Company Registration No. SC198334 (Scotland)
BIP CANDY & TOYS UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
BIP CANDY & TOYS UK LIMITED
COMPANY INFORMATION
Director
J M D Harberts
Company number
SC198334
Registered office
Summit House
4-5 Mitchell Street
Edinburgh
Scotland
EH6 7BD
Senior statutory auditor
Cathryn McDowell FCCA
Auditor
Chadwick & Company (Manchester) Limited
Chartered Accountants
Statutory Auditors
Capital House
272 Manchester Road
Droylsden
Manchester
M43 6PW
Business address
1st Floor, Unit E
Orbital 24
Oldham Street
Denton
Manchester
M34 3SU
Bankers
National Westminster Bank plc
36 The Rock
Bury
Lancashire
BL9 0NU
ABN AMRO (ABN AMRO Asset Based Finance N.V. UK Branch)
Sheencroft House
10-12 Church Road
Haywards Heath
West Sussex
RH16 3SN
BIP CANDY & TOYS UK LIMITED
CONTENTS
Page
Strategic report
1 - 2
Director's report
3 - 4
Independent auditor's report
5 - 7
Statement of income and retained earnings
8
Balance sheet
9
Statement of cash flows
10
Notes to the financial statements
11 - 23
BIP CANDY & TOYS UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -
The director presents the strategic report for the year ended 31 March 2023.
Fair review of the business
Our business increased further this year where no impact of the Covid-19 pandemic was recognisable anymore and transportation costs associated with shipping goods from Far East suppliers and exchange rates evolved in a positive way which improved the gross margin significantly.
The turnover further improved to a level as it was pre-pandemic.
Furthermore, we maintained a wide customer base which secures the monthly sales due to all year round listings at retail customers which is recurring business. On top of this the seasonal business attracts as well which results in further overall growth.
Turnover for the year, after discounts allowed, increased by 6% to £18,059,552 (2022 - £17,038,722). The gross profit margin remained consistent at 17.5% (2022 - 17.5%).
Principal risks and uncertainties
Interest rate risk
The company's principal interest rate risk is in relation to its Invoice Finance arrangements, which incur fixed interest rates for the duration of the agreement.
Liquidity risk
Since last year-end the bank overdraft has been replaced by invoice finance via ABN Amro UK which incurs fixed interest rates for the duration of the agreement.
Foreign currency risk
The company's principal foreign currency risk arises from sourcing product lines from the Far East and Europe, which exposes the company to fluctuating currency markets, in particular US Dollars and the Euro. The company, to minimise this exposure, enters into foreign exchange forward contracts.
Credit risk
All customers who wish to trade on credit terms are subject to stringent credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
Development and performance
The company is sufficiently funded and continues to return profits in uncertain economic times. As a consequence the director remains confident the company is strongly placed to exploit trading opportunities as they arise.
The company is continually striving to target growth sector companies.
Key performance indicators
During continued difficult trading conditions as a result of factors outside the company's control the key performance indicators remain consistent.
At the year end, the company had shareholders' funds of £2,429,072 (2022 - £2,126,404) including distributable reserves amounting to £2,389,072 (2022 - £2,086,404). Given that net current assets exceeded current liabilities by £2,413,622 (2022 - £2,107,365) the director believes the company's position to be satisfactory.
BIP CANDY & TOYS UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -
Future developments
During the year the business continued to support company-wide IT solutions enabling a blend of in-house and remote activity. At 1 April 2023 the UK environment of Sage was replaced by SAPbyDesign so, with the exception of Germany, all countries within the group are working in the same ERP system. This should improve the transparency and consistency group wide and will support further strategic growth.
Forecasts have been prepared to include the impact of the current year cost increases and the team are confident they can continue to withstand the economic challenges that are appearing.
Today we can confirm that the realised gross sales in the first months of the new financial year 23/24 are in line with the budget. Gross profit margins are also on track, but the most intensive sales months will now start. We are convinced that we will be able to meet the settled targets for the whole year.
