Company registration number 10052668 (England and Wales)
NONWOVENN LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
NONWOVENN LTD
COMPANY INFORMATION
Directors
Mr D P Lamb
Mr A M Brownlow
Mr M Molyneux
Mr P L Oldham
Mr S Hellyar
(Appointed 1 December 2022)
Company number
10052668
Registered office
Bath Road
and business address
Bridgwater
Somerset
TA6 4NZ
Auditor
Pierce C A Limited
Mentor House
Ainsworth Street
Blackburn
Lancashire
BB1 6AY
NONWOVENN LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Group balance sheet
9
Company balance sheet
10
Group statement of changes in equity
11
Group statement of cash flows
12
Notes to the financial statements
13 - 36
NONWOVENN LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -

The directors present the strategic report and financial statements for the year to 31 March 2023.

.

 

Fair review of the business

The directors are pleased to report that business performance has been strong across the Group.

Growth in all sectors as the investments in people and assets are delivering opportunities and resultant turnover and profitability.

The business continues investing in the development of new customers and markets.

The directors are proud of the Group’s ability to develop and deliver solutions to complex problems faced by our customers and provide premium customer service.

Part of Lantor (UK) Limited is in the process of being relocated and integrated with the BFF Nonwovens Limited site in Bridgwater. This is a strategic move to streamline the business and significantly reduce the indirect cost base of the business to improve profitability and enable us to deliver an enhanced customer experience for our customers.

Financial Highlights

The results set out in the profit and loss account show that the turnover for the year ended 31 March 2023 was £36.5 million (2022: £28.5 million), being a growth of 28%.

Earnings before exceptional costs, interest, tax, depreciation, and amortisation (EBITDA) was £7.4 million (2022: £5.4 million), a growth of 37% on prior year. The result reflects the benefits of significant investment in the business to facilitate growth with new manufacturing equipment, integration of two manufacturing sites and key people to deliver, a strong performance and significant growth within the Group.

The Group is committed to investing in the development of new, innovative products, through R&D and employing people with a high level of technical skills to deliver its products.

 

Financial Risk Management

Credit risk

Credit risk in the Group arises from the granting of payment terms to customers. Where feasible customers are credit vetted using third party credit agencies or through analysis of customer provided financial information.

Economy

The Brexit and Covid plans were well executed in prior years and has not resulted in any material impact on the business. The Group continues to monitor for any further impacts and has robust systems in place to deal with them.

Our employees have continued to show passions and commitment throughout a difficult and stressful time. We are confident that our talented employees will propel us forward in our journey.

Foreign exchange risk

The Group is predominantly exposed to currency risk on sales and purchases made in several currencies. The company operates natural hedging and hedging facilities to minimise risk and exposure.

Competition

The Group can maintain competitive advantage by continual investment in the business.

Financial Key Performance Indicators

Given the nature of the business the Group’s directors believe key performance indicators are important. The Group uses several indicators to monitor and improve the development, performance and position of the business.

NONWOVENN LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -
Principal Risk and Uncertainties

The strength of the business combined with the resilience of our teams have enabled us to deliver a strong performance during challenging times.

The business has robust systems in place and continues to be flexible by working closely with internal and external stakeholders to ensure that the business is able to react to any changes.

Our enterprise focus stays un-wavered on perpetually maximising the sustainable benefits for people and the planet while never letting profit keep us from making a positive sustainable impact.

Through our strategic double materiality approach and a number of ESG programmes, which are recognised to be the best in class by our business partners, we are constantly lowering our impact on the environment. Furthermore we have implemented an industry-leading unified waste management programme which has enabled us to deliver zero waste to landfill from December 2022.

We do so in active collaboration with the wider industry, customers, suppliers, and all major stakeholders through sustainable innovation to keep enabling the Circular Economy.

On behalf of the board

Mr D P Lamb
Director
28 September 2023
NONWOVENN LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -

The directors present their annual report and financial statements for the year ended 31 March 2023.

Principal activities

The principal activity of the company since incorporation has been that of a holding company supplying management services to its subsidiary companies.

 

The principal activity of the group during the year has been that of the development, manufacture and wholesale of nonwoven roll goods, fabrics and medical wound dressings and other specialist industrial fabrics.

