Company Registration No. 00067442 (England and Wales)
Joshua Ellis and Company Limited
Annual report and financial statements
for the year ended 31 December 2023
Joshua Ellis and Company Limited
Company information
Directors
Andrew Seal
Jeremy Seal
Steven Wilson
Company number
00067442
Registered office
Grange Valley Road
Batley
West Yorkshire
WF17 6GH
Independent auditor
Saffery LLP
Mitre House
North Park Road
Harrogate
North Yorkshire
HG1 5RX
Joshua Ellis and Company Limited
Contents
Page
Strategic report
1
Directors' report
2 - 3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 25
Joshua Ellis and Company Limited
Strategic report
For the year ended 31 December 2023
1

The directors present the strategic report for the year ended 31 December 2023.

Business Model

The Company is funded primarily by externally provided debt finance in the form of asset-based lending. The Company trades globally and specialises in high quality, luxury products. The Company benefits from a long-standing presence in its markets and a reputation for quality products, it generates repeat business through the provision of best in class customer service and response. Customers and suppliers are geographically diversified and have been built up over many years of trading in these varied markets.

Key Performance Indicators

The Directors use a number of key indicators as part of a much wider reporting framework that enables them to understand the development, performance and position of the business. These include, but are not limited to turnover, gross profit and net cash flow as found in the primary statements and these are measured on a monthly basis.

Risks and Uncertainties

The business is subject to the same world economic performance and political issues as in previous years. The key business risks and uncertainties affecting the Company are considered to relate to the following :-

 

 

 

 

 

The Directors remain confident that the day-to-day approach to the business in the company and wider group put both in a good position to trade through the above uncertainties and any other unrelated issues that may arise.

 

The Company continues to benefit from committed bank facilities, a prudent management approach and the underlying strength of a portfolio of high - quality brands as well as a broad and diversified supplier and customer base. The Directors will continue to manage the Company with its long - term success in mind.

 

On behalf of the board

Jeremy Seal
Director
19 July 2024
Joshua Ellis and Company Limited
Directors' report
For the year ended 31 December 2023
2

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

Principal activities

The principal activity of the company continued to be that of the production and sale of luxury cashmere and lambs wool fabrics and accessories.

Results and dividends

The results for the year are set out on page 9.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Oliver Platts
(Resigned 6 December 2023)
Andrew Seal
Jeremy Seal
Steven Wilson
Financial instruments

The company uses credit insurance and has a robust credit management system. The company operates in multiple foreign currencies, however the directors note that the exchange rate is substantially hedged due to the asset backed nature of its funding. The arrangement is significantly self hedged given that borrowings are drawn in the underlying currency of the asset held. Where appropriate the company also use foreign exchange contracts and derivatives.

Future developments

The directors are satisfied with the company's position at the year-end. The objectives for the coming year are to maximise the profitable business opportunities that arise and to best position the company so it can take advantage of opportunities in the future.

Auditor

Saffery LLP were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

Joshua Ellis and Company Limited
Directors' report (continued)
For the year ended 31 December 2023
3
On behalf of the board
Jeremy Seal
Director
19 July 2024
Joshua Ellis and Company Limited
Directors' responsibilities statement
For the year ended 31 December 2023
4

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law).

 

Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the 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.

Joshua Ellis and Company Limited
Independent auditor's report
To the members of Joshua Ellis and Company Limited
5
Opinion

We have audited the financial statements of Joshua Ellis and Company Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, 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 the financial statements:

Basis for opinion

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

 

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Joshua Ellis and Company Limited
Independent auditor's report (continued)
To the members of Joshua Ellis and Company Limited
6

Opinions on other matters prescribed by the Companies Act 2006

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

 

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

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

 

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.

Joshua Ellis and Company Limited
Independent auditor's report (continued)
To the members of Joshua Ellis and Company Limited
7

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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.

