Company registration number 02946493 (England and Wales)
CORPORATE DIRECT (EUROPE) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
CORPORATE DIRECT (EUROPE) LIMITED
COMPANY INFORMATION
Directors
Mr P A Baxter
Mr J W Davies
Company number
02946493
Registered office
Beswick House
Green Fold Lane
Leigh
Greater Manchester
WN7 3XT
Auditor
Wheawill & Sudworth Limited
Chartered Accountants
35 Westgate
Huddersfield
West Yorkshire
HD1 1PA
Bankers
HSBC Bank plc
2-4 St Ann's Square
Manchester
M2 7HD
CORPORATE DIRECT (EUROPE) LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Independent auditor's report
3 - 6
Profit and loss account
7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 22
The following pages do not form part of the statutory financial statements
CORPORATE DIRECT (EUROPE) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Principal activities
The principal activity of Corptel is to sell and distribute telecom/IT peripherals, mainly call centre and office headset related products. Over the last 30 years Corptel has become one of the leading and trusted suppliers of such products.
The company's strategy is to have sustainable and profitable growth by expanding our product portfolio, improving our supplier relationships and reaching out to existing and new potential clients.
Review of the business
The Directors were satisfied with our results. Our industry has had a challenging year having seen a slowdown in business from April, based mainly on government cutbacks,that remained throughout the year. We made some tough decisions and closed down our operations in Europe and USA. As a result this reduced our operating profit by £274k. Our turnover has reduced from £26.4 million in 2022 to £22.4 million in 2023.
Principal risks and uncertainties
Liquidity continues to be managed by the use of a mix of invoice financing and strict credit control procedures that minimise the risk of overdue debts. Trade creditors are paid within terms. Attention is paid to foreign exchange movements and trends.
Development and performance
Operational developments
We continue to invest in our infrastructure and IT resources to help increase business efficiencies in the years to come allowing for extra capacity to be gained from our experienced and skilled workforce.
Our people
The business recognises the loyalty and dedication of its staff that helps create the success for the business with the support of management. Over half the team have now been with the business for more than 10 years. We are a member of the Living Wage Foundation due to our higher than average salary levels within the North West. We also provide private healthcare, and our pension scheme benefits are well above the government legal requirements.
Other information and explanations
Future outlook
The business is well placed to deliver profitable growth moving forward. We have expanded our portfolio of distribution rights to new product categories that compliment our existing portfolio and allow for increased opportunities with our existing customer base. We hope to see inflation return to normal levels and a decrease in the interest rate in 2024 and 2025, to give customers greater confidence to invest in technology improvements.
Mr P A Baxter
Director
18 September 2024
CORPORATE DIRECT (EUROPE) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. 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:
Mr P A Baxter
Mr J W Davies
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;
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.
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr P A Baxter
Director
18 September 2024
CORPORATE DIRECT (EUROPE) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CORPORATE DIRECT (EUROPE) LIMITED
- 3 -
Opinion
We have audited the financial statements of Corporate Direct (Europe) Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 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.
CORPORATE DIRECT (EUROPE) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CORPORATE DIRECT (EUROPE) LIMITED (CONTINUED)
- 4 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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, 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 these financial statements.
CORPORATE DIRECT (EUROPE) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CORPORATE DIRECT (EUROPE) LIMITED (CONTINUED)
- 5 -
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Obtained an understanding of the legal and regulatory framework applicable to the entity and how the entity is complying with that framework;
Assessment of the susceptibility of the entity’s financial statements to material misstatement, including how fraud might occur;
Ensured whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations;
Gained clear understanding of the entity’s current activities, the scope of its authorisation and confirmed the effectiveness of its control environment where the entity is a regulated entity;
As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
· Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
· Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control.
· Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
· Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
· Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Other matters which we are required to address
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
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.
CORPORATE DIRECT (EUROPE) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CORPORATE DIRECT (EUROPE) LIMITED (CONTINUED)
- 6 -
David Butterworth
Senior Statutory Auditor
For and on behalf of Wheawill & Sudworth Limited
18 September 2024
Chartered Accountants
Statutory Auditor
35 Westgate
Huddersfield
West Yorkshire
HD1 1PA
CORPORATE DIRECT (EUROPE) LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
22,431,545
26,380,485
Cost of sales
(18,115,994)
(21,285,423)
Gross profit
4,315,551
5,095,062
Distribution costs
(389,718)
(379,392)
Administrative expenses
(2,975,300)
(3,108,489)
Other operating income
9,000
Exceptional item
4
(274,129)
Operating profit
5
676,404
1,616,181
Interest receivable and similar income
11,682
2,973
Interest payable and similar expenses
(112,240)
(63,486)
Profit before taxation
575,846
1,555,668
Tax on profit
8
(254,211)
(343,755)
Profit for the financial year
321,635
1,211,913
The profit and loss account has been prepared on the basis that all operations are continuing operations.
