Company registration number 7329987 (England and Wales)
GEM Imports Limited
Annual report and financial statements
For the year ended 31 January 2024
GEM Imports Limited
Company information
Directors
Mr C J Edwards
Mr T B Wilcox
Company number
07329987
Registered office
2 Athena Way
Hoyland
Barnsley
South Yorkshire
S74 0FQ
Auditor
DJH Audit Limited
The Exchange
5 Bank Street
Bury
BL9 0DN
GEM Imports Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3 - 5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 27
GEM Imports Limited
Strategic report
For the year ended 31 January 2024
- 1 -
The directors present the strategic report for the year ended 31 January 2024.
Review of the business
Within the year Gem has continued to grow the business and add to our well-established customer base.
This has included major investment in a new head office and warehouse facility. The investment in the new premises allows for increased capacity, stock holdings and overall product range, which has allowed us to grow our team to add further wealth of expertise. In addition, we have installed a new state of the art showroom to showcase our growing product range, which provides customers with more quality and choice.
The company’s investment in stockholdings has protected us from major supply chain issues that we have seen elsewhere in the market.
Principal risks and uncertainties
During the year the Sterling value vs the Dollar increased by 20%. The company has continued to protect any risk against foreign exchange movement with foreign exchange forward contracts.
Within the year shipping rates remained stable, however we have seen significant increases in rates during 2024. We have worked closely with our shipping partners to mitigate this risk where possible. As we move into H2 in 2024 rates have stabilised.
We continue to review shipping and exchange rates to protect our customers against fluctuating prices.
Key performance indicators
The company’s key financial and other performance indicators during the year were as follows:
Unit 2024 2023
Turnover £ 52,750,250 57,895,964
Gross Profit £ 11,767,254 11,967,849
Profit before tax £ 6,393,544 6,326,949
Promoting the success of the company
Our Employees
Our employees are vital to the successful running of the business, through their dedication, experience and skill. To support this, the company offers ongoing training and routinely updates its employees regarding best business practices.
The business is fully committed as an equal opportunities employer and makes every effort to ensure that it has a diverse workforce, with a zero-tolerance approach to any form of discrimination.
Our Customers and Suppliers
Customer satisfaction is essential to the success of Gem Imports. To support this, the company has a vastly experienced buying team that can source a wide range of high-quality products at affordable prices, ensuring the customer receives great value for money.
All goods are subject to rigorous factory testing to ensure that the products are in line with the quality required.
Our Community
The business works closely with a local charity, which provides support and investment in research to help children living with cancer.
The company has provided jobs to 71 members of staff.
GEM Imports Limited
Strategic report (continued)
For the year ended 31 January 2024
- 2 -
Our Environment
The business recognises that it has an obligation to minimise its impact on the environment. During the year we have moved our operations within one warehouse facility which will support reducing our carbon footprint.
The main source of electricity consumption is lighting. Consumption is routinely monitored, to ensure that it is as low as possible. As part of the operations being moved into one warehouse facility, we have installed energy efficient LED and auto sensor lighting.
As a business, we are committed to having a more sustainable supply chain. We are working closely with our suppliers to reduce the use of plastic packaging for our products. Alternative packaging is being introduced wherever possible and is constantly monitored.
Mr C J Edwards
Director
30 October 2024
GEM Imports Limited
Directors' report
For the year ended 31 January 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 January 2024.
Principal activities
The principal activity of the company continued to be that of an importer and wholesale supplier of discount product ranges and pound lines.
Results and dividends
The results for the year are set out on page 9.
Ordinary interim dividends were paid amounting to £1,250,000. 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 C J Edwards
Mr T B Wilcox
Financial instruments
The company operates a treasury function which is responsible for managing the liquidity, interest and foreign currency risks associated with the company’s activities.
The company’s principal financial instruments include derivative financial instruments, the purpose of which is to manage currency risks and interest rate risks arising from the company’s activities, and bank overdrafts, loans and corporate bonds, the main purpose of which is to raise finance for the company’s operations. In addition, the company has various other financial assets and liabilities such as trade debtors and trade creditors arising directly from its operations. Derivative transactions which the company enters into principally comprise forward exchange contracts. In accordance with company’s treasury policy, derivative instruments are not entered into for speculative purposes.
The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
The company’s principal foreign currency exposures arise from trading with overseas companies. Company policy permits but does not demand that these exposures may be hedged in order to fix the cost in sterling. This hedging activity involves the use of foreign exchange forward contracts.
Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
Auditor
DJH Audit Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Energy and carbon report
The company set out their energy consumption and emissions for the financial year. This is the first year in which the company has been required to report their energy consumption and emissions.
