Registered number: 07822479
SNOWDOG ENTERPRISES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
SNOWDOG ENTERPRISES LIMITED
COMPANY INFORMATION
|
SNOWDOG ENTERPRISES LIMITED
CONTENTS
|
|
|
|
|
|
Directors' responsibilities statement
|
|
Independent auditor's report
|
|
Statement of comprehensive income
|
|
|
|
Statement of changes in equity
|
|
Notes to the financial statements
|
|
|
SNOWDOG ENTERPRISES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their Strategic Report of Snowdog Enterprises Limited (the 'Company') for the year ended 31 December 2023.
The Company’s immediate parent company is Snowman Enterprises Limited, which is a wholly owned subsidiary of Penguin Books Limited, which is a subsidiary of Penguin Random House Limited, all companies registered in the United Kingdom. The Company is domiciled and registered in the United Kingdom. The principal activity of the Company continues to be a merchandise agent under a licence agreement.
The Company saw a small growth in turnover for the year to £213,352, which was an 9.0% increase compared to the prior year (2022: £195,758). Gross merchandising income for the Snowman and Snowdog brand increased by 5.1% in the parent company, Snowman Enterprises Limited ("SEL"), compared to the prior year. In accordance with a deed of assignment between the Company and SEL the Company received a 50% allocation of net profits from SEL after deduction of distribution and other expenses. The allocation from SEL is paid out by the Company to the talent pool in accordance with the agreed percentage rates. The gross profit margin decreased to 53.5% (2022: 62.4%). Operating profit for the year decreased by £37,119 to £58,214, which was a 38.9% decrease on prior year (2022: £95,333) due to inflationary pressures across most lines. Overall, the Company saw a 25.5% decrease in profit for the financial year on the prior year. The Company's profit for the financial year was £61,677 (2022: £82,744).
Key Performance Indicators ('KPIs')
|
The Company monitors progress and performance during the year and historical trend data which is set out in the following KPI’s:
The KPIs are in line with forecast expectations. Detailed explanations for the year on year movements are included in the business review section.
|
SNOWDOG ENTERPRISES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Principal Risks and Uncertainties
|
The Company's operations expose it to a variety of commercial and financial risks. The Company is subject to risk management procedures and an annual risk assessment implemented by the ultimate parent Company, Bertelsmann SE & Co KGaA. The Company has procedures in place to make the directors aware of the various risks to the Company’s business. The risks are monitored and reported to management.
Commercial risk
The continuing uncertainty in the global economy and high level of inflation in the UK presents ongoing pressure on costs and margins. The Company actively monitors market trends and these are incorporated into the detailed commercial plans of the business.
Price risk
The Company is exposed to commodity price risk as a result of its operations. The directors regularly review the appropriateness of commodity purchasing policies, particularly in the event of changes to the size or nature of the Company's operations in an attempt to mitigate the risk.
Credit risk
The Company may offer credit terms to its customers which allow payment of the debt after delivery of the goods. The Company is at risk to the extent that a customer may be unable to pay the debt on the specified due date. The Company has mitigated this risk of payment default by implementing policies which ensure that appropriate checks on potential customers are performed before credit terms are granted. Where a customer or group of customers is assessed to have a higher risk profile, these are included within the Company's credit insurance programme.
Liquidity and cash flow risk
The objective of the Company in managing liquidity risk is to ensure that it can meet its financial obligations as and when they fall due. The Company expects to meet its financial obligations through operating cash flows. The Company’s results, including cash flows, are reviewed by the Board on a monthly basis. Risks are further mitigated by the cash pooling arrangements in place across the Bertelsmann group, which ensures funds are available to the Company to meet all liabilities as and when they fall due.
|
SNOWDOG ENTERPRISES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Directors’ section 172 statement
|
The Directors of the Company must act in accordance with a set of general duties, as detailed in section 172 of the UK Companies Act 2006, summarised as follows:
A director of a Company must act in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its shareholders as a whole and, in doing so have regard (amongst other matters) to:
• the likely consequences of any decisions in the long-term;
• the interest of the Company’s employees;
• the need to foster the Company’s business relationships with suppliers, customers and others;
• the impact of the Company’s operations on the community and environment;
• the desirability of the Company maintaining a reputation for high standards of business conduct; and
• the need to act fairly as between the shareholders of the Company.
