Company registration number 06109979 (England and Wales)
CLUB L (RETAIL) LIMITED
ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024
CLUB L (RETAIL) LIMITED
COMPANY INFORMATION
Directors
P Randev
A K Randev
Secretary
A K Randev
Company number
06109979 (England and Wales)
Registered office
Building 1 Think Park Mosley Road
Trafford Park
Manchester
United Kingdom
M17 1FQ
Auditor
Sedulo Audit Limited
605 Albert House
256-260 Old Street
London
United Kingdom
EC1V 9DD
CLUB L (RETAIL) LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Group statement of comprehensive income
8
Group balance sheet
9
Company balance sheet
10
Group statement of changes in equity
11
Company statement of changes in equity
12
Group statement of cash flows
13
Notes to the financial statements
14 - 35
CLUB L (RETAIL) LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 31 MARCH 2024
- 1 -
The directors present the strategic report for the period ended 31 March 2024.
Fair Review of the Business
The extended 14 month financial period ending 31 March 2024 was a period of continued growth for the brand with turnover at £44,417k, increasing by 51% versus the prior period. This is despite a backdrop in poor consumer confidence caused by high and persistent inflation and a cost of living crisis.
Gross profit margin for the year ended 31 March 2024 reduced from 60% (2023) to 53% due to management now mapping certain costs relating to the fulfilment of orders in cost of sales rather than in distribution costs to better reflect the transactions and make it clearer for the users of the financial statements. Despite this realignment of costs, profit before tax margin has reduced to 7% (2023: 16%), following continued investment into the business in preparation for future growth. The Group invested into a new distribution center and headquarters during the prior financial year, with the first full year of costs in the current financial year. The Group also continued to invest in people with headcount increasing to 94 (2023: 64).
The Directors are confident that profit before tax will increase back to beyond prior year levels during 2025 following continued growth in the brand in the UK and internationally.
On 14 October 2022, Club L London merged with Club L Retail and subsequently it's subsidiaries (Club L Europe BV and Club L Los Angeles LLC) making Club L London the TopCo for the full group.
Principal risks and uncertainties
Economic, market and business risk
Specific macroeconomic factors and changes due to geopolitical uncertainty can have an impact on how customers behave and can also have an impact on our operations and supply chain, which in turn could impact on our overall financial performance. Mitigations put in place to help the Group prepare for any potential volatility include: the Group has a diverse product range that is competitively priced. The Group has strong relationships with multiple carriers and logistics providers so we can spread our carriage if required. The Group has a strong supply chain consisting of multiply suppliers across multiple locations to help overreliance on any individual supplier.
Technology risk
Technology with e-commerce advances rapidly alongside increasing customer expectations of website user
experience and functionality. The Group continues to invest heavily in technology across their website,inventory management, warehouse management, customer experience and overall IT infrastructure.
Liquidity risk
The business is self-funding and there are no external bank borrowings. The risk around liquidity is managed through a strong banking relationship and the availability of financing such as trade or asset financing if required. The directors have prepared forecasts including cashflows for the year ending and beyond, and the Group monitors cash as part of its day-to-day control procedures. The Group has considered cash headroom, and consequently, the directors believe the Group is well placed to manage business risk.
Currency risk
The Group trades in several currencies, but mostly GBP, USD, EUR and AUD. It has income and expenditure in all currencies creating a natural hedge that is sufficient to reduce exposure. Any surplus currency is exchanged into GBP at appropriate times.
Credit risk
The Group operates a DTC model where the customers pay instantly when purchasing goods. This mitigates the risk of bad debts.
Key personnel
The loss of key individuals would represent significant operational difficulties for the Group. The Directors continue to ensure that key personnel are appropriately renumerated to ensure that good performance is recognised.
CLUB L (RETAIL) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
- 2 -
Key performance indicators
Going Concern
As of 31 March 2024, the Group made a profit for the period of £2,574k and has a net asset position of £9,116k. The Group is operationally cash generative and at 31 March 2024, the Group has cash available of £8,763k.
