Company registration number 05454806 (England and Wales)
ORDER LINE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
ORDER LINE LIMITED
COMPANY INFORMATION
Directors
Mrs A Bhojani
Mr M R Bhojani
Mr S H Bhojani
Mr Z A Y Bhojani
Secretary
Mr M R Bhojani
Company number
05454806
Registered office
7 Prince William Road
Loughborough
England
LE11 5GU
Auditor
Mazars LLP
Meridian Business Park
6 Dominus Way
Leicester
LE19 1RP
Bankers
Lloyds Bank Plc
37/38 High Street
Loughborough
LE11 2QG
ORDER LINE LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 24
ORDER LINE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 1 -
The directors present the strategic report for the year ended 28 February 2023.
Review of the business
The directors are pleased to report a year of improved trading following the full removal of COVID-19 restrictions and consider turnover, increased customer numbers, gross profit margin, stock levels and net assets as the key performance indicators of the company.
During the year, the company generated income of £37.2m (2022: £31.5m), with a gross profit margin 14.0% (2022: 13.8%) achieved.
At the year end the company held stocks of £3.0m (2022: £1.4m) and had net assets of £553k (2022: £147k). The increased level of stock reflects the increased level of demand for the company's products.
Operating profits have continued to increase as the company continues to see increased demand for its products following the removal of the final COVID-19 restrictions. The directors are pleased to report overall a relatively strong performance during the year and post year end.
The directors therefore believe the company's position to be satisfactory, in line with expectations and the strategic direction agreed by the directors.
The company remains committed to being fully compliant with all relevant regulatory bodies and being the company of choice in our market for our customers and established suppliers.
The company continues to invest significantly in its workplace, infrastructure and service capability to achieve these objectives with high levels of quality compliance and to ensure it continues to be seen as the preferred choice within its core market where it operates. Other streams of revenue such as NHS prescription dispensing have continued to be stable.
ORDER LINE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 2 -
Principal risks and uncertainties
The directors are not aware of any significant high risks facing the company in the next twelve months, Low UK GDP growth expectations from 2023-24 may be offset with a forecasted reduction in UK inflation and interest rates; the directors are expecting for the company’s performance to be relatively stable into 2024. Medium term uncertainties facing the company may primarily be linked to any significant economic downturn due to global tensions in the middle east and the on-going Russian-Ukraine war which in turn may impact on revenue. The company continues to be well established within its current markets and therefore any economic downturn within the UK over the medium term may be somewhat mitigated based on the company’s strong and dynamic market position.
The principal ongoing general business risks include:
Increase in operating costs including but not limited to human resources costs. The directors continue to invest in stream-lining the company to mitigate this risk such as up-skilling existing teams to multi-task with continued investment into I.T to seek further efficiencies in business processes. Energy cost increases continued to be mitigated where possible through investment planning on vehicles and buildings infrastructure.
Continued risks in disruption of supply chains - such risks are continued to be managed by maintaining a close working relationship with major manufacturers then forecasting for adequate stocks to be procured while redundant supply chains are in place for alternative products.
Risk of competition - the company is strongly established within its core market. The directors have maintained robust customer relationships by offering excellent quality products and services therefore the directors consider that risks around competition is mitigated to a satisfactory level however we remain vigilant.
Cash flow and liquidity risk - the company currently mitigates risk by actively managing its cash flow i.e through tight controls on limiting the amount of credit offerings backed-up with personal guarantees while being proactive on collection of debts. The company’s stock purchasing regime is working in line with just-in-time stock ordering policies to maximise cash flow liquidity. With a strong cash position of the company and regular demand from customers, it is considered sufficient risk has been mitigated to a satisfactory level.
On 24 February 2022 Russian Forces entered Ukraine, resulting in Western Nation reactions including announcements of sanctions against Russia and Russian interests worldwide. It is also noted the recent heightened tensions in the Middle-East where there may be political and economic ramifications within region and beyond. The Directors have carried out an additional assessment of these potential impacts on the company, including the impact of mitigation measures and uncertainties. The business does not operate in Ukraine, Russia or the Middle-East and no key suppliers or customers are located in any of these countries. The Board’s assessment of these highly tragic geopolitical situations is that the business is not directly impacted at present, however the directors acknowledge that there is some indirect impact on the company based on impacts to the global economy i.e. increased energy costs; the company has taken into account during the going concern assessment, and will continue to monitor its impact, and respond accordingly.
.
Other information and explanations
The business climate remains challenging, although demand is relatively stable. The company continues to find new and innovative routes to market and to build-on established partnerships with major brands.
