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Registered number: 12075176









VARLEY INTERNATIONAL HOLDINGS LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 JULY 2023

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 
 
COMPANY INFORMATION


Directors
Dalbir Bains (resigned 24 February 2023)
Benjamin Mead 
Lara Mead 
Lise Kaae 
Ronald Dennis 




Registered number
12075176



Registered office
101 New Cavendish Street
1st Floor South

London

W1W 6XH




Independent auditors
Harris & Trotter LLP
Chartered Accountants & Business Advisers

101 New Cavendish Street

1st Floor South

London

W1W 6XH





 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 

CONTENTS



Page
Group Strategic Report
1 - 2
Directors' Report
3 - 4
Independent Auditors' Report
5 - 8
Consolidated Statement of Comprehensive Income
9
Consolidated Statement of Financial Position
10 - 11
Company Statement of Financial Position
12 - 13
Consolidated Statement of Changes in Equity
14
Company Statement of Changes in Equity
15
Consolidated Statement of Cash Flows
16 - 17
Consolidated Analysis of Net Debt
18
Notes to the Financial Statements
19 - 33


 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 
 
GROUP STRATEGIC REPORT
FOR THE PERIOD ENDED 31 JULY 2023

Introduction
 
The principal activity of the Group is the design and sale of Varley branded womenswear and accessories, which iis sold through wholesale partners and its own website.
The Directors have shortened the current accounting period to 10 months ending 31 July 2023 to align the year-end of the Group with one of its shareholders.

Business review
 
Turnover for the 10 months to 31 July 2023 was $29.1m compared to $24.2m in the 12 months to 30 September 2022. The growth in turnover was attributable to the Group’s E-Commerce channel through an increased investment in marketing and brand awareness.
The Group continued to invest in employees and systems generating an operating profit for the period of $1.7m compared to a loss of $1.1m in the previous financial year.

Principal risks and uncertainties
 
Brand Risk
The Group faces ongoing risk connected with the exposure of and need to protect the Varley brand intellectual property rights, by monitoring and managing infringement and counterfeit activity, improving security systems and being clear with our partners about permissions and use of the Varley brand. The Group continues to manage this by investing in personnel and resources to monitor and manage this exposure.
Liquidity Risk
Effective cash management is crucial to ensure the Group's capacity to meet its continuous obligations to suppliers and employees. The Group manages liquidity risk by regularly forecasting future cashflows and working capital. 
Internal Risk
An internal risk arises from the fact that the business is continuing to expand, which applies pressure on processes and procedures, as well as key resources such as personnel and infrastructure. The Group’s success will hinge on its capacity to effectively oversee and promptly react to these pressure points. The Group has strategically invested in various aspects of the business, including personnel, systems, and resources, and will continue to do so, alongside consistently evaluating the ongoing impact on operations. 
Supply Chain Risk
Effective management of the supply chain from procurement to the distribution centres is crucial for achieving business growth. The Group must work to be agile enough to manage disruptions in product availability and/or demand within the business as well as global delivery to customers, always maintaining product quality/regulatory expectations and holding our supply chain to the standards imposed by our supplier code of conduct connected with being a responsible clothing brand. The company consistently evaluates its suppliers to confirm their ability to handle higher volumes and maintain the standards we expect.
Credit Risk
The Group faces credit risk exposure due to its trade debtors (whether as part of usual trading activity, change of control and/or insolvency). To mitigate this risk, the aging of debtors is closely monitored, and terms are regularly reassessed. Additionally, numerous wholesale customers adhere to prepayment terms or credit insurance is obtained. The Group continues to review the onboarding process and contractual arrangements with trade debtors to assist in managing this exposure.

Page 1

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 JULY 2023

Financial key performance indicators
 
The Directors consider turnover, gross profit margin, and operating profit key measures to assess the performance of the Group. Performance indicators are reviewed monthly and compared with budgets and comparatives in prior years. 


This report was approved by the board and signed on its behalf.



Benjamin Mead
Director

Date: 30 July 2024

Page 2

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 JULY 2023

The directors present their report and the financial statements for the period ended 31 July 2023.