The Directors have a reasonable expectation that the Group and Company has adequate resources to continue operations for the foreseeable future and there are no material uncertainties that cast significant doubt on the Group’s and Company's ability to meet its liabilities as they fall due.
Outlook
The Directors expect the Group to continue to grow over the coming year with a key strategic focus on increasing international presence.
Section 172 Companies Act 2006 statement
In the decisions taken during the period ended 31 March 2024 the directors have always acted in good faith and in a way that they consider would be most likely to promote the success of the Group.
In making decisions concerning the business, the directors must consider a variety of matters including the interests of various stakeholders, the consequences of their decisions on the short and long term and the overarching reputation of the Group. It is important to the board that we develop strong and positive relationships with our stakeholders, in particular with our employees, customers and suppliers.
Our employees are the core of the company’s success. The Group continues to work on the wellbeing of its employees, and it has implemented a healthcare policy for physical and mental health support to enhance wellbeing and productivity. Through emails and newsletters, the Group informs employees on trading and key developments.
We value all our suppliers and have multi-year contracts in place with our key suppliers. The directors discuss
payment terms with management at high level to make sure they are in line with industry and market benchmarks.
The directors believe it is fundamental to nurture the relationship with our customers. We communicate and engage with them through different marketing channels.
P Randev
Director
17 February 2025
CLUB L (RETAIL) LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 MARCH 2024
- 3 -
The directors present their annual report and financial statements for the period ended 31 March 2024.
Principal activities
The principal activity of the company and group continued to be that of an online fashion retailer.
Results and dividends
The results for the period are set out on page 8.
Ordinary dividends were paid amounting to £65,000. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
P Randev
A K Randev
Post reporting date events
Information relating to post reporting date events is given in the notes to the financial statements.
Auditor
The auditors, Sedulo Audit Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.
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 group and company, and of the profit or loss of the group 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 ;
prepare the on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Strategic report
The group has chosen in accordance with Section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 to set out in the company's strategic report information required by schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008. true
CLUB L (RETAIL) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
- 4 -
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 auditor of the company 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 auditor of the company is aware of that information.
On behalf of the board
P Randev
Director
17 February 2025
CLUB L (RETAIL) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CLUB L (RETAIL) LIMITED
- 5 -
Opinion
We have audited the financial statements of Club L (Retail) Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 March 2024 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group 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 group's and the parent company's affairs as at 31 March 2024 and of the group's profit for the period 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 group and parent 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 group's and parent 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 period 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.
CLUB L (RETAIL) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CLUB L (RETAIL) LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, 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 parent 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 parent 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.
Extent to which the audit was capable of detecting irregularities, including fraud
The primary responsibility for the prevention and detection of fraud rests with directors and management, and we cannot be expected to detect non-compliance with all laws and regulations.
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our knowledge of the business and sector, enquiries of directors and management, and review of regulatory information and correspondence. We communicated identified laws and regulations throughout the audit team and remained alert to any indications of non-compliance throughout the audit.
We discussed with directors and management the policies and procedures in place to ensure compliance with laws and regulations and otherwise prevent, deter and detect fraud.
Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations identified as potentially having a material effect on the financial statements. Our procedures included review of financial statement information and testing of that information, enquiry of management and examination of relevant documentation, analytical procedures to identify unusual or unexpected relationships that may indicate fraud, and procedures to address the risk of fraud through director or management override of controls.
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.
CLUB L (RETAIL) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CLUB L (RETAIL) LIMITED
- 7 -
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 require to state to them in a Report of the Auditors 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.