Going Concern
After reviewing the company's forecasts and projections, the directors have reasonable expectation that the company can remain a viable going concern for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing the financial statements.
ORDER LINE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 3 -
Mr S H Bhojani
Director
17 November 2023
ORDER LINE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 4 -
The directors present their annual report and financial statements for the year ended 28 February 2023.
Principal activities
The principal activity of the company continued to be that of the wholesale and retail trading of pharmaceutical products and research, development and sale of information technology projects.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid during the current or prior year. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mrs A Bhojani
Mr M R Bhojani
Mr S H Bhojani
Mr Z A Y Bhojani
Principal risks and uncertainties
The strategic report contains details of the principal risks and uncertainties which are faced by the company.
Future developments
The directors are confident about the future prospects for the company, having undertaken a review of the company's performance post-year end.
Auditor
The auditor, Mazars LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
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 enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
ORDER LINE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 5 -
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.
On behalf of the board
Mr S H Bhojani
Director
17 November 2023
ORDER LINE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ORDER LINE LIMITED
- 6 -
Opinion
We have audited the financial statements of Order Line Limited (the ‘company’) for the year ended 28 February 2023 which comprise the statement of comprehensive income, balance sheet, statement of changes in equity and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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 28 February 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the “Auditor’s responsibilities for the audit of the financial statements” section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
ORDER LINE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ORDER LINE LIMITED
- 7 -
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 directors' report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
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.
Based on our understanding of the company and its industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: employment regulation, health and safety regulation and anti-money laundering regulation.
ORDER LINE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ORDER LINE LIMITED
- 8 -
To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
Inquiring of management and, where appropriate, those charged with governance, as to whether the company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;
Inspecting correspondence, if any, with relevant licensing or regulatory authorities;
Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and
Considering the risk of acts by the company which were contrary to applicable laws and regulations, including fraud.
We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as tax legislation, pension legislation, the Companies Act 2006.
In addition, we evaluated the directors’ and management’s incentives and opportunities for fraudulent manipulation of the financial statements, including the risk of management override of controls, and determined that the principal risks related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, in particular in relation to, revenue recognition (which we pinpointed to the cut-off risk), and significant one-off or unusual transactions.
Our audit procedures in relation to fraud included but were not limited to:
Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
Gaining an understanding of the internal controls established to mitigate risks related to fraud;
Discussing amongst the engagement team the risks of fraud; and
Addressing the risks of fraud through management override of controls by performing journal entry testing.
There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Stephen English (Senior Statutory Auditor)
for and on behalf of
Mazars LLP
Chartered Accountants and Statutory Auditor
Meridian Business Park
6 Dominus Way
Leicester
LE19 1RP
17 November 2023
ORDER LINE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
37,222,797
31,517,669
Cost of sales
(32,020,585)
(27,170,255)
Gross profit
5,202,212
4,347,414
Administrative expenses
(4,753,483)
(4,343,522)
Other operating income
3
42,449
107,426
Operating profit
4
491,178
111,318
Interest receivable and similar income
7
2,349
7,476
Interest payable and similar expenses
8
(38,505)
(16,852)
Profit before taxation
455,022
101,942
Tax on profit
9
(49,488)
(73,171)
Profit and total comprehensive income for the financial year
405,534
28,771
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
There are no recognised gains and losses other than those passing through the statement of comprehensive income.
The notes on pages 12 to 24 form part of these financial statements.
ORDER LINE LIMITED
BALANCE SHEET
AS AT
28 FEBRUARY 2023
28 February 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
10
245,068
217,254
Tangible assets
11
375,747
342,040
620,815
559,294
Current assets
Stocks
12
3,040,662
1,353,758
Debtors
13
1,454,652
1,227,462
Cash at bank and in hand
1,642,359
1,654,516
6,137,673
4,235,736
Creditors: amounts falling due within one year
14
(5,379,798)
(3,569,916)
Net current assets
757,875
665,820
Total assets less current liabilities
1,378,690
1,225,114
Creditors: amounts falling due after more than one year
15
(731,822)
(1,004,545)
Provisions for liabilities
Deferred tax liability
18
(93,936)
(73,171)
(93,936)
(73,171)
Net assets
552,932
147,398
Capital and reserves
Called up share capital
20
100
100
Profit and loss reserves
21
552,832
147,298
Total equity
552,932
147,398
The financial statements were approved by the board of directors and authorised for issue on 17 November 2023 and are signed on its behalf by:
Mr S H Bhojani
Director
Company Registration No. 05454806
The notes on pages 12 to 24 form part of these financial statements.