Examples of how the Directors have oversight of these stakeholder matters are included throughout the Strategic and Director’s report as well as set out specifically below.
Long-term decision making
The Board operates a structured governance model which supports the Group in ensuring that decisions are considered, documented and reported upon, and in alignment with our strategic plans. Detailed budgets and forecasts are prepared which enable the Board to track performance and ensure that it is as expected, or that mitigation steps are taken to deliver performance in line with, or close to, expectations. The Board and senior management personnel operate within this structure, with the aim of promoting the success of the Company and delivering long-term shareholder value.
The Board is presented with regular board packs and other information that it needs to fulfil its responsibilities. During the period at Board meetings the Board have discussed and made decisions on a number of specific issues including business priorities and strategy, capital investment, and the ongoing management of the current economic situation.
The interest of the Company's employees
The Board recognises that employees are central to the long-term success of the Company. The Company systematically provides employees with information on matters of concern to them, consulting them or their representatives regularly, and providing forums and communication routes so that their views can be taken into account when making decisions that are likely to affect their interests. Employee involvement in the Company is encouraged, as achieving a common awareness on the part of all employees of the financial and economic factors affecting the Company, plays a major role in maintaining its prosperity. The Company also regularly informs staff and staff representatives of Company updates and activities to keep them informed of the Company’s progress and performance.
The Company is committed to employment policies, which follow best practice, based on equal opportunities for all employees, irrespective of sex, race, colour, disability or sexual orientation as well as providing various employee networks to support the diverse and inclusive culture of the Company.
All staff receive regular performance reviews as well as opportunity for learning to support the development of all employees’ careers. This includes training programs and secondment opportunities for staff.
Engagement with customers, suppliers and other stakeholders
The directors appreciate the importance of fostering business relationships with key stakeholders, such as customers and suppliers, and focus on the maintenance and growth of these relationships in their decision making and strategic planning. The Company employs dedicated relationship managers to foster these
|
SNOWDOG ENTERPRISES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
relationships which also ensures the Board has a high degree of visibility to take stakeholder considerations into account.
Community impact and customer relations
|
The Board ensures significant consideration is given to the impact of the Company’s operations on the community and their customers in their decision-making. The Company’s approach is to use its position of strength to ensure it is an asset to the communities and people with which it interacts.
Environmental sustainability
|
The Company’s leadership team ensure environmental issues are managed effectively and considered in the strategic decisions of the Company. The Company strives to create positive change in reducing the environmental impact of its businesses whilst maintaining effective and continuing business practices. As part of the environmental strategy, the Bertelsmann group aims to be climate neutral by 2030.
High standards of business conduct
|
The Company has a Code of Conduct setting out the behaviours and values expected of all of our employees, which is communicated to all colleagues. Company processes ensure the Board and management are continually updated on the operation of the code and an independent whistleblowing service enables employees and third parties to anonymously raise concerns. Through its oversight and monitoring role, the Board requires all of our people to work to the highest standards of business conduct.
The Board recognises the importance of regular and open dialogue with the shareholders and the need to ensure the strategy and goals of the Company are effectively communicated to them. Feedback on these plans and objectives is welcomed by the directors and major business decisions are made closely and with the approval of the shareholders.
The Company is presenting the financial statements in accordance with Financial Reporting Standards 101, 'Reduced Disclosure Framework' (FRS101).
This report was approved by the board and signed on its behalf.
|
SNOWDOG ENTERPRISES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
The profit for the year, after taxation, amounted to £61,677 (2022: £82,744).
No dividends were paid during the year (2022: £Nil). The directors do not propose payment of a final dividend for 2023.
The directors who served during the year and up to the date of signing the financial statements were:
Looking ahead, the market remains challenging and the economic backdrop remains similarly tough. With the support of Snowman Enterprises Limited the Company will continue to be a merchandise agent under licence agreements. The directors do not anticipate any significant changes in the activities of the Company.
