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Registered number: 03120147









PROFILE BOOKS LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2023

 
PROFILE BOOKS LIMITED
 
 
COMPANY INFORMATION


Directors
S P Brough 
C J Engle 
F A Ford 
A C Franklin 
R Gray (appointed 1 July 2023)
U A Mackenzie 
D Mardolka 
K McFarlan 
J Stanley 
N Viner 




Company secretary
K McFarlan



Registered number
03120147



Registered office
29 Cloth Fair

London

EC1A 7JQ




Independent auditors
BKL Audit LLP
Chartered Accountants & Statutory Auditor

35 Ballards Lane

London

N3 1XW





 
PROFILE BOOKS LIMITED
 

CONTENTS



Page
Strategic Report
 
 
1 - 2
Directors' Report
 
 
3 - 4
Independent Auditors' Report
 
 
5 - 8
Statement of Comprehensive Income
 
 
9
Statement of Financial Position
 
 
10 - 11
Statement of Changes in Equity
 
 
12
Statement of Cash Flows
 
 
13
Notes to the Financial Statements
 
 
14 - 32


 
PROFILE BOOKS LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023

Introduction
 
The directors present their strategic report for the Company for the year ended 31 March 2023.

Business review
 
The year to March 2023 was a good year. It was marked by a strong performance in both frontlist and backlist titles. In particular, export sales were very strong, especially backlist titles.  Titles by Robert Greene and by Ryan Holiday continue to perform excellently in all areas. Major frontlist trade titles included The Good Drinker by Adrian Chiles, Building a Second Brain by Tiago Forte, The Mysterious Case of the Alperton Angels by Janice Hallett, Discipline is Destiny by Ryan Holiday, Born to Run 2 by Chris McDougall and The Book of Phobias and Manias by Kate Summerscale. New paperbacks included The Twyford Code by Janice Hallett. 

Principal risks and uncertainties
 
Credit Risk
Debt is uninsured and is managed by regular review of credit and consultation with credit controllers at the distributor.
Changes in the UK Retail Trade
Online purchasing of physical and ebooks is largely controlled by a single retailer. Audio books have grown in popularity and the majority are sold by a single retailer, which is part of the same group. The continued pressure on high street bookshops, both chain and independents, is a major factor affecting the company’s ability to sell books to readers. 
Operational Risk, including systems failures and disaster
The Company has extensive plans for disaster recovery including recovery from systems collapse, and the Company annually assesses the appropriate level of insurance cover against business interruption.
Libel litigation
The Company has insurance cover against libel, the level of which is assessed annually, and has a system of pre-publication review of new titles for potential libels.
Security of Bank Deposits and Investments
The Company has substantial cash. Much of the cash is deposited with the company’s bankers Lloyds Banking Group. There are also holdings with other banks. The directors keep all these under regular review.
Foreign Exchange risk
Where possible the company deals in sterling. Foreign currency accounts are held and the company endeavours to manage the balances so as to reduce the risk.
Inflation
Where possible, the company attempts to limit future cost increases by entering into contracts for services and goods for a period of years. Book prices are kept under review whenever books are printed or reprinted.

Page 1

 
PROFILE BOOKS LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023

Financial key performance indicators
 
Management use a range of performance measures to monitor and manage the business. After consideration the Company has decided that it is more effective to monitor the number of books published for the first time in the year, rather than measuring all editions, as previously.  Revised editions with substantially different text are counted as “new”. The performance measures are financial key performance indicators as set out below:
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Directors' statement of compliance with duty to promote the success of the Company

The directors consider, both individually and collectively, that the manner in which they have acted and the decisions that they have made during the year ended 31 March 2023 have been those most likely to promote success for the benefit of its members.
The directors engage in setting, approving and executing the agreed strategic vision, and regularly review business performance, risk and compliance, health and safety and corporate responsibility matters at both board and informal meetings.
The Company seeks to build long-term, trusted and mutually beneficial relationships with both customers and suppliers. Employees are encouraged to recommend strategic and operational improvements and the company seeks at all times to prioritise the safety and welfare of its staff.
Wherever possible, the company aims to positively impact upon the environment and to make as constructive a contribution as possible to the local community. To that end the company has established an environmental staff group to monitor and suggest improvements to working practices.

This report was approved by the board and signed on its behalf.





F A Ford
Director

Date: 20 September 2023

Page 2

 
PROFILE BOOKS LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023

The directors present their report and the financial statements for the year ended 31 March 2023.