GEM Imports Limited
Directors' report (continued)
For the year ended 31 January 2024
- 4 -
2024
2023
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
308,563
-
2024
2023
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 1 - direct emissions
- Gas combustion
7.00
-
- Fuel consumed for owned transport
-
-
7.00
-
Scope 2 - indirect emissions
- Electricity purchased
47.00
-
Scope 3 - other indirect emissions
- Fuel consumed for transport not owned by the company
10.00
-
Total gross emissions
64.00
-
Intensity ratio
Kg of CO2e per employee
1118
Quantification and reporting methodology
We have followed the 2019 UK Government Environmental Reporting Guidelines.
We have used the 2023 UK Government’s Conversion Factors for Company Reporting.
The energy efficiency narrative methodology has been created based on energy management best practice.
Operational Scopes
We have measured our scope 1 and 2 emissions and included scope 3 emissions related to employee use of their own vehicles, where they claim mileage allowance (grey fleet).
Intensity measurement
The company has adopted tCO2e per full time as its key intensity ratio.
Gas and Electricity
The energy use in kWh was taken from supplier invoices which have been collated into a spreadsheet by Gem Imports Limited.
Transport
Grey fleet data was calculated from expense records and fuel purchases.
Measures taken to improve energy efficiency
During the year, the energy efficiency actions taken by the company included
• Moving all operations under one site with energy efficient LED and auto light sensors installed.
• Electric vehicle charging points for staff vehicles.
GEM Imports Limited
Directors' report (continued)
For the year ended 31 January 2024
- 5 -
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr C J Edwards
Director
30 October 2024
GEM Imports Limited
Independent auditor's report
To the member of GEM Imports Limited
- 6 -
Opinion
We have audited the financial statements of GEM Imports Limited (the 'company') for the year ended 31 January 2024 which comprise the statement of comprehensive income, the statement of financial position, 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 January 2024 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.
GEM Imports Limited
Independent auditor's report (continued)
To the member of GEM Imports Limited
- 7 -
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.
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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the company;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
GEM Imports Limited
Independent auditor's report (continued)
To the member of GEM Imports Limited
- 8 -
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions; and
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
reading the minutes of meetings of those charged with governance;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HMRC, relevant regulators, and the company’s legal advisors.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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.
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Mr Richard Bell
Senior Statutory Auditor
For and on behalf of DJH Audit Limited
30 October 2024
Accountants
Statutory Auditor
The Exchange
5 Bank Street
Bury
BL9 0DN
GEM Imports Limited
Statement of comprehensive income
For the year ended 31 January 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
52,750,250
57,895,964
Cost of sales
(40,982,996)
(45,928,115)
Gross profit
11,767,254
11,967,849
Administrative expenses
(5,383,171)
(5,598,706)
Operating profit
4
6,384,083
6,369,143
Interest receivable and similar income
8
9,461
7,049
Interest payable and similar expenses
9
(49,243)
Profit before taxation
6,393,544
6,326,949
Tax on profit
10
(1,581,238)
(1,202,143)
Profit for the financial year
4,812,306
5,124,806
The income statement has been prepared on the basis that all operations are continuing operations.
GEM Imports Limited
Statement of financial position
As at 31 January 2024
31 January 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Intangible assets
12
5,700
19,359
Tangible assets
13
1,607,870
241,904
1,613,570
261,263
Current assets
Stocks
15
7,235,283
8,287,622
Debtors
16
12,838,131
10,898,391
Cash at bank and in hand
2,591,273
240,086
22,664,687
19,426,099
Creditors: amounts falling due within one year
17
(6,940,961)
(6,085,457)
Net current assets
15,723,726
13,340,642
Total assets less current liabilities
17,337,296
13,601,905
Provisions for liabilities
Deferred tax liability
18
185,585
12,500
(185,585)
(12,500)
Net assets
17,151,711
13,589,405
Capital and reserves
Called up share capital
20
100
100
Profit and loss reserves
17,151,611
13,589,305
Total equity
17,151,711
13,589,405
The financial statements were approved by the board of directors and authorised for issue on 30 October 2024 and are signed on its behalf by:
Mr C J Edwards
Director
Company registration number 7329987 (England and Wales)
GEM Imports Limited
Statement of changes in equity
For the year ended 31 January 2024
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 February 2022
100
8,464,499
8,464,599
Year ended 31 January 2023:
Profit and total comprehensive income
-
5,124,806
5,124,806
Balance at 31 January 2023
100
13,589,305
13,589,405
Year ended 31 January 2024:
Profit and total comprehensive income
-
4,812,306
4,812,306
Dividends
11
-
(1,250,000)
(1,250,000)
Balance at 31 January 2024
100
17,151,611
17,151,711
GEM Imports Limited
Statement of cash flows
For the year ended 31 January 2024
- 12 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
24
6,745,995
(608,346)
Interest paid
(49,243)
Income taxes paid
(1,583,304)
(1,725,383)
Net cash inflow/(outflow) from operating activities
5,162,691
(2,382,972)
Investing activities
Purchase of tangible fixed assets
(1,579,078)
(189,519)
Proceeds from disposal of tangible fixed assets
8,113
12,970
Repayment of loans
2,489,267
Interest received
9,461
29,364
Other income received from investments
(22,315)
Net cash (used in)/generated from investing activities
(1,561,504)
2,319,767
Financing activities
Dividends paid
(1,250,000)
Net cash used in financing activities
(1,250,000)
-
Net increase in cash and cash equivalents
2,351,187
19,801
Cash and cash equivalents at beginning of year
240,086
220,285
Cash and cash equivalents at end of year
2,591,273
240,086
GEM Imports Limited
Notes to the financial statements
For the year ended 31 January 2024
- 13 -
1
Accounting policies
Company information
GEM Imports Limited is a private company limited by shares incorporated in England and Wales. The registered office is 2 Athena Way, Hoyland, Barnsley, South Yorkshire, ST4 0FQ.