In preparing these financial statements, the directors have assessed the ability of the Company to continue to operate for a period of at least twelve months from the date of signing the financial statements.
The Company has undertaken a risk assessment and forecasting exercise to assess the Company’s liquidity position. The forecast for the going concern period has been prepared using the three year plan approved by the Board and takes account of prior trends and key cost drivers such as inflation.
For the purposes of the Company’s going concern assessment, the directors have performed sensitivity analysis on cashflows based on unforeseen changes in demand and the potential impact of increased inflationary pressures. In addition, reverse stress testing has been performed to establish the levels of performance where cash availability would be breached. The results of the analysis demonstrated that there was sufficient cash availability within the current intra group cash pooling facility to deal with all of the identified plausible scenarios.
Based on the Company’s current trading performance, the sensitivity and reverse stress testing scenarios performed, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future, being a period of no less than twelve months from the date of approval of these financial statements. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
Matters covered in the Strategic Report
|
Details on engagement with customers, suppliers and other stakeholders, and financial risk management policy sections are not included within the Directors Report as they are considered to be of strategic importance to the Company and, as permitted under the Companies Act 2006 s.414C(11), they have instead been included in the Strategic Report.
|
SNOWDOG ENTERPRISES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Streamlined energy and carbon reporting (SECR)
|
The Company has not disclosed information in respect of greenhouse gas emissions and energy consumption as it satisfies the thresholds for exemption and its energy consumption in the United Kingdom is less than 40,000kWh for the year.
Disclosure of information to auditor
|
Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
∙so far as each director is aware, there is no relevant audit information of which the Company's auditor is unaware; and
∙the directors have taken all the steps that ought to have been taken as a director in order to make themselves aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
The auditor, Grant Thornton UK LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
|
SNOWDOG ENTERPRISES LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
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 101 ‘Reduced Disclosure Framework’. 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 judgments 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 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.
|
SNOWDOG ENTERPRISES LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SNOWDOG ENTERPRISES LIMITED
We have audited the financial statements of Snowdog Enterprises Limited (the 'Company') for the year ended 31 December 2023, which comprise the Statement of Comprehensive Income, the Balance Sheet, the 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 Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (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 December 2023 and of its profit for the year then ended;
∙the financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
∙the financial statements 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.
|
SNOWDOG ENTERPRISES LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SNOWDOG ENTERPRISES LIMITED (CONTINUED)
Conclusions relating to going concern
|
We are responsible for concluding 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 report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the auditor’s opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the Company to cease to continue as a going concern.
In our evaluation of the directors’ conclusions, we considered the inherent risks associated with the Company's business model including effects arising from macro-economic uncertainties such as the cost of living crisis and the impact of the war in Ukraine, we assessed and challenged the reasonableness of estimates made by the directors and the related disclosures and analysed how those risks might affect the Company's financial resources or ability to continue operations over the going concern period.
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 and the financial statements other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the Annual report and financial statements. 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 there is 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.
|
SNOWDOG ENTERPRISES LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SNOWDOG ENTERPRISES LIMITED (CONTINUED)
Matters on which we are required to report under the Companies Act 2006
|
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.
Matters on which we are required to report by exception
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 7, 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.
|
SNOWDOG ENTERPRISES LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SNOWDOG ENTERPRISES LIMITED (CONTINUED)
Auditor's responsibilities for the audit of the financial statements
|
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:
∙We obtained an understanding of the legal and regulatory frameworks applicable to the Company and industry in which it operates through our general commercial and sector experience, discussions with management and review of board minutes. We determined that the following laws and regulations were most significant: United Kingdom Accounting Standards, including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (United Kingdom Generally Accepted Accounting Practice), the Companies Act 2006 and the relevant tax compliance regulations in the UK. In addition, we concluded that there are certain laws and regulations that may have an effect on the determination of the amounts and disclosures in the financial statements such as health and safety and employee matters.
