Company registration number 01471011 (England and Wales)
CURTIS WOOL DIRECT LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
CURTIS WOOL DIRECT LIMITED
COMPANY INFORMATION
Directors
Mr T L Holgate
Mr D A Isbecque
Mr K H Sævik
Ms K Ireland
Ms S Meling
Mr R G Fjeldheim
(Appointed 12 June 2023)
Mr R Norris
(Appointed 4 April 2024)
Mr P Stride
(Appointed 4 April 2024)
Secretary
Mr T L Holgate
Company number
01471011
Registered office
Lawrence House
Dowley Gap Business Park
Bingley
West Yorkshire
BD16 1WA
Auditor
Azets Audit Services Limited
12 King Street
Leeds
LS1 2HL
CURTIS WOOL DIRECT LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 23
CURTIS WOOL DIRECT LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present their Strategic Report together with the audited financial statements for the year ended 31 December 2023.
Review of the business
The directors are pleased to report that they are satisfied with the performance of the Company, producing another strong set of results during the year
The directors report a turnover of £39,698,154 for the year ended 31 December 2023 compared to a turnover of £36,827,467 for the year ended 31 December 2022. The profit before tax for the year of £2,948,655, 7% of turnover, compares with a profit of £2,199,191, 6% of turnover for the prior year.
Principal risks and uncertainties
The key business risks and uncertainties affecting the company are considered to be the volatile nature of wool markets and foreign currencies, which are managed and controlled through the year by stock holding and forward currency trades.
Financial instruments
The company uses forward exchange contracts to minimise its risk in respect of exchange rate fluctuations. It is exposed to the usual credit risk and cash flow risk associated with selling on credit and manages this through credit control procedures.
Financial key performance indicators
The key performance indicators used by the directors to measure the performance of the company are turnover, gross margin and the forward order book. These are reviewed on a continual basis, to ensure that targets and budgets are being met. Turnover and Gross Margin can be seen in the Statement of Comprehensive Income on page 10 and the forward order book is regularly internally monitored for its quality in terms of size, timing, geography and price, all of which represents the market and therefore is commercially sensitive.
Going concern
The directors have monitored any ongoing impact on the Group’s financial projections, cash flows and the wider going concern status from the impact of the cost of inflation and the effects of global events. In particular, the directors have had regard to customer demand, the operations of the business, rising costs and the availability of appropriate funding for the company’s day to day requirements.
The company has not experienced any significant issues within its supply chain to date and there are none foreseen that will reduce the ability to supply products and deliver services.
The company expects to remain profitable and to operate within current cash facilities.
Therefore, the directors have a reasonable expectation that the company has adequate resources to continue to adopt the going concern basis in preparing the financial statements.
CURTIS WOOL DIRECT LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Section 172 statement
This section is intended to explain how directors regard broader stakeholder interests and seek to promote the success of the company for the benefit of its members as a whole.
The directors are committed to conducting business in a professional manner. This underpins our approach to everything we do and everyone we deal with. Our team is committed to acting responsibly, managing our resources sustainably, engaging with our people and supporting the communities in which we operate.
Stakeholders
The directors consider the following groups are the company’s key stakeholders:
Workforce
Customers
Investors
Suppliers
The directors seek to understand the respective interests of such stakeholder groups so they can be properly considered in their decisions.
Workforce
The strength of our business is built on the hard work and dedication of all of our employees and the benefits of having a committed workforce is recognised. This is achieved through regular meetings at all levels in the workforce and feedback to the directors.
Customers
Our customers are key to the continued existence and growth of the business and the directors recognise that acting promptly upon customer feedback is essential. Either through direct contact or via feedback from the trading team, the directors are aware of customers' opinions.
Investors
Our parent company is Nortura SA, they rely on the directors to protect and manage their investment in a responsible and sustainable manner to generate value for them. The directors are in regular contact with the investors and keep them appraised on the ongoing performance of the company both operationally and financially.
Suppliers
The directors are actively involved in discussions with key suppliers to ensure high quality products and services are delivered to customers and the ensure value for money for the investors.
The directors disclose key decisions were made during 2023 that directly or indirectly affected business stakeholders during 2023:
Mr T L Holgate
Director
29 April 2024
CURTIS WOOL DIRECT LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company is that of processing and merchanting wool.
Results and dividends
The profit for the year, after taxation, amounted to £2,865,747 (2022 - £1,864,288).
Ordinary dividends were declared amounting to £1,300,000 (2022 - £750,000).
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr T L Holgate
Mr D A Isbecque
Mr D N Gisbourne
(Resigned 4 April 2024)
Mr E S Høeg
(Resigned 4 April 2024)
Mr K H Sævik
Ms K Ireland
Ms S Meling
Mr R G Fjeldheim
(Appointed 12 June 2023)
Mr K P Daugaard
(Resigned 12 June 2023)
Mr R Norris
(Appointed 4 April 2024)
Mr P Stride
(Appointed 4 April 2024)
Engagement with suppliers, customers and others
Details of how the directors have engaged with suppliers, customers and others is supplied in the S172 report within the Strategic Report.
