Company Registration No. 07683340 (England and Wales)
Re:creation Limited
Unaudited director's report and financial statements
for the year ended 31 March 2018
Re:creation Limited
Unaudited director's report and financial statements
Contents
Re:creation Limited
Company Information
for the year ended 31 March 2018
Directors
N Fowler
M P Lehrter
M J Woolley
J R Kirkley
A K Nayyar
F J Perkins
Secretary
A Loader (resigned 7 May 2018)
Company Number
07683340 (England and Wales)
Registered Office
Unit 2 Meadows Business Park
Station Approach, Blackwater
Camberley
Surrey
GU17 9AB
Accountants
Wellden Turnbull Limited
Munro House
Portsmouth Road
Cobham
Surrey
KT11 1PP
Re:creation Limited
Statement of financial position
as at 31 March 2018
Intangible assets
116,470
149,568
Tangible assets
2,203
16,280
Inventories
1,324,014
758,472
Debtors
3,771,719
2,091,089
Cash at bank and in hand
42,158
172,661
Creditors: amounts falling due within one year
(3,465,440)
(1,708,779)
Net current assets
1,672,451
1,313,443
Total assets less current liabilities
1,791,124
1,479,291
Creditors: amounts falling due after more than one year
(162,500)
(162,500)
Net assets
1,628,624
1,316,791
Called up share capital
369,800
369,800
Capital redemption reserve
30,200
30,200
Profit and loss account
1,228,624
916,791
Shareholders' funds
1,628,624
1,316,791
For the year ending 31 March 2018 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies. The members have not required the company to obtain an audit in accordance with section 476 of the Companies Act 2006.
The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.
These accounts have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies' regime and in accordance with the provisions of FRS 102 Section 1A - Small Entities. The profit and loss account has not been delivered to the Registrar of Companies.
Approved by the Board on 22 February 2019.
N Fowler
Director
Company Registration No. 07683340
Re:creation Limited
Notes to the Accounts
for the year ended 31 March 2018
Re:creation Limited is a private company, limited by shares, registered in England and Wales, registration number 07683340. The registered office is Unit 2 Meadows Business Park, Station Approach, Blackwater, Camberley, Surrey, GU17 9AB.
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
These financial statements are presented in sterling, which is the functional currency of the company and rounded to the nearest £.
The following principal accounting policies have been applied:
2.2 Compliance with accounting standards
The accounts have been prepared in accordance with the provisions of FRS 102 Section 1A Small Entities. There were no material departures from that standard.
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 will receive the consideration due under the transaction; and
- the costs incurred or to be incurred in respect of the transaction can be measured reliably.
2.4 Intangible fixed assets
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer's interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Profit and Loss Account over its useful economic life.
Other intangible assets
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Re:creation Limited
Notes to the Accounts
for the year ended 31 March 2018
2.5 Tangible fixed assets and depreciation
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Profit and Loss Account.
Depreciation is provided on the following basis:
Land & buildings
Over the term of the lease
Fixtures & fittings
20% straight line
Computer equipment
33% straight line
Expenditure on research and development is written off in the year in which it is incurred and is included within sundry expenses.
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 first in, first out basis. Work in progress and finished goods include labour and attributable overheads.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
2.9 Cash and cash equivalents
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Re:creation Limited
Notes to the Accounts
for the year ended 31 March 2018
2.10 Financial instruments
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instruments constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in the case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
2.12 Foreign currency translation
Functional and presentation currency
The Company's functional and representational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Finance costs are charged to the Profit and Loss Account over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Interest income is recognised in the Profit and Loss Account using the effective interest method.
All borrowing costs are recognised in the Profit and Loss Account in the year in which they are incurred.
