Company registration number 02791895 (England and Wales)
COTSWOLD COLLECTIONS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 JANUARY 2023
COTSWOLD COLLECTIONS LIMITED
COMPANY INFORMATION
Directors
Ms K J Cheesman
Mr T Brown
Secretary
Mr T Brown
Company number
02791895
Registered office
Unit 3, Centrum Park
Tewkesbury Road
Cheltenham
Gloucestershire
United Kingdom
GL51 9FD
Auditor
Azets Audit Services
Epsilon House
The Square
Gloucester Business Park
Gloucester
United Kingdom
GL3 4AD
COTSWOLD COLLECTIONS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Independent auditor's report
4 - 6
Statement of income and retained earnings
7
Balance sheet
8
Statement of cash flows
9
Notes to the financial statements
10 - 23
COTSWOLD COLLECTIONS LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 29 JANUARY 2023
- 1 -
The directors present the strategic report for the period ended 29 January 2023.
Review of business and future developments
The principal activities of the company are home shopping which includes on-line purchasing. For the 52-week period ended 29 January 2023 the company made a profit before tax of £217k, (52 weeks to 30th January 2022 - £1,310k). Revenue for the 52 weeks to 29 January 2023 was £10,196k (52 weeks to 30th January 2022 - £11,497k).
Revenue for the year ended 29 January 2023 decreased by £1,301k to £10,196k and showed a 11.3% drop on the previous year. Profit before Tax fell to £217k and represented 2.1% of sales against 11.4% for the previous year. The war in Ukraine, subsequent cost pressures and the death of the Queen all had a material impact on the business as the company continued to invest in promotional activity to build the customer database.
Cotswold Collections is a long established, ladies clothing company and it remains committed to maximising the brand’s profitability. The company has reviewed all aspects of its trading but has continued to invest in catalogues, national advertising and on-line advertising to build its customer database for longer term growth.
We believe the future prospects of the business to be strong with a loyal customer database and an increasing market in America.
Principal risks and uncertainties
Cotswold Collections operates in a competitive market which is a continuing risk and could result in losing sales to key competitors. The company manages risk by monitoring its competitors to ensure the company provides an exceptional product and customer service which includes a fast and efficient delivery service.
Any risk in fluctuating exchange rates is mitigated by forward exchange contracts. We also have a natural hedge provided by dollars received from USA purchases.
The company has a number of long-term suppliers who we work closely with to ensure continuity of supply and mitigation of cost rises. To mitigate the global shortage of paper the company has agreed a long-term deal with our printers to ensure catalogues can be printed.
The company is exposed to trading risk in a competitive retail sector. The company is susceptible to a possible downturn in consumer spending, influenced by factors such as inflation. Despite these risks the company has a reasonable expectation that the company has adequate resources to continue operations for the longer term.
The business meets its day to day working capital requirements through its cash in bank and is supported by a rolling RCF facility. The company is currently using this facility but aims to repay by the end of this current financial year.
Principal strategic decisions
The directors have agreed to focus on promotional spend which will give the best returns whilst reviewing the company's cost base. We remain committed to growing the customer database via catalogues, national advertising and on-line strategies.
Key performance indicators
Liquidity is measured by reviewing the company’s cash levels, which has shown a reduction from £735k to £422k.
Turnover and profit before tax, as disclosed in the Fair review of the business section of this report, are both key performance indicators for the business.
COTSWOLD COLLECTIONS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 29 JANUARY 2023
- 2 -
Section 172(1) statement
The directors are aware of their responsibilities to the shareholders and key stakeholders of the business and any decisions made are only taken after due consideration is given to the potential impact of that decision on the key stakeholders.
Key stakeholders
Shareholders
The directors are in constant communication with the owner of the business Cotswold Collections Group Ltd through monthly board meetings. Any key business decisions and capital investment needs are only made following approval by the shareholders. The shareholders are provided with up to date, financial data, supporting short and long term, cash forecasts, monthly management accounts plus numerous ad-hoc reports as requested.
Customers
The long-standing relationship with our customers is key in ensuring the long term, success of the company. Our success has been built on delivering exceptional customer service and a key factor in our business strategy is to maintain and improve our customer service. The directors ensure the business is in the best position to adapt quickly to a changing world whilst providing quality products and exceptional service thereby satisfying customer needs.
Suppliers
The company works closely with key suppliers to ensure the supply process is efficient as possible. Over 50% of clothing sold is sourced from UK-based suppliers and the majority of the balance is supplied by European factories, thereby reducing supply chain risk and transport costs.
Environment/Sustainability
The company is a responsible business and employer and acts to minimise the impact we have on the community and environment. Consequently, the board has an objective to ensure the company upholds the highest environmental requirements and adheres at all times to the updated legislative requirements in this regard. The company has also committed to the UK Government backed Race to Zero campaign.