J M D Harberts
Director
27 March 2024
BIP CANDY & TOYS UK LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -
The director presents his annual report and financial statements for the year ended 31 March 2023.
Principal activities
The principal activity of the company was that of confectionery distributors specialising in children's novelty products and adult gift confectionery.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The director does not recommend payment of a final dividend.
Director
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
G Rill
(Resigned 23 February 2023)
J M D Harberts
(Appointed 22 December 2022)
Auditor
In accordance with the company's articles, a resolution proposing that Chadwick & Company (Manchester) Limited be reappointed as auditor of the company will be put at a General Meeting.
Statement of director's responsibilities
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
BIP CANDY & TOYS UK LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 4 -
Strategic Report
Details of the company's future developments and risk exposure are included in the Strategic Report.
On behalf of the board
J M D Harberts
Director
27 March 2024
BIP CANDY & TOYS UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BIP CANDY & TOYS UK LIMITED
- 5 -
Opinion
We have audited the financial statements of BIP Candy & Toys UK Limited (the 'company') for the year ended 31 March 2023 which comprise the statement of income and retained earnings, the balance sheet, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 March 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to Note 1.2 in the financial statements, which indicates that the company has been in breach of several financial covenants in respect of its Debts Purchased Agreement (DPA) with ABN AMRO Bank, during the year to 31 March 2023 and into the following period. Although the bank has indicated it would continue to support the business, they are currently undertaking a review of the facility and terms are yet to be renewed. Further to this, a termination clause exists within the current agreement which would enable the bank to end the DPA if the financial clauses are not adhered to.
With the exception of the above, in auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
BIP CANDY & TOYS UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BIP CANDY & TOYS UK LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the director's 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 remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of director
As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the director is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We considered and updated our knowledge of the company's specific industry and its regulatory environment, and reviewed the company's documentation surrounding the policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of management about their own identification and assessment of the risks of irregularities. Based on this understanding, we identified and assessed the risks of material misstatement in the financial statements and designed and performed audit procedures in response to those risks.
We identified the key laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements, the most significant of these is the UK Companies Act 2006. We also gained knowledge of the legal and regulatory frameworks which do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate or to avoid a material penalty.
Audit response to risks identified
The audit engagement team were made aware of the potential opportunities and incentives that may exist within the company for fraudulent activity and how and where fraud might occur or be concealed within the financial statements.
BIP CANDY & TOYS UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BIP CANDY & TOYS UK LIMITED
- 7 -
In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override of controls. In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other manual adjustments; assessed whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business.
In addition to the above, we designed procedures which included:
enquiring of management and those charged with governance concerning actual and potential litigation and claims and any known instances of non-compliance with laws and regulations;
assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry or inspection;
reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
performing detailed audit work on areas identified as being susceptible to management bias and override of controls, such as provisions, estimates and journal entries, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of bias;
performing analytical procedures to identify any unusual relationships that may indicate a risk of material misstatement due to fraud.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. 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.
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 him 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.
Cathryn McDowell FCCA (Senior Statutory Auditor)
For and on behalf of Chadwick & Company (Manchester) Limited
Chartered Accountants
Statutory Auditors
Capital House
272 Manchester Road
Droylsden
Manchester
M43 6PW
28 March 2024
BIP CANDY & TOYS UK LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 MARCH 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
18,059,552
17,038,722
Cost of sales
(14,907,913)
(14,064,894)
Gross profit
3,151,639
2,973,828
Distribution costs
(1,152,562)
(1,311,386)
Administrative expenses
(1,542,736)
(1,717,545)
Operating profit/(loss)
4
456,341
(55,103)
Interest payable and similar expenses
7
(81,988)
(69,741)
Profit/(loss) before taxation
374,353
(124,844)
Tax on profit/(loss)
8
(71,685)
23,762
Profit/(loss) for the financial year
302,668
(101,082)
Retained earnings brought forward
2,086,404
2,187,486
Retained earnings carried forward
2,389,072
2,086,404
The statement of income and retained earnings has been prepared on the basis that all operations are continuing operations.