Diccon Thornely (Senior Statutory Auditor)
For and on behalf of Sedulo Audit Limited, Statutory Auditor
Chartered Accountants
605 Albert House
256-260 Old Street
London
EC1V 9DD
United Kingdom
17 February 2025
CLUB L (RETAIL) LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 MARCH 2024
- 8 -
Period
Year
ended
ended
31 March
31 January
2024
2023
as restated
Notes
£
£
Turnover
44,416,875
29,507,079
Cost of sales
(21,052,467)
(11,793,930)
Gross profit
23,364,408
17,713,149
Distribution costs
(11,634,931)
(8,508,529)
Administrative expenses
(8,702,335)
(5,374,760)
Other operating income
-
821,891
Operating profit
4
3,027,142
4,651,751
Interest receivable and similar income
8
69,630
21,371
Interest payable and similar expenses
9
(1,493)
(11,342)
Profit before taxation
3,095,279
4,661,780
Tax on profit
10
(520,973)
(896,668)
Profit for the financial period
21
2,574,306
3,765,112
Other comprehensive income
Currency translation gain arising in the period
5,469
829
Total comprehensive income for the period
2,579,775
3,765,941
Profit for the financial period is all attributable to the owners of the parent company.
Total comprehensive income for the period is all attributable to the owners of the parent company.
The notes on pages 14 to 35 form part of these financial statements.
CLUB L (RETAIL) LIMITED
GROUP BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 9 -
Period
Year
ended
ended
31 March 2024
31 January 2023
as restated
Notes
£
£
£
£
Fixed assets
Intangible assets
12
334,579
175,066
Tangible assets
13
1,360,474
1,472,321
1,695,053
1,647,387
Current assets
Stocks
15
3,923,830
2,630,475
Debtors
16
2,008,766
2,046,060
Cash at bank and in hand
8,763,087
5,538,410
14,695,683
10,214,945
Creditors: amounts falling due within one year
17
(7,148,943)
(5,064,177)
Net current assets
7,546,740
5,150,768
Total assets less current liabilities
9,241,793
6,798,155
Provisions for liabilities
Deferred tax liability
18
125,445
196,582
(125,445)
(196,582)
Net assets
9,116,348
6,601,573
Capital and reserves
Called up share capital
20
1
1
Other reserves
6,298
829
Profit and loss reserves
21
9,110,049
6,600,743
Total equity
9,116,348
6,601,573
The notes on pages 14 to 35 form part of these financial statements.
The financial statements were approved by the board of directors and authorised for issue on 17 February 2025 and are signed on its behalf by:
17 February 2025
P Randev
Director
Company registration number 06109979 (England and Wales)
CLUB L (RETAIL) LIMITED
COMPANY BALANCE SHEET
AS AT 31 MARCH 2024
31 March 2024
- 10 -
Period
Year
ended
ended
31 March 2024
31 January 2023
as restated
Notes
£
£
£
£
Fixed assets
Intangible assets
12
334,579
175,066
Tangible assets
13
1,356,526
1,467,403
1,691,105
1,642,469
Current assets
Stocks
15
3,923,830
2,630,475
Debtors
16
1,786,287
3,440,556
Cash at bank and in hand
8,056,329
3,168,950
13,766,446
9,239,981
Creditors: amounts falling due within one year
17
(7,141,814)
(4,160,238)
Net current assets
6,624,632
5,079,743
Total assets less current liabilities
8,315,737
6,722,212
Provisions for liabilities
Deferred tax liability
18
125,445
196,582
(125,445)
(196,582)
Net assets
8,190,292
6,525,630
Capital and reserves
Called up share capital
20
1
1
Profit and loss reserves
21
8,190,291
6,525,629
Total equity
8,190,292
6,525,630
The notes on pages 14 to 35 form part of these financial statements.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company's profit for the period was £1,719,568 (2023 year- £3,726,148 profit).
The financial statements were approved by the board of directors and authorised for issue on 17 February 2025 and are signed on its behalf by:
17 February 2025
P Randev
Director
Company registration number 06109979 (England and Wales)
CLUB L (RETAIL) LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 MARCH 2024
- 11 -
Share capital
Currency translation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
As restated for the period ended 31 January 2023:
Balance at 1 February 2022
1
2,835,631
2,835,632
Year ended 31 January 2023:
Profit for the year
-
-
3,765,112
3,765,112
Other comprehensive income:
Currency translation differences
-
829
829
Total comprehensive income
-
829
3,765,112
3,765,941
Balance at 31 January 2023
1
829
6,600,743
6,601,573
Period ended 31 March 2024:
Profit for the period
-
-
2,574,306
2,574,306
Other comprehensive income:
Currency translation differences
-
5,469
5,469
Total comprehensive income
-
5,469
2,574,306
2,579,775
Dividends
11
-
-
(65,000)
(65,000)
Balance at 31 March 2024
1
6,298
9,110,049
9,116,348
The notes on pages 14 to 35 form part of these financial statements.
