Registered number:
For the Year Ended
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Qualtex Global Limited
Company Information
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Qualtex Global Limited
Contents
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Qualtex Global Limited
Group Strategic Report
For the Year Ended 31 December 2023
The directors present their Group Strategic Report and financial statements for the 12 months ended 31 December 2023. The principal activity of the Group is the provision of home appliance spare parts which are available for distribution worldwide.
The Board are very pleased to report another strong year, with growth seen across all sales channels achieving Turnover of £28.5m (2022: £26.9m).
Trading margins remained strong within the year, however gross profit margin reduced to 21.0% (2022: £22.7%). This was driven by a new stock provision policy (£226k increase) and adverse movements on foreign exchange differences (£583k) in the UK business. Whilst sales still remain challenging for the US entity, it made a small profit in 2023. The Group has a robust balance sheet and has strong backing from its lender, HSBC. A revolving credit facility of £3 million was renewed in 2022, and is now in place until June 2025.
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Qualtex Global Limited
Group Strategic Report (continued)
For the Year Ended 31 December 2023
The Group operates in a competitive market place, and maintains advantage through stock availability, customer service and product quality. Customer demands are typically met through next day delivery. The Group has a broad range of customers with whom it maintains strong relationships.
The Group purchases significant amount of stock, in line with customer demand. Stock is acquired usually with bank loan facilities and often in foreign currencies to alleviate currency movement on transactions with foreign suppliers. The Group uses various financial instruments. These include loans, cash and various items, such as trade debtors and trade creditors that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the Group's operations. The existence of these financial instruments exposes the Group to a number of financial risks, which are described in more detail below. The main risks arising from the Group's financial instruments are market risk, currency risk, cash flow interest rate risk, credit risk and liquidity risk. The directors review and agree policies for managing each of these risks and they are summarised below. Market risk Market risk encompasses three types of risk, being currency risk, fair value interest rate risk and price risk. The Group's policies for managing fair value interest rate risk are considered along with those for managing cash flow interest rate risk and are set out in the subsection entitled "interest rate risk" below. Currency risk The Group is exposed to translation and transaction foreign exchange risk. In relation to translation risk, this is not considered material to the business. Transaction risk arises on the Group's sales and purchases. The Group operates a policy of "self-hedging" as it holds US$'s and €'s in separate bank accounts and pays suppliers from funds within these bank accounts to minimise the impact of exchange gains and losses arising on individual transactions. Interest rate risk The Group finances its operations through a mixture of retained profits, cash and external loans. The Group's exposure to interest rate fluctuations on its borrowings is not considered material. Liquidity risk The Group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs. Credit risk The Group's principal financial assets are cash and trade debtors. The credit risk associated with cash is limited as the counterparty is a UK clearing bank with a high credit rating. Credit risk associated with the Group's trade debtors is not considered material.
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Qualtex Global Limited
Group Strategic Report (continued)
For the Year Ended 31 December 2023
The directors consider the following KPIs to be the main focus for the Group: sales, gross profit margin and profit before tax.
Sales: 2023: £28,505,310 2022: £26,923,139 Gross profit margin: 2023: 21.0% 2022: 22.7% Profit before tax: 2023: £1,503,518 2022: £1,164,195 Future developments The Business will continue to develop new, high quality pattern parts, whilst continuing to supply a wide range of OEM parts, to offer our customers the best products at competitive prices. Further focus will be placed on returning sales to the EU to pre-Brexit levels in the UK business. The US business will follow the UK in implementing a new ERP system in 2024, as this was delayed in 2023.
This report was approved by the board and signed on its behalf.
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Qualtex Global Limited
Directors' Report
For the Year Ended 31 December 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
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.
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 2006. They 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.
The profit for the year, after taxation, amounted to £1,333,792 (2022: £866,453).
The dividend for the year is £1,004,551 (2022: £1,294,968). The directors do not recommend the payment of a final dividend.
