Interlink Direct Limited |
Strategic Report |
|
The directors present their strategic report on the company for the year ended 31 March 2024. |
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The directors aim to present a balanced and comprehensive review of the development and performance of the company's business during the year and its position at the year end. The review is consistent with the size and non-complex nature of the business and is written in the context of the risks and uncertainties the company faces. |
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Business review |
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Although there has been a decline in inflation rates during the year, the weak sterling currency and intense market competitiveness have negatively impacted the turnover and profit for the year. |
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The directors continue to review the ongoing activities of the company on a regular basic although trading conditions remain difficult and challenging. |
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Principal risk and uncertainties |
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The business environment in which the company operates continues to be challenging as it is subject to consumers' spending patterns and disposable income. |
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The energy costs continued to increase, albeit there are signs the cost are slowly coming down. The supply chains are significantly impacted by the conflict in the Middle East and Ukraine, causing substantial increase in freight costs. |
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A tight labour market due to Brexit has resulted in the reduced availability of the workforce. Therefore, this has caused an increase in employment cost. |
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Despite the factors mentioned above, the directors believe that the company is well-prepared to deal with any potential changes in the business environment. They are confident in their ability to manage it effectively. |
|
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Financial key performance indicators |
|
The directors consider that the company's key financial performance indicators are those that communicate its financial performance and strength as a whole and these are: |
|
|
|
|
|
2024 |
2023 |
|
Turnover (UK) |
51,248,507 |
56,895,177 |
|
Turnover (Europe) |
202,037 |
212,532 |
|
Total Turnover |
51,450,544 |
57,107,709 |
|
Gross profit margin |
19% |
28% |
|
Profit before tax |
7,838,570 |
12,064,814 |
|
|
This report was approved by the board on 3 September 2024 and signed on its behalf. |
|
|
|
|
|
Ms Y H Kwok |
Director |
|
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Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
|
Conclusions relating to going concern |
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. |
|
Other information |
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. |
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Opinions 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. |
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Matters on which we are required to report by exception |
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 irreqularities, including fraud. The extent to which our procedures are capable of detecting irregularities. We identified that the principal risk of fraud or non-compliance with laws and regulations related to: |
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Our procedures included, but were not limited to: |
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● |
Enquiry of management and those charged with governance around actual and potential litigation and claims including instances of non compliance with laws and regulations and fraud; |
● |
Reviewing minutes of meetings of those charged with governance, where available; |
● |
Reviewing legal expenditure in the year to identify instances of non-compliance with laws and regulations and fraud; |
● |
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations; and |
● |
Performing audit work over the risk of management override controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for lias, in particular depreciation of fixed assets. |
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It Is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud. |
