Company registration number 1603882 (England and Wales)
PREMIER TEXTILES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
PREMIER TEXTILES LIMITED
COMPANY INFORMATION
Directors
Mr A A Kallumpram
Mrs A E Kallumpram
Mr N Smith
Mr I J E Kallumpram
Mr A M E Kallumpram
Secretary
Mrs A E Kallumpram
Company number
1603882
Registered office
Green Lane Industrial Estate
Green Lane
Stockport
Cheshire
SK4 2JR
Auditors
Josolyne LLP
Merchant Exchange
Waters Green
Macclesfield
Cheshire
SK11 6JX
Business address
Green Lane Industrial Estate
Green Lane
Stockport
Cheshire
SK4 2JR
PREMIER TEXTILES LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Statement of financial position
8
Statement of changes in equity
9
Notes to the financial statements
10 - 21
PREMIER TEXTILES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 1 -
The directors present the strategic report for the year ended 30 June 2023.
Fair review of the business
The last financial year was a challenging year. The impact of the war in Ukraine with increased energy prices, inflation and cost of living crisis led to a reduction in demand and less business activity. Despite this, we have been able to maintain steady sales. We have benefited from the recent warehouse acquisition in 2019 with cost savings and an improved flexible service to our customers.
We have also reorganised our business so that we work on 2 key areas - the 1st is supply to UK Textile Manufacturing companies and the 2nd is supply of fabrics to the UK and Global Digital print market.
The future of the business is to focus on bespoke textile products with new and existing customers. We are working with customers and suppliers alike as partners, and have reorganised our team to develop the specialist skills to support our key customers. We plan to invest more resources into development of our team in the forthcoming year. We have also spent considerable time with our suppliers so that we are more aligned and this will continue.
We are also working hard on reducing general stockholding and aged stock.
We look forward positively as we adjust, adapt and build for the new market conditions In UK, USA and Europe.
Principal risks and uncertainties
Due to the nature of the business, the company is exposed to the following risks which are managed by regular reviewing of management information, together with day to day involvement of the Directors.
Foreign currency risk
The company has a significant level of foreign imports but it has limited its exposure to foreign currency risk by using forward contracts.
Credit Risk
The company is at risk from its customers defaulting in making payments for goods that have been supplied to them, however they reduce this risk by using credit insurance where possible.
Key performance indicators
The directors consider the Key Performance indicators are as follows;
2023 2022
Turnover - £’s £12,466,318 £14,522,288
Gross Margin - £’s £2,333,619 £2,959,128
Gross Profit - % 19% 20%
Pre-tax Profit - £’s £553,835 £1,132,230
Net worth of company £12.6m £12.3m
Average employees 27 26
Mr A A Kallumpram
Director
29 November 2023
PREMIER TEXTILES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 2 -
The directors present their report and the audited financial statements for the year ended 30 June 2023.
Principal activities
The principal activity of the company continued to be that of the wholesale of textiles and related products.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr A A Kallumpram
Mrs A E Kallumpram
Mr N Smith
Mr I J E Kallumpram
Mr A M E Kallumpram
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £60,000. The directors do not recommend payment of a final dividend.
Auditors
The auditors have expressed their willingness to continue in office and will be deemed to be reappointed under section 487 of The Companies Act 2006.
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 auditors
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 auditors are 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 auditors are aware of that information.
PREMIER TEXTILES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 3 -
On behalf of the board
Mr A A Kallumpram
Director
29 November 2023
PREMIER TEXTILES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PREMIER TEXTILES LIMITED
- 4 -
Qualified opinion on financial statements.
We have audited the financial statements of Premier Textiles Limited (the 'company') for the year ended 30 June 2023 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity 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, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements:
give a true and fair view of the state of the company's affairs as at 30 June 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for qualified opinion
The evidence available to us was limited because we were re-appointed as auditors during the year and we have been unable to carry out auditing procedures necessary to obtain adequate assurance regarding the opening balances and comparative figures because the financial statements for the year ended 30 June 2022 were unaudited. Any adjustments to the opening balances would have a consequential effect on the profit for the year.
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.
PREMIER TEXTILES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF PREMIER TEXTILES LIMITED
- 5 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In respect solely of the limitation on our work relating to opening balances:
we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and
we were unable to determine whether adequate accounting records had been maintained.