Results and dividends

The results for the year are set out on page 8.

Ordinary dividends were paid amounting to £2,707,866 (2022: £2,900,000). The directors do not recommend the payment of a further 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 D P Lamb
Mr A M Brownlow
Mr M Molyneux
Mrs P S Thomas
(Resigned 28 September 2022)
Mr P L Oldham
Mr S Hellyar
(Appointed 1 December 2022)
Auditor

In accordance with the company's articles, a resolution proposing that Pierce C A Limited be reappointed as auditor of the group will be put at a General Meeting.

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
Mr D P Lamb
Director
28 September 2023
NONWOVENN LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023
- 4 -

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:

 

 

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.

NONWOVENN LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF NONWOVENN LTD
- 5 -
Opinion

We have audited the financial statements of Nonwovenn Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2023 which comprise the group profit and loss account, the group balance sheet, the company balance sheet, 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:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the 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.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

NONWOVENN LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NONWOVENN LTD
- 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:

 

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.

In identifying and assessing risks of material misstatements in respect of irregularities (including fraud) we considered the following:

 

We have also performed specific procedures to consider the risk of management override and of fraud arising in significant transactions outside the normal course of business.

We did not identify a material risk of non-compliance with laws and regulations or of fraud.

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.

NONWOVENN LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NONWOVENN LTD
- 7 -

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Linda Wilkinson (Senior Statutory Auditor)
For and on behalf of Pierce C A Limited
28 September 2023
Statutory Auditor
Mentor House
Ainsworth Street
Blackburn
Lancashire
BB1 6AY
NONWOVENN LTD
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
36,539,162
28,513,026
Cost of sales
(17,194,554)
(13,204,991)
Gross profit
19,344,608
15,308,035
Distribution costs
(977,862)
(719,871)
Administrative expenses
(12,560,287)
(10,629,827)
Other operating income
247,894
377,920
Exceptional operating expenditure
4
(544,954)
(1,080,658)
Profit on the disposal of freehold land and buildings
-
0
7,884,847
Operating profit
5
5,509,399
11,140,446
Interest receivable and similar income
9
-
0
2,213
Interest payable and similar expenses
10
(809,842)
(1,011,630)
Profit before taxation
4,699,557
10,131,029
Tax on profit
11
(399,097)
(2,225,795)
Profit for the financial year
4,300,460
7,905,234
Profit for the financial year is all attributable to the owners of the parent company.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

NONWOVENN LTD
GROUP BALANCE SHEET
AS AT 31 MARCH 2023
31 March 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
13
834,787
1,112,982
Tangible assets
14
9,405,136
6,906,695
10,239,923
8,019,677
Current assets
Stocks
17
3,602,483
3,163,748
Debtors
19
7,914,976
6,534,188
Cash at bank and in hand
3,052,514
6,822,977
14,569,973
16,520,913
Creditors: amounts falling due within one year
20
(6,458,531)
(8,828,911)
Net current assets
8,111,442
7,692,002
Total assets less current liabilities
18,351,365
15,711,679
Creditors: amounts falling due after more than one year
21
(645,486)
(265,399)
Provisions for liabilities
Provisions
23
904,316
904,316
Deferred tax liability
24
1,813,390
1,146,385
(2,717,706)
(2,050,701)
Net assets
14,988,173
13,395,579
Capital and reserves
Called up share capital
27
65
65
Share premium account
99,890
99,890
Capital redemption reserve
21
21
Other reserves
699,250
699,250
Profit and loss reserves
14,188,947
12,596,353
Total equity
14,988,173
13,395,579
The financial statements were approved by the board of directors and authorised for issue on 28 September 2023 and are signed on its behalf by:
28 September 2023
Mr D P Lamb
Director
NONWOVENN LTD
COMPANY BALANCE SHEET
AS AT 31 MARCH 2023
31 March 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
14
75,181
48,039
Investments
15
2,101,204
2,101,204
2,176,385
2,149,243
Current assets
Debtors
19
4,859,951
556,707
Cash at bank and in hand
337,862
2,948,229
5,197,813
3,504,936
Creditors: amounts falling due within one year
20
(2,879,536)
(3,699,973)
Net current assets/(liabilities)
2,318,277
(195,037)
Total assets less current liabilities
4,494,662
1,954,206
Creditors: amounts falling due after more than one year
21
(645,486)
(265,399)
Net assets
3,849,176
1,688,807
Capital and reserves
Called up share capital
27
65
65
Share premium account
99,890
99,890
Capital redemption reserve
21
21
Other reserves
699,250
699,250
Profit and loss reserves
3,049,950
889,581
Total equity
3,849,176
1,688,807

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 year was £4,868,235 (2022 - £2,065,919 profit).