ORDER LINE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 11 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 March 2021
100
118,527
118,627
Year ended 28 February 2022:
Profit and total comprehensive income for the year
-
28,771
28,771
Balance at 28 February 2022
100
147,298
147,398
Year ended 28 February 2023:
Profit and total comprehensive income for the year
-
405,534
405,534
Balance at 28 February 2023
100
552,832
552,932
ORDER LINE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 12 -
1
Accounting policies
Company information
Order Line Limited is a private company limited by shares incorporated in England and Wales. The registered office is 7 Prince William Road, Loughborough, England, LE11 5GU.
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 Pound 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.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Skynet Ltd. These consolidated financial statements are available from its registered office, 7 Prince William Road, Loughborough, LE11 5GU.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods supplied net of discounts and Value Added Tax.
Turnover 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 despatch of the goods), the amount of turnover 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
Intangible fixed assets other than goodwill
Intangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses.
ORDER LINE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 13 -
Amortisation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following annual basis:
IT Software Development
33% straight line
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following annual bases:
Fixtures, fittings and equipment
12.5% straight line
Motor vehicles
25% 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.
1.6
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
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.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors, loans to fellow group companies 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.
ORDER LINE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 14 -
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, finance leases and bank loans, 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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
ORDER LINE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 15 -
1.11
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.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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.
ORDER LINE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 16 -
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
There are considered to be no judgement, estimates or assumptions which have a significant risk of causing a material adjustment to the carrying value of assets and liabilities.
ORDER LINE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 17 -
3
Turnover and other operating income
2023
2022
£
£
Other operating income
Grants received
193
88,571
Rental income
6,000
10,000
Other
36,256
8,855
42,449
107,426
2023
2022
£
£
Turnover analysed by geographical market
UK
37,090,680
31,443,520
Rest of world
132,117
74,149
37,222,797
31,517,669
Turnover is wholly attributable to the principal activity of the company.
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Foreign exchange losses/(gains)
9,409
(402)
Fees payable to the company's auditor for the audit of the company's financial statements
15,000
12,000
Depreciation of owned tangible fixed assets
79,774
76,739
Depreciation of tangible fixed assets held under finance leases
22,457
-
Profit on disposal of tangible fixed assets
(3,000)
-
Amortisation of intangible assets
228,265
394,119
Operating lease charges
21,500
51,500
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Administration
37
26
Operations
19
24
Total
56
50
ORDER LINE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
5
Employees
(Continued)
- 18 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,451,621
1,370,334
Social security costs
145,728
136,660
Pension costs
28,066
24,449
1,625,415
1,531,443
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
7,500
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
2,349
3,459
Other interest income
4,017
Total income
2,349
7,476
8
Interest payable
2023
2022
£
£
Interest on bank loans
36,720
16,852
Interest on finance leases
1,785
-
38,505
16,852
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
38,104
Adjustments in respect of prior periods
(9,381)
Total current tax
28,723
ORDER LINE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
9
Taxation
2023
2022
£
£
(Continued)
- 19 -
Deferred tax
Origination and reversal of timing differences
20,765
73,171
Total tax charge
49,488
73,171
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
455,022
101,942
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
86,454
19,369
Tax effect of expenses that are not deductible in determining taxable profit
5,407
2,012
Tax effect of income not taxable in determining taxable profit
(570)
Unutilised tax losses carried forward
(21,443)
28,175
Adjustments in respect of prior years
(9,381)
Group relief
(22,816)
Differences between capital allowances and depreciation
19,424
14,967
Other reversing timing differences
(7,587)
8,648
Taxation charge for the year
49,488
73,171
With effect from 1 April 2023, the main rate of UK Corporation Tax increased from 19% to 25% in accordance with Finance Act 2021 which was substantively enacted on 24 May 2021.
Where tax charges are expected to reverse they have been calculated in accordance with the main rate of Corporation Tax in effect at the date of reversal.