Directors' responsibilities statement

The directors are responsible for preparing the Strategic Report, the 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Principal activity

The principal activity of the Company is book publishing.

Results and dividends

The profit for the year, after taxation, amounted to £1,709,750 (2022 - £1,295,033).

Dividends totalling £342,451 (2022: £311,319) were paid during the year.

Directors

The directors who served during the year were:

S P Brough 
C J Engle 
F A Ford 
A C Franklin 
U A Mackenzie 
D Mardolka 
K McFarlan 
J Stanley 
N Viner 

Page 3

 
PROFILE BOOKS LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023

Future developments

The Managing Director, Andrew Franklin, remains as a director and an editor but the role of Managing Director was taken over by Rebecca Gray as from 1 July 2023.
The Company remains open to new opportunities for acquisitions but at present has no specific targets

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Auditors

During the year, Kreston Reeves LLP resigned as auditors for Profile Books Limited and BKL Audit LLP were appointed in their stead.
Under section 487 (2) of the Companies Act 2006, BKL Audit LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.

This report was approved by the board and signed on its behalf.
 





F A Ford
Director

Date: 20 September 2023

Page 4

 
PROFILE BOOKS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PROFILE BOOKS LIMITED
 

Opinion


We have audited the financial statements of Profile Books Limited (the 'Company') for the year ended 31 March 2023, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 March 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


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 Auditors' 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 United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


Conclusions relating to going concern


In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.


Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.


Page 5

 
PROFILE BOOKS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PROFILE BOOKS LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.


Opinion on other matters 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 the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.


We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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 Directors' Responsibilities Statement set out on page 3, 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.


Page 6

 
PROFILE BOOKS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PROFILE BOOKS LIMITED (CONTINUED)


Auditors' 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 Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
 
Enquiring of management around actual and potential litigation and claims;
Reviewing minutes of meetings of those charged with governance;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias;
Reviewing the general ledger in detail for all transactions with related parties;
Performing walkthrough testing to ensure systems and controls are operating as recorded where appropriate.


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 is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:


Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors' Report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditors' Report. However,
Page 7

 
PROFILE BOOKS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PROFILE BOOKS LIMITED (CONTINUED)


future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.


We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.


Use of our 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 2006Our 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 Auditors' 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.





Myfanwy Neville (FCA) (Senior Statutory Auditor)
  
for and on behalf of
BKL Audit LLP
 
Chartered Accountants
Statutory Auditor
  
London

20 September 2023
Page 8

 
PROFILE BOOKS LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023

2023
2022
Note
£
£

  

Turnover
 4 
18,500,312
16,639,386

Cost of sales
  
(9,936,547)
(9,493,277)

Gross profit
  
8,563,765
7,146,109

Distribution costs
  
(1,031,686)
(855,496)

Administrative expenses
  
(5,335,645)
(4,785,729)

Operating profit
 5 
2,196,434
1,504,884

Interest receivable and similar income
  
10,938
8,189

Profit before tax
  
2,207,372
1,513,073

Tax on profit
 10 
(497,622)
(218,040)

Profit for the financial year
  
1,709,750
1,295,033

There was no other comprehensive income for 2023 (2022:£NIL).

The notes on pages 14 to 32 form part of these financial statements.

Page 9

 
PROFILE BOOKS LIMITED
REGISTERED NUMBER: 03120147

STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2023

2023
2022 as restated
Note
£
£

Fixed assets
  

Intangible assets
 12 
28,898
76,553

Tangible assets
 13 
129,099
187,912

Investments
 14 
687,585
687,585

  
845,582
952,050

Current assets
  

Stocks
 16 
1,836,937
1,533,455

Debtors: amounts falling due after more than one year
 17 
59,820
59,820

Debtors: amounts falling due within one year
 17 
7,138,411
7,045,831

Cash at bank and in hand
  
8,646,972
7,017,399

  
17,682,140
15,656,505

Creditors: amounts falling due within one year
 18 
(4,716,325)
(4,051,045)

Net current assets
  
 
 
12,965,815
 
 
11,605,460

Total assets less current liabilities
  
13,811,397
12,557,510

Creditors: amounts falling due after more than one year
  
(122,168)
(110,203)

Provisions for liabilities
  

Other provisions
 21 
(565,834)
(691,211)

  
 
 
(565,834)
 
 
(691,211)

Net assets
  
13,123,395
11,756,096

Page 10

 
PROFILE BOOKS LIMITED
REGISTERED NUMBER: 03120147
    
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 MARCH 2023


Capital and reserves
  

Called up share capital 
 22 
31,132
31,132

Share premium account
 23 
652,782
652,782

Other reserves
 23 
4,398
4,398

Profit and loss account
 23 
12,435,083
11,067,784

  
13,123,395
11,756,096


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




F A Ford
Director

Date: 20 September 2023

The notes on pages 14 to 32 form part of these financial statements.