The financial statements were approved by the board of directors and authorised for issue on 28 September 2023 and are signed on its behalf by:
28 September 2023
Mr D P Lamb
Director
Company Registration No. 10052668
NONWOVENN LTD
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 11 -
Share capital
Share premium account
Capital redemption reserve
Other equity reserves
Profit and loss reserves
Total
Notes
£
£
£
£
£
£
Balance at 1 April 2021
65
99,890
21
699,250
7,591,119
8,390,345
Year ended 31 March 2022:
Profit and total comprehensive income for the year
-
-
-
-
7,905,234
7,905,234
Dividends
12
-
-
-
-
(2,900,000)
(2,900,000)
Balance at 31 March 2022
65
99,890
21
699,250
12,596,353
13,395,579
Year ended 31 March 2023:
Profit and total comprehensive income for the year
-
-
-
-
4,300,460
4,300,460
Dividends
12
-
-
-
-
(2,707,866)
(2,707,866)
Balance at 31 March 2023
65
99,890
21
699,250
14,188,947
14,988,173
NONWOVENN LTD
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
34
5,078,776
2,650,623
Interest paid
(809,842)
(1,011,630)
Income taxes paid
(1,671,650)
(100,001)
Net cash inflow from operating activities
2,597,284
1,538,992
Investing activities
Purchase of tangible fixed assets
(3,422,947)
(2,542,003)
Proceeds on disposal of tangible fixed assets
80,200
12,807,741
Interest received
-
0
2,213
Net cash (used in)/generated from investing activities
(3,342,747)
10,267,951
Financing activities
Repayment of borrowings
(375,000)
(250,000)
Repayment of bank loans
-
(3,588,000)
Dividends paid to equity shareholders
(2,650,000)
(2,700,000)
Net cash used in financing activities
(3,025,000)
(6,538,000)
Net (decrease)/increase in cash and cash equivalents
(3,770,463)
5,268,943
Cash and cash equivalents at beginning of year
6,822,977
1,554,034
Cash and cash equivalents at end of year
3,052,514
6,822,977
NONWOVENN LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 13 -
1
Accounting policies
Company information

Nonwovenn Limited ("the company") is a private limited company domiciled and incorporated in England and Wales. The registered office is Bath Road, Bridgwater, Somerset, TA6 4NZ.

 

The group consists of Nonwovenn Ltd and all of its subsidiaries.

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
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 combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

The consolidated group financial statements consist of the financial statements of the parent company Nonwovenn Ltd together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 March 2023. 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

At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future.

 

The group has a revolving credit facility available to finance trading operations and ongoing capital investment. The directors are not aware of any reasons why this facility will not be maintained.

 

As a result the directors have continued to adopt the going concern basis in preparing the financial statements.

 

 

NONWOVENN LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 14 -
1.4
Turnover

Turnover represents amounts receivable for goods and services net of VAT and trade discounts.

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 dispatch 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.

1.5
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is ten years.

 

Other acquired goodwill is written off in equal instalments over its estimated useful economic life of five years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.6
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:

Leasehold land and buildings
Reducing balance over period of lease/Period of the lease/Straight line with 0%/10% residual value
Plant and equipment
10% straight line with 10%/40% residual value and 10%-33.3% straight line
Fixtures and fittings
10%, 25% and 33.3% straight line
Computers
33.3% straight line
Motor vehicles
25% and 33.3% straight line with 25% residual value

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.

1.7
Fixed asset investments

Fixed asset investments are stated at cost less provision for diminution in value.

NONWOVENN LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 15 -
1.8
Stocks

Stocks are valued at the lower of cost and net realisable value after making due allowances for slow moving and obsolete items.