CLUB L (RETAIL) LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 MARCH 2024
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
As restated for the period ended 31 January 2023:
Balance at 1 February 2022
1
2,799,481
2,799,482
Year ended 31 January 2023:
Profit and total comprehensive income for the year
-
3,726,148
3,726,148
Balance at 31 January 2023
1
6,525,629
6,525,630
Period ended 31 March 2024:
Profit and total comprehensive income
-
1,729,662
1,729,662
Dividends
11
-
(65,000)
(65,000)
Balance at 31 March 2024
1
8,190,291
8,190,292
The notes on pages 14 to 35 form part of these financial statements.
CLUB L (RETAIL) LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 MARCH 2024
- 13 -
2024
2023
as restated
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
25
3,355,021
5,413,636
Interest paid
(1,493)
(11,342)
Income taxes refunded/(paid)
243,974
(1,018,762)
Net cash inflow from operating activities
3,597,502
4,383,532
Investing activities
Purchase of intangible assets
(201,283)
(175,066)
Purchase of tangible fixed assets
(177,827)
(1,454,355)
Proceeds from disposal of tangible fixed assets
1,655
7,331
Release of negative goodwill
-
394,212
Interest received
69,630
21,371
Net cash used in investing activities
(307,825)
(1,206,507)
Financing activities
Dividends paid to equity shareholders
(65,000)
Net cash used in financing activities
(65,000)
-
Net increase in cash and cash equivalents
3,224,677
3,177,025
Cash and cash equivalents at beginning of period
5,538,410
2,361,385
Cash and cash equivalents at end of period
8,763,087
5,538,410
The notes on pages 14 to 35 form part of these financial statements.
CLUB L (RETAIL) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024
- 14 -
1
Accounting policies
Company information
Club L (Retail) Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Building 1 Think Park Mosley Road, Trafford Park, Manchester, United Kingdom, M17 1FQ.
The group consists of Club L (Retail) Limited and all of its subsidiaries.
The principal activity of the group for the period under review was that of an online fashion retailer.
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
Business combinations and basis of consolidation
In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill.
The consolidated financial statements incorporate those of Club L (Retail) Limited and all of its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method.
Their results are incorporated from the date that control passes.
Certain subsidiary undertakings have non-coterminous year-ends, but the difference between these year-ends and the parent do not exceed three months. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
1.3
Going concern
As of 31 March 2024, the Group made a profit for the period of £2,574k and has a net asset position of £9,116k. The Group is operationally cash generative and at 31 March 2024, the Group has cash available of £8,763k.
The Directors have a reasonable expectation that the Group and Company has adequate resources to continue operations for the foreseeable future and there are no material uncertainties that cast significant doubt on the Group’s and Company's ability to meet its liabilities as they fall due.
CLUB L (RETAIL) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -
1.4
Turnover
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Company has transferred the significant risks and rewards of ownership to the buyer;
the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Company receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Other revenue is recognised in the period to which it relates.
1.5
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
1.6
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.
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:
Software
20-30% straight-line
1.7
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:
Fixtures and fittings
20% reducing balance
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 recognised in the profit and loss account.
CLUB L (RETAIL) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 16 -
1.8
Fixed asset investments
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.9
Impairment of fixed assets
At each reporting period end date, the group 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
1.10
Stocks
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted average basis.
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.
CLUB L (RETAIL) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 17 -
1.11
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.
1.12
Financial instruments
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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.
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 group 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.
CLUB L (RETAIL) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 18 -
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 group after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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.
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 group's contractual obligations expire or are discharged or cancelled.
1.13
Equity instruments
Equity instruments issued by the group 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 group.
1.14
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 period. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
CLUB L (RETAIL) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 19 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is 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.
1.15
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.