Page 11

 
PROFILE BOOKS LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023


Called up share capital
Share premium account
Other reserves
Profit and loss account
Total equity

£
£
£
£
£


At 1 April 2021
30,632
603,282
4,398
10,084,070
10,722,382



Profit for the year
-
-
-
1,295,033
1,295,033
Total comprehensive income for the year
-
-
-
1,295,033
1,295,033

Dividends: Equity capital
-
-
-
(311,319)
(311,319)

Shares issued during the year
500
49,500
-
-
50,000


Total transactions with owners
500
49,500
-
(311,319)
(261,319)



At 1 April 2022
31,132
652,782
4,398
11,067,784
11,756,096



Profit for the year
-
-
-
1,709,750
1,709,750
Total comprehensive income for the year
-
-
-
1,709,750
1,709,750

Dividends: Equity capital
-
-
-
(342,451)
(342,451)


Total transactions with owners
-
-
-
(342,451)
(342,451)


At 31 March 2023
31,132
652,782
4,398
12,435,083
13,123,395


The notes on pages 14 to 32 form part of these financial statements.
Page 12

 
PROFILE BOOKS LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023

2023
2022
£
£

Cash flows from operating activities

Profit for the financial year
1,709,750
1,295,033

Adjustments for:

Amortisation of intangible assets
47,655
47,163

Depreciation of tangible assets
67,966
63,413

Interest received
(10,938)
(8,189)

Taxation charge
497,622
218,040

(Increase)/decrease in stocks
(303,482)
126,389

(Increase) in debtors
(70,210)
(1,331,424)

Increase in creditors
460,260
549,146

(Decrease)/increase in provisions
(125,377)
248,141

Corporation tax (paid)
(303,007)
(180,444)

Net cash generated from operating activities

1,970,239
1,027,268


Cash flows from investing activities

Purchase of tangible fixed assets
(9,153)
(27,542)

Interest received
10,938
8,189

Net cash from investing activities

1,785
(19,353)

Cash flows from financing activities

Issue of ordinary shares
-
50,000

Dividends paid
(342,451)
(311,319)

Net cash used in financing activities
(342,451)
(261,319)

Net increase in cash and cash equivalents
1,629,573
746,596

Cash and cash equivalents at beginning of year
7,017,399
6,270,803

Cash and cash equivalents at the end of year
8,646,972
7,017,399


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
8,646,972
7,017,399

8,646,972
7,017,399


The notes on pages 14 to 32 form part of these financial statements.

Page 13

 
PROFILE BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

1.


General information

The principal activity of Profile Books ("the Company") is book publishing.
The Company is a private company limited by shares and is incorporated in England and Wales.
The Registered Office and principal place of business address is 29 Cloth Fair, London, EC1A 7JQ.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Exemption from preparing consolidated financial statements

The Company is exempt from the requirement to prepare consolidated financial statements as all of its subsidiaries are required to be excluded from consolidation by section 402 of the Companies Act 2006.

 
2.3

Going concern

The financial statements of the Company have been prepared on a going concern basis.
The Company has net current assets of £12,965,815 (2022: £11,605,460) with cash at bank and in hand of £8,646,972 (2022: £7,017,399). This conclusion that going concern is the most appropriate basis follows the detailed modelling of the Company's future trading prospects, its working capital requirements and cashflows.

Page 14

 
PROFILE BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)

 
2.4

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

 
2.5

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods
Turnover from the sale of books is recognised when title passes. A provision for anticipated returns is made based primarily on historical return rates. If these estimates do not reflect actual returns in future periods, then turnover could be understated or overstated for that particular period. 
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
• the amount of revenue can be measured reliably;
• it is probable that the Company will receive the consideration due under the contract;
• the stage of completion of the contract at the end of the reporting period can be measured reliably; and
• the costs incurred and the costs to complete the contract can be measured reliably.
On certain contracts, where the Company acts as agent, turnover includes commissions and fees receivable for services rendered.

