||
Working capital adjustments |
|||
(Increase)/decrease in stocks |
( |
|
|
Decrease/(increase) in trade debtors |
|
( |
|
(Decrease) in trade creditors |
( |
( |
|
Net cash flow from operating activities |
( |
|
|
Cash flows from investing activities |
|||
Interest received |
- |
|
|
Acquisition of tangible assets |
- |
( |
|
Acquisition of intangible assets |
( |
( |
|
Net cash flows from investing activities |
( |
( |
|
Cash flows from financing activities |
|||
Interest paid |
( |
( |
|
Proceeds from other borrowing draw downs |
|
|
|
Repayment of other borrowing |
( |
( |
|
Net cash flows from financing activities |
|
|
|
Net (decrease)/increase in cash and cash equivalents |
( |
|
|
Cash and cash equivalents at 1 April |
|
|
|
Cash and cash equivalents at 30 June |
1,088 |
1,850 |
Secret Sales Limited
Notes to the Financial Statements for the Period from 1 April 2018 to 30 June 2018
General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
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 have been prepared in accordance with Financial Reporting Standard 102 - 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006.
Basis of preparation
These financial statements have been prepared using the historical cost convention except for, where disclosed in these accounting policies, certain items that are shown at fair value.
The presentational currency of the financial statements is Pounds Sterling, being the functional currency of the primary economic environment in which the company operates. Monetary amounts in these financial statements are rounded to the nearest Pound.
Going concern
The directors have considered the ability of the Company to continue in operational existence for the foreseeable future as well as the relevant business and financial risks. In doing this, they have considered the Company's business activities, together with the factors likely to affect its future development, performance and position.
The financial statements have been prepared on a going concern basis. Whilst the Company has net liabilities at the statement on financial position date and made a loss before taxation for the 3 month period, the directors continue to have full support from the Company's parent company, Lifestyle Retail Group Limited, and its shareholders.
The company's forecasts indicate growth in sales and profit after tax. On the basis of the forecasts and on the assumption that the Company’s parent company and ultimate shareholders will continue to provide financial
support (as they have done in the period to date and have indicated an intention to continue to do so), the directors have a reasonable expectation that the Company will have adequate resources to continue in
operational existence for the foreseeable future and therefore consider it appropriate to prepare the financial statements on a going concern basis. Specifically, the forecasts assume that 1) shareholder and other loans, including those which fall due for repayment in the 12months after approval of the financial statements, will be refinanced on no less favourable terms than current arrangements, and 2) new funding will be made available to the Company as required. The financial statements do not include any adjustments that would result from insufficient facilities continuing to be made available to the Company.
Reporting period
The accounting policies below have been prepared on a consistent basis in both the current and prior periods, unless otherwise stated. The financial period ended 30 June 2018 consists of 3 months (2018: 9 months).
Secret Sales Limited
Notes to the Financial Statements for the Period from 1 April 2018 to 30 June 2018
2 |
Accounting policies (continued) |
Critical accounting 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 amounts 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Key sources of estimation uncertainty
No key sources of estimation uncertainty have been identified by management in preparing these financial statements other than those detailed in these accounting policies.
Revenue recognition
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 and 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.
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
Foreign currency transactions and balances
Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.
Exceptional income/(costs)
The Company classifies certain one-off charges or credits that have a material impact on the Company's financial results as 'exceptional income/(costs)'. These are disclosed separately to provide further understanding of the financial performance of the Company.
Tax
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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.
Secret Sales Limited
Notes to the Financial Statements for the Period from 1 April 2018 to 30 June 2018
2 |
Accounting policies (continued) |
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 income statement, 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.
Intangible assets
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date if the fair value can be measured reliably.
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 |
Trademarks |
2-3 years |
Development costs |
2-3 years |
Tangible assets
Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
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 |
Fixtures and fittings |
15% on reducing balance method |
Computers |
33% on reducing balance method |
Secret Sales Limited
Notes to the Financial Statements for the Period from 1 April 2018 to 30 June 2018
2 |
Accounting policies (continued) |
Impairment of fixed assets
At each reporting period end date, the Company reviews the carrying amount of its tangible and intangible 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 assets 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 reversal of impairment loss is treated is treated as a revaluation.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have creased to apply. where an impairment loss subsequently reserves, 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.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.