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We obtained an understanding of the legal and regulatory frameworks that are applicable to the entity and its industry, and determined that the most significant are those that relate to breaches of health and safety regulations, data protection, employment laws and tax legislation. We also considered those laws and regulations that have a direct effect on the financial statements such as FRS102 accounting principles and the Companies Act 2006. We have considered the extent to which non-compliance might have a material effect on the financial statements and also evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements.
PREMIER TEXTILES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF PREMIER TEXTILES LIMITED
- 6 -
We established that the principal risks related to revenue recognition, management bias in accounting estimates and management override. Audit procedures performed included:
Reviewed deliveries and sales around the year end to ensure that revenue and costs had been recorded in the correct period
Designed our audit procedures in order to incorporate unpredictability around the nature, timing or extent of our testing.
Identifying and testing journal entries to consider the appropriateness of journal entries and other adjustments;
Assessed whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluated the business rationale of significant transactions that are unusual or outside the normal course of business.
Challenging assumptions made by management in making their significant accounting estimates
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
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.
Other matters which we are required to address
Comparative information in the financial statements is derived from the company's prior period financial statements which were not audited as the company was eligible for exemption.
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.
Matthew Pace ACA
Senior Statutory Auditor
For and on behalf of Josolyne LLP
29 November 2023
Chartered Accountants
Statutory Auditor
Merchant Exchange
Waters Green
Macclesfield
Cheshire
SK11 6JX
PREMIER TEXTILES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
- 7 -
2023
2022
Notes
£
£
Revenue
2
12,466,318
14,522,288
Cost of sales
(10,132,699)
(11,563,160)
Gross profit
2,333,619
2,959,128
Administrative expenses
(1,904,178)
(1,884,911)
Other operating income
140,482
71,809
Operating profit
3
569,923
1,146,026
Investment income
6
9,155
312
Finance costs
7
(25,243)
(14,108)
Profit before taxation
553,835
1,132,230
Tax on profit
8
(170,735)
(201,262)
Profit for the financial year
383,100
930,968
The income statement has been prepared on the basis that all operations are continuing operations.
PREMIER TEXTILES LIMITED
STATEMENT OF FINANCIAL POSITION
- 8 -
2023
2022
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
10
4,483,901
4,491,975
Current assets
Inventories
12
3,253,318
4,765,858
Trade and other receivables
13
3,727,003
4,358,862
Cash and cash equivalents
2,471,669
1,555,861
9,451,990
10,680,581
Current liabilities
14
(1,007,886)
(2,044,202)
Net current assets
8,444,104
8,636,379
Total assets less current liabilities
12,928,005
13,128,354
Non-current liabilities
15
(38,290)
(642,269)
Provisions for liabilities
Deferred tax liability
18
246,585
166,055
(246,585)
(166,055)
Net assets
12,643,130
12,320,030
Equity
Called up share capital
20
710,000
710,000
Capital redemption reserve
290,003
290,003
Retained earnings
11,643,127
11,320,027
Total equity
12,643,130
12,320,030
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true
The financial statements were approved by the board of directors and authorised for issue on 29 November 2023 and are signed on its behalf by:
Mr A A Kallumpram
Director
Company registration number 1603882 (England and Wales)
PREMIER TEXTILES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
- 9 -
Share capital
Capital redemption reserve
Retained earnings
Total
Notes
£
£
£
£
Balance at 1 July 2021
710,000
290,003
10,449,059
11,449,062
Year ended 30 June 2022:
Profit and total comprehensive income
-
-
930,968
930,968
Dividends
9
-
-
(60,000)
(60,000)
Balance at 30 June 2022
710,000
290,003
11,320,027
12,320,030
Year ended 30 June 2023:
Profit and total comprehensive income
-
-
383,100
383,100
Dividends
9
-
-
(60,000)
(60,000)
Balance at 30 June 2023
710,000
290,003
11,643,127
12,643,130
PREMIER TEXTILES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
- 10 -
1
Accounting policies
Company information
Premier Textiles Limited is a private company limited by shares incorporated in England and Wales. The registered office is Green Lane Industrial Estate, Green Lane, Stockport, Cheshire, SK4 2JR.