∙We enquired of management concerning the Company’s policies and procedures relating to:
∙the identification, evaluation and compliance with laws and regulations;
∙the detection and response to the risks of fraud; and
∙the establishment of internal controls to mitigate risks related to fraud or non-compliance with laws and regulations.
∙We enquired of management and those charged with governance, whether they were aware of any instances of non-compliance with laws and regulations or whether they had any knowledge of actual, suspected of alleged fraud.
∙We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur and the risk of management override of controls. Audit procedures are performed by the engagement team included:
∙identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;
∙challenging assumptions and judgements made by management in its significant accounting estimates;
∙identifying and testing journal entries, in particular journal entries posted with unusual account combinations that increased revenues or that reduced costs in the Statement of Comprehensive Income; and
∙assessing the extent of compliance with the relevant laws and regulations as part of our procedures on the related financial statement item.
∙In addition, we completed audit procedures to conclude on the compliance of disclosures in the Annual report and financial statements with applicable financial reporting requirements.
|
SNOWDOG ENTERPRISES LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SNOWDOG ENTERPRISES LIMITED (CONTINUED)
Auditor's responsibilities for the audit of the financial statements (continued)
∙These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it;
∙The assessment of the appropriateness of the collective competence and capabilities of the engagement team including consideration of the engagement team’s:
∙understanding of, and practical experience with audit engagements of a similar nature and complexity through appropriate training and participation;
∙knowledge of the industry in which the client operates; and
∙understanding of the legal and regulatory requirements specific to the entity including, the provisions of the applicable legislation and the applicable statutory provision.
∙We communicated relevant laws and regulations and potential fraud risks to all engagement team members. We remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
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.
Tim Broadway
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Milton Keynes
12 July 2024
|
SNOWDOG ENTERPRISES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest receivable and similar income
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the financial year
|
|
|
|
Other comprehensive income
|
|
|
|
Total comprehensive income for the year
|
|
|
|
Prior year balances have been restated as detailed in note 13.
There were no recognised gains and losses for 2023 or 2022 other than those included in the statement of comprehensive income.
All activities derive from continuing operations.
|
The notes on pages 16 to 27 form part of these financial statements.
|
|
SNOWDOG ENTERPRISES LIMITED
REGISTERED NUMBER: 07822479
BALANCE SHEET
AS AT 31 DECEMBER 2023
|
|
|
|
|
|
|
|
|
|
|
|
Debtors: amounts falling due within one year
|
|
|
|
|
|
|
|
|
|
|
|
Creditors: amounts falling due within one year
|
|
|
|
|
|
|
|
|
|
|
|
Total assets less current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior year balances have been restated as detailed in note 13.
The notes on pages 16 to 27 form part of these financial statements.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
|
SNOWDOG ENTERPRISES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income for the year
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2023 (as previously stated)
|
|
|
|
|
|
|
|
At 1 January 2023 (as restated)
|
|
|
|
Comprehensive income for the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior year balances have been restated as detailed in note 13.
The notes on pages 16 to 27 form part of these financial statements.
|
|
SNOWDOG ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Snowdog Enterprises Limited (the "Company") is a merchandise agent under licence agreement. The Company is a private company limited by shares and is incorporated in the United Kingdom. The address of its registered office is 20 Vauxhall Bridge Road, London, SWlV 2SA.
2.Accounting policies
|
|
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 101 'Reduced Disclosure Framework' and the Companies Act 2006.
In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements of international accounting standards in conformity with the requirements of the Companies Act 2006 (“UK-adopted IFRS”), but makes amendments where necessary in order to comply with Companies Act 2006 and has set out below where advantage of the FRS 101 disclosure exemptions has been taken.
The preparation of financial statements in compliance with FRS 101 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies. Management considers there are no areas involving a higher degree of judgement or complexity, nor any areas where assumptions and estimates are significant to the financial statements. (see note 3).