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Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increase the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. |
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The risk is also greater regarding irregularities occurring due to fraud rather than error, as graud involves intentional concealment, forgery, collusion, omission or misrepresentation. |
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Interlink Direct Limited |
Statement of Cash Flows |
for the year ended 31 March 2024 |
|
Notes |
|
2024 |
|
2023 |
£ |
£ |
Operating activities |
Profit for the financial year |
6,304,838 |
|
9,782,738 |
|
Adjustments for: |
(Profit)/loss on sale of fixed assets |
(1,873,050) |
|
2,238 |
Interest receivable |
(414,228) |
|
(111,149) |
Interest payable |
- |
|
30,965 |
Tax on profit on ordinary activities |
1,533,732 |
|
2,282,076 |
Depreciation |
345,570 |
|
379,382 |
Increase in stocks |
(2,314,286) |
|
(986,465) |
Increase in debtors |
(5,651,146) |
|
(8,080,808) |
Increase/(decrease) in creditors |
5,766,633 |
|
(3,112,249) |
|
|
|
3,698,063 |
|
186,728 |
|
Interest received |
414,228 |
|
111,149 |
Interest paid |
|
|
- |
|
(30,965) |
Corporation tax paid |
(2,234,974) |
|
(1,162,755) |
|
Cash generated by/(used in) operating activities |
1,877,317 |
|
(895,843) |
|
|
|
|
|
|
Investing activities |
Payments to acquire intangible fixed assets |
(250) |
|
- |
Payments to acquire tangible fixed assets |
(373,261) |
|
(580,339) |
Proceeds from sale of tangible fixed assets |
5,980,031 |
|
- |
|
Cash generated by/(used in) investing activities |
5,606,520 |
|
(580,339) |
|
|
|
|
|
|
Financing activities |
Equity dividends paid |
(105,000) |
|
(76,000) |
Repayment of loans |
- |
|
(1,608,132) |
|
Cash used in financing activities |
(105,000) |
|
(1,684,132) |
|
|
|
|
|
|
Net cash generated/(used) |
Cash generated by/(used in) operating activities |
1,877,317 |
|
(895,843) |
Cash generated by/(used in) investing activities |
5,606,520 |
|
(580,339) |
Cash used in financing activities |
(105,000) |
|
(1,684,132) |
|
Net cash generated/(used) |
7,378,837 |
|
(3,160,314) |
|
Cash and cash equivalents at 1 April |
6,343,829 |
|
9,504,143 |
Cash and cash equivalents at 31 March |
13,722,666 |
|
6,343,829 |
|
|
|
|
|
|
Cash and cash equivalents comprise: |
Cash at bank |
13,722,666 |
|
6,343,829 |
|
|
|
|
|
|
|
|
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Significant judgements and estimates |
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In the application of the Company's accounting policies, management is required to make judgements, estimates and assumptions about the carrying value of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. The key sources of estimation uncertainty that have a significant effect on the amounts recognised in the financial statements relate mainly to stock obsolescence. |
|
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Stocks |
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Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first in first out method. The carrying amount of stock sold is recognised as an expense in the period in which the related revenue is recognised. |
|
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Debtors |
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Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts. |
|
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Creditors |
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Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. |
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Taxation |
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A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted. |
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Provisions |
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Provisions (ie liabilities of uncertain timing or amount) are recognised when there is an obligation at the reporting date as a result of a past event, it is probable that economic benefit will be transferred to settle the obligation and the amount of the obligation can be estimated reliably. |
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Functional and foreign currencies |
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The company's functional currency is sterling. Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
|
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Foreign currency forward contracts |