Employees
The directors consider their employees to be the key resource of the business and are aware that future success and growth depend on having a workforce committed to delivering the quality service our customers have come to expect. Cotswold Collections ensure all staff training requirements are met and support a culture which encourages all staff to engage on all aspects of their employment.
Mr T Brown
Secretary
29 August 2023
COTSWOLD COLLECTIONS LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 29 JANUARY 2023
- 3 -
The directors present their annual report and financial statements for the period ended 29 January 2023.
Principal activities
The principal activity of the company continued to be that of retail trade.
Results and dividends
The results for the period are set out on page 7.
Ordinary dividends were paid amounting to £1,000,000. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
Ms K J Cheesman
Mr T Brown
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
By order of the board
Mr T Brown
Secretary
29 August 2023
COTSWOLD COLLECTIONS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF COTSWOLD COLLECTIONS LIMITED
- 4 -
Opinion
We have audited the financial statements of Cotswold Collections Limited (the 'company') for the period ended 29 January 2023 which comprise the statement of income and retained earnings, the balance sheet, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 29 January 2023 and of its 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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial 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.
COTSWOLD COLLECTIONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF COTSWOLD COLLECTIONS LIMITED
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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.
COTSWOLD COLLECTIONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF COTSWOLD COLLECTIONS LIMITED
- 6 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
Claire Clift (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
1 September 2023
Chartered Accountants
Statutory Auditor
Epsilon House
The Square
Gloucester Business Park
Gloucester
United Kingdom
GL3 4AD
COTSWOLD COLLECTIONS LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE PERIOD ENDED 29 JANUARY 2023
- 7 -
Period
Period
ended
ended
29 January
30 January
2023
2022
Notes
£
£
Turnover
3
10,196,392
11,497,250
Cost of sales
(3,942,428)
(4,382,087)
Gross profit
6,253,964
7,115,163
Distribution costs
(4,675,745)
(4,460,778)
Administrative expenses
(1,352,863)
(1,354,707)
Other operating income
10,628
Operating profit
4
225,356
1,310,306
Interest payable and similar expenses
7
(8,367)
Profit before taxation
216,989
1,310,306
Tax on profit
8
(32,865)
(260,571)
Profit for the financial period
184,124
1,049,735
Retained earnings brought forward
3,886,552
3,336,817
Dividends
9
(1,000,000)
(500,000)
Retained earnings carried forward
3,070,676
3,886,552
The profit and loss account has been prepared on the basis that all operations are continuing operations.
COTSWOLD COLLECTIONS LIMITED
BALANCE SHEET
AS AT
29 JANUARY 2023
29 January 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
95,793
140,175
Investments
12
1
1
95,794
140,176
Current assets
Stocks
14
2,085,248
1,918,144
Debtors
15
2,791,049
3,183,745
Cash at bank and in hand
421,550
735,270
5,297,847
5,837,159
Creditors: amounts falling due within one year
16
(1,923,808)
(1,691,626)
Net current assets
3,374,039
4,145,533
Total assets less current liabilities
3,469,833
4,285,709
Provisions for liabilities
Provisions
18
54,366
54,366
Deferred tax liability
19
12,247
12,247
(66,613)
(66,613)
Net assets
3,403,220
4,219,096
Capital and reserves
Called up share capital
21
300,000
300,000
Share premium account
22
16,295
16,295
Capital redemption reserve
23
16,249
16,249
Profit and loss reserves
24
3,070,676
3,886,552
Total equity
3,403,220
4,219,096
The financial statements were approved by the board of directors and authorised for issue on 29 August 2023 and are signed on its behalf by:
Mr T Brown
Director
Company Registration No. 02791895
COTSWOLD COLLECTIONS LIMITED
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 29 JANUARY 2023
- 9 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
30
297,107
1,334,890
Interest paid
(8,367)
Income taxes paid
(175,901)
(327,996)
Net cash inflow from operating activities
112,839
1,006,894
Investing activities
Purchase of tangible fixed assets
(18,878)
(57,067)
Net cash used in investing activities
(18,878)
(57,067)
Financing activities
Proceeds of new bank loans
250,000
Dividends paid
(1,000,000)
(500,000)
Amounts advanced to parent company
-
(467,647)
Amounts repaid by parent company
342,319
-
Net cash used in financing activities
(407,681)
(967,647)
Net decrease in cash and cash equivalents
(313,720)
(17,820)
Cash and cash equivalents at beginning of period
735,270
753,090
Cash and cash equivalents at end of period
421,550
735,270
COTSWOLD COLLECTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 JANUARY 2023
- 10 -
1
Accounting policies
Company information
Cotswold Collections Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 3, Centrum Park, Tewkesbury Road, Cheltenham, Gloucestershire, United Kingdom, GL51 9FD.