The following principal accounting policies have been applied:
|
SNOWDOG ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
|
|
Financial Reporting Standard 101 - reduced disclosure exemptions
|
The Company has taken advantage of the following disclosure exemptions under FRS 101:
∙the requirements of IFRS 7 Financial Instruments: Disclosures
∙the requirements of paragraphs 91-99 of IFRS 13 Fair Value Measurement
∙the requirement in paragraph 38 of IAS 1 'Presentation of Financial Statements' to present comparative information in respect of:
- paragraph 79(a)(iv) of IAS 1;
∙the requirements of the following paragraphs of IAS 1, 'Presentation of financial statements':
- 10(d) statement of cash flows;
- 10(f) statement of financial position as at the beginning of the preceding period when
retrospective restatement or reclassifications apply;
- 16 statement of compliance with all IFRS;
- 38A requirement for minimum of two primary financial statements, including cash flow
statements;
- 38B, 38C, 38D additional comparative information;
- 40A, 40B, 40C, 40D requirements to provide additional statements in respect of
retrospective restatements and reclassifications;
- 111 statement of cash flows information; and
- 134 - 136 capital management disclosures.
∙the requirements of IAS 7 Statement of Cash Flows
∙the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
∙the requirements of paragraph 17 and 18A of IAS 24 Related Party Disclosures
∙the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member
This information is included in the consolidated financial statements of Bertelsmann SE & Co KGaA as at 31 December 2023 and these financial statements may be obtained from Bertelsmann SE & Co KGaA, Corporate Communications, Carl Bertelsmann Strasse 270, Postfach 111, D-33311 Gütersloh, Germany.
|
SNOWDOG ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
In preparing these financial statements, the directors have assessed the ability of the Company to continue to operate for a period of at least twelve months from the date of signing the financial statements.
The Company has undertaken a risk assessment and forecasting exercise to assess the Company’s liquidity position. The forecast for the going concern period has been prepared using the three year plan approved by the Board and takes account of prior trends and key cost drivers such as inflation.
For the purposes of the Company’s going concern assessment, the directors have performed sensitivity analysis on cashflows based on unforeseen changes in demand and the potential impact of increased inflationary pressures. In addition, reverse stress testing has been performed to establish the levels of performance where cash availability would be breached. The results of the analysis demonstrated that there was sufficient cash availability within the current intra group cash pooling facility to deal with all of the identified plausible scenarios.
Based on the Company’s current trading performance, the sensitivity and reverse stress testing scenarios performed, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future, being a period of no less than twelve months from the date of approval of these financial statements. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
|
|
Foreign currency transactions
|
Functional and presentation currency
The Company's functional and presentational currency is GBP.
Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates. The financial statements are presented in pound sterling, which is also the functional currency of the Company.
Transactions and balances
Transactions in a currency other than the functional currency (“foreign currency”) 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. Management assess the underlying asset and liability in the transaction to determine the nature of the foreign exchange gains and losses. As this results from operating activities 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 the profit and loss account within ‘Administrative expenses’.
Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are retranslated to the functional currency at foreign exchange rates ruling at the dates the fair value was determined. Foreign exchange differences arising on translation are recognised in the profit and loss account under administrative expenses.
|
SNOWDOG ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for goods supplied, stated net of discounts, returns and value added taxes. The Company recognises revenue when performance obligations have been satisfied and for the Company this is when the goods have transferred to the customer and the customer has control of these. The Company’s activities are described in detail below.
Merchandise and TV or film income
Merchandise and TV or film income is recognised as turnover when the performance obligations under the agreement are satisfied. Where the brand is managed by external agents, revenue is recognised monthly based upon received reports.
Income from subrights
Revenue from licensing and subrights, including film, overseas and electronic, is recognised when the performance obligation under the agreement has been satisfied. This is at the point in time when the associated material is transferred.
An assessment is made on each contract as to the relevant performance obligations to assess whether the customer receives a right to access or use the Company’s intellectual property. Where the performance obligation is deemed over time, an appropriate recognition framework is created based on the consumption and provision of the goods or service in question.
For related sales-based royalties of license of Company’s intellectual property, the income is recognised as the subsequent sale occurs. Where the third party sales information is not readily available at the reporting date, an estimation is made based on the information available to hand. An adjusting post balance sheet adjustment is made where subsequent information is received post year end but before the date of approval of the financial statements.