BIP CANDY & TOYS UK LIMITED
BALANCE SHEET
AS AT
31 MARCH 2023
31 March 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
17,513
21,016
Current assets
Stocks
10
3,006,409
2,199,035
Debtors
11
2,189,787
3,033,626
Cash at bank and in hand
581,963
220,532
5,778,159
5,453,193
Creditors: amounts falling due within one year
12
(3,364,537)
(3,345,828)
Net current assets
2,413,622
2,107,365
Total assets less current liabilities
2,431,135
2,128,381
Provisions for liabilities
Deferred tax liability
14
2,063
1,977
(2,063)
(1,977)
Net assets
2,429,072
2,126,404
Capital and reserves
Called up share capital
16
28,000
28,000
Capital redemption reserve
17
12,000
12,000
Profit and loss reserves
17
2,389,072
2,086,404
Total equity
2,429,072
2,126,404
The financial statements were approved by the board of directors and authorised for issue on 27 March 2024 and are signed on its behalf by:
J M D Harberts
Director
Company Registration No. SC198334
BIP CANDY & TOYS UK LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023
- 10 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
22
649,294
84,095
Interest paid
(81,988)
(69,741)
Income taxes (paid)/refunded
(12,381)
6,864
Net cash inflow from operating activities
554,925
21,218
Net increase in cash and cash equivalents
554,925
21,218
Cash and cash equivalents at beginning of year
27,038
5,820
Cash and cash equivalents at end of year
581,963
27,038
Relating to:
23
Cash at bank and in hand
581,963
220,532
Bank overdrafts included in creditors payable within one year
(193,494)
BIP CANDY & TOYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 11 -
1
Accounting policies
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
These financial statements are prepared on the going concern basis. The director has a reasonable expectation that the company will continue in operational existence for the foreseeable future. However, the director is aware of certain material uncertainties which may cause doubt on the company's ability to continue as a going concern.
The company has been in breach of several financial covenants in respect of its Debts Purchased Agreement (DPA) with ABN AMRO Bank, during the year to 31 March 2023 and into the following period. Although the bank has indicated it would continue to support the business, they are currently undertaking a review of the facility and terms are yet to be renewed. Further to this, a termination clause exists within the agreement which would enable the bank to end the DPA if the financial clauses are not adhered to.
The parent company, B.C.F Holding B.V. has received a letter of comfort from DOK Kindersusswaren GmbH, who are 95% shareholders of the group, confirming that it is willing and able to continue providing financial support for at least the next 12 months following the date of signing the consolidated 31 March 2024 financial statements.
1.3
Turnover
Turnover represents amounts derived from the provision of goods and services (net of VAT and trade discounts) to customers during the year.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:
Leasehold improvements
10 years straight line
Plant and machinery
3 years straight line
Fixtures, fittings & equipment
3 years straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
BIP CANDY & TOYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 12 -
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
1.6
Stocks
Stock and work in progress are valued at the lower of cost and net realisable value. Cost is calculated using the average cost method of valuation.
Net realisable value is based on estimated selling price less the estimated cost of disposal.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’.
Basic 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.
BIP CANDY & TOYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 13 -
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
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, unless hedge accounting is applied and the hedge is a cash flow hedge.
BIP CANDY & TOYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 14 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled. The company enters into foreign exchange forward contracts in order to manage its exposure to foreign exchange risk. The company follows the accounting policy of the group and hedge accounting is applied. Any gain or loss on forward exchange contracts expiring during the year are taken through the profit and loss account.
1.9
Hedge accounting
The company follows the accounting policy of the group and hedge accounting is applied. Any gain or loss on forward exchange contracts expiring during the year are taken through the profit and loss account.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
BIP CANDY & TOYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 15 -
1.14
Foreign exchange
Monetary assets and liabilities denominated in foreign currencies are translated into sterling, where appropriate, at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to profit and loss account.
1.15
The financial statements include an adjustment for transfer pricing and the group continues to ensure its methodologies are appropriate and up to date. Adjustments calculated are recognised in cost of sales on the profit and loss account, and any adjusting figure is invoiced/credited by the parent company. The rate used on the company's turnover encompasses management charges and royalty payments, which were invoiced by the parent company separately in previous years. The current transfer pricing agreement expires on 31 March 2025.