CORPORATE DIRECT (EUROPE) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
£
£
Profit for the year
321,635
1,211,913
Other comprehensive income
-
-
Total comprehensive income for the year
321,635
1,211,913
CORPORATE DIRECT (EUROPE) LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
144,033
201,943
Current assets
Stocks
11
8,475,934
6,856,518
Debtors
12
2,578,321
4,004,059
Cash at bank and in hand
480,441
277,657
11,534,696
11,138,234
Creditors: amounts falling due within one year
13
(7,461,695)
(7,434,473)
Net current assets
4,073,001
3,703,761
Total assets less current liabilities
4,217,034
3,905,704
Provisions for liabilities
Deferred tax liability
14
30,105
40,410
(30,105)
(40,410)
Net assets
4,186,929
3,865,294
Capital and reserves
Called up share capital
16
50,000
50,000
Profit and loss reserves
4,136,929
3,815,294
Total equity
4,186,929
3,865,294
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 18 September 2024 and are signed on its behalf by:
Mr P A Baxter
Director
Company registration number 02946493 (England and Wales)
CORPORATE DIRECT (EUROPE) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
50,000
3,603,381
3,653,381
Year ended 31 December 2022:
Profit and total comprehensive income
-
1,211,913
1,211,913
Dividends
9
-
(1,000,000)
(1,000,000)
Balance at 31 December 2022
50,000
3,815,294
3,865,294
Year ended 31 December 2023:
Profit and total comprehensive income
-
321,635
321,635
Balance at 31 December 2023
50,000
4,136,929
4,186,929
CORPORATE DIRECT (EUROPE) LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
21
539,383
1,117,827
Interest paid
(112,240)
(63,486)
Income taxes paid
(203,530)
(163,070)
Net cash inflow from operating activities
223,613
891,271
Investing activities
Purchase of tangible fixed assets
(32,511)
(15,893)
Proceeds from disposal of tangible fixed assets
370
Interest received
11,682
2,973
Net cash used in investing activities
(20,829)
(12,550)
Financing activities
Dividends paid
(1,000,000)
Net cash used in financing activities
-
(1,000,000)
Net increase/(decrease) in cash and cash equivalents
202,784
(121,279)
Cash and cash equivalents at beginning of year
277,657
398,936
Cash and cash equivalents at end of year
480,441
277,657
CORPORATE DIRECT (EUROPE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
Corporate Direct (Europe) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Beswick House, Green Fold Lane, Leigh, Greater Manchester, WN7 3XT.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared on the historical cost basis.
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 measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts and Value Added Tax.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably.
Revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that it is probable the expenses recognised will be recovered.
1.4
Tangible fixed assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Short leasehold property
over period of lease
Plant and equipment
10% and 20%
Fixtures and fittings
20% straight line
Computers
33% 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.
CORPORATE DIRECT (EUROPE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.5
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.
For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets.
For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units.
1.6
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition. Cost is based on the cost of purchase on a first in, first out basis.
1.7
Financial instruments
A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument.
Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.
Debt instruments are subsequently measured at amortised cost.
Where investments in non-convertible preference shares and non-puttable ordinary shares or preference shares are publicly traded or their fair value can otherwise be measured reliably, the investment is subsequently measured at fair value with changes in fair value recognised in profit or loss. All other such investments are subsequently measured at cost less impairment.
Other financial instruments, including derivatives, are initially recognised at fair value, unless payment for an asset is deferred beyond normal business terms or financed at a rate of interest that is not a market rate, in which case the asset is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.
Other financial instruments are subsequently measured at fair value, with any changes recognised in profit or loss, with the exception of hedging instruments in a designated hedging relationship.
Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately.
For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets are either assessed individually or grouped on the basis of similar credit risk characteristics.
Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.
CORPORATE DIRECT (EUROPE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.8
Taxation
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively.
Current tax
Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
CORPORATE DIRECT (EUROPE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Deferred tax
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
1.9
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense.
Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
1.10
Retirement benefits
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund.
When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.11
Leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
1.12
Government grants
Government grants are recognised at the fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and the grants will be received.
Government grants are recognised using the accrual model and the performance model.
Under the accrual model, government grants relating to revenue are recognised on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs are recognised in income in the period in which it becomes receivable.
Grants relating to assets are recognised in income on a systematic basis over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income and not deducted from the carrying amount of the asset.
Under the performance model, where the grant does not impose specified future performance-related conditions on the recipient, it is recognised in income when the grant proceeds are received or receivable. Where the grant does impose specified future performance-related conditions on the recipient, it is recognised in income only when the performance-related conditions have been met. Where grants received are prior to satisfying the revenue recognition criteria, they are recognised as a liability.
CORPORATE DIRECT (EUROPE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.13
Foreign exchange
Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to the profit and loss account.