 

Cost represents all expenditure incurred in bringing stock to its present condition and location at the accounting date.

 

Net realisable value is based on the estimated selling prices less further costs expected to be incurred to completion and disposal.

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.

1.9
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.

1.10
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.

 

During a previous period the group issued unsecured fixed rate loan notes of £1,000,000. The loan note instrument provides for the payment of a redemption premium of £4,000,000. The payment of this premium is unconditional.

 

The redemption premium extant in the above loan note instrument is being accrued and recognised equally over a period of eight years within the term of the loan note instrument in the financial statements. The instrument was created on 15 April 2016 and will cease on 30 September 2024.

 

The above treatment is a departure from the provisions of Section 11 of FRS 102, which requires the redemption premium to be treated as a transaction cost in full and to be recognised as part of the overall transaction price on initial recognition. The departure from FRS 102 is considered to be necessary to show a true and fair view as the redemption premium is not considered to represent an incremental cost of the loan note instrument, but is considered to represent a long term obligation to receive a share of the group's current and future earned profits.

NONWOVENN LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 16 -
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.

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, 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.

NONWOVENN LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 17 -
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.

1.11
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.

1.12
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 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.

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.

 

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.

NONWOVENN LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 18 -
1.13
Provisions

Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

1.14
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.

1.15
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.16
Share-based payments

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted.The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

 

Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

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.

1.18
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

NONWOVENN LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 19 -
1.19
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.

1.20

Research and development

Research expenditure is written off to the profit and loss account in the year in which it is incurred. Development expenditure is written off in the same way unless the directors are satisfied as to the technical, commercial and financial viability of individual projects. In this situation, the expenditure is deferred and amortised over the period during which the company is expected to benefit.

 

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.

NONWOVENN LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 20 -
3
Turnover and other revenue

An analysis of the group's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
From principal activity
36,298,550
28,323,461
Other
240,612
189,565
36,539,162
28,513,026
2023
2022
£
£
Other revenue
Interest income
-
2,213
Government furlough scheme receipts
-
46,580
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
12,852,549
8,700,365
Europe
17,876,129
12,868,661
Rest of the World
5,810,484
6,944,000
36,539,162
28,513,026
4
Exceptional operating expenditure
2023
2022
£
£
Exceptional expenditure
544,954
1,080,658

During the previous year the decision was taken to close the group's manufacturing facility in Bolton and to transfer the production from that site to the group's site in Bridgwater.

 

The exceptional costs relate to the provision made for the above restructuring (see note 23) and to the associated legal and other costs incurred in that year and the current year.

 

The total costs disclosed above have been charged in arriving at the operating profit for the current year and the previous year.

NONWOVENN LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 21 -
5
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange losses/(gains)
168,517
(61,678)
Government furlough scheme receipts
-
(46,580)
Depreciation of owned tangible fixed assets
889,175
685,735
(Profit)/loss on disposal of tangible fixed assets
(44,869)
28,211
Amortisation of intangible assets
278,195
279,796
Share-based payments
5,083
13,375
Operating lease charges
1,065,204
452,582
6
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
7,364
7,000
Audit of the financial statements of the company's subsidiaries
28,422
28,600
35,786
35,600
For other services
Other taxation services
11,000
5,500
11,000
5,500
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
722,947
690,693
Company pension contributions to defined contribution schemes
19,944
19,046
742,891
709,739
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
336,494
307,774
NONWOVENN LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 22 -
8
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Production and engineering
117
108
-
-
Sales and administration
114
104
41
40
231
212
41
40

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
8,734,707
8,113,085
3,398,884
3,313,456
Social security costs
1,047,255
891,605
427,407
399,385
Pension costs
360,029
336,787
141,071
135,704
10,141,991
9,341,477
3,967,362
3,848,545
9
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
-
2,213
10
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
91,002
105,290
Interest on unsecured fixed rate loan notes
218,836
406,336
Other interest on financial liabilities
500,004
500,004
809,842
1,011,630
NONWOVENN LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 23 -
11
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
101,092
1,442,845
Adjustments in respect of prior periods
-
0
107,638
Total current tax
101,092
1,550,483
Deferred tax
Origination and reversal of timing differences
667,005
675,312
Tax losses carried forward
(369,000)
-
0
Total deferred tax
298,005
675,312
Total tax charge
399,097
2,225,795