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, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Revenue
Revenue is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
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
Property, plant and equipment
Property, plant and equipment 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:
Land and buildings Freehold
2% straight line
Tenants improvements
2% straight line
Plant and machinery
15% straight line
Fixtures, fittings & equipment
15 - 25% straight line
Computer equipment
100% straight line
Motor vehicles
25 - 50% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
PREMIER TEXTILES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 11 -
1.5
Impairment of non-current assets
At each reporting end date, the company reviews the carrying amounts of its tangible 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). Recoverable amount is the higher of fair value less costs to sell and value in use.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried in at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Inventories
Inventories 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 inventories to their present location and condition.
Stock is computed on a first in first out basis.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of inventories 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.
1.7
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.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
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.
PREMIER TEXTILES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 12 -
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.
Basic financial liabilities
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.
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.
1.9
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
PREMIER TEXTILES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 13 -
Deferred tax
Deferred tax is provided in full on all timing differences that have originated but not reversed at the balance sheet date.
1.11
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 non-current 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.
1.12
Retirement benefits
The company operates a defined contribution scheme for the benefit of its employees. The assets of the scheme are held separately from those of the company. The annual contributions payable are charged to the profit and loss account.
1.13
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
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.
1.14
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
Revenue
An analysis of the company's revenue is as follows:
2023
2022
£
£
Revenue analysed by class of business
Sale of fabrics
12,466,318
14,522,288
PREMIER TEXTILES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
2
Revenue
(Continued)
- 14 -
2023
2022
£
£
Revenue analysed by geographical market
United Kingdom
10,308,504
12,268,483
Overseas
2,157,814
2,253,805
12,466,318
14,522,288
2023
2022
£
£
Other revenue
Interest income
9,155
312
3
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(26,015)
(42,044)
Fees payable to the company's auditors for the audit of the company's financial statements
10,000
Depreciation of owned property, plant and equipment
204,444
181,311
Depreciation of property, plant and equipment held under finance leases
6,532
25,083
Profit on disposal of property, plant and equipment
(10,185)
(34,245)
Impairment of inventories recognised or reversed
423,312
141,583
Operating lease charges
75,588
63,365
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Sales and marketing
8
7
Office and management
13
12
Warehouse
6
7
Total
27
26
PREMIER TEXTILES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
4
Employees
(Continued)
- 15 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,034,804
986,032
Social security costs
123,149
116,778
Pension costs
65,063
49,007
1,223,016
1,151,817
5
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
381,776
414,972
Company pension contributions to defined contribution schemes
12,040
11,807
393,816
426,779
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
150,912
170,306
6
Investment income
2023
2022
£
£
Interest income
Interest on bank deposits
9,095
231
Other interest income
60
81
Total income
9,155
312
7
Finance costs
2023
2022
£
£
Interest on bank overdrafts and loans
22,262
11,196
Interest on finance leases and hire purchase contracts
2,981
2,912
25,243
14,108
PREMIER TEXTILES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 16 -
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
90,205
178,626
Deferred tax
Origination and reversal of timing differences
80,530
22,636
Total tax charge
170,735
201,262
As part of the budget on 3 March 2021, the government announced that the main rate of corporation tax increased from 19% to 25% with effect from 1st April 2023. The change in tax rate was substantively enacted on 24 May 2021. Taxes have therefore been calculated at 25%, pro-rata for accounting periods spanning 1st April 2023.
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
553,835
1,132,230
Expected tax charge based on the standard rate of corporation tax in the UK of 20.50% (2022: 19.00%)
113,536
215,124
Tax effect of expenses that are not deductible in determining taxable profit
9,632
Depreciation on assets not qualifying for tax allowances
7,882
7,613
Change in corporation tax rate
57,921
Utilisation of brought forward NTLR deficits
(15,945)
(12,098)
Enhanced capital allowances
(2,291)
(9,377)
Taxation charge for the year
170,735
201,262
9
Dividends
2023
2022
£
£
Interim paid
60,000
60,000
PREMIER TEXTILES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 17 -
10
Property, plant and equipment
Land and buildings Freehold
Leasehold improvements
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 July 2022
4,414,296
256,307
237,325
305,383
415,774
5,629,085
Additions
5,345
48,735
164,819
218,899
Disposals
(53,631)
(50,140)
(103,771)
At 30 June 2023
4,414,296
256,307
189,039
354,118
530,453
5,744,213
Depreciation
At 1 July 2022
556,328
64,666
135,257
184,701
196,158
1,137,110
Depreciation charged in the year
88,276
7,258
27,819
34,891
52,732
210,976
Eliminated in respect of disposals
(53,631)
(34,143)
(87,774)
At 30 June 2023
644,604
71,924
109,445
219,592
214,747
1,260,312
Carrying amount
At 30 June 2023
3,769,692
184,383
79,594
134,526
315,706
4,483,901
At 30 June 2022
3,857,968
191,641
102,068
120,682
219,616
4,491,975
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Motor vehicles
49,458
93,472
Depreciation charge for the year in respect of leased assets
6,532
25,083
11
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Instruments measured at fair value through profit or loss
2,849
590
Hedging arrangements
The company committed to purchase USD$192,975 at a rate of 1.2865. Due to movements in the exchange rate between the commitment date and 30th June 2023, in order to buy the same amount it would cost £2,849 more, therefore a profit on forward contracts has been recognised.