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The fair value of the foreign currency forward contracts is determined using quoted forward exchange rates at the reporting date and present value calculations based on high credit quality yield curves in the respective currencies. |
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|
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Foreign currency translation |
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Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss. |
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Leased assets |
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A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. The rights of use and obligations under finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction in the outstanding liability using the effective interest rate method. The finance charge is allocated to each period during the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability. Leased assets are depreciated in accordance with the company's policy for tangible fixed assets. If there is no reasonable certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the lower of the lease term and its useful life. Operating lease payments are recognised as an expense on a straight line basis over the lease term. |
|
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Pensions |
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Contributions to defined contribution plans are expensed in the period to which they relate. |
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|
2 |
Analysis of turnover |
2024 |
|
2023 |
£ |
£ |
|
|
Sale of goods |
51,450,544 |
|
57,107,709 |
|
|
|
|
|
|
|
|
|
|
By geographical market: |
|
|
UK |
51,248,507 |
|
56,895,177 |
|
Europe |
202,037 |
|
212,532 |
|
|
|
|
|
|
51,450,544 |
|
57,107,709 |
|
|
|
|
|
|
|
|
|
|
3 |
Operating profit |
2024 |
|
2023 |
£ |
£ |
|
This is stated after charging: |
|
|
Depreciation of owned fixed assets |
345,570 |
|
379,382 |
|
Operating lease rentals - land and buildings |
85,510 |
|
85,510 |
|
Auditors' remuneration for audit services |
10,000 |
|
10,000 |
|
Carrying amount of stock sold |
44,025,942 |
|
42,325,547 |
|
|
|
|
|
|
|
|
|
|
4 |
Directors' emoluments |
2024 |
|
2023 |
£ |
£ |
|
|
Emoluments |
89,000 |
|
84,000 |
|
|
|
|
|
|
|
|
|
|
5 |
Staff costs |
2024 |
|
2023 |
£ |
£ |
|
|
Wages and salaries |
2,196,944 |
|
2,068,933 |
|
Social security costs |
213,496 |
|
210,437 |
|
Other pension costs |
26,301 |
|
20,172 |
|
|
|
|
|
|
2,436,741 |
|
2,299,542 |
|
|
|
|
|
|
|
|
|
|
|
Average number of employees during the year |
Number |
Number |
|
|
Administration |
31 |
|
27 |
|
Distribution |
39 |
|
43 |
|
|
|
|
|
|
70 |
|
70 |
|
|
|
|
|
|
|
|
|
|
6 |
Interest payable |
2024 |
|
2023 |
£ |
£ |
|
|
Bank loans and overdrafts |
- |
|
30,378 |
|
Other loans |
- |
|
587 |
|
|
|
|
|
|
- |
|
30,965 |
|
|
|
|
|
|
|
|
|
|
7 |
Taxation |
2024 |
|
2023 |
£ |
£ |
|
Analysis of charge in period |
|
Current tax: |
|
UK corporation tax on profits of the period |
1,496,462 |
|
2,234,974 |
|
|
|
|
|
|
|
|
|
|
Deferred tax: |
|
Origination and reversal of timing differences |
37,270 |
|
47,102 |
|
|
|
|
|
|
|
|
|
|
|
Tax on profit on ordinary activities |
1,533,732 |
|
2,282,076 |
|
|
|
|
|
|
|
|
|
|
|
Factors affecting tax charge for period |
|
The differences between the tax assessed for the period and the standard rate of corporation tax are explained as follows: |
|
|
|
|
|
|
|
2024 |
|
2023 |
£ |
£ |
|
Profit on ordinary activities before tax |
7,838,570 |
|
12,064,814 |
|
|
|
|
|
|
|
|
|
|
Standard rate of corporation tax in the UK |
25% |
|
19% |
|
£ |
£ |
|
Profit on ordinary activities multiplied by the standard rate of corporation tax |
|
1,959,643 |
|
2,292,315 |
|
|
Effects of: |
|
Expenses not deductible for tax purposes |
(463,181) |
|
(57,341) |
|
|
Current tax charge for period |
1,496,462 |
|
2,234,974 |
|
|
|
|
|
|
|
|
|
|
|
Factors that may affect future tax charges |
|
There were no factors that may affect future tax charges. |
|
|
8 |
Intangible fixed assets |
£ |
|
Trademark: |
|
|
Cost |
|
Additions |
250 |
|
At 31 March 2024 |
250 |
|
|
|
|
|
|
|
|
|
|
Amortisation |
|
At 31 March 2024 |
- |
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
At 31 March 2024 |
250 |
|
|
|
|
|
|
|
|
|
|
|
|
9 |
Tangible fixed assets |
|
|
Land and buildings |
|
Plant and machinery |
|
Motor vehicles |
|
Total |
|
|
At cost |
|
At cost |
|
At cost |
£ |
£ |
£ |
£ |
|
Cost or valuation |
|
At 1 April 2023 |