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
4,699,557
10,131,029
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
892,916
1,924,896
Tax effect of expenses that are not deductible in determining taxable profit
5,323
168,497
Adjustments in respect of prior years
-
0
107,638
Permanent capital allowances in excess of depreciation
(4,295)
84,204
Amortisation on assets not qualifying for tax allowances
52,857
52,667
Research and development tax credit
(190,697)
(195,843)
Other permanent differences
(68,549)
(34,772)
Effect of changes in estimated future tax rates
69,515
162,075
Utilisation of losses brought forward
(77,533)
(43,567)
Deferred tax on future utilisation of accumulated tax losses
(280,440)
-
0
Taxation charge
399,097
2,225,795
12
Dividends
2023
2022
Recognised as distributions to equity holders:
£
£
Final paid
257,866
200,000
Interim paid
2,450,000
2,700,000
2,707,866
2,900,000
NONWOVENN LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 24 -
13
Intangible fixed assets
Group
Goodwill
Negative goodwill
Total
£
£
£
Cost
At 1 April 2022 and 31 March 2023
2,781,955
(354,661)
2,427,294
Amortisation and impairment
At 1 April 2022
1,668,973
(354,661)
1,314,312
Amortisation charged for the year
278,195
-
0
278,195
At 31 March 2023
1,947,168
(354,661)
1,592,507
Carrying amount
At 31 March 2023
834,787
-
0
834,787
At 31 March 2022
1,112,982
-
0
1,112,982
The company had no intangible fixed assets at 31 March 2023 or 31 March 2022.

Negative goodwill relates to the purchase in a previous period of the entire issued share capital of BFF Nonwovens Limited and represents the excess of the fair value of the assets acquired over the consideration price. The full amount of the negative goodwill was written back to profit in that period.

NONWOVENN LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 25 -
14
Tangible fixed assets
Group
Leasehold land and buildings
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 April 2022
647,317
7,124,156
887,537
333,404
119,355
9,111,769
Additions
843,379
2,385,731
68,812
62,057
62,968
3,422,947
Disposals
-
0
(34,735)
-
0
-
0
(69,032)
(103,767)
At 31 March 2023
1,490,696
9,475,152
956,349
395,461
113,291
12,430,949
Depreciation and impairment
At 1 April 2022
298,533
1,124,416
530,942
181,224
69,959
2,205,074
Depreciation charged in the year
42,133
585,162
128,662
114,414
18,804
889,175
Eliminated in respect of disposals
-
0
(17,443)
-
0
-
0
(50,993)
(68,436)
At 31 March 2023
340,666
1,692,135
659,604
295,638
37,770
3,025,813
Carrying amount
At 31 March 2023
1,150,030
7,783,017
296,745
99,823
75,521
9,405,136
At 31 March 2022
348,784
5,996,487
359,848
152,180
49,396
6,906,695
Company
Computers
Motor vehicles
Total
£
£
£
Cost
At 1 April 2022
31,392
125,313
156,705
Additions
1,739
62,968
64,707
Disposals
-
0
(69,032)
(69,032)
At 31 March 2023
33,131
119,249
152,380
Depreciation and impairment
At 1 April 2022
30,039
78,627
108,666
Depreciation charged in the year
722
18,804
19,526
Eliminated in respect of disposals
-
0
(50,993)
(50,993)
At 31 March 2023
30,761
46,438
77,199
Carrying amount
At 31 March 2023
2,370
72,811
75,181
At 31 March 2022
1,353
46,686
48,039
NONWOVENN LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 26 -
15
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
16
-
0
-
0
2,101,204
2,101,204
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 April 2022 and 31 March 2023
2,101,204
Carrying amount
At 31 March 2023
2,101,204
At 31 March 2022
2,101,204

In accordance with Section 27 - FRS 102 - 'Impairment of assets', the carrying value of the company's investment in Sterling Materials Limited has been compared to its recoverable amount, represented by its value in use to the company. This has resulted in a total impairment loss of £1,210,000 being recognised in a previous year. This total impairment loss is equivalent to the total cost of the investment acquired by the company less the value of the net assets recoverable from the subsidiary. Sterling Materials Limited ceased to trade on 31 March 2017. Its tangible fixed assets, stock and trade were transferred to other companies in the group on the same date. The company is in the process of being liquidated.