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 under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on despatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
GEM Imports Limited
Notes to the financial statements (continued)
For the year ended 31 January 2024
1
Accounting policies
(Continued)
- 14 -
Amortisation 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:
Trademarks
20% straight line commencing year after addition
Website development
20% straight line commencing year after addition
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
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:
Freehold land and buildings
10% straight line
Plant and equipment
25% straight line
Fixtures and fittings
20% straight line
Computers
33% straight line
Motor vehicles
10% straight line
Office equipment
25% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
GEM Imports Limited
Notes to the financial statements (continued)
For the year ended 31 January 2024
1
Accounting policies
(Continued)
- 15 -
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
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.
GEM Imports Limited
Notes to the financial statements (continued)
For the year ended 31 January 2024
1
Accounting policies
(Continued)
- 16 -
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
GEM Imports Limited
Notes to the financial statements (continued)
For the year ended 31 January 2024
1
Accounting policies
(Continued)
- 17 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
GEM Imports Limited
Notes to the financial statements (continued)
For the year ended 31 January 2024
- 18 -
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Product sales
52,750,250
57,895,964
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
52,750,250
57,895,964
2024
2023
£
£
Other revenue
Interest income
9,461
7,049
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(655,820)
1,342,035
Depreciation of owned tangible fixed assets
146,211
159,741
Loss/(profit) on disposal of tangible fixed assets
58,788
(242)
Amortisation of intangible assets
2,520
18,398
Loss on disposal of intangible assets
11,139
-
Operating lease charges
1,389,186
743,913
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
25,000
11,750
GEM Imports Limited
Notes to the financial statements (continued)
For the year ended 31 January 2024
- 19 -
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Warehouse
20
15
Administration
37
33
Total
57
48
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
2,157,661
1,878,648
Social security costs
175,559
172,040
Pension costs
35,579
29,836
2,368,799
2,080,524
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
361,646
282,854
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023 - 2).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
168,000
170,108
Company pension contributions to defined contribution schemes
1,321
-
GEM Imports Limited
Notes to the financial statements (continued)
For the year ended 31 January 2024
- 20 -
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Other interest income
9,461
29,364
Other income from investments
Gains on financial instruments measured at fair value through profit or loss
(22,315)
Total income
9,461
7,049
2024
2023
Investment income includes the following:
£
£
Interest on financial assets measured at fair value through profit or loss
(22,315)
9
Interest payable and similar expenses
2024
2023
£
£
Other finance costs:
Other interest
49,243
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
1,398,908
1,202,143
Adjustments in respect of prior periods
9,245
Total current tax
1,408,153
1,202,143
Deferred tax
Origination and reversal of timing differences
173,085
Total tax charge
1,581,238
1,202,143
GEM Imports Limited
Notes to the financial statements (continued)
For the year ended 31 January 2024
10
Taxation
(Continued)
- 21 -
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:
2024
2023
£
£
Profit before taxation
6,393,544
6,326,949
Expected tax charge based on the standard rate of corporation tax in the UK of 24.03% (2023: 19.00%)
1,536,369
1,202,120
Tax effect of expenses that are not deductible in determining taxable profit
6,864
4,851
Adjustments in respect of prior years
9,245
(417)
Effect of change in corporation tax rate
7,209
Depreciation on assets not qualifying for tax allowances
6,093
Other permanent differences
(5,640)
Deferred tax adjustments in respect of prior years
15,488
Deferred tax not recognised
(121)
Other
1
Remeasurement of deferred tax for changes in tax rates
1,349
Enhanced capital allowances
(30)
Taxation charge for the year
1,581,238
1,202,143
11
Dividends
2024
2023
£
£
Interim paid
1,250,000
GEM Imports Limited
Notes to the financial statements (continued)