Directors

The directors who served during the period were:

Dalbir Bains (resigned 24 February 2023)
Benjamin Mead 
Lara Mead 
Lise Kaae 
Ronald Dennis 

Directors' responsibilities statement

The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Group's financial statements and then apply them consistently;

make judgments 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 Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The profit for the period, after taxation, amounted to $771,160 (2022 - loss $1,317,622).

It is important to note that the accounting year end date has changed in the current year and hence the comparatives are not entirely comparable. The current period is a 10 month period. Whilst the prior year column is a 15 month period. The group has decided to change the year end date in order to align all entities, which allows for performance to be easily compared across the Group. July has been chosen as it coincides with low season and hence provides a more accurate financial position by avoiding a period of high activity.
In addition to the above change, the Group has also decided to change the presentational currency of the statements to US Dollars.

Page 3

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 JULY 2023

Future developments

The Management team launched the Group’s expansion into retail with the opening of a flagship store in Chelsea, London in August 2023 and a second store in Marylebone, London in February 2024. The retail channel generates growth in revenue, new customer acquisition, and increased brand awareness. The Management team are optimistic about further new store opportunities in key locations in the United States, including a flagship location in New York City. 

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Group since the year end.

Auditors

The auditorsHarris & Trotter LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 





Benjamin Mead
Director

Date: 30 July 2024

Page 4

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF VARLEY INTERNATIONAL HOLDINGS LIMITED
 

Opinion


We have audited the financial statements of Varley International Holdings Limited (the 'parent Company') and its subsidiaries (the 'Group') for the period ended 31 July 2023, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 July 2023 and of the Group's profit for the period then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


Conclusions relating to going concern


In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.


Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.


Page 5

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF VARLEY INTERNATIONAL HOLDINGS LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.


Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the Group 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 Group 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 the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.


We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Page 6

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF VARLEY INTERNATIONAL HOLDINGS LIMITED (CONTINUED)


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 3, 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 Group's and the parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Auditors' 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 Auditors' 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 Group financial statements.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

The objectives of our audit are to identify and assess the risks of material misstatement of the financial
statements due to fraud or error; to obtain sufficient appropriate audit evidence regarding the assessed risks of
material misstatement due to fraud or error; and to respond appropriately to those risks. Owing to the inherent
limitations of an audit, there is an unavoidable risk that material misstatements in the financial statements may
not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK).
.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and noncompliance with laws and regulations, our procedures included the following:
• We obtained an understanding of the legal and regulatory frameworks applicable to the Group and the industry
in which it operates. We determined that the following laws and regulations were most significant: FRS 102 and
the Companies Act 2006.
• We obtained an understanding of how the Group is complying with those legal and regulatory frameworks by
making enquiries of management.
• We challenged assumptions and judgments made by management in its significant accounting estimates.
We did not identify any key audit matters relating to irregularities, including fraud.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.


Page 7

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF VARLEY INTERNATIONAL HOLDINGS LIMITED (CONTINUED)


Other matters 
 

As this year is the first time that the company has required an audit, the corresponding figures and comparative financial statements are unaudited.


Use of our report
 

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our 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 Auditors' 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.





Daniel Walters (Senior Statutory Auditor)
  
for and on behalf of
Harris & Trotter LLP
 
Chartered Accountants & Business Advisers
  
101 New Cavendish Street
1st Floor South
London
W1W 6XH

30 July 2024
Page 8

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 JULY 2023

period ended
31 July
period ended
30 September
2023
2022
Note
$
$

  

Turnover
 3 
29,134,499
24,220,439

Cost of sales
  
(10,609,818)
(10,782,788)

Gross profit
  
18,524,681
13,437,651

Distribution costs
  
(8,903,376)
(6,861,796)

Administrative expenses
  
(7,907,454)
(7,677,975)

Operating profit/(loss)
  
1,713,851
(1,102,120)

Interest receivable and similar income
 7 
168,279
54,607

Interest payable and similar expenses
 8 
(450,845)
(211,601)

Profit/(loss) before taxation
  
1,431,285
(1,259,114)

Tax on profit/(loss)
  
(660,125)
(58,508)

Profit/(loss) for the financial period
  
771,160
(1,317,622)

Profit/(loss) for the period attributable to:
  

Owners of the parent Company
  
771,160
(1,317,622)

  
771,160
(1,317,622)

There were no recognised gains and losses for 2023 or 2022 other than those included in the consolidated statement of comprehensive income.