1.16
Retirement benefits
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension
plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are
shown in accruals as a liability in the Statement of financial position. The assets of the plan are held
separately from the Group in independently administered funds.
1.17
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 leased asset are consumed.
CLUB L (RETAIL) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 20 -
1.18
Foreign exchange
Functional and presentation currency
The Group's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the date of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and nonmonetary items measured at fair value measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow
hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income with 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income.
1.19
Provisions for liabilities
Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and opportunities.
When payments are eventually made, they are charged to the provision carried in the balance sheet.
1.20
The Group has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.
Transactions between group entities which have been eliminated on consolidated are not disclosed within the financial statements.
CLUB L (RETAIL) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
- 21 -
2
Judgements and key sources of estimation uncertainty
In the application of the group’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.
Negative goodwill
On the 4th of November 2022, Club L (Retail) Limited acquired 100% of Club L Los Angeles LLC for no consideration, when the net asset value was $480,110 (£394,212). Under FRS 102 19.24, when the net amount of the identifiable assets, liabilities and provisions for contingent liabilities exceeds the consideration, negative goodwill arises. On initial recognition, the negative goodwill would be recognised on the statement of financial position, but judgement arises on the extent with which the negative goodwill should be released to profit or loss.
FRS 102 does not require a specific write-off period (as it would be required for positive goodwill) for the release of negative goodwill to profit or loss, but rather requires the release to be proportional to the excess of the fair value of the non-monetary assets acquired in profit or loss in which the non-monetary assets are recovered. The amounts exceeding the fair values of the non-monetary assets acquired are recognised in profit or loss in the periods expected to be benefited.
Uncertainty arises on determining the extent with which the negative goodwill is released for the year ended 31 January 2023 and subsequent periods.
It has been determined that the majority of the net assets acquired at acquisition date were recovered or expected to be benefited at 31 January 2023, with the amount not included in the majority being immaterial, and therefore the full amount of negative goodwill of £394,212 was recognised in profit or loss in the year ending 31 January 2023.
3
Exceptional item
2024
2023
as restated
£
£
Expenditure
Exceptional items included under administrative expenses
283,635
128,582
The exceptional items included in administrative expenses relate to costs incurred related to relocating office premises and bonuses awarded.
CLUB L (RETAIL) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
- 22 -
4
Operating profit
2024
2023
as restated
£
£
Operating profit for the period is stated after charging/(crediting):
Exchange losses/(gains)
177,729
(94,939)
Hire of plant and machinery
-
4,229
Depreciation of owned tangible fixed assets
288,019
72,257
Amortisation of intangible assets
41,770
-
Release of negative goodwill
-
(394,212)
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor:
£
£
For audit services
Audit of the financial statements of the group and company
36,000
39,975
6
Employees
The average monthly number of persons (including directors) employed by the group and company during the period was:
Group
Company
2024
2023
2024
2023
Number
Number
Number
Number
Admin
92
63
92
63
Directors
2
2
2
2
Total
94
65
94
65
Their aggregate remuneration comprised:
Group
Company