The company takes out forward contracts in order to hedge against the risk of foreign exchange movement.
PREMIER TEXTILES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 18 -
12
Inventories
2023
2022
£
£
Finished goods and goods for resale
3,253,318
4,765,858
13
Trade and other receivables
2023
2022
Amounts falling due within one year:
£
£
Trade receivables
3,476,380
4,245,334
Amounts owed by group undertakings
960
960
Derivative financial instruments
2,849
590
Other receivables
124,477
17,305
Prepayments and accrued income
122,337
94,673
3,727,003
4,358,862
14
Current liabilities
2023
2022
Notes
£
£
Bank loans
16
45,501
Obligations under finance leases
17
2,090
94,375
Trade payables
368,297
1,144,761
Corporation tax
90,205
178,626
Other taxation and social security
238,361
197,951
Other payables
5,513
65,513
Accruals and deferred income
303,420
317,475
1,007,886
2,044,202
15
Non-current liabilities
2023
2022
Notes
£
£
Bank loans and overdrafts
16
642,269
Obligations under finance leases *
17
38,290
38,290
642,269
* The obligations under finance leases are secured against the asset to which the finance relates.
PREMIER TEXTILES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 19 -
16
Borrowings
2023
2022
£
£
Bank loans
687,770
Payable within one year
45,501
Payable after one year
642,269
17
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
40,380
94,375
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
18
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
246,585
166,055
2023
Movements in the year:
£
Liability at 1 July 2022
166,055
Charge to profit or loss
80,530
Liability at 30 June 2023
246,585
PREMIER TEXTILES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 20 -
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
65,063
49,007
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
20
Share capital
2023
2022
£
£
Ordinary share capital
Issued and fully paid
219,000 A Ordinary Shares of £1 each
219,000
219,000
219,000 B Ordinary Shares of £1 each
219,000
219,000
36,000 C Ordinary Shares of £1 each
36,000
36,000
36,000 D Ordinary Shares of £1 each
36,000
36,000
100,000 E Ordinary Shares of £1 each
100,000
100,000
100,000 F Ordinary Shares of £1 each
100,000
100,000
710,000
710,000
Each class of share ranks pari passu, carrying voting rights and are entitled to distribution, including on winding up.
21
Operating lease commitments
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
129,437
53,143
Between two and five years
306,095
210,572
In over five years
4,387
57,030
439,919
320,745
PREMIER TEXTILES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 21 -
22
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sales
Sales
2023
2022
£
£
Bancroft Soft Furnishings Limited - Company under control of A Kallumpram
114,161
189,847
PremEx Solutions Inc - Entity established in USA under control of A Kallumpram
783,707
-
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due from related parties
£
£
Bancroft Soft Furnishings Limited - Company under control of A Kallumpram
1,270,755
1,294,589
Premier Digital Textiles Limited - Company under common control - loan
960
960
PremEx Solutions Inc - Entity established in USA under control of A Kallumpram - loan
104,957
-
PremEx Solutions Inc - Entity established in USA under control of A Kallumpram
441,177
-
Other information
All above outstanding amounts are repayable on demand and there is no interest rate applicable.
No Guarantees have been given or received.
23
Ultimate controlling party
The ultimate controlling party is Premier Textiles Holdings Limited, a company with registered office Green Lane Industrial Estate, Green Lane, Stockport, Greater Manchester, England, SK4 2JR. Copies of the consolidated accounts can be obtained from the registered office.
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