 

 

16
Subsidiaries

Details of the company's subsidiaries at 31 March 2023 are as follows:

Name of undertaking
Registered
Nature of business
Class of
% Held
office
shares held
Direct
Indirect
BFF Nonwovens Limited
BFF Business Park, Bath Road, Bridgwater, Somerset, TA6 4NZ
Manufacture of nonwoven roll goods
Ordinary
100.00
0
Hamsard 3293 Limited
As above
Dormant
Ordinary
100.00
0
Lantor (UK) Limited
As above
Development, manufacture and sale of medical wound dressings and other specialist fabrics
Ordinary
100.00
0
Square Foot Concepts Limited
As above
Operation of storage and warehouse facilities
Ordinary
100.00
0
Sterling Materials Limited
As above
Dormant
Ordinary
100.00
0
NONWOVENN LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 27 -
17
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Raw materials and consumables
2,436,143
2,001,555
-
-
Work in progress
504,160
519,853
-
-
Finished goods and goods for resale
662,180
642,340
-
0
-
0
3,602,483
3,163,748
-
-
18
Financial instruments
Group
Company
2023
2022
2023
2022
£
£
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
5,930,565
5,027,720
4,793,944
505,001
Carrying amount of financial liabilities
Measured at amortised cost
5,982,627
6,865,820
3,129,777
3,527,017
19
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
5,872,792
4,988,785
24,059
19,121
Corporation tax recoverable
177,746
-
0
-
0
-
0
Amounts owed by group undertakings
-
-
4,715,917
448,827
Other debtors
614,139
564,872
53,968
37,053
Prepayments and accrued income
575,299
674,531
66,007
51,706
7,239,976
6,228,188
4,859,951
556,707
Amounts falling due after more than one year:
Deferred tax asset (note 24)
675,000
306,000
-
0
-
0
Total debtors
7,914,976
6,534,188
4,859,951
556,707
NONWOVENN LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 28 -
20
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Other borrowings
22
250,000
500,000
250,000
500,000
Trade creditors
3,051,210
2,530,674
117,007
61,703
Amounts owed to group undertakings
-
0
-
0
1,100,000
221,069
Corporation tax payable
-
0
1,392,812
-
0
-
0
Other taxation and social security
894,573
820,303
374,787
422,980
Dividends payable
257,866
200,000
257,866
200,000
Other creditors
283,105
276,564
245,236
238,723
Accruals and deferred income
1,721,777
3,108,558
534,640
2,055,498
6,458,531
8,828,911
2,879,536
3,699,973
21
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Other borrowings
22
125,000
250,000
125,000
250,000
Liability for share based payments
26
20,458
15,375
20,458
15,375
Accruals and deferred income
500,028
24
500,028
24
645,486
265,399
645,486
265,399
22
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Other loans
375,000
750,000
375,000
750,000
Payable within one year
250,000
500,000
250,000
500,000
Payable after one year
125,000
250,000
125,000
250,000
NONWOVENN LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
22
Loans and overdrafts
(Continued)
- 29 -

Included in Other loans are fixed rate loan notes of £375,000 (2022: £750,000).

 

All the Other loans are unsecured.

 

The loan notes are payable in full in a period in excess of five years and include a redemption premium of £4,000,000 which is payable on the same dates as the loan notes. Repayment of the loan notes and the redemption premium commenced on 31 March 2021 and will end on 30 September 2024. Payments are in equal instalments at six monthly intervals throughout this period (see note 1.10).

 

On 14 March 2022 the group agreed to make an early redemption payment, relating to the loan notes and the redemption premium, of £625,000 on 31 March 2022 in addition to the scheduled redemption payment due on the same date.

 

Interest of 10% per annum was charged in respect of the loan notes and the redemption premium in the year.