There was no other comprehensive income for 2023 (2022:$NIL).

The notes on pages 19 to 33 form part of these financial statements.

Page 9

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
REGISTERED NUMBER: 12075176

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 JULY 2023

31 July
30 September
2023
2022
Note
$
$

Fixed assets
  

Tangible assets
 9 
315,639
146,552

Assets under construction
 11 
794,623
-

  
1,110,262
146,552

Current assets
  

Stocks
 12 
10,188,581
5,734,947

Debtors: amounts falling due within one year
 13 
4,181,199
2,580,073

Cash at bank and in hand
 14 
207,524
349,442

  
14,577,304
8,664,462

Creditors: amounts falling due within one year
 15 
(12,283,903)
(6,303,747)

Net current assets
  
 
 
2,293,401
 
 
2,360,715

Total assets less current liabilities
  
3,403,663
2,507,267

Creditors: amounts falling due after more than one year
 16 
(25,604)
(30,902)

Provisions for liabilities
  

Net assets
  
3,378,059
2,476,365


Capital and reserves
  

Called up share capital 
 18 
33
33

Share premium account
 19 
5,151,263
5,151,263

Foreign exchange reserve
 19 
(90,260)
(220,794)

Profit and loss account
 19 
(1,682,977)
(2,454,137)

Equity attributable to owners of the parent Company
  
3,378,059
2,476,365

  
3,378,059
2,476,365


Page 10

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
REGISTERED NUMBER: 12075176
    
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 JULY 2023

The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 

Benjamin Mead
Director

Date: 30 July 2024

The notes on pages 19 to 33 form part of these financial statements.

Page 11

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
REGISTERED NUMBER: 12075176

COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 JULY 2023

31 July
30 September
2023
2022
Note
$
$

Fixed assets
  

Investments
 10 
23
23

  
23
23

Current assets
  

Debtors: amounts falling due within one year
 13 
10,748,236
7,787,219

  
10,748,236
7,787,219

Creditors: amounts falling due within one year
 15 
(5,842,476)
(3,639,710)

Net current assets
  
 
 
4,905,760
 
 
4,147,509

Total assets less current liabilities
  
4,905,783
4,147,532

  

  

Net assets excluding pension asset
  
4,905,783
4,147,532

Net assets
  
4,905,783
4,147,532


Capital and reserves
  

Called up share capital 
 18 
33
33

Share premium account
 19 
5,151,263
5,151,263

Foreign exchange reserve
 19 
(29,687)
(758,486)

Profit and loss account
  
(215,826)
(245,278)

  
4,905,783
4,147,532


Page 12

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
REGISTERED NUMBER: 12075176
    
COMPANY STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 JULY 2023

The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 

Benjamin Mead
Director

Date: 30 July 2024

The notes on pages 19 to 33 form part of these financial statements.

Page 13

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 JULY 2023


Called up share capital
Share premium account
Foreign exchange reserve
Profit and loss account
Total equity

$
$
$
$
$


At 1 October 2021
33
5,151,263
-
(1,136,515)
4,014,781



Loss for the year
-
-
-
(1,317,622)
(1,317,622)

Foreign exchange gains/losses
-
-
(220,794)
-
(220,794)



At 1 October 2022
33
5,151,263
(220,794)
(2,454,137)
2,476,365



Profit for the period
-
-
-
771,160
771,160

Foreign exchange gains/losses
-
-
130,534
-
130,534


At 31 July 2023
33
5,151,263
(90,260)
(1,682,977)
3,378,059


The notes on pages 19 to 33 form part of these financial statements.