2024
2023
2024
2023
£
£
£
£
Wages and salaries
3,427,134
2,286,190
3,427,134
2,273,258
Social security costs
397,253
213,298
397,253
211,936
Pension costs
148,659
28,363
148,659
28,191
3,973,046
2,527,851
3,973,046
2,513,385
CLUB L (RETAIL) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
- 23 -
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
92,435
41,556
Company pension contributions to defined contribution schemes
936
872
93,371
42,428
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
69,630
21,371
9
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
1,493
11,580
Other finance costs:
Other interest
-
(238)
Total finance costs
1,493
11,342
10
Taxation
2024
2023
as restated
£
£
Current tax
UK corporation tax on profits for the current period
760,450
723,639
Adjustments in respect of prior periods
(168,340)
Total current tax
592,110
723,639
Deferred tax
Origination and reversal of timing differences
(71,137)
173,029
Total tax charge
520,973
896,668
CLUB L (RETAIL) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
10
Taxation
(Continued)
- 24 -
The actual charge for the period can be reconciled to the expected charge for the period based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit before taxation
3,095,279
4,661,780
Expected tax charge based on the standard rate of corporation tax in the UK of 24.17% (2023: 19.00%)
748,129
885,738
Tax effect of expenses that are not deductible in determining taxable profit
3,134
13,307
Adjustments in respect of prior years
(168,340)
Effect of change in corporation tax rate
-
41,527
Effect of overseas tax rates
(8,069)
(7,403)
Tax at marginal rate
(649)
Enhanced capital allowances
(53,232)
(36,501)
Taxation charge
520,973
896,668
11
Dividends
2024
2023
Recognised as distributions to equity holders:
£
£
Final paid
65,000
-
12
Intangible fixed assets
Group
Software
£
Cost
At 1 February 2023
175,066
Additions
201,283
At 31 March 2024
376,349
Amortisation and impairment
At 1 February 2023
Amortisation charged for the period
41,770
At 31 March 2024
41,770
CLUB L (RETAIL) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
12
Intangible fixed assets
(Continued)
- 25 -
Carrying amount
At 31 March 2024
334,579
At 31 January 2023
175,066
Company
Software
£
Cost
At 1 February 2023
175,066
Additions
201,283
At 31 March 2024
376,349
Amortisation and impairment
At 1 February 2023
Amortisation charged for the period
41,770
At 31 March 2024
41,770
Carrying amount
At 31 March 2024
334,579
At 31 January 2023
175,066
CLUB L (RETAIL) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
- 26 -
13
Tangible fixed assets
Group
Fixtures and fittings
Computers
Total
£
£
£
Cost
At 1 February 2023
1,348,408
217,969
1,566,377
Additions
97,076
80,751
177,827
Disposals
(1,655)
(1,655)
At 31 March 2024
1,445,484
297,065
1,742,549
Depreciation and impairment
At 1 February 2023
46,661
47,395
94,056
Depreciation charged in the period
190,868
97,151
288,019
At 31 March 2024
237,529
144,546
382,075
Carrying amount
At 31 March 2024
1,207,955
152,519
1,360,474
At 31 January 2023
1,301,747
170,574
1,472,321
Company
Fixtures and fittings
Computers
Total
£
£
£
Cost
At 1 February 2023
1,348,408
210,352
1,558,760
Additions
94,591
80,751
175,342
At 31 March 2024
1,442,999
291,103
1,734,102
Depreciation and impairment
At 1 February 2023
46,661
44,696
91,357
Depreciation charged in the period
190,178
96,041
286,219
At 31 March 2024
236,839
140,737
377,576
Carrying amount
At 31 March 2024
1,206,160
150,366
1,356,526
At 31 January 2023
1,301,747
165,656
1,467,403
14
Subsidiaries
Details of the company's subsidiaries at 31 March 2024 are as follows:
CLUB L (RETAIL) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
14
Subsidiaries
(Continued)
- 27 -
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Club L Europe B.V.
Portland 66, 1046BD, Amsterdam,
Netherlands
Online fashion retailer
Ordinary shares
100.00
Club Los Angeles LLC
6010 Celedon Creek No7, Playa Vista,
CA, 90094
Online fasion retailer
Ordinary shares
100.00
The aggregate capital and reserves and the result for the period of the subsidiaries noted above was as follows:
Name of undertaking
Capital and Reserves
Profit/(Loss)
£
£
Club L Europe B.V.