The directors who served during the year were:
The future developments of the Group are disclosed in the Strategic Report.
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Qualtex Global Limited
Directors' Report (continued)
For the Year Ended 31 December 2023
There have been no significant events affecting the Group since the year end.
The auditors, Hurst Accountants Limited, will 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.
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Qualtex Global Limited
Independent Auditors' Report to the Members of Qualtex Global Limited
We have audited the financial statements of Qualtex Global Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, 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 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).
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.
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.
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 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.
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Qualtex Global Limited
Independent Auditors' Report to the Members of Qualtex Global Limited (continued)
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 year 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.
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.
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Qualtex Global Limited
Independent Auditors' Report to the Members of Qualtex Global Limited (continued)
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:
Identifying and assessing potential risks related to irregularities In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following: • The nature of the industry and sector in which the company operates; the control environment and business performance including key drivers for directors' remuneration, bonus levels and performance targets. • The outcome of enquiries of local management and parent company management, including whether management was aware of any instances of non-compliance with laws and regulations, and whether management had knowledge of any actual, suspected, or alleged fraud. • Supporting documentation relating to the Company's policies and procedures for: - Identifying, evaluating, and complying with laws and regulations - Detecting and responding to the risks of fraud • The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations. • The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. • The legal and regulatory framework in which the Company operates, particularly those laws and regulations which have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or which had a fundamental effect on the operations of the Company, including General Data Protection requirements, and Anti-bribery and Corruption. Audit response to risks identified Our procedures to respond to the risks identified included the following: • Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the provisions of those relevant laws and regulations which have a direct effect on the financial statements. • Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud. • Evaluation of the operating effectiveness of management’s controls designed to prevent and detect irregularities. • Enquiring of management about any actual and potential litigation and claims. • Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of material misstatement due to fraud.
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Qualtex Global Limited
Independent Auditors' Report to the Members of Qualtex Global Limited (continued)
We have also considered the risk of fraud through management override of controls by:
• Testing the appropriateness of journal entries and other adjustments. We have used data analytics software to identify accounting transactions which may pose a heightened risk of material misstatement, whether due to fraud or error. • Challenging assumptions made by management in their significant accounting estimates, and assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and • Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of them. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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.
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 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.
for and on behalf of
Chartered Accountants & Statutory Auditors
3 Stockport Exchange
Cheshire
SK1 3GG
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Qualtex Global Limited
Consolidated Statement of Comprehensive Income
For the Year Ended 31 December 2023
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Qualtex Global Limited
Registered number: 08812633
Consolidated Balance Sheet
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 40 form part of these financial statements.
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Qualtex Global Limited
Registered number: 08812633
Company Balance Sheet
As at
The Company had taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has presented its own Statement of Comprehensive Income in these financial statements.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 40 form part of these financial statements.
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Qualtex Global Limited
Consolidated Statement of Changes in Equity
For the Year Ended 31 December 2023
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Qualtex Global Limited
Company Statement of Changes in Equity
For the Year Ended 31 December 2023
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Qualtex Global Limited
Consolidated Statement of Cash Flows
For the Year Ended 31 December 2023
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Qualtex Global Limited
Consolidated Statement of Cash Flows (continued)
For the Year Ended 31 December 2023
Consolidated Analysis of Net Debt
For the Year Ended 31 December 2023
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Qualtex Global Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
Qualtex Global Limited is a private company limited by shares, incorporated in England and Wales and its registered office is Unit 1, Denton Hall Farm Road, Denton, Manchester M34 2SX. The principal activity of the group is the provision of home appliance spare parts which are distributed worldwide. The principal activity of the company is that of a holding company which also holds the property from which the Group trades. The company's registered number is 08812633.
2.Accounting policies
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 (see note 3).
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 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 Balance Sheet, 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. . The following principal accounting policies have been applied:
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
- The requirement of Section 7 Statement of Cash Flows; - The requirement of Section 3 Financial Statement Presentation paragraph 3.17 (d). The company's information is included in the consolidated financial statements.