 

Identifying and assessing risks related to irregularities:

We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and by updating our understanding of the sector in which the company operates.

 

Laws and regulations of direct significance in the context of the company include The Companies Act 2006 and UK Tax legislation.

 

Audit response to risks identified

We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.

During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. 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 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.

Use of our report

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

Joshua Ellis and Company Limited
Independent auditor's report (continued)
To the members of Joshua Ellis and Company Limited
8
Sally Appleton
Senior Statutory Auditor
For and on behalf of Saffery LLP
9 August 2024
Chartered Accountants
Statutory Auditors
Mitre House
North Park Road
Harrogate
North Yorkshire
HG1 5RX
Joshua Ellis and Company Limited
Profit and loss account
For the year ended 31 December 2023
9
2023
2022
as restated
Notes
£
£
Turnover
3
7,385,674
7,386,162
Cost of sales
(5,219,738)
(5,643,281)
Gross profit
2,165,936
1,742,881
Distribution costs
(1,013,719)
(974,498)
Administrative expenses
(741,772)
(663,254)
Other operating income
-
0
687
Operating profit
4
410,445
105,816
Interest payable and similar expenses
7
(270,204)
(374,283)
Profit/(loss) before taxation
140,241
(268,467)
Tax on profit/(loss)
8
89,449
(61,343)
Profit/(loss) for the financial year
229,690
(329,810)

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

Joshua Ellis and Company Limited
Statement of comprehensive income
For the year ended 31 December 2023
10
2023
2022
as restated
£
£
Profit/(loss) for the year
229,690
(329,810)
Other comprehensive income
-
-
Total comprehensive income for the year
229,690
(329,810)
Joshua Ellis and Company Limited
Balance sheet
As at 31 December 2023
11
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
795,482
843,297
Current assets
Stocks
10
7,384,310
8,140,354
Debtors
11
2,286,922
2,473,411
Cash at bank and in hand
13,230
16,191
9,684,462
10,629,956
Creditors: amounts falling due within one year
12
(10,010,781)
(11,281,890)
Net current liabilities
(326,319)
(651,934)
Total assets less current liabilities
469,163
191,363
Creditors: amounts falling due after more than one year
13
(59,967)
(11,857)
Net assets
409,196
179,506
Capital and reserves
Called up share capital
17
32,593
32,593
Capital redemption reserve
49,791
49,791
Profit and loss reserves
326,812
97,122
Total equity
409,196
179,506
The financial statements were approved by the board of directors and authorised for issue on 19 July 2024 and are signed on its behalf by:
Andrew Seal
Director
Company Registration No. 00067442
Joshua Ellis and Company Limited
Statement of changes in equity
For the year ended 31 December 2023
12
Share capital
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
As restated for the period ended 31 December 2022:
Balance at 1 January 2022
32,593
49,791
426,932
509,316
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
-
(329,810)
(329,810)
Balance at 31 December 2022
32,593
49,791
97,122
179,506
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
229,690
229,690
Balance at 31 December 2023
32,593
49,791
326,812
409,196
Joshua Ellis and Company Limited
Notes to the financial statements
For the year ended 31 December 2023
13
1
Accounting policies
Company information

Joshua Ellis and Company Limited is a private company limited by shares incorporated in England and Wales. The registered office is Grange Valley Road, Batley, West Yorkshire, WF17 6GH.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

The financial statements of the company are consolidated in the financial statements of Stonecroft Holdings Ltd. These consolidated financial statements are available from its registered office, Ladywell Mills, Hall Lane, Bradford, BD4 7DF.

1.2
Going concern

The company meets its working capital needs using an asset-based lending facility. The directors have made reasonable enquiries, including a review of existing customer and supplier relationships and future financial forecast to enable them to form a reasonable expectation that the company has adequate reserves and financial facilities to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.true

1.3
Turnover

Turnover represents amounts receivable for cashmere and lambs wool fabrics and accessories, net of VAT and trade discounts.