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.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sale of goods
20,797,578
24,556,563
Rendering of services
1,633,967
1,823,922
22,431,545
26,380,485
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
21,002,192
23,306,042
Overseas
1,429,353
3,074,443
22,431,545
26,380,485
2023
2022
£
£
Other revenue
Interest income
11,682
2,973
Grants received
-
9,000
4
Exceptional item
2023
2022
£
£
Expenditure
Write off of group balances
274,129
-
CORPORATE DIRECT (EUROPE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
5
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
4,225
3,631
Research and development costs
903
22,707
Government grants
-
(9,000)
Fees payable to the company's auditor for the audit of the company's financial statements
12,000
12,000
Depreciation of owned tangible fixed assets
90,420
98,786
Profit on disposal of tangible fixed assets
-
(370)
Operating lease charges
168,662
157,421
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Administrative staff
13
13
Warehouse staff
8
9
Marketing staff
2
2
Sales staff
13
13
Total
36
37
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,393,307
1,571,634
Social security costs
157,479
188,796
Pension costs
111,023
91,580
1,661,809
1,852,010
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
292,047
343,633
Company pension contributions to defined contribution schemes
16,120
16,120
308,167
359,753
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).
CORPORATE DIRECT (EUROPE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Directors' remuneration
(Continued)
- 18 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
175,624
191,566
Company pension contributions to defined contribution schemes
10,000
10,000
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
268,624
347,448
Adjustments in respect of prior periods
(4,108)
11,620
Total current tax
264,516
359,068
Deferred tax
Other adjustments
(10,305)
(15,313)
Total tax charge
254,211
343,755
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
575,846
1,555,668
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
143,962
295,577
Tax effect of expenses that are not deductible in determining taxable profit
119,863
37,395
Adjustments in respect of prior years
(4,107)
11,620
Effect of change in corporation tax rate
(8,522)
Effect of capital allowances and depreciation
3,015
(837)
Taxation charge for the year
254,211
343,755
CORPORATE DIRECT (EUROPE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
9
Dividends
2023
2022
£
£
Final paid
1,000,000
10
Tangible fixed assets
Short leasehold property
Plant and equipment
Fixtures and fittings
Computers
Total
£
£
£
£
£
Cost
At 1 January 2023
154,075
518,522
171,975
118,846
963,418
Additions
20,294
2,344
9,873
32,511
Disposals
(12,849)
(26,043)
(67,084)
(105,976)
At 31 December 2023
154,075
525,967
148,276
61,635
889,953
Depreciation and impairment
At 1 January 2023
120,903
414,900
118,497
107,176
761,476
Depreciation charged in the year
15,406
44,415
21,389
9,210
90,420
Eliminated in respect of disposals
(12,849)
(26,043)
(67,084)
(105,976)
At 31 December 2023
136,309
446,466
113,843
49,302
745,920
Carrying amount
At 31 December 2023
17,766
79,501
34,433
12,333
144,033
At 31 December 2022
33,172
103,622
53,478
11,670
201,943
11
Stocks
2023
2022
£
£
Finished goods and goods for resale
8,475,934
6,856,518
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,373,098
3,370,869
Amounts owed by group undertakings
86,828
Other debtors
1,678
4,797
Prepayments and accrued income
203,545
541,565
2,578,321
4,004,059
CORPORATE DIRECT (EUROPE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
12
Debtors
(Continued)
- 20 -
Included within trade debtors are factored debts amounting to £2,236,694 (2022: £3,136,271).
13
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
4,485,208
4,439,032
Amounts owed to group undertakings
348,159
Corporation tax
228,433
167,448
Other taxation and social security
672,704
497,811
Other creditors
1,662,702
2,270,220
Accruals and deferred income
64,489
59,962
7,461,695
7,434,473
Included within other creditors is £1,648,635 (2022: £2,269,937) for an invoice finance facility which is secured by a fixed and floating charge on the assets of the company.
14
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
30,105
40,410
2023
Movements in the year:
£
Liability at 1 January 2023
40,410
Credit to profit or loss
(10,305)
Liability at 31 December 2023
30,105
15
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
111,023
91,580
CORPORATE DIRECT (EUROPE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
16
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
50,000
50,000
50,000
50,000
17
Government grants
The amounts recognised in the financial statements for government grants included in other operating income was £nil (2022: £9,000).
18
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
72,358
9,650
Between two and five years
212,516
370,511
284,874
380,161
19
Related party transactions
At the year end date the company owed £348,159 to Corporate Telecommunications (UK) Limited (2022: was owed £86,828). Corporate Telecommunications (UK) Limited is the parent company of Corporate Direct (Europe) Limited. The balance is unsecured, interest-free and repayable on demand.
The parent has provided a charge over its assets in support of the company's bank facilities.
During the year, loans of £274,129 owed by other group companies were deemed to be irrecoverable and have been written off in full.
20
Ultimate controlling party
The company is a wholly-owned subsidiary of Corporate Telecommunications (UK) Limited. This company is controlled by P A Baxter.
CORPORATE DIRECT (EUROPE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
21
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
321,635
1,211,913
Adjustments for:
Taxation charged
254,211
343,755
Finance costs
112,240
63,486
Investment income
(11,682)
(2,973)
Gain on disposal of tangible fixed assets
-
(370)
Depreciation and impairment of tangible fixed assets
90,420
98,788
Movements in working capital:
Increase in stocks
(1,619,416)
(1,834,171)
Decrease/(increase) in debtors
1,425,738
(207,430)
(Decrease)/increase in creditors
(33,763)
1,444,829
Cash generated from operations
539,383
1,117,827
22
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
277,657
202,784
480,441
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