Principal v agent considerations
The Company may enter contracts with another party in addition to the customer in the arrangement. An assessment is made for each such contract as to who understands the related good or service prior to the transfer to the end customer to determine if revenue should be recognised on a gross or net basis. Where the Company acts as agent, revenue represents any commissions and fees receivable for such services rendered. Any third-party costs incurred on behalf of the principal that are rechargeable under the contractual arrangement are included in turnover with a corresponding expense recognised in the income statement.
|
SNOWDOG ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
|
|
Current and deferred taxation
|
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the Statement of comprehensive income except to the extent that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised directly in equity or other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither acounting nor taxable profit other than in a business combination, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probably that future taxable profits will be available against which the temporary difference can be utilised.
|
SNOWDOG ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The Company classifies its financial assets in the following categories:
• Amortised cost
• Fair Value through profit or loss (FVTPL)
• Fair Value through other comprehensive income (FVOCI)
The classification depends on the purpose for which the financial assets were acquired i.e. the entity’s business model for managing the financial assets and/or the contractual cash flow characteristics of the financial asset. Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.
A debt instrument is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
• it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amounts outstanding.
Subsequent to initial recognition these are measured at amortised cost using the effective interest method. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other (expenses)/income together with foreign exchange gains and losses. Impairment losses are presented as a separate line item in the profit or loss under ‘net impairment losses on financial and contract assets'.
On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment's fair value in OCI. This election is made on an investment-by-investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. The Company does not have any assets classified at FVOCI nor FVTPL.
The Company assesses at the end of each reporting period whether there is objective evidence that one or more event has occurred which has impacted on the estimated cash flows of the financial asset.
Financial assets are impaired and impairment losses are incurred only if such objective evidence of impairment can be reliably measured.
|
SNOWDOG ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
|
|
Trade debtors and amount owed by group undertakings
|
Trade debtors and amounts owed by group undertakings are stated at amortised cost after provision for bad and doubtful debts.
The Company applies IFRS 9 when using the expected credit loss model. Management adopts the “simplified approach” to determine an amount equal to the lifetime expected credit losses for insignificant trade debtors and a risk score on an individual basis for significant trade debtors. To measure the expected credit losses, trade debtors are grouped based on shared credit risk characteristics and the balance of uninsured debt across the Company.
|
|
Cash and cash equivalents
|
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short- term highly liquid investments with original maturities of three months or less, and bank overdrafts. In the balance sheet, bank overdrafts are shown within borrowings in creditors: amounts falling due within one year.
|
|
Creditors including group undertakings
|
Trade and other creditors are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
Creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers or a commitment to provide goods and services where monies have been receipted.
Interest income is recognised in profit or loss using the effective interest method.
|
Judgments in applying accounting policies and key sources of estimation uncertainty
|
In the application of the Company’s accounting policies, which are described in note 2, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates, underlying assumptions and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable and relevant under the circumstances, however, there are no significant accounting judgements and estimates applicable to this entity.
|
SNOWDOG ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
Analysis of revenue by geographical location:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior year disclosures have been restated as detailed in note 13.
|
|
|
The operating profit is stated after charging:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Auditors remuneration:
- Audit services
|
|
|
The Company has no employees. Staff costs relate exclusively to an allocation of director's remuneration charged to the Company by the entity who contractually employs them.
Although the directors of the Company have service contracts with Penguin Books Limited and The Random House Group Limited, a proportion of their time and efforts relating to Snowdog Enterprises Limited, and therefore an apportionment of their emoluments, have been included in these financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts receivable under long term incentives
|
|
|
|
Company pension contributions
|
|
|
|
|
|
|
|
|
|
|
|
SNOWDOG ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|
Employees and directors (continued)
|
Retirement benefits are accruing to two directors (2022: two) under a defined benefit pension scheme and to one director (2022: one) under a money purchase scheme.