 

Turnover is recognised on date of despatch of products.

Joshua Ellis and Company Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
14
1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Leasehold improvements
27.26% reducing balance
Plant and equipment
5-25% on cost & 5-50% reducing balance
Motor vehicles
25% on cost

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.5
Impairment of fixed assets

At each reporting period 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). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

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 (or cash-generating unit) 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 (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.6
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials, and where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Joshua Ellis and Company Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
15
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 balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Joshua Ellis and Company Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
16
Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.9
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.10
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 profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Joshua Ellis and Company Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
17
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.11
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 fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.12
Retirement benefits

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

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 balance sheet 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.

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
Government grants

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

 

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

Joshua Ellis and Company Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
1
Accounting policies (continued)
18
1.15
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
Critical accounting judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sale of lambs wool and cashmere fabric and accessories
7,385,674
7,386,162
2023
2022
£
£
Turnover analysed by geographical market
UK
2,440,170
3,016,976
Europe
2,827,527
2,180,239
Rest of the World
2,117,977
2,188,947
7,385,674
7,386,162
2023
2022
£
£
Other revenue
Grants received
-
687
Joshua Ellis and Company Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
19
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
-
(687)
Fees payable to the company's auditor for the audit of the company's financial statements
6,000
5,950
Depreciation of owned tangible fixed assets
76,808
75,421
Loss on disposal of tangible fixed assets
7,005
-
Operating lease charges
209,002
187,727
5
Employees

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

2023
2022
Number
Number
Administration, sales and distribution
11
4
Production
41
48
Directors
4
5
Total
56
57

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
1,643,769
1,324,984
Social security costs
148,669
123,391
Pension costs
35,320
29,845
1,827,758
1,478,220
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
150,858
145,457
Company pension contributions to defined contribution schemes
5,799
5,462
156,657
150,919

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).

Joshua Ellis and Company Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
20
7
Interest payable and similar expenses
2023
2022
£
£
Interest payable to group undertakings
-
0
221,317
Other interest
270,204
152,966
270,204
374,283
8
Taxation
2023
2022
£
£
Deferred tax
Origination and reversal of timing differences
(88,064)
682
Adjustment in respect of prior periods
(1,385)
60,661
Total deferred tax
(89,449)
61,343

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

2023
2022
£
£
Profit/(loss) before taxation
140,241
(268,467)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
32,985
(51,009)
Tax effect of expenses that are not deductible in determining taxable profit
235
113
Adjustments in respect of prior years
(1,385)
-
0
Group relief
-
0
52,090
Permanent capital allowances in excess of depreciation
-
0
(14,842)
Depreciation on assets not qualifying for tax allowances
-
0
14,330
Other permanent differences
1
-
0
Deferred tax adjustments in respect of prior years
-
0
60,661
Fixed asset differences
3,701
-
0
Remeasurement of deferred tax for changes in tax rates
2,322
-
0
Movement in deferred tax not recognised
(127,308)
-
0
Taxation (credit)/charge for the year
(89,449)
61,343
Joshua Ellis and Company Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
21
9
Tangible fixed assets
Leasehold improvements
Plant and equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2023
261,055
1,320,036
4,650
1,585,741
Additions
3,440
271,106
-
0
274,546
Disposals
-
0
(366,562)
-
0
(366,562)
At 31 December 2023
264,495
1,224,580
4,650
1,493,725
Depreciation and impairment
At 1 January 2023
215,063
522,731
4,650
742,444
Depreciation charged in the year
3,881
72,927
-
0
76,808
Eliminated in respect of disposals
-
0
(121,009)
-
0
(121,009)
At 31 December 2023
218,944
474,649
4,650
698,243
Carrying amount
At 31 December 2023
45,551
749,931
-
0
795,482
At 31 December 2022
45,992
797,305
-
0
843,297