Page 14

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 JULY 2023


Called up share capital
Share premium account
Foreign exchange reserve
Profit and loss account
Total equity

$
$
$
$
$


At 1 October 2021
33
5,151,263
-
(110,124)
5,041,172



Loss for the year
-
-
-
(135,154)
(135,154)

Foreign exchange gains/losses
-
-
(758,486)
-
(758,486)



At 1 October 2022
33
5,151,263
(758,486)
(245,278)
4,147,532



Profit for the period
-
-
-
29,452
29,452

Foreign exchange gains/losses
-
-
728,799
-
728,799


At 31 July 2023
33
5,151,263
(29,687)
(215,826)
4,905,783


The notes on pages 19 to 33 form part of these financial statements.

Page 15

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 JULY 2023

period ended
31 July
period ended
30 September
2023
2022
$
$

Cash flows from operating activities

Profit/(loss) for the financial period
771,160
(1,317,622)

Adjustments for:

Depreciation of tangible assets
181,202
61,298

Loss on disposal of tangible assets
(73)
1,089

Interest paid
450,845
211,601

Interest received
(168,279)
(54,607)

Taxation charge
660,125
58,508

(Increase) in stocks
(4,453,634)
(1,921,079)

(Increase) in debtors
(1,601,126)
(190,620)

Increase in creditors
3,191,457
1,258,870

Corporation tax received/(paid)
-
(225,299)

Net cash generated from operating activities

(968,323)
(2,117,861)


Cash flows from investing activities

Purchase of tangible fixed assets
(160,764)
(212,607)

Sale of tangible fixed assets
55,612
194

Purchase of assets under construction
(794,623)
-

Interest received
168,279
54,607

Net cash from investing activities

(731,496)
(157,806)
Page 16

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE PERIOD ENDED 31 JULY 2023

period ended
31 July
period ended
30 September

2023
2022

$
$



Cash flows from financing activities

Repayment of loans
(3,154)
(22,613)

Other new loans
2,000,000
2,338,097

Interest paid
(450,845)
(211,601)

Net cash used in financing activities
1,546,001
2,103,883

Net (decrease) in cash and cash equivalents
(153,818)
(171,784)

Cash and cash equivalents at beginning of period
339,542
511,326

Cash and cash equivalents at the end of period
185,724
339,542


Cash and cash equivalents at the end of period comprise:

Cash at bank and in hand
207,524
349,442

Bank overdrafts
(21,800)
(9,900)

185,724
339,542


The notes on pages 19 to 33 form part of these financial statements.

Page 17

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 

CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE PERIOD ENDED 31 JULY 2023




At 1 October 2022
Cash flows
At 31 July 2023
$

$

$

Cash at bank and in hand

349,442

(141,918)

207,524

Bank overdrafts

(9,900)

(11,900)

(21,800)

Debt due after 1 year

(30,902)

5,298

(25,604)

Debt due within 1 year

(4,721,981)

(790,883)

(5,512,864)


(4,413,341)
(939,403)
(5,352,744)

The notes on pages 19 to 33 form part of these financial statements.

Page 18

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 JULY 2023

1.


General information

Varley International Holdings Limited is a private company limited by shares and incorporated in England and Wales (registered number 12075176). The registered office is 101 New Cavendish Street, 1st Floor South, London, W1W 6XH.
The principal activity of the group is the manufacturing and sale of womens clothing.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies.

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
In accordance with the transitional exemption available in FRS 102, the Group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being .

Page 19

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 JULY 2023

2.Accounting policies (continued)

 
2.3

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is USD.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

On consolidation, the results of overseas operations are translated into Dollars at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

Page 20

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 JULY 2023

2.Accounting policies (continued)

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Group has transferred the significant risks and rewards of ownership to the buyer;
the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

 
2.5

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

 
2.6

Interest income

Interest income is recognised in profit or loss using the effective interest method.

Page 21

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 JULY 2023

2.Accounting policies (continued)

 
2.7

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.8

Borrowing costs

All borrowing costs are recognised in profit or loss in the period in which they are incurred.