Page 15

 
PROFILE BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)

  
2.6

Royalty advance

Advances of royalties paid to authors are included as a prepaid expense until titles are published, at which date they are written off.  Where a paperback version is to be published following the first edition, the directors may allocate a proportion of the advance to be treated as a prepaid expense until publication of the paperback edition.
At each reporting date, advances on unpublished titles are assessed for impairment. If the value is impaired, the carrying amount is reduced to any amounts deemed to be recoverable. The impairment loss is recognised immediately in profit or loss.

 
2.7

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.8

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.9

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in the Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.

 
2.10

Share-based payments

Where share options are awarded to employees, the fair value of the options at the date of grant is charged to the Statement of Comprehensive Income over the vesting period. Non market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. 
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the Statement of Comprehensive Income over the remaining vesting period.
Where equity instruments are granted to persons other than employees, the Statement of Comprehensive Income is charged with fair value of goods and services received.

Page 16

 
PROFILE BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)

 
2.11

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

 
2.12

Intangible assets

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Statement of Comprehensive Income over its useful economic life.

Other intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. The estimated useful life of the Goodwill and Intellectual Property is five years.

 
2.13

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Page 17

 
PROFILE BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)


2.13
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Plant and machinery
-
33%

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of Comprehensive Income.

 
2.14

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.15

Stocks

Stocks comprises finished goods and work in progress in respect of books and are stated at the lower of cost and net realisable value. Cost is determined using the 'first in first out' method.
Stock held by distributors are valued on a title by title basis at the lower of manufacturing cost and net realisable value.
Cost includes the direct costs of paper, printing and binding incurred on a title by title basis. Plant costs which do not vary with the number of copies printed (for example typesetting, origination and illustration), are charged to the Statement of Comprehensive Income in full on publication.
A provision is made for excess, obsolete and slow moving stocks. Net realisable value is calculated as the estimated selling price in the ordinary course of business less applicable variable selling expenses.



 
2.16

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.



Page 18

 
PROFILE BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)

 
2.17

Provisions for liabilities

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to the Statement of Comprehensive Income in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.

  
2.18

Returns provision

The Company sells books to some customers on a 'sale or return' basis. During the course of succeeding periods some of those books will be returned, and some sales made in one accounting period will be returned in the next. The Company has an enforceable obligation to make a full refund against those returns and, in accordance with the requirements of FRS102, provisions are made for the costs involved based on the historical trend of returns, modified where necessary, by the directors' evaluation of each title, and after taking into consideration actual returns received after the year end.

 
2.19

Financial instruments

The Company only enters into basic financial instruments and transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors and loans to and from related parties.
(i) Financial assets
Basic financial assets, including trade and other debtors, and amounts due from related companies, are initially recognised at transaction price, 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.
Such assets are subsequently carried at amortised cost using the effective interest method.
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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 the Statement of Income and Retained Earnings.
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions
 
Page 19

 
PROFILE BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)


2.19
Financial instruments (continued)

(ii) Financial liabilities
Basic financial liabilities, including trade and other creditors and accruals, 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 receipts discounted at a market rate of interest.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors 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.
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.

 
2.20

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the amounts reported for assets and liabilities as at the Statement of Financial Position date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates.
The following judgments (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
(i) Provision for Returns
The Company has agreements in place to allow some customers to return books on a 'sale or return' basis. An estimated provision is made for post year end returns based upon the pattern of returns for the previous completed year, excluding exceptional titles. See note 21 for further details.
(ii) Stock provision
Judgement is required in determining whether there is any allowance for slow-moving or obsolete items. This involves evaluating the likelihood of the further sales of particular stock items. See note 16 for further details.
 

Page 20

 
PROFILE BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

4.


Turnover

An analysis of turnover by class of business is as follows:


2023
2022
£
£

Goods
14,351,734
13,275,970

Services
2,312,023
2,073,746

Royalties
1,385,887
1,131,920

Commission
287,604
90,885

Other
163,064
66,865

18,500,312
16,639,386


Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
11,053,491
11,246,340

Rest of Europe
2,013,236
1,258,570

Rest of the world
5,433,585
4,134,476

18,500,312
16,639,386



5.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Depreciation of tangible fixed assets
67,966
63,413

Exchange differences
(115,068)
(7,559)

Land and building operating lease rentals
249,255
245,101

Other operating lease rentals
4,518
4,825

Amortisation of intangible assets, including goodwill
47,655
47,164

Pension contributions
285,386
169,406

Page 21

 
PROFILE BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

6.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors:


2023
2022
£
£

Fees payable to the Company's auditors in respect of:

The auditing of accounts of associates of the Company
12,450
11,200

Accounts preparation
2,000
1,800

Taxation compliance services
3,500
3,250


7.