1,113,097
313,184
Club Los Angeles LLC
1,006,510
533,389
15
Stocks
Group
Company
2024
2023
2024
2023
£
£
£
£
Stocks
3,923,830
2,630,475
3,923,830
2,630,475
16
Debtors
Group
Company
2024
2023
as restated
2024
2023
as restated
Amounts falling due within one year:
£
£
£
£
Trade debtors
993,652
267,647
775,532
44,316
Amounts owed by group undertakings
-
-
-
1,690,626
Amounts owed by undertakings in which the company has a participating interest
581,860
1,114,066
581,860
1,114,066
Other debtors
295,351
577,696
290,992
504,897
Prepayments and accrued income
137,903
86,651
137,903
86,651
2,008,766
2,046,060
1,786,287
3,440,556
CLUB L (RETAIL) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
- 28 -
17
Creditors: amounts falling due within one year
Group
Company
2024
2023
as restated
2024
2023
as restated
£
£
£
£
Trade creditors
1,089,784
1,504,549
1,071,072
1,485,493
Amounts owed to group undertakings
1,760,996
Amounts owed to undertakings in which the group has a participating interest
125,027
456,549
125,027
456,549
Corporation tax payable
1,058,926
222,842
859,668
224,806
Other taxation and social security
1,412,479
666,047
235,180
67,503
Other creditors
764,235
680,905
529,457
671,207
Accruals and deferred income
2,698,492
1,533,285
2,560,414
1,254,680
7,148,943
5,064,177
7,141,814
4,160,238
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Liabilities
Liabilities
2024
2023
Group
£
£
Accelerated capital allowances
127,351
198,906
Pensions
(1,906)
(2,324)
125,445
196,582
Liabilities
Liabilities
2024
2023
Company
£
£
Accelerated capital allowances
127,351
198,906
Pensions
(1,906)
(2,324)
125,445
196,582
CLUB L (RETAIL) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
18
Deferred taxation
(Continued)
- 29 -
Group
Company
2024
2024
Movements in the period:
£
£
Liability at 1 February 2023
196,582
196,582
Credit to profit or loss
(71,137)
(71,137)
Liability at 31 March 2024
125,445
125,445
19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
148,659
28,191
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Outstanding at 31 March 2024 was £15,128 (31 January 2023: £14,873) which is included in other creditors.
20
Share capital
Group and company
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1
1
1
1
Full voting rights are attached to the ordinary shares.
CLUB L (RETAIL) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
- 30 -
21
Profit and loss reserves
Group
Company
2024
2023
2024
2023
as restated
as restated
£
£
£
£
At the beginning of the period
6,697,647
2,835,631
6,112,514
2,799,481
Prior year adjustment
(96,904)
-
413,115
-
As restated
6,600,743
2,835,631
6,525,629
2,799,481
Profit for the period
2,574,306
3,765,112
1,729,662
3,726,148
Dividends
(65,000)
-
(65,000)
-
At the end of the period
9,110,049
6,600,743
8,190,291
6,525,629
CLUB L (RETAIL) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
- 31 -
22
Related party transactions
Related party relationships:
Shareholder- Club L London Limited
Common ownership- Cuba Holdings Limited, Cuby Holdings Limited, Inspired, The Agency Limited, Chu Leic Limited
Common management- Cube Manufacturing Limited, China Manufacturing Limited, Solid Fulfilment Limited.
Transactions between group companies, which are related parties, have been eliminated on consolidation and are not disclosed in this note.
The following purchases and (sales) occurred with related parties:
| | |
| | |
| | |
| | |
| | |
Cube Manufacturing Limited | | |
The following amounts were owed by (owing to) related parties:
| | |
| | |
| | |
| | |
| | |
Inspired, The Agency Limited | | |
Cube Manufacturing Limited | | |
China Manufacturing Limited | | |
23
Controlling party
The immediate parent undertaking is Club L London Limited, a company registered in England and Wales.
The ultimate controlling party is Anita Randev.
CLUB L (RETAIL) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
- 32 -
24
Comparative information
As a result of the company changing its reporting period end from January to March, the comparative period is not comparable.
The comparative period is for the 12 months ended 31 January 2023 whereas the current period is for a 14 month period ended 31 March 2024.
25
Cash generated from group operations
2024
2023
as restated
£
£
Profit after taxation
2,574,306
3,765,112
Adjustments for:
Taxation charged
520,973
896,668
Finance costs
1,493
11,342
Investment income
(69,630)
(21,371)
Gain on disposal of tangible fixed assets
-
(236)
Amortisation and impairment of intangible assets
41,770
-
Depreciation and impairment of tangible fixed assets
288,019
72,257
Release of negative goodwill
-
(394,212)
Movements in working capital:
Increase in stocks
(1,293,355)
(719,324)
Decrease in debtors
37,294
185,031
Increase in creditors
1,254,151
1,618,369
Cash generated from operations
3,355,021
5,413,636
26
Analysis of changes in net funds - group
1 February 2023
Cash flows
31 March 2024
£
£
£
Cash at bank and in hand
5,538,410
3,224,677
8,763,087
27
Events after the reporting period
The director is not aware of any post balance sheet events.