 
2.9

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds.

 
2.10

Taxation

Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company and the Group operate and generate income.

 
2.11

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Page 22

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 JULY 2023

2.Accounting policies (continued)


2.11
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Long-term leasehold property
-
20%
straight line
Fixtures and fittings
-
25%
straight line
Office equipment
-
25%
straight line
Computer equipment
-
33%
straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.12

Investment property

Investment property is carried at fair value determined annually by external valuers and derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset. No depreciation is provided. Changes in fair value are recognised in profit or loss.

 
2.13

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.14

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted average basis. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.15

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Page 23

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 JULY 2023

2.Accounting policies (continued)

 
2.16

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

 
2.17

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.


3.


Turnover

period ended
31 July
period ended
30 September
2023
2022
$
$

Turnover
29,134,499
24,220,439

29,134,499
24,220,439


Analysis of turnover by country of destination:

period ended
31 July
period ended
30 September
2023
2022
$
$

United Kingdom
4,860,667
5,533,047

Europe
1,680,345
1,972,533

USA
22,593,487
16,714,859

29,134,499
24,220,439


Page 24

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 JULY 2023

4.


Auditors' remuneration

During the period, the Group obtained the following services from the Company's auditors:


period ended
31 July
period ended
30 September
2023
2022
$
$

Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
36,270
-

The current period is the first time the company has breached the audit threshold and therefore no auditors renumeration in the prior year.


5.


Employees

Staff costs were as follows:


Group
31 July
Group
30 September
Company
31 July
Company
30 September
2023
2022
2023
2022
$
$
$
$


Wages and salaries
3,168,013
2,858,685
-
-

Social security costs
266,281
256,713
-
-

Cost of defined contribution scheme
42,948
37,402
-
-

3,477,242
3,152,800
-
-


The average monthly number of employees, including the directors, during the period was as follows:



Group
Group
Company
Company
     period ended
        31 July
     period ended
     30 September
     period ended
        31 July
     period ended
     30 September
        2023
        2022
        2023
        2022
            No.
            No.
            No.
            No.









Employees and Directors
50
43
4
4

Page 25

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 JULY 2023

6.


Directors' remuneration



The highest paid director received remuneration of $98,231 (2022 - $96,975).

The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to $NIL (2022 - $NIL).

The value of the Group's contributions paid to a defined benefit pension scheme in respect of the highest paid director amounted to $NIL (2022 - $NIL).

During the period NIL directors received shares under the long-term incentive schemes (2022 -NIL)

The total accrued pension provision of the highest paid director at 31 July 2023 amounted to $NIL (2022 - $NIL).

The amount of the accrued lump sum in respect of the highest paid director at 31 July 2023 amounted to $NIL (2022 - $NIL).


7.


Interest receivable

period ended
31 July
period ended
30 September
2023
2022
$
$


Other interest receivable
168,279
54,607

168,279
54,607


8.


Interest payable and similar expenses

period ended
31 July
period ended
30 September
2023
2022
$
$


Bank interest payable
252,430
135,564

Other loan interest payable
198,415
76,037

450,845
211,601

Page 26

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 JULY 2023

9.


Tangible fixed assets

Group








Long-term leasehold property
Leasehold improvements
Fixtures and fittings
Office equipment
Computer equipment

$
$
$
$
$



Cost or valuation


At 1 October 2022
57,231
-
10,500
149,142
174,816


Additions
60,235
7,583
105,481
(16,401)
3,866


Disposals
(47,342)
-
-
(6,719)
(1,551)



At 31 July 2023

70,124
7,583
115,981
126,022
177,131



Depreciation


At 1 October 2022
9,125
-
875
110,521
124,616


Charge for the period on owned assets
7,588
379
11,719
(62,681)
(20,940)



At 31 July 2023

16,713
379
12,594
47,840
103,676



Net book value



At 31 July 2023
53,411
7,204
103,387
78,182
73,455



At 30 September 2022
48,106
-
9,625
38,621
50,200
Page 27

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 JULY 2023

           9.Tangible fixed assets (continued)