 

 

 

NONWOVENN LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 30 -
23
Provisions for liabilities
Group
Company
2023
2022
2023
2022
£
£
£
£
Restructure provision
904,316
904,316
-
-
Movements on provisions:
Restructure provision
Group
£
At 1 April 2022 and 31 March 2023
904,316

The above provision relates to the termination costs estimated to be incurred following the decision taken in the previous year to close the group's manufacturing facility in Bolton. The costs provided for relate to the estimated dilapidation expenses arising from vacating the leased property and the estimated costs of terminating the employment of the majority of the employees at that site.

 

The provision is expected to be released over the next six to twelve months.

NONWOVENN LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 31 -
24
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Group
£
£
£
£
Accelerated capital allowances
1,863,898
1,149,250
-
-
Tax losses
-
-
675,000
306,000
Unrelieved pension contributions and provisions
(50,508)
(2,865)
-
-
1,813,390
1,146,385
675,000
306,000
The company has no deferred tax assets or liabilities.
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 April 2022
840,385
-
Charge to profit or loss
298,005
-
Liability at 31 March 2023
1,138,390
-

The deferred tax liability set out above is relates to accelerated capital allowances which are expected to reverse within five years and unrelieved pension contributions and provisions that are expected to mature or reverse within the same period.

 

The deferred tax asset set out above is expected to reverse within the next two to five years and relates to the utilisation of tax losses against the expected future profits of a subsidiary company in the same period.

25
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
360,029
336,787

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.

NONWOVENN LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 32 -
26
Share-based payment transactions
Group and company
Number of share options
Weighted average exercise price
2023
2022
2023
2022
Number
Number
£
£
Outstanding at 1 April 2022
5,760
5,400
29.63
29.63
Granted
3,600
2,160
27.78
27.78
Forfeited
(2,100)
(1,800)
28.57
27.78
Outstanding at 31 March 2023
7,260
5,760
29.51
29.63
Exercisable at 31 March 2023
-
-
-
-

During a previous year the company granted options to a director and certain employees, under the EMI option scheme, to acquire up to 1,800 'D' Ordinary shares of 0.1p each and 3,600 'E' Ordinary shares of 0.1p each, in Nonwovenn Ltd, for an exercise price of £33.33 per 'D' Ordinary share and £27.78 per 'E' Ordinary share. In the previous year the company granted options of 1,360 'E' Ordinary Shares of 0.1p each to certain employees for an exercise price of £27.78 per 'E' Ordinary share. An option granted in a previous year for 1,800 'E' Ordinary shares of 0.1p each was forfeited during the previous year. In the current year the company granted options of 3,600 'E' Ordinary shares of 0.1p each to a director and an employee for an exercise price of £27.78 per 'E' Ordinary share. Options for 300 'D' ordinary shares of 0.1p each and 1,800 'E' Ordinary shares of 0.1p each were forfeited in the same period.

 

An option can only be exercised to the extent that it has been vested. The Board of Directors has the absolute discretion to determine that a vesting schedule can apply to an option and that the vesting of an option be subject to the satisfaction of a performance condition or conditions. If an option is not exercised in a ten year period commencing from the date of the grant of the option, it will lapse.

 

Both the 'D' Ordinary shares and the 'E' Ordinary shares are non-voting and have no entitlement to dividends.

 

The 'D' Ordinary shares have the right to a share of the exit proceeds in excess of £60 million from a future sale of the company.

 

The 'E' Ordinary shares have the right to a share of the exit proceeds in excess of £80 million from a future sale of the company.

 

The assessed fair value of the options granted in the year to 31 March 2023 is £210,000 (2022: £170,000).

Group
Company
2023
2022
2023
2022
£
£
£
£
Liabilities at the period end
Arising from equity settled share based payment transactions
20,458
15,375
20,458
15,375
Expenses recognised in the year
Arising from equity settled share based payment transactions
5,083
13,375
5,083
13,375
NONWOVENN LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 33 -
27
Share capital
Group and company
2023
2022
Ordinary share capital
£
£
Issued and fully paid
31,875 A Ordinary shares of 0.1p each
32
32
6,250 B Ordinary shares of 0.1p each
6
6
25,625 C Ordinary shares of 0.1p each
26
26
1,300 Z Ordinary shares of 0.1p each
1
1
65
65

 

The holders of the Z 0.1p ordinary shares are not entitled to receive a dividend or attend and vote at a general meeting of the company and have restricted rights to a return of capital and surplus assets on a disposal or liquidation of the company.