6,705,342 |
|
2,387,772 |
|
328,134 |
|
9,421,248 |
|
Additions |
- |
|
56,793 |
|
316,468 |
|
373,261 |
|
Disposals |
(6,705,342) |
|
- |
|
(90,589) |
|
(6,795,931) |
|
At 31 March 2024 |
- |
|
2,444,565 |
|
554,013 |
|
2,998,578 |
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
At 1 April 2023 |
756,652 |
|
1,670,315 |
|
197,996 |
|
2,624,963 |
|
Charge for the year |
- |
|
239,951 |
|
105,619 |
|
345,570 |
|
On disposals |
(756,652) |
|
- |
|
(66,458) |
|
(823,110) |
|
At 31 March 2024 |
- |
|
1,910,266 |
|
237,157 |
|
2,147,423 |
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
At 31 March 2024 |
- |
|
534,299 |
|
316,856 |
|
851,155 |
|
At 31 March 2023 |
5,948,690 |
|
717,457 |
|
130,138 |
|
6,796,285 |
|
|
|
|
|
|
|
|
|
|
|
10 |
Stocks |
2024 |
|
2023 |
£ |
£ |
|
|
Finished goods and goods for resale |
10,338,809 |
|
8,024,523 |
|
|
|
|
|
|
|
|
|
|
11 |
Debtors |
2024 |
|
2023 |
£ |
£ |
|
|
Trade debtors |
4,798,660 |
|
5,049,299 |
|
Amounts owed by group undertakings and undertakings in which the company has a participating interest |
|
13,449,044 |
|
7,466,350 |
|
Other debtors |
490,050 |
|
548,784 |
|
Prepayments and accrued income |
166,584 |
|
188,759 |
|
|
|
|
|
|
18,904,338 |
|
13,253,192 |
|
|
|
|
|
|
|
|
|
|
12 |
Creditors: amounts falling due within one year |
2024 |
|
2023 |
£ |
£ |
|
|
Trade creditors |
6,959,490 |
|
1,237,093 |
|
Amounts owed to group undertakings and undertakings in which the company has a participating interest |
|
86,250 |
|
57,250 |
|
Corporation tax |
1,496,462 |
|
2,234,974 |
|
Other taxes and social security costs |
154,869 |
|
163,381 |
|
Other creditors |
85,465 |
|
64,110 |
|
Accruals and deferred income |
25,600 |
|
23,207 |
|
|
|
|
|
|
8,808,136 |
|
3,780,015 |
|
|
|
|
|
|
|
|
|
|
13 |
Deferred taxation |
2024 |
|
2023 |
£ |
£ |
|
|
Accelerated capital allowances |
153,732 |
|
116,462 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
£ |
£ |
|
|
At 1 April |
116,462 |
|
69,360 |
|
Charged to the profit and loss account |
37,270 |
|
47,102 |
|
|
At 31 March |
153,732 |
|
116,462 |
|
|
|
|
|
|
|
|
|
|
|
14 |
Share capital |
Nominal |
|
2024 |
|
2024 |
|
2023 |
value |
Number |
£ |
£ |
|
Allotted, called up and fully paid: |
|
Ordinary shares |
£1 each |
|
- |
|
2 |
|
2 |
|
|
|
|
|
|
|
|
|
|
15 |
Other reserves |
2024 |
|
2023 |
|
Revaluation reserve |
£ |
£ |
|
|
At 1 April |
1,865,840 |
|
2,455,915 |
|
Loss on revaluation of land and buildings |
(1,865,840) |
|
(590,075) |
|
|
At 31 March |
- |
|
1,865,840 |
|
|
|
|
|
|
|
|
|
|
16 |
Profit and loss account |
2024 |
|
2023 |
£ |
£ |
|
|
At 1 April |
28,655,510 |
|
18,948,772 |
|
Profit for the financial year |
6,304,838 |
|
9,782,738 |
|
Dividends |
(105,000) |
|
(76,000) |
|
|
At 31 March |
34,855,348 |
|
28,655,510 |
|
|
|
|
|
|
|
|
|
|
17 |
Dividends |
2024 |
|
2023 |
£ |
£ |
|
|
Dividends on ordinary shares (note 16) |
105,000 |
|
76,000 |
|
|
|
|
|
|
|
|
|
|
|
18 |
Other financial commitments |
|
|
Total future minimum lease payments under non-cancellable operating leases: |
|
|
|
Land and buildings |
|
Land and buildings |
Other |
Other |
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
£ |
£ |
£ |
£ |
|
Falling due: |
|
within two to five years |
56,302 |
|
56,302 |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
19 |
Related party transactions |
|
|
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102.'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group |
|
|
|
|
2024 |
|
2023 |
|
Key management personnel of the company |
|
Key management personnel renumeration |
89,000 |
|
84,000 |
|
|
20 |
Controlling party |
|
|
The ultimate controlling party is Interlink Direct Holdings Limited, a company registered in England and Wales. Interlink Direct Holdings Limited holds 100% of the shares in the company. |
|
|
21 |
Presentation currency |
|
|
The financial statements are presented in Sterling. |
|
|
22 |
Legal form of entity and country of incorporation |
|
|
Interlink Direct Limited is a private company limited by shares and incorporated in England. |
|
|
23 |
Principal place of business |
|
|
The address of the company's principal place of business and registered office is: |
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402-404 Roding Lane South |
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Woodford Green |
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Essex |
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IG8 8EY |
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