For the year ended 31 January 2024
- 22 -
12
Intangible fixed assets
Trademarks
Website development
Total
£
£
£
Cost
At 1 February 2023
17,925
74,064
91,989
Disposals
(17,176)
(17,176)
At 31 January 2024
17,925
56,888
74,813
Amortisation and impairment
At 1 February 2023
17,925
54,705
72,630
Amortisation charged for the year
2,520
2,520
Disposals
(6,037)
(6,037)
At 31 January 2024
17,925
51,188
69,113
Carrying amount
At 31 January 2024
5,700
5,700
At 31 January 2023
19,359
19,359
GEM Imports Limited
Notes to the financial statements (continued)
For the year ended 31 January 2024
- 23 -
13
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Office equipment
Total
£
£
£
£
£
£
£
Cost
At 1 February 2023
284,780
520,728
141,451
52,340
999,299
Additions
203,467
35,577
1,197,840
97,389
16,699
28,106
1,579,078
Disposals
(8,113)
(121,908)
(130,021)
At 31 January 2024
203,467
312,244
1,596,660
238,840
16,699
80,446
2,448,356
Depreciation and impairment
At 1 February 2023
166,487
439,187
102,244
49,477
757,395
Depreciation charged in the year
8,478
41,576
63,037
30,260
2,860
146,211
Eliminated in respect of disposals
(1,014)
(62,106)
(63,120)
At 31 January 2024
8,478
207,049
440,118
132,504
52,337
840,486
Carrying amount
At 31 January 2024
194,989
105,195
1,156,542
106,336
16,699
28,109
1,607,870
At 31 January 2023
118,293
81,541
39,207
2,863
241,904
GEM Imports Limited
Notes to the financial statements (continued)
For the year ended 31 January 2024
- 24 -
14
Financial instruments
2024
2023
£
£
Carrying amount of financial liabilities
Measured at fair value through profit or loss
- Other financial liabilities
43,562
75,654
15
Stocks
2024
2023
£
£
Finished goods and goods for resale
7,235,283
8,287,622
16
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
9,618,633
10,774,517
Amounts owed by group undertakings
3,000,000
Other debtors
42,064
29,364
Prepayments and accrued income
177,434
94,510
12,838,131
10,898,391
17
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
4,906,317
4,662,523
Corporation tax
555,908
731,059
Other taxation and social security
319,083
303,538
Derivative financial instruments
43,562
75,654
Other creditors
606,561
4,662
Accruals and deferred income
509,530
308,021
6,940,961
6,085,457
GEM Imports Limited
Notes to the financial statements (continued)
For the year ended 31 January 2024
- 25 -
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
185,585
12,500
2024
Movements in the year:
£
Liability at 1 February 2023
12,500
Charge to profit or loss
173,085
Liability at 31 January 2024
185,585
19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
35,579
29,836
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
20
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
GEM Imports Limited
Notes to the financial statements (continued)
For the year ended 31 January 2024
- 26 -
21
Operating lease commitments
Lessee
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:
2024
2023
£
£
Within one year
864,860
69,530
Between two and five years
6,067,333
5,458,881
In over five years
6,568,516
8,041,828
13,500,709
13,570,239
22
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2024
2023
£
£
Aggregate compensation
257,535
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sales
Sales
Purchases
Purchases
2024
2023
2024
2023
£
£
£
£
Other related parties
31,056,393
30,970,662
6,851,398
7,212,790
2024
2023
Amounts due to related parties
£
£
Other related parties
146,638
415,063
The following amounts were outstanding at the reporting end date:
2024
2023
Amounts due from related parties
£
£
Other related parties
6,340,798
4,223,226
GEM Imports Limited
Notes to the financial statements (continued)
For the year ended 31 January 2024
- 27 -
23
Directors' transactions
Description
% Rate
Opening balance
Closing balance
£
£
Directors Loan Account
2.25
29,364
29,364
29,364
29,364
24
Cash generated from/(absorbed by) operations
2024
2023
£
£
Profit for the year after tax
4,812,306
5,124,806
Adjustments for:
Taxation charged
1,581,238
1,202,143
Finance costs
49,243
Investment income
(9,461)
(7,049)
Loss/(gain) on disposal of tangible fixed assets
58,788
(242)
Loss on disposal of intangible assets
11,139
-
Amortisation and impairment of intangible assets
2,520
18,398
Depreciation and impairment of tangible fixed assets
146,211
159,741
Movements in working capital:
Decrease/(increase) in stocks
1,052,339
(2,663,017)
Increase in debtors
(1,939,740)
(3,828,761)
Increase/(decrease) in creditors
1,030,655
(663,608)
Cash generated from/(absorbed by) operations
6,745,995
(608,346)
25
Analysis of changes in net funds
1 February 2023
Cash flows
31 January 2024
£
£
£
Cash at bank and in hand
240,086
2,351,187
2,591,273
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