1.16
Company information
BIP Candy & Toys UK Limited is a private company limited by shares incorporated in Scotland. The registered office is Summit House, 4-5 Mitchell Street, Edinburgh, Scotland, EH6 7BD.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Transfer Pricing Agreement
As per Note 1.15, the financial statements include an adjustment for transfer pricing, to account for logistics, administration and management services provided by the parent company, BIP Holland B.V.
A formal transfer pricing document has been prepared by Quantera Global based on benchmarks from 2016 to 2018. The benchmarks produced a range of percentages to be used from March 2020 to March 2025 at which point a new agreement on current benchmarks would be produced.
The transfer pricing adjustment included in the financial statements is based on 2.66%, applied to the total turnover of the company, resulting in an additional charge to the profit & loss of £858,324 (2022 - £68,151).
Historically the transfer pricing adjustment had been calculated on the sale of products supplied by BIP Holland B.V, only at 1.79%, with management fees and royalties charged separately.
BIP CANDY & TOYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 16 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Sales generated under the company's principal activity
18,059,552
17,038,722
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
16,196,784
16,273,526
European Union
1,862,768
765,196
18,059,552
17,038,722
4
Operating profit/(loss)
2023
2022
Operating profit/(loss) for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
(74,865)
73,033
Depreciation of owned tangible fixed assets
3,503
3,502
Operating lease charges
47,928
47,830
BIP CANDY & TOYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 17 -
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
25,500
30,000
For other services
All other non-audit services
2,515
3,438
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Sales
3
3
Administration
3
3
Marketing and product design
3
3
Logistics and quality control
4
4
Total
13
13
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
619,206
544,387
Social security costs
63,334
54,584
Pension costs
38,226
48,744
720,766
647,715
7
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
6,944
20,516
Interest on invoice finance arrangements
74,893
49,206
81,837
69,722
Other finance costs:
Other interest
151
19
81,988
69,741
BIP CANDY & TOYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 18 -
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
71,599
(23,369)
Deferred tax
Origination and reversal of timing differences
86
(393)
Total tax charge/(credit)
71,685
(23,762)
2023
2022
£
£
Profit/(loss) before taxation
374,353
(124,844)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
71,127
(23,720)
Tax effect of expenses that are not deductible in determining taxable profit
179
150
Tax effect of income not taxable in determining taxable profit
(116)
(192)
Permanent capital allowances in excess of depreciation
409
393
Deferred tax
86
(393)
Taxation charge/(credit) for the year
71,685
(23,762)
Factors that may affect future tax charges
In the Spring Budget 2021, the Government announced that from 1 April 2023 the corporation tax rate for larger businesses would increase to 25% (rather than remaining at 19%, as previously enacted). As a result, the relevant deferred tax balances have been calculated at 25% as the applicable rate.
BIP CANDY & TOYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 19 -
9
Tangible fixed assets
Leasehold improvements
Plant and machinery
Fixtures, fittings & equipment
Total
£
£
£
£
Cost
At 1 April 2022 and 31 March 2023
35,027
11,800
30,251
77,078
Depreciation and impairment
At 1 April 2022
14,011
11,800
30,251
56,062
Depreciation charged in the year
3,503
3,503
At 31 March 2023
17,514
11,800
30,251
59,565
Carrying amount
At 31 March 2023
17,513
17,513
At 31 March 2022
21,016
21,016
10
Stocks
2023
2022
£
£
Work in progress
96,775
21,246
Finished goods and goods for resale
2,909,634
2,177,789
3,006,409
2,199,035
Finished goods valuation above includes provision against slow-moving stocks of £170,000 (2022 - £67,000).
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,006,335
2,926,357
Corporation tax recoverable
18,260
Other debtors
39,625
654
Prepayments and accrued income
143,827
88,355
2,189,787
3,033,626
Other debtors includes amounts owed to the company by ABN AMRO Asset Based Finance N.V. of £39,451 (2022 - £nil) relating to cash held in respect of trade debts discounted on a recourse basis.