All directors who have authority and responsibility for planning, directing and controlling the activities of the Company are considered to be key management personnel. Total remuneration in respect of these individuals was £18,678 (2022: £20,591).
|
Interest receivable and similar income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest receivable on cash pooling
|
|
|
|
|
|
|
|
Further details regarding cash pooling arrangements are included in note 9.
|
|
|
|
|
|
Uk corporation tax tax on profits for the year
|
|
|
|
Adjustments in respect of prior years
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SNOWDOG ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
8.Tax on profit (continued)
|
Factors affecting tax charge for the year
|
|
The tax assessed for the year is the same as (2022 - higher than) the standard rate of corporation tax in the UK of 23.5% (2022 - 19%). The differences are explained below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit multiplied by standard rate of corporation tax in the UK of 23.5% (2022 - 19%)
|
|
|
|
|
|
|
|
Adjustments in respect of prior years - current tax
|
|
|
|
|
|
|
|
Total tax charge for the year
|
|
|
|
Factors that may affect future tax charges
|
An increase in the UK corporation rate from 19% to 25% (effective 1 April 2023) was substantively enacted on 24 May 2021.
Prior year balances have been restated as detailed in note 13.
|
SNOWDOG ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
Debtors: amounts falling due within one year
|
|
|
|
|
|
Amounts owed by group undertakings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts owed by group undertakings (excluding amounts owed by Bertelsmann UK Limited) are unsecured and repayable on demand. Included within this is £499,344 owed by Bertelsmann UK Limited (2022: £565,005) in respect of a cash pooling agreement which is unsecured and has no fixed repayment date, but can be terminated by either party giving three days notice. These amounts incur interest on a monthly basis; the interest rate for the year ranged from 3.25% to 5.01% (2022: 0.05% to 3.25%).
|
|
Creditors: amounts falling due within one year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts owed to group undertakings
|
|
|
|
|
|
|
|
Accruals and deferred income
|
|
|
|
|
|
|
|
|
|
|
|
Amounts owed to group undertakings are unsecured, interest free and repayable on demand.
Prior year balances have been restated as detailed in note 13.
|
|
|
Allotted, called up and fully paid
|
|
|
|
|
|
|
|
|
|
100 (2022 - 100) Ordinary shares of £1.00 each
|
|
|
|
There is a single class of ordinary shares. There are no restrictions on dividends and the repayment of capital.
|
|
SNOWDOG ENTERPRISES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Profit and loss account
This includes all current and prior period retained profits and losses. All reserves in respect of profit and
loss are distributable reserves.
The Company has restated certain prior year balances relating to the following issues identified during the course of preparing these financial statements.
Revenue disclosure
The Company has restated the revenue disclosure in order to disaggregate by geographical location. The restated disclosure is in note 4 of these financial statements.
Adjustment to allocation of revenue from parent company
An error in the basis of the allocation of merchandising income from the parent company in 2022, and resultant impact on author share costs, was identified and restated.
The impact of the restatement was to decrease revenue by £69,843 and cost of sales by £71,500, a decrease in accruals by £71,500 and an increase in amounts owed to group companies by £69,843. The restatement resulted in an increase of the Company's profit after tax and net assets of £1,657 at 31 December 2022.
|
Related party transactions
|
As the Company is a wholly owned subsidiary within the Penguin Random House Limited ("PRHL") group of companies, the Company is exempt from the requirement, under International Accounting Standard 24 ‘Related party disclosures’, to disclose transactions with other entities that are wholly owned by PRHL. The Company has taken advantage of this exemption.
The Company's immediate parent undertaking is Snowman Enterprises Limited, who is a wholly owned subsidiary of Penguin Books Limited. The Company’s ultimate controlling party is Bertelsmann SE & Co KGaA, which is incorporated in Germany. Copies of Bertelsmann SE & Co KGaA’s consolidated financial statements (the smallest and largest financial statements in which the Company is consolidated) can be obtained from:
Bertelsmann SE & Co KGaA
Corporate Communications
Carl Bertelsmann Strasse 270
33311 Gütersloh, German
|
|