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Qualtex Global Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
2.Accounting policies (continued)
The financial statements have been prepared on a going concern basis. The following paragraphs set out the basis on which the directors have reached their conclusion.
At 31 December 2023 the Group has net current liabilities of £238,609 (2022: £849,548), this is due to a liability of £8,407,841 (2022: £8,407,841) related to share capital treated as debt being included within creditors due within 1 year. These are redeemable at the Group's discretion and therefore this is not considered to cause a significant going concern issue. The directors have prepared forecasts which show that the Group is expected to continue to be profitable and be able to meet its day-to-day working capital requirements from positive operating cash flows. The directors believe it is appropriate, therefore, to prepare the financial statements to 31 December 2023 on a going concern basis.
Functional and presentation currency
Transactions and balances
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Qualtex Global Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
2.Accounting policies (continued)
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Qualtex Global Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
2.Accounting policies (continued)
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Qualtex Global Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
2.Accounting policies (continued)
Goodwill
Other intangible assets
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
The group values its' freehold property at a valuation based on the latest revalued amount, less any depreciation and accumulated impairment losses. The property is owned by the parent company and rented to another group entity. Under the provisions of FRS 102, such a property should be accounted for either as an investment property or under the cost model in the company accounts.
Management have elected to adopt a true and fair over-ride and have not transferred the property to investment property, instead adopting the same approach as that applied by the group, which is felt is a fairer reflection of the fair value of the property and more accurately reflects its usage as an operating base for the group's principal activity. If the property were to be transferred to investment property, no depreciation would be charged, which would increase the net assets of the company by £582,926 (2022: £291,463). There is no impact on the net assets as reported in the consolidated balance sheet in either the current or prior year.
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Qualtex Global Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
2.Accounting policies (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:
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.
Assets under construction are only subject to depreciation at the point that they are brought into use. The carrying value is reviewed periodically and if any assets are unlikely to generate future economic benefit they are subject to impairment accordingly.
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Qualtex Global Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.
Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
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Qualtex Global Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
2.Accounting policies (continued)
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Group after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.
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Qualtex Global Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
Measurement of provision for obsolete stock The stock provision is determined by ageing the stock in conjunction with management's knowledge and experience of stock movements. The provision applied reduces the carrying value to its selling price less costs to sell. Accordingly, provision for impairment is made where the net realisable value is less than the cost based on best estimates by management. The value of stock held at the year end totalled £9,054,478 (2022: £10,419,411), which included impairments of £705,711 (2022: £602,233).
The whole of the turnover is attributable to the distribution of home appliance spare parts.
Analysis of turnover by country of destination:
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Qualtex Global Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
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Qualtex Global Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
8.Employees (continued)
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Qualtex Global Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
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Qualtex Global Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
12.Taxation (continued)
There were no factors that may affect future tax charges.
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Qualtex Global Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
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Qualtex Global Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
Cost or valuation of freehold property at 31 December 2023 is as follows:
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Qualtex Global Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
16.Tangible fixed assets (continued)
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Qualtex Global Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
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Qualtex Global Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
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Qualtex Global Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
Page 35
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Qualtex Global Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
Net obligations under finance leases and hire purchase contracts are secured on the assets to which they relate.
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Qualtex Global Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
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Qualtex Global Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
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Qualtex Global Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
Revaluation reserve
The revaluation reserve represents the surplus created on the revaluation of certain categories of fixed assets during the year. Capital redemption reserve The capital redemption reserve relates to preference share buy backs. Foreign exchange reserve The foreign exchange reserve relates to retranslation gains or losses on the consolidation of foreign subsidiaries. Profit and loss account The profit and loss account includes all current and prior period retained profits and losses.
The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £28,164 (2022: £29,221). Contributions totaling £6,967 (2022: £5,760) were payable to the fund at the balance sheet date and are included in creditors.
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Qualtex Global Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
The Group is controlled by P Hulme by virtue of his majority ordinary share holding in Qualtex Global Limited.
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