Employees

Staff costs, including directors' remuneration, were as follows:


2023
2022
£
£

Wages and salaries
3,562,892
3,098,526

Social security costs
329,955
334,693

Cost of defined contribution scheme
285,386
169,406

4,178,233
3,602,625


The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Directors (not including Non-Executive directors)
2
2



Administration
13
11



Editorial
29
26



Sales and publicity
19
17

63
56

Page 22

 
PROFILE BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

8.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
356,231
392,385

Company contributions to defined contribution pension schemes
8,639
9,744

364,870
402,129


During the year retirement benefits were accruing to 1 director (2022 - 1) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £165,453 (2022 - £157,685).


9.


Interest receivable

2023
2022
£
£


Other interest receivable
10,938
8,189

10,938
8,189


10.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
466,289
228,343

Adjustments in respect of previous periods
53,703
(10,303)


519,992
218,040


Total current tax
519,992
218,040

Deferred tax


Origination and reversal of timing differences
(22,370)
-

Total deferred tax
(22,370)
-


Tax on profit
497,622
218,040
Page 23

 
PROFILE BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
 
10.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - lower than) the standard rate of corporation tax in the UK of 19% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
2,207,372
1,513,073


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2022 - 19%)
419,401
287,484

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
9,640
7,937

Capital allowances for year in excess of depreciation
10,480
5,208

Adjustments to tax charge in respect of prior periods
53,703
(10,303)

Short-term timing difference leading to an increase (decrease) in taxation
26,723
(2,101)

Other timing differences leading to an increase (decrease) in taxation
45
(52,222)

Tax relief for share scheme deduction
-
(17,963)

Deferred tax
(22,370)
-

Total tax charge for the year
497,622
218,040


Factors that may affect future tax charges

The UK Government announced its intention to increase the rate of UK corporation tax from 19% to 25% with effect from 1 April 2023. The increase in the rate of UK corporation tax was enacted in the Finance Act 2021 which received Royal Assent on 10 June 2021.


11.


Dividends

2023
2022
£
£


Dividends: Equity Capital
342,451
311,319

342,451
311,319

Page 24

 
PROFILE BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

12.


Intangible assets




Patents
Goodwill
Total

£
£
£



Cost


At 1 April 2022
233,224
5,894
239,118



At 31 March 2023

233,224
5,894
239,118



Amortisation


At 1 April 2022
158,271
4,294
162,565


Charge for the year
46,644
1,011
47,655



At 31 March 2023

204,915
5,305
210,220



Net book value



At 31 March 2023
28,309
589
28,898



At 31 March 2022
74,953
1,600
76,553

In October 2018, the Company purchased the publishing rights to the titles published by Souvenir Press Limited. The acquisition included goodwill and the trademarks relating to the titles acquired.



Page 25

 
PROFILE BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

13.


Tangible fixed assets





Plant and machinery

£



Cost or valuation


At 1 April 2022
402,480


Additions
9,153



At 31 March 2023

411,633



Depreciation


At 1 April 2022
214,568


Charge for the year
67,966



At 31 March 2023

282,534



Net book value



At 31 March 2023
129,099



At 31 March 2022
187,912


14.


Fixed asset investments





Investments in subsidiary companies

£



Cost or valuation


At 1 April 2022
687,585



At 31 March 2023
687,585




Page 26

 
PROFILE BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

15.



Subsidiary undertakings



Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Class of shares

Holding

Serpent's Tail Limited
Ordinary
100%
Third Millennium Publishing Limited
Ordinary
100%

The aggregate of the share capital and reserves as at 31 March 2023 and the profit or loss for the year ended on that date for the subsidiary undertakings were as follows:

Name
Aggregate of share capital and reserves
Profit/(Loss)
£
£

Serpent's Tail Limited
380,964
-

Third Millennium Publishing Limited
1
-


16.


Stocks

2023
2022 as restated
£
£

Finished goods and goods for resale
1,836,937
1,533,455

1,836,937
1,533,455


An impairment loss of £320,336 (2022264,531) was recognised in the Statement of Comprehensive Income.

Page 27

 
PROFILE BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

17.


Debtors

2023
2022
£
£

Due after more than one year

Other debtors
59,820
59,820

59,820
59,820


2023
2022 as restated
£
£

Due within one year

Trade debtors
5,233,572
5,137,769

Other debtors
143,488
113,086

Prepayments, advance royalties and accrued income
1,737,284
1,793,279

Deferred taxation
24,067
1,697

7,138,411
7,045,831



18.