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.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
Cotswold Collections Limited is a wholly owned subsidiary of Cotswold Collections Group Limited and the results of Cotswold Collections Limited are included in the consolidated financial statements of Cotswold Collections Group Limited which are available from Unit 3, Centrum Park, Tewkesbury Road, Cheltenham, Gloucestershire, United Kingdom, GL51 9FD.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. Revenue is reduced for estimated customer returns, rebates and other similar allowances.
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.
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
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:
Patents & licences
25% on cost
COTSWOLD COLLECTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JANUARY 2023
1
Accounting policies
(Continued)
- 11 -
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and machinery
25% on cost
Fixtures and fittings
20% on cost
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
1.8
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
COTSWOLD COLLECTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JANUARY 2023
1
Accounting policies
(Continued)
- 12 -
1.9
Cash at bank and in hand
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
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
COTSWOLD COLLECTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JANUARY 2023
1
Accounting policies
(Continued)
- 13 -
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 company’s contractual obligations expire or are discharged or cancelled.
1.11
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.12
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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
COTSWOLD COLLECTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JANUARY 2023
1
Accounting policies
(Continued)
- 14 -
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 when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.13
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company 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
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.17
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.
COTSWOLD COLLECTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JANUARY 2023
1
Accounting policies
(Continued)
- 15 -
1.18
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover
2023
2022
£
£
Turnover analysed by geographical market
UK
9,430,894
10,981,596
Europe
61,049
66,021
Rest of World
704,449
449,633
10,196,392
11,497,250
4
Operating profit
2023
2022
Operating profit for the period is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
12,850
8,975
Depreciation of owned tangible fixed assets
63,260
65,845
Operating lease charges
121,929
118,537
5
Employees
The average monthly number of persons (including directors) employed by the company during the period was:
2023
2022
Number
Number
Total
38
40
COTSWOLD COLLECTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JANUARY 2023
5
Employees
(Continued)
- 16 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,032,575
1,076,857
Social security costs
105,742
101,819
Pension costs
27,487
28,468
1,165,804
1,207,144
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
232,522
207,729
Company pension contributions to defined contribution schemes
6,475
6,679
238,997
214,408
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
117,133
111,686
Company pension contributions to defined contribution schemes
3,312
3,366
7
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
8,238
Other interest
129
8,367
COTSWOLD COLLECTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JANUARY 2023
- 17 -
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
11,354
209,098
Adjustments in respect of prior periods
(8,363)
9,095
Group tax relief
29,874
42,378
Total current tax
32,865
260,571
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:
2023
2022
£
£
Profit before taxation
216,989
1,310,306
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
41,228
248,958
Adjustments in respect of prior years
(8,363)
9,095
Other adjustments including change in rate
2,518
Taxation charge for the period
32,865
260,571
Factors that may affect future tax charges
A rate of 25% (2022: 25%) was used for purposes of considering the effects of deferred taxation in the current period, as the increase in the main rate of UK Corporation Tax intended to take effect from 1 April 2023 had been substantively enacted at the Balance Sheet date.
9
Dividends
2023
2022
£
£
Interim paid
1,000,000
500,000
COTSWOLD COLLECTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JANUARY 2023
- 18 -
10
Intangible fixed assets
Patents & licences
£
Cost
At 31 January 2022 and 29 January 2023
1,395
Amortisation and impairment
At 31 January 2022 and 29 January 2023
1,395
Carrying amount
At 29 January 2023
At 30 January 2022
Intangible fixed assets have been pledged to secure borrowings of the company under a fixed and floating charge.
Intangible fixed assets are also pledged as security for bank and other loans of group companies by way of a cross guarantee under a fixed and floating charge.
11
Tangible fixed assets
Plant and machinery
Fixtures and fittings
Total
£
£
£
Cost
At 31 January 2022
380,067
157,314
537,381
Additions
18,878
18,878
Disposals
(7,575)
(7,575)
At 29 January 2023
391,370
157,314
548,684
Depreciation and impairment
At 31 January 2022
246,511
150,695
397,206
Depreciation charged in the period
60,913
2,347
63,260
Eliminated in respect of disposals
(7,575)
(7,575)
At 29 January 2023
299,849
153,042
452,891
Carrying amount
At 29 January 2023
91,521
4,272
95,793
At 30 January 2022
133,556
6,619
140,175
Tangible fixed assets have been pledged to secure borrowings of the company under a fixed and floating charge.
Tangible fixed assets are also pledged as security for bank and other loans of group companies by way of a cross guarantee under a fixed and floating charge.
COTSWOLD COLLECTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JANUARY 2023
- 19 -
12
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
13
1
1
Fixed asset investments have been pledged to secure borrowings of the company under a fixed and floating charge.