ORDER LINE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 20 -
10
Intangible fixed assets
IT Software Development
£
Cost
At 1 March 2022
1,564,532
Additions
256,079
At 28 February 2023
1,820,611
Amortisation and impairment
At 1 March 2022
1,347,278
Amortisation charged for the year
228,265
At 28 February 2023
1,575,543
Carrying amount
At 28 February 2023
245,068
At 28 February 2022
217,254
11
Tangible fixed assets
Fixtures, fittings and equipment
Motor vehicles
Total
£
£
£
Cost
At 1 March 2022
712,413
87,201
799,614
Additions
20,283
115,655
135,938
Disposals
(5,423)
(5,423)
At 28 February 2023
732,696
197,433
930,129
Depreciation and impairment
At 1 March 2022
393,751
63,823
457,574
Depreciation charged in the year
65,525
36,706
102,231
Eliminated in respect of disposals
(5,423)
(5,423)
At 28 February 2023
459,276
95,106
554,382
Carrying amount
At 28 February 2023
273,420
102,327
375,747
At 28 February 2022
318,662
23,378
342,040
ORDER LINE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
11
Tangible fixed assets
(Continued)
- 21 -
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases.
2023
2022
£
£
Motor vehicles
67,382
12
Stocks
2023
2022
£
£
Finished goods and goods for resale
3,040,662
1,353,758
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
220,345
182,875
Corporation tax recoverable
66,051
Amounts owed by group undertakings
664,736
128,145
Other debtors
532,869
669,919
Prepayments and accrued income
36,702
180,472
1,454,652
1,227,462
Amounts owed by group undertakings are interest free and repayable upon demand.
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loan
16
309,091
309,091
Obligations under finance leases
17
22,655
Trade creditors
4,541,085
2,711,026
Amounts owed to group undertakings
76,523
Corporation tax
38,104
Other taxation and social security
29,174
26,640
Other creditors
277,279
290,113
Accruals and deferred income
162,410
156,523
5,379,798
3,569,916
Amounts owed to group undertakings are interest free and repayable upon demand.
ORDER LINE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 22 -
15
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loan
16
695,454
1,004,545
Obligations under finance leases
17
36,368
731,822
1,004,545
16
Loans
2023
2022
£
£
Bank loan
1,004,545
1,313,636
Payable within one year
309,091
309,091
Payable after one year
695,454
1,004,545
The bank loan is secured by an unlimited debenture secured against the assets of the company.
The loan is repayable in monthly instalments until it is fully repaid on 28 May 2026. Interest is charged at 1.28% per annum above the Bank of England base rate.
17
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
22,655
In two to five years
36,368
59,023
Finance lease payments represent amounts payable by the company for motor vehicles. Finance lease obligations are secured on the asset to which they relate.
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
93,936
73,171
ORDER LINE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
18
Deferred taxation
(Continued)
- 23 -
2023
Movements in the year:
£
Liability at 1 March 2022
73,171
Charge to profit or loss
20,765
Liability at 28 February 2023
93,936
The deferred tax liability set out above is expected to reverse within 7 years and relates to accelerated capital allowances that are expected to mature within the same period.
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
28,066
24,449
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.
Included within closing creditors are contributions of £6,135 (2022: £5,768) in respect of the year.
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
The company has one class of ordinary shares which carry voting, dividend and capital distribution rights.
21
Reserves
Called up share capital
This represents the nominal value of shares in issue.
Profit and loss account
This reserve records retained earnings and accumulated losses.
ORDER LINE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 24 -
22
Operating lease commitments
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
6,500
21,500
Between two and five years
26,000
26,000
In over five years
3,792
10,292
36,292
57,792
23
Related party transactions
Transactions with related parties
As a subsidiary undertaking of Skynet Ltd, the company has taken advantage of the exemption under Section 33.1A of FRS 102 from disclosing transactions with other members that are wholly owned within the group.
During the year the company made advances totalling £54,369 (2022: £74,882) to various connected parties of the directors or the company, and received repayments totalling £28,086 (2022: £32,273). At the year end £114,267 (2022: £87,985) was owed to the company from these connected parties.
During the year, the company made sales to a business operated by a close family member of a director totalling £12,794 (2022: £22,524). At the year end £571 (2022: £2,003) was due to the company from these related parties.
24
Parent company and ultimate controlling party
The company's immediate and ultimate parent is Skynet Ltd, incorporated in England & Wales.
The most senior parent entity producing publicly available financial statement is Skynet Ltd. These financial statements are available upon request from 7 Prince William Road, Loughborough, LE11 5GU.
The ultimate controlling parties are Mr M R and Mrs A Bhojani.
25
Directors' transactions
During the year, the company made payments totalling £118,105 (2022: £520,885) to the directors, and received payments totalling £320,536 (2022: £302,861) from the directors. Interest of £nil (2022: £4,017) was charged by the company on outstanding balances. At 28 February 2023 £77,938 was owed to the directors by the company (2022: £124,493 was due to the company from its directors).
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