Re:creation Limited
Notes to the Accounts
for the year ended 31 March 2018
The tax expense for the year comprises current and deferred tax. Tax is recognised in the Profit and Loss Account, except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance Sheet date, except that:
- The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
- Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
2.17 Research and development
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
3
Intangible fixed assets
Goodwill
Charge for the year
33,098
Re:creation Limited
Notes to the Accounts
for the year ended 31 March 2018
4
Tangible fixed assets
Land & buildings
Fixtures & fittings
Computer equipment
Total
Cost or valuation
At cost
At cost
At cost
At 1 April 2017
6,185
84,853
17,706
108,744
At 31 March 2018
6,185
84,853
21,011
112,049
At 1 April 2017
3,857
75,287
13,320
92,464
Charge for the year
2,328
9,566
5,488
17,382
At 31 March 2018
6,185
84,853
18,808
109,846
At 31 March 2018
-
-
2,203
2,203
At 31 March 2017
2,328
9,566
4,386
16,280
Carrying values included above held under finance leases and hire purchase contracts:
£
£
- Land and buildings
-
2,328
Finished goods
1,324,014
758,472
Trade debtors
2,945,720
1,097,931
Deferred tax asset
4,812
58,328
Accrued income and prepayments
221,024
337,052
Other debtors
600,163
597,778
Re:creation Limited
Notes to the Accounts
for the year ended 31 March 2018
7
Creditors: amounts falling due within one year
2018
2017
Bank loans and overdrafts
2,246,583
1,001,899
Trade creditors
787,541
296,450
Taxes and social security
57,210
31,905
Other creditors
104,186
136,429
Secured loans
Included within bank loans and overdrafts is an amount of £2,024,521 (2017: £432,916) owed to HSBC Invoice Finance (UK) Limited. This amount is secured by a fixed and floating charge on the company's assets, whether in existence now or coming into existence in the future.
8
Creditors: amounts falling due after more than one year
2018
2017
In respect of the above loan notes there are warrants in place to issue 62,500 shares at 7.8125 pence per share. These warrants are exercisable by the holders of the loan notes up until 31 March 2021. The loan notes are unsecured. Interest is payable on the loan notes on a quarterly basis at 5% per annum.
9
Deferred taxation
2018
2017
Accelerated capital allowances
(4,812)
(58,328)
Provision at start of year
(58,328)
(35,428)
Charged/(credited) to the profit and loss account
53,516
(22,900)
Provision at end of year
(4,812)
(58,328)
Allotted, called up and fully paid:
1,479,200 Ordinary shares of £0.25 each
369,800
369,800
Re:creation Limited
Notes to the Accounts
for the year ended 31 March 2018
11
Operating lease commitments
2018
2017
At 31 March 2018 the company has commitments under non-cancellable operating leases as follows:
Operating leases expiring:
12
Transactions with related parties
Rust Group LP
A partnership in which M Lehrter, M Woolley and A Loader are partners.
Fees totalling £Nil (2017 - £110,000) were charged by Rust Group LP to the company in respect of consultancy services. The amount due to the related party at the balance sheet date was £Nil (2017 - £Nil).
Re:creation Group Plc
A company in which MJ Woolley, M Lehrter and F Perkins are directors.
The company had paid legal and other fees of behalf of re:creation Group pic to allow that company to defend legal action and commence subsequent recovery action, against its former Managing Director. The amount due from the related party at the balance sheet date was £Nil (2017 - £480,271).
M Lehrter
Company director
There is a loan due to M Lehrter with a year end balance of £41,683 (2017 - £136,429). Amounts of £Nil (2017 - £24,231) were loaned to the Company in the year and interest accrued of £4,014 (2017 - £7,473).
Choc O Bloc Limited
The directors of the company are also directors of Choc O Bloc Limited.
During the year the company made purchases on behalf of Choc O Bloc Limited totalling £4,350 (2017 - £4,350). The amount due from the related party at the balance sheet date was £Nil (2017 - £74,248).
Directors
At the year end included within creditors due in more than one year is a loan of £62,500 (2017 - £62,500). The loan is owed to the following directors (or by virture of their relationship with a director) as follows:
M Lehrter: £50,222 (2017 - £50,222).
L Valkenaar (the wife of M Woolley, a director of the company): £9,961 (2017 - £9,661).
A Nayyar: £2,317 (2017 - £2,317).
Re:creation Limited
Notes to the Accounts
for the year ended 31 March 2018
13
Average number of employees
During the year the average number of employees was 14 (2017: 22).