CLUB L (RETAIL) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
- 33 -
28
Prior period adjustment
Reconciliation of changes in equity - group
1 February
31 January
2022
2023
£
£
Adjustments to prior period
UK tax effect of cost of goods sold recharge with wholly-owned subsidiary
-
(96,904)
Equity as previously reported
2,835,632
6,698,477
Equity as adjusted
2,835,632
6,601,573
Analysis of the effect upon equity
Profit and loss reserves
-
(96,904)
Reconciliation of changes in profit for the previous financial period
2023
£
Adjustments to prior period
UK tax effect of cost of goods sold recharge with wholly-owned subsidiary
(96,904)
Profit as previously reported
3,862,016
Profit as adjusted
3,765,112
During the period to 31 March 2024 management identified that within Club L Retail Limited, there were recharges relating to cost of goods sold amounting to £510,019 to Club L Los Angeles LLC that related to the year ending 31 January 2023 which were not included in the published financial statements. As these were material to the Company a prior period adjustment has been made, however for the purposes of these consolidated financial statements, the net impact is £96,904, arising from the UK tax on this adjustment, as the effect of the recharge is eliminated on consolidation.
Changes to the balance sheet - company
As previously reported
Adjustment
As restated at 31 Jan 2023
£
£
£
Current assets
Debtors due within one year
2,930,537
510,019
3,440,556
Creditors due within one year
Taxation
(127,902)
(96,904)
(224,806)
Net assets
6,112,515
413,115
6,525,630
Capital and reserves
Profit and loss reserves
6,112,514
413,115
6,525,629
CLUB L (RETAIL) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
28
Prior period adjustment
(Continued)
- 34 -
Changes to the profit and loss account - company
As previously reported
Adjustment
As restated
Period ended 31 January 2023
£
£
£
Cost of sales
(10,596,964)
510,019
(10,086,945)
Taxation
(799,764)
(96,904)
(896,668)
Profit after taxation
3,313,033
413,115
3,726,148
Reconciliation of changes in equity - company
1 February
31 January
2022
2023
£
£
Adjustments to prior period
Club L Los Angeles LLC cost of goods sold recharge
-
413,115
Equity as previously reported
2,799,482
6,112,515
Equity as adjusted
2,799,482
6,525,630
Analysis of the effect upon equity
Profit and loss reserves
-
413,115
Reconciliation of changes in profit for the previous financial period
2023
£
Adjustments to prior period
Club L Los Angeles LLC cost of goods sold recharge
413,115
Profit as previously reported
3,313,033
Profit as adjusted
3,726,148
During the period to 31 March 2024 management identified that within Club L Retail Limited, there were recharges relating to cost of goods sold amounting to £510,019 to Club L Los Angeles LLC that related to the year ending 31 January 2023 which were not included in the published financial statements. Management have corrected this through a prior period adjustment reducing the costs in the year to 31 January 2023 by £510,019 with a reflecting intercompany Debtor balance owed from Club L Los Angeles LLC, this in turn has had an impact on corporation tax owed to HMRC, increasing the cost by £96,904 and the relating creditor by the same amount. This led to an increase in profit and retained earnings of £413,115.
CLUB L (RETAIL) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
28
Prior period adjustment
(Continued)
- 35 -
Other reclassifications:
In the previous year, administrative expenses totaled £5,640,389, while other income amounted to £1,216,103. These figures have been restated to reflect the write-off of negative goodwill amounting to £394,212, which has been included in administrative expenses, and the corresponding reversal of the bargain purchase, which was recorded under other income. Additionally, an amount of £128,582, previously classified as an exceptional item, has been reallocated to administrative expenses for consistency with the current period. These adjustments have no impact on equity.
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