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
£
£
Plant and equipment
116,043
283,787
10
Stocks
2023
2022
£
£
Finished goods and goods for resale
7,384,310
8,140,354
Joshua Ellis and Company Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
22
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,297,216
1,456,627
Amounts owed by group undertakings
546,681
569,911
Prepayments and accrued income
74,426
167,723
1,918,323
2,194,261
Deferred tax asset (note 15)
368,599
279,150
2,286,922
2,473,411
12
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
14
56,076
22,684
Trade creditors
303,850
450,197
Amounts owed to group undertakings
5,786,522
6,624,276
Corporation tax
13
-
0
Other taxation and social security
46,424
(35,338)
Other creditors
3,612,193
3,980,568
Accruals and deferred income
205,703
239,503
10,010,781
11,281,890

Creditors include secured liabilities amounting to £3,609,499 (2022 - £3,803,283) of which £2,894,199 (2022 - £2,950,592) was secured against inventory and £715,300 (2022 - £860,945) against trade debtors to which they relate.

13
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
14
59,967
2,412
Government grants
-
0
9,445
59,967
11,857
Joshua Ellis and Company Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
23
14
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
56,076
22,684
In two to five years
59,967
2,412
116,043
25,096

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 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

15
Deferred taxation

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

Assets
Assets
2023
2022
Balances:
£
£
Accelerated capital allowances
(153,745)
(123,990)
Tax losses
520,738
403,140
Short term timing differences
1,606
-
368,599
279,150
2023
Movements in the year:
£
Asset at 1 January 2023
(279,150)
Credit to profit or loss
(89,449)
Asset at 31 December 2023
(368,599)

 

16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
35,320
29,845

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.

Joshua Ellis and Company Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
24
17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
32,593
32,593
32,593
32,593
18
Financial commitments, guarantees and contingent liabilities

The bank borrowings of the group headed by Stonecroft Holdings Limited are secured by a mortgage debenture comprimising a legal mortgage and fixed and floating charge over the assets of the group, including the company (a cross-guarantee). At 31 December 2023 £13,625,404 (2022 - £14,561,380) was outstanding under this debenture, of which £10,015,904 (2022 - £10,758,097) is not recognised on the balance sheet of these accounts.

19
Operating lease commitments
Lessee

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

2023
2022
£
£
Within one year
144,000
120,000
Between two and five years
-
0
300,000
144,000
420,000
20
Related party transactions
Transactions with related parties

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

 

Roberts Dyers & Finishers Limited, a company in which the company's immediate parent undertaking, SIL Holdings Limited, has a joint venture interest, purchased services from the entity amounting to £22,244 (2022 - £37,219) during the financial year.

 

At 31 December 2023 £nil (2022 - £13,019) was owed to Roberts Dyers & Finishers Limited.

21
Ultimate controlling party

The directors regard Stonecroft Holdings Limited, registered in England and Wales, to be the company's ultimate parent company and controlling party.

 

The largest group of undertakings preparing consolidated accounts which include the company is Stonecroft Holdings Limited, the smallest group of undertakings preparing consolidated accounts which include the company is SIL Holdings Limited. The group accounts are available from Companies House, Crown Way, Cardiff.

Joshua Ellis and Company Limited
Notes to the financial statements (continued)
For the year ended 31 December 2023
25
22
Prior period adjustment
Reconciliation of changes in equity
The prior period adjustments do not give rise to any effect upon equity.
Reconciliation of changes in loss for the previous financial period
2022
£
Adjustments to prior year
Cost of sales
(28,312)
Distribution costs
635,082
Administrative expenses
(606,770)
Total adjustments
-
Loss as previously reported
(329,810)
Loss as adjusted
(329,810)
Notes to reconciliation

A prior period restatement has been made in order to reallocate costs within the profit and loss account in order to more accurately reflect their underlying nature. This prior year restatement does not give rise to any effect on profit for the financial year or equity.

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