 

 

28
Other equity reserves

On 21 November 2018 the group entered into an agreement to grant an option for the subscription of 6,250 C ordinary shares of 0.1p each in the capital of the group.

 

The consideration for the option was £699,250. No further consideration is payable on the exercise of the option.

 

The option shall be exercised on a change of control in the group's ownership. If, before the option can be exercised, an order is made or an effective resolution is passed for the winding up of the company then to the extent that the option has not been exercised, the holder may exercise the option and be entitled to receive out of the assets available to the group's shareholders, the amount to which it would have been entitled to.

 

The amount of the consideration paid for the option has been recognised as a non-distributable reserve at the balance sheet date.

29
Capital commitments

Amounts contracted for but not provided in the financial statements:

Group
Company
2023
2022
2023
2022
£
£
£
£
Acquisition of tangible fixed assets
272,766
-
-
-
NONWOVENN LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 34 -
30
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
1,010,000
1,068,000
-
-
Between two and five years
3,531,485
3,763,540
-
-
In over five years
11,962,500
12,832,500
-
-
16,503,985
17,664,040
-
-

On 21 December 2021 the group signed a lease for a term of twenty years for the premises at BFF Business Park, Bath Road, Bridgwater, Somerset. The total annual rent for the property is £870,000.

 

 

31
Related party transactions
Transactions with related parties

During the year the group entered into the following transactions with related parties:

Sale of goods and recharges
Management fees payable
2023
2022
2023
2022
£
£
£
£
Group
Entities associated with the C ordinary shareholders
-
-
62,910
57,541
Entities in which D P Lamb is a director
384,809
338,691
-
-
Company
Entities associated with the C ordinary shareholders
-
-
62,910
57,541
Entities in which D P Lamb is a director
240,612
220,347
-
-
NONWOVENN LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023

 

 

(Continued)
- 35 -
Loan note interest and premium
Purchase of goods
2023
2022
2023
2022
£
£
£
£
Group
Entities associated with the C ordinary shareholders
718,840
906,340
-
-
Entities in which D P Lamb is a director
-
-
1,862
5,557
Company
Entities associated with the C ordinary shareholders
718,840
906,340
-
-

The following amounts were outstanding at the reporting end date:

Amounts due to related parties
2023
2022
£
£
Group
Entities associated with the C ordinary shareholders
375,000
750,000
Entities in which D P Lamb is a director
1,674
7,774
Company
Entities associated with the C ordinary shareholders
375,000
750,000
Entities in which D P Lamb is a director
1,674
3,591

The following amounts were outstanding at the reporting end date:

Amounts due from related parties
2023
2022
Balance
Balance
£
£
Group
Entities in which D P Lamb is a director
37,260
30,713
Company
Entities in which D P Lamb is a director
24,061
19,122
32
Controlling party

The company is under the control of the directors, D P Lamb and A N Brownlow, by virtue of their shareholdings.

 

NONWOVENN LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 36 -
33
Directors' transactions

During a previous year a loan of £50,000 was advanced to the group by a director. A loan amount of £50,000 remains outstanding at 31 March 2023 and is not interest bearing.

34
Cash generated from group operations
2023
2022
£
£
Profit for the year after tax
4,300,460
7,905,234
Adjustments for:
Taxation charged
399,097
2,225,795
Finance costs
809,842
1,011,630
Investment income
-
0
(2,213)
(Gain)/loss on disposal of tangible fixed assets
(44,869)
28,211
Profit on disposal of freehold land and buildings
-
(7,884,847)
Amortisation and impairment of intangible assets
278,195
277,195
Depreciation and impairment of tangible fixed assets
889,175
685,735
Equity settled share based payment expense
5,083
13,375
Increase in provisions
-
904,316
Movements in working capital:
Increase in stocks
(438,735)
(309,789)
(Increase) in debtors
(756,327)
(2,044,680)
(Decrease) in creditors
(363,145)
(159,339)
Cash generated from operations
5,078,776
2,650,623
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