Total

$



Cost or valuation


At 1 October 2022
391,689


Additions
160,764


Disposals
(55,612)



At 31 July 2023

496,841



Depreciation


At 1 October 2022
245,137


Charge for the period on owned assets
(63,935)



At 31 July 2023

181,202



Net book value



At 31 July 2023
315,639



At 30 September 2022
146,552




The net book value of land and buildings may be further analysed as follows:


31 July
30 September
2023
2022
$
$

Long leasehold
53,410
48,106

Leasehold improvements
7,203
-

60,613
48,106


Page 28

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 JULY 2023

10.


Fixed asset investments

Company








Unlisted investments

$



Cost or valuation


At 1 October 2022
23



At 31 July 2023
23





11.


Assets under construction

Group





Property under construction

$



Valuation


Additions at cost
794,623



At 31 July 2023
794,623

The 2023 valuation is based on purchase cost.











Page 29

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 JULY 2023

12.


Stocks

Group
31 July
Group
30 September
2023
2022
$
$

Finished goods and goods for resale
10,188,581
5,734,947

10,188,581
5,734,947


The difference between purchase price or production cost of stocks and their replacement cost is not material.


13.


Debtors

Group
31 July
Group
30 September
Company
31 July
Company
30 September
2023
2022
2023
2022
$
$
$
$


Trade debtors
1,382,012
1,379,357
-
-

Other debtors
1,065,670
255,556
10,566,077
7,735,979

Prepayments and accrued income
1,733,517
945,160
182,159
51,240

4,181,199
2,580,073
10,748,236
7,787,219



14.


Cash and cash equivalents

Group
31 July
Group
30 September
2023
2022
$
$

Cash at bank and in hand
207,524
349,442

Less: bank overdrafts
(21,800)
(9,900)

185,724
339,542


Page 30

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 JULY 2023

15.


Creditors: Amounts falling due within one year

Group
31 July
Group
30 September
Company
31 July
Company
30 September
2023
2022
2023
2022
$
$
$
$

Bank overdrafts
21,800
9,900
-
-

Bank loans
12,864
10,720
-
-

Other loans
5,000,000
3,000,000
5,000,000
3,000,000

Trade creditors
4,425,874
1,215,361
120,101
78,402

Foreign Corporation tax
717,777
32,570
-
-

Other taxation and social security
128,740
223,538
-
-

Other creditors
937,562
1,111,105
500,000
500,000

Accruals and deferred income
1,039,286
700,553
222,375
61,308

12,283,903
6,303,747
5,842,476
3,639,710



16.


Creditors: Amounts falling due after more than one year

Group
31 July
Group
30 September
2023
2022
$
$

Bank loans
25,604
30,902

25,604
30,902




Page 31

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 JULY 2023

17.


Loans


Analysis of the maturity of loans is given below:


Group
31 July
Group
30 September
Company
31 July
Company
30 September
2023
2022
2023
2022
$
$
$
$

Amounts falling due within one year

Bank loans
12,864
10,720
-
-

Other loans
5,000,000
3,000,000
5,000,000
3,000,000


5,012,864
3,010,720
5,000,000
3,000,000

Amounts falling due 1-2 years

Bank loans
13,222
10,995
-
-


13,222
10,995
-
-

Amounts falling due 2-5 years

Bank loans
12,382
19,907
-
-


12,382
19,907
-
-


5,038,468
3,041,622
5,000,000
3,000,000



18.


Share capital

31 July
30 September
2023
2022
$
$
Allotted, called up and fully paid



3,334 (2022 - 3,334) Ordinary shares of $0.01 each
33
33


Page 32

 
VARLEY INTERNATIONAL HOLDINGS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 JULY 2023

19.


Reserves

Share premium account

Includes all premiums paid on the acquisition of share capital.

Foreign exchange reserve

Includes all foreign exchange differences resulting from translating operating currencies to presentational currency.

Profit and loss account

Includes all current and prior period retained profits and losses.

 
Page 33