The cost of finished goods comprises direct materials and, where applicable, those overheads that have been incurred in bringing the inventories to their present location and condition. Stocks held for distribution at no or nominal consideration are measured at the lower of replacement cost and cost, adjusted where applicable for any loss of service potential. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
Leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.
Secret Sales Limited
Notes to the Financial Statements for the Period from 1 April 2018 to 30 June 2018
2 |
Accounting policies (continued) |
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 statement of financial position 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.
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.
Secret Sales Limited
Notes to the Financial Statements for the Period from 1 April 2018 to 30 June 2018
2 |
Accounting policies (continued) |
Financial Instruments (continued)
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.
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 though 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.
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the Company.
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
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.
Secret Sales Limited
Notes to the Financial Statements for the Period from 1 April 2018 to 30 June 2018
Revenue |
The analysis of the company's revenue for the period from continuing operations is as follows:
1 April 2018 to 30 June |
1 July 2017 to 31 March |
|
Sale of goods |
|
|
The analysis of the company's turnover for the period by market is as follows:
1 April 2018 to 30 June |
1 July 2017 to 31 March |
|
UK |
|
|
Europe |
|
|
|
|
Other operating income |
The company's other operating income for the prior period relates to RDEC tax credits receivable.
Exceptional items |
The analysis of the company's other operating income for the period is as follows:
1 April 2018 to 30 June |
1 July 2017 to 31 March |
|
Exceptional income |
- |
|
TUPE costs |
- |
(68) |
- |
|
The prior period exceptional income of £6,608,000 relates to the income and costs associated with the change in ownership of the business in the prior period. As part of this, previous borrowings were forgiven or novated to the new parent company resulting in exceptional income of £6,985,000. This exceptional income is offset by exceptional costs of £505,000 in relation to legal and payroll costs associated with the change in ownership, the business reorganisation and recognition of financial liabilities.
TUPE costs were incurred further to an internal reorganisation during the prior period totalling £68,000.
Secret Sales Limited
Notes to the Financial Statements for the Period from 1 April 2018 to 30 June 2018
Operating profit |
Arrived at after charging/(crediting):
1 April 2018 to 30 June 2018 |
1 July 2017 to 31 March 2018 |
|
Foreign exchange losses |
|
|
Auditor's remuneration |
6 |
24 |
Depreciation expense |
|
|
Amortisation expense |
|
|
Cost of stocks recognised as an expense |
2,854 |
8,921 |
Impairment of stocks recognised or reversed |
58 |
(116) |
Operating lease expense |
|
|
Interest payable and similar expenses |
1 April 2018 to 30 June |
1 July 2017 to 31 March |
|
Interest expense on other finance liabilities |
- |
|
Other finance costs |
|
- |
|
|
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
1 April 2018 to 30 June 2018 |
1 July 2017 to 31 March 2018 |
|
Wages and salaries |
|
|
Social security costs |
|
|
Pension costs |
|
|
|
|
The average number of persons employed by the company (including directors) during the period, analysed by category was as follows:
1 April 2018 to 30 June 2018 |
1 July 2017 to 31 March 2018 |
|
Sales and administration |
|
|
Secret Sales Limited
Notes to the Financial Statements for the Period from 1 April 2018 to 30 June 2018
Directors' remuneration |
The directors' remuneration for the period was as follows:
1 April 2018 to |
1 July 2017 to |
|
Remuneration |
|
|
During the period the number of directors who were receiving benefits and share incentives was as follows:
1 April 2018 to |
1 July 2017 to |
|
Accruing benefits under money purchase pension scheme |
|
|
Taxation |
Tax charged in the profit and loss account
1 April 2018 to 30 June 2018 |
1 July 2017 to 31 March 2018 |
|
Current taxation |
||
UK corporation tax adjustment to prior periods |
- |
|
The tax on profit before tax for the period is higher than the standard rate of corporation tax in the UK (2018 - higher than the standard rate of corporation tax in the UK) of
The differences are reconciled below:
1 April 2018 to |
1 July 2017 to |
|
(Loss)/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) |
|
|
Effect of tax losses |
|
|
Increase in tax from adjustment for prior periods |
- |
|
Tax decrease from research and development tax credit |
( |
( |
Other tax effects |
- |
|
Total tax charge |
- |
|
Secret Sales Limited
Notes to the Financial Statements for the Period from 1 April 2018 to 30 June 2018
10 |
Taxation (continued) |
The company has tax losses of £23,900,000 (March 2018: £23,750,000) which, subject to agreement of HM Revenue and Customs, are available to be carried forward and offset against future profits of the same trade. A potential deferred tax asset has not been recognised in the financial statements in respect of these losses due to uncertainty as to the timing of future recoverability.