BIP CANDY & TOYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 20 -
12
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
13
193,494
Trade creditors
1,291,513
1,253,915
Corporation tax
40,958
Other taxation and social security
821,499
921,442
Other creditors
963,121
716,380
Accruals and deferred income
247,446
260,597
3,364,537
3,345,828
Other creditors includes amounts owed by the company to RBS Invoice Finance of £nil (2022 - £646,124) relating to cash received in respect of trade debts discounted on a recourse basis and is secured by a floating charge over all of the assets of the company.
On 2 February 2023, the charges relating to RBS Invoice Finance were released and replaced by charges with ABN AMRO Asset Based Finance N.V.
13
Loans and overdrafts
2023
2022
£
£
Bank overdrafts
193,494
Payable within one year
193,494
The bank overdraft was secured by a fixed charge, containing a negative pledge, held by National Westminster Bank Plc dated 19 January 2023.
14
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
2,063
1,977
2023
Movements in the year:
£
Liability at 1 April 2022
1,977
Charge to profit or loss
86
Liability at 31 March 2023
2,063
BIP CANDY & TOYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 21 -
15
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
38,226
48,744
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
16
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
28,000
28,000
28,000
28,000
17
Reserves
Capital redemption reserve
Capital redemption reserve records the nominal value of shares repurchased by the company.
Own shares
Called up share capital represents the nominal value of shares that have been issued.
Profit and loss reserve
Profit and loss reserve includes all current and prior period retained profits and losses.
18
Financial commitments, guarantees and contingent liabilities
Forward exchange contracts
The company's policy is to enter into forward exchange contracts on future purchases where there is a high degree of likelihood of an exposure occurring. Gains and losses on these contracts are recognised in the profit and loss when they are completed.
At 31 March 2023, the company had outstanding contracts amounting to £4,344,796 (2022 - £4,953,432), translated at the contract rate in US Dollars and Euros, due to mature within one year. This represents $4,461,460 and €750,000 (2022 - $3,500,000 and €4,000,000). The fair value relating to forward exchange contracts amounted to a loss of £78,314 (2022 - gain £40,327).
Goods committed to
At 31 March 2023, the company was committed to purchases of goods amounting to £3,437,060 (2022 - £2,741,015).
BIP CANDY & TOYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 22 -
19
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
10,875
32,625
Between two and five years
163,125
141,375
In over five years
32,625
174,000
206,625
20
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Other information
No guarantees have been given or received.
The company has taken advantage of the exemption under the Financial Reporting Standard 102 Section 33.1A from disclosing any transactions and balances with group entities of which the group owns 100% of the share capital.
21
Ultimate controlling party
The parent company of BIP Candy & Toys UK Limited is BIP Holland B.V, who own 100% of the issued Ordinary share capital of the company, and is registered in the Netherlands.
The financial statements of the company are consolidated into the accounts of BCF Holding B.V. located at Bredaseweg 123, 4872 LA Etten-Leur, Netherlands,. This company owns 100% of the issued Ordinary share capital of BIP Holland B.V.
This company is itself 95% owned by DOK Kindersüßwaren GmbH, a company registered in Germany, located at Aspastraße 24, 59394 Nordkirchen, Germany.
BIP CANDY & TOYS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 23 -
22
Cash generated from operations
2023
2022
£
£
Profit/(loss) for the year after tax
302,668
(101,082)
Adjustments for:
Taxation charged/(credited)
71,685
(23,762)
Finance costs
81,988
69,741
Depreciation and impairment of tangible fixed assets
3,503
3,502
Movements in working capital:
Increase in stocks
(807,374)
(444,153)
Decrease/(increase) in debtors
825,579
(693,093)
Increase in creditors
171,245
1,272,942
Cash generated from operations
649,294
84,095
23
Analysis of changes in net funds
1 April 2022
Cash flows
31 March 2023
£
£
£
Cash at bank and in hand
220,532
361,431
581,963
Bank overdrafts
(193,494)
193,494
27,038
554,925
581,963
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