Fixed asset investments are also pledged as security for bank and other loans of group companies by way of a cross guarantee under a fixed and floating charge.
13
Subsidiaries
Details of the company's subsidiaries at 29 January 2023 are as follows:
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
2C Fashion Ltd
Unit 3, Centrum Park, Tewkesbury Road, Cheltenham, Gloucestershire, GL51 9FD
Dormant company
Ordinary
100.00
14
Stocks
2023
2022
£
£
Finished goods and goods for resale
2,085,248
1,918,144
Stocks have been pledged to secure borrowings of the company under a fixed and floating charge.
Stocks are also pledged as security for bank and other loans of group companies by way of a cross guarantee under a fixed and floating charge.
A stock provision of £129,110 (2022: £110,272) is included in the above stock figure.
15
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
38
Corporation tax recoverable
30,886
Amounts owed by group undertakings
2,636,455
3,008,648
Other debtors
48,225
66,437
Prepayments and accrued income
75,483
108,622
2,791,049
3,183,745
COTSWOLD COLLECTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JANUARY 2023
15
Debtors
(Continued)
- 20 -
All debtor balances have been pledged to secure borrowings of the company under a fixed and floating charge.
All debtor balances are also pledged as security for bank and other loans of group companies by way of a cross guarantee under a fixed and floating charge.
Amounts owed by group undertakings are unsecured, interest free and have no fixed date of repayment and are repayable on demand.
16
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
17
250,000
Trade creditors
1,255,886
1,013,688
Corporation tax
112,150
Other taxation and social security
214,323
359,339
Other creditors
68,006
70,538
Accruals and deferred income
135,593
135,911
1,923,808
1,691,626
17
Loans and overdrafts
2023
2022
£
£
Bank loans
250,000
Payable within one year
250,000
The company has granted a fixed and floating charge on its assets to secure the above creditors.
The above creditors are also secured by a cross guarantee giving a fixed and floating charge over the assets of other group companies.
18
Provisions for liabilities
2023
2022
£
£
Returns provision
54,366
54,366
COTSWOLD COLLECTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JANUARY 2023
18
Provisions for liabilities
(Continued)
- 21 -
Movements on provisions:
Returns provision
£
At 30 January 2022 and 29 January 2023
54,366
19
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
12,247
12,247
There were no deferred tax movements in the period.
20
Retirement contribution schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
27,487
28,468
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each
300,000
300,000
300,000
300,000
Called-up share capital represents the nominal value of shares that have been issued.
Each holder of an Ordinary Share shall have one vote for each Ordinary share of which he is the holder.
There are no restrictions on the repayment of capital.
22
Share premium account
Share premium represents the excess over the par value paid for the share capital of the company.
COTSWOLD COLLECTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JANUARY 2023
- 22 -
23
Capital redemption reserve
The capital redemption reserve includes amounts transferred following the purchase of own shares.
24
Profit and loss reserves
Profit and loss reserves include all current and prior period retained profits and losses.
25
Financial commitments, guarantees and contingent liabilities
There were no contingent liabilities as at 29 January 2023 (2022: £Nil).
As at 29 January 2023, the company was subject to cross guarantees on facilities provided to its parent company. The maximum amount due at this date by the company in respect of these guarantees was £1,175,000 (2022: £1,675,000).
26
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
65,972
103,246
Between two and five years
483,514
333
549,486
103,579
27
Capital commitments
As at 29 January 2023, there were capital commitments of £Nil (2022: £Nil).
28
Related party transactions
The company has taken advantage of exemption, under the term 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.
29
Ultimate controlling party
The ultimate parent company of the only group of which the company is a member is Cotswold Collections Group Limited, a company incorporated and registered in England and Wales, with its registered office of Unit 3, Centrum Park, Tewkesbury Road, Cheltenham, Gloucestershire, GL51 9FD. The financial statements for Cotswold Collections Group Limited consolidate the results of the company and are publicly available.
COTSWOLD COLLECTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 29 JANUARY 2023
- 23 -
30
Cash generated from operations
2023
2022
£
£
Profit for the period after tax
184,124
1,049,735
Adjustments for:
Taxation charged
32,865
260,571
Finance costs
8,367
Depreciation and impairment of tangible fixed assets
63,260
65,845
Increase in provisions
9,366
Movements in working capital:
Increase in stocks
(167,104)
(361,031)
Decrease in debtors
81,263
41,088
Increase in creditors
94,332
269,316
Cash generated from operations
297,107
1,334,890
31
Analysis of changes in net funds
31 January 2022
Cash flows
29 January 2023
£
£
£
Cash at bank and in hand
735,270
(313,720)
421,550
Borrowings excluding overdrafts
-
(250,000)
(250,000)
735,270
(563,720)
171,550
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