Legislation was enacted in September 2016 to reduce the UK corporation tax rate from 19% to 17% from 1 April 2020.
Intangible assets |
Trademarks |
Development costs |
Total |
|
Cost |
|||
At 1 April 2018 |
|
|
|
Additions internally developed |
- |
|
|
At 30 June 2018 |
|
|
|
Amortisation |
|||
At 1 April 2018 |
- |
|
|
Amortisation charge |
- |
|
|
At 30 June 2018 |
- |
|
|
Carrying amount |
|||
At 30 June 2018 |
|
|
|
At 31 March 2018 |
|
|
|
Tangible assets |
Fixtures and fittings |
Computers |
Total |
|
Cost |
|||
At 1 April 2018 and 30 June 2018 |
|
|
|
Depreciation |
|||
At 1 April 2018 |
|
|
|
Charge for the period |
|
|
|
At 30 June 2018 |
|
|
|
Carrying amount |
|||
At 30 June 2018 |
|
|
|
At 31 March 2018 |
|
|
|
Secret Sales Limited
Notes to the Financial Statements for the Period from 1 April 2018 to 30 June 2018
Financial instruments |
Categorisation of financial instruments
30 June |
31 March |
|
Financial assets that are debt instruments measured at amortised cost |
|
|
Financial liabilities measured at amortised cost |
( |
( |
Stocks |
30 June |
31 March |
|
Finished goods and goods for resale |
|
|
Debtors |
Note |
30 June |
31 March |
|
Other debtors |
|
|
|
Prepayments |
|
|
|
Corporation tax asset |
76 |
71 |
|
|
|
Creditors |
Note |
30 June |
31 March |
|
Due within one year |
|||
Trade creditors |
|
|
|
Social security and other taxes |
|
|
|
Other creditors |
|
|
|
Accrued expenses |
|
|
|
|
|
||
Due after one year |
|||
Loans and borrowings |
|
|
Secret Sales Limited
Notes to the Financial Statements for the Period from 1 April 2018 to 30 June 2018
Loans and borrowings |
2018 |
2018 |
|
Non-current loans and borrowings |
||
Other borrowings |
|
|
Other loans are secured by senior fixed and floating charges over the Company's assets. These are repayable 12 months after the issue date.
Pension and other schemes |
Defined contribution pension scheme
The company operates a defined contribution pension scheme. The pension cost charge for the period represents contributions payable by the company to the scheme and amounted to £
Contributions totalling £5,069 (2018: £5,106) were payable to the scheme at the end of the period and are included in creditors.
Share capital and reserves |
Allotted, called up and fully paid shares
2018 |
2018 |
|||
No. |
£ 000 |
No. |
£ 000 |
|
Ordinary shares of 0.01p each |
750,315,077 |
75 |
750,315,077 |
75 |
Reserves of the Company represent the following:
Share premium account
Consideration received for shares issued above their nominal value new of transaction costs
Profit and loss account
Cumulative profit and loss new of distributions to the owners.
Other reserve
This balance represents loans notes which were repayable until the Company's controlling shareholder during the prior period exited its investment in the Group or the Company was sold as a stand-alone entity. In line with the requirements of Section 22 of FRS 102, the balance was classified as equity. The balance was unsecured and carried no interest payable.
Secret Sales Limited
Notes to the Financial Statements for the Period from 1 April 2018 to 30 June 2018
Obligations leases commitments |
The total of future minimum lease payments is as follows:
30 June |
31 March |
|
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 period was £99,000 (2018 - £271,000).
Related party transactions |
Key management personnel
Key management personnel are considered to be the directors of the company and key management personnel compensation is disclosed in note 9 to the financial statements.
|
Controlling party |
Until 26 March 2018, the immediate parent company was Excalibur Silver Bidco Limited and the ultimate parent undertaking was Excalibur Holdco Limited.
On 27 March 2018, the parent company became Lifestyle Retail Group Ltd. There is no ultimate controlling party.