Creditors: Amounts falling due within one year

2023
2022
£
£

Trade creditors
1,774,777
1,392,021

Amounts owed to group undertakings
383,348
383,348

Corporation tax
383,221
166,236

Other creditors
12,387
40,746

Accruals and deferred income
2,162,592
2,068,694

4,716,325
4,051,045



19.


Creditors: Amounts falling due after more than one year

2023
2022
£
£

Accruals and deferred income
122,168
110,203

122,168
110,203


Page 28

 
PROFILE BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

20.


Deferred taxation




2023


£






At beginning of year
1,697


Charged to profit or loss
22,370



At end of year
24,067

The deferred tax asset is made up as follows:

2023
2022
£
£


Accelerated capital allowances
(21,116)
(8,324)

Expenses allowable when realised
45,183
10,021

24,067
1,697


21.


Provisions




Provision for returns

£





At 1 April 2022
691,211


Charged to profit or loss
(125,377)



At 31 March 2023
565,834

The provision has been made for books sold in the current year which will be returned in subsequent years in accordance with the accounting policy set out in note .


22.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



31,132 (2022 - 31,132) Share shares of £1.00 each
31,132
31,132


Page 29

 
PROFILE BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

23.


Reserves

Share premium account

The share premium reserve includes all amounts paid over and above par value for shares issued in the
Company.

Other reserves

The other reserves include the employee equity benefits reserve.

Profit and loss account

Comprises current year and accumulated profits, less any dividends paid.


24.


Share based payment

The Company operates an Enterprise Management Incentive Share Option Scheme for employees.
Each employee's Share Options converts into one Ordinary Share of Profile Books Limited on exercise. No amounts are paid, or payable, by the recipient on receipt of the option and the options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.
The Options issued in 2013 are exercisable at a price equal to market value at the date of grant and those issued in 2014 have an exercise price based on a value expected to prevail at the end of the vesting period. All Options have a service condition attached that requires the employee to remain with the Company for a period equal to the vesting period.
The Options are forfeited if the employee leaves the Company before the options vest.
The fair value of the Share Options has been determined by applying a Black-Scholes-Merton Model.
No share options were granted during the year (2022: Nil share options), and no share options were exercised during the year (2022: 5,000 share options exercised).
The weighted average fair value of Options granted during the previous year determined using the Black-Scholes-Merton valuation model was £Nil per option (2022: £Nil).
There were a total of 2,500 Share Options outstanding at 31 March 2023 (2022: 2,500).
The value of the Options was reduced by the present value of dividends expected to be paid during the vesting period.
Expected volatility, measured at the annualised standard deviation of net assets, was determined by calculating the historical volatility of the Company's net assets over the previous 5 years.  

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PROFILE BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

25.


Prior year adjustment

The financial statements include a presentational prior year adjustment in respect of a reclassification of royalty advances paid to authors.  These have been reclassified from stock to debtors, as the directors feel this is a more appropriate presentation for the financial statements. This has not resulted in any adjustment to reported profit or net assets of the prior year, but the adjustment has reduced stock for the comparative period by £1,362,325 and increased debtors for the comparative period by the same amount.  


26.


Pension commitments

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £285,386 (2022:  £169,406). Contributions totalling £18,849 (2022: £15,084) were payable to the fund at the reporting date and are included in creditors.


27.


Commitments under operating leases

At 31 March 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£


Not later than 1 year
254,244
254,244

Later than 1 year and not later than 5 years
1,016,976
1,016,976

Later than 5 years
303,681
557,925

1,574,901
1,829,145

2023
2022

£
£


Not later than 1 year
2,700
3,618

2,700
3,618


28.Other financial commitments

The Company operates a credit facility to cover the clearance of foreign cheques for which the Company are allowed to withdraw funds, this facility is secured via fixed and floating charges over the assets of the Company.

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PROFILE BOOKS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

29.


Related party transactions

During the year the Company received professional services of £19,567 (2022: £Nil) from a director.
During the year total dividends of £298,648 (2022: £289,457) were paid to the directors and their related parties.
Directors' remuneration is disclosed in note 8, the directors of the Company are the key management personnel.
During the year no options were exercised by a director of the Company to purchase ordinary shares in the Company (2022: 5,000 options exercised).

The group has taken advantage of the exemption provided by Section 33 Related Party Disclosures paragraph 33.1A of Financial Reporting Standard 102 from disclosing related party transactions entered into between the Company and other group companies, where the subsidiary undertaking is wholly owned by a member of the group.
 
 
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