Greenhouse gas emissions and environmental matters
The company has taken the exemption available to subsidiary companies not to disclose information in respect of greenhouse gas emissions, energy consumption and energy efficiency action given this is disclosed in the consolidated financial statements of the immediate parent company, Curtis Wool Direct Holdings Limited.
The company will seek to minimise adverse impacts on the environment from its activities, whilst continuing to address health, safety and economic issues. The company has complied with all applicable legislation and regulations.
Qualifying third party indemnity provisions
The company has taken out qualifying third party indemnity insurance for the benefit of one or more of the directors of the company. Such third party indemnity provisions were in place at the date of the signing of the Directors' Report.
Matters covered in the strategic report
Disclosures required under S416(4) of the Companies Act 2006 are commented upon in the Strategic Report as the directors consider them to be of strategic importance to the company.
Auditor
The auditor, Azets Audit Services Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
CURTIS WOOL DIRECT LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
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.
On behalf of the board
Mr T L Holgate
Director
29 April 2024
CURTIS WOOL DIRECT LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
CURTIS WOOL DIRECT LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CURTIS WOOL DIRECT LIMITED
- 6 -
Opinion
We have audited the financial statements of Curtis Wool Direct Limited (the 'company') for the year ended 31 December 2023 which comprise 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:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
CURTIS WOOL DIRECT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CURTIS WOOL DIRECT LIMITED
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
CURTIS WOOL DIRECT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CURTIS WOOL DIRECT LIMITED
- 8 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias;
Performing audit work over the timing and recognition of revenue and in particular whether it has been recorded in the correct accounting period.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Matthew Grant
Senior Statutory Auditor
For and on behalf of Azets Audit Services Limited
29 April 2024
Chartered Accountants
Statutory Auditor
12 King Street
Leeds
LS1 2HL
CURTIS WOOL DIRECT LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
39,698,154
36,827,467
Cost of sales
(35,238,033)
(32,383,448)
Gross profit
4,460,121
4,444,019
Administrative expenses
(1,254,664)
(2,090,439)
Other operating income
30,000
30,000
Operating profit
4
3,235,457
2,383,580
Interest receivable and similar income
6
15,088
5,220
Interest payable and similar expenses
7
(339,295)
(156,353)
Losses/(Gains) on forward currency contracts
37,405
(33,256)
Profit before taxation
2,948,655
2,199,191
Tax on profit
8
(82,908)
(334,903)
Profit for the financial year
2,865,747
1,864,288
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
CURTIS WOOL DIRECT LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
10
67,812
71,562
Tangible assets
11
486,113
507,574
553,925
579,136
Current assets
Stocks
13
9,689,908
9,460,599
Debtors
14
10,246,758
7,993,915
Cash at bank and in hand
2,367
3,137
19,939,033
17,457,651
Creditors: amounts falling due within one year
15
(8,377,835)
(7,392,028)
Net current assets
11,561,198
10,065,623
Total assets less current liabilities
12,115,123
10,644,759
Provisions for liabilities
Deferred tax liability
16
(65,383)
(50,000)
65,383
50,000
Net assets
12,180,506
10,694,759
Capital and reserves
Called up share capital
18
2,915,711
2,915,711
Profit and loss reserves
9,264,795
7,779,048
Total equity
12,180,506
10,694,759
The financial statements were approved by the board of directors and authorised for issue on 29 April 2024 and are signed on its behalf by:
Mr T L Holgate
Mr D A Isbecque
Director
Director
Company Registration No. 01471011
CURTIS WOOL DIRECT LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
2,915,711
6,664,760
9,580,471
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
1,864,288
1,864,288
Dividends
9
-
(750,000)
(750,000)
Balance at 31 December 2022
2,915,711
7,779,048
10,694,759
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
2,865,747
2,865,747
Dividends
9
-
(1,380,000)
(1,380,000)
Balance at 31 December 2023
2,915,711
9,264,795
12,180,506
CURTIS WOOL DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
Curtis Wool Direct Limited is a private company limited by shares incorporated in England and Wales. The registered office is Lawrence House, Dowley Gap Business Park, Bingley, West Yorkshire, BD16 1WA.
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 £1.
The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. 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:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Curtis Wool Direct Holdings Limited. These consolidated financial statements are available from its registered office, Lawrence House, Dowley Gap Business Park, Bingley, West Yorkshire, BD16 1WA.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents amounts receivable for goods and services net of VAT and trade discounts.
Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer usually on dispatch of the goods, the amount of turnover can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Shipping and handling costs invoiced to customers are included in turnover and those costs incurred by the Company are included in cost of sales.
CURTIS WOOL DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 20 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, 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:
Freehold buildings
2% of cost or valuation
Plant and machinery
20% straight line
Fixtures, fittings and equipment
20% 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.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset 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.
CURTIS WOOL DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials, direct labour costs and attributable overheads.
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.
1.8
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.
1.9
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 and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Trade debtors, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.
Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
CURTIS WOOL DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies 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.
CURTIS WOOL DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.10
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.
1.11
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
Forward contracts
The company, in the normal course of business, enters into forward purchase and sale contracts for wool. Unmatched forward contracts are assessed individually and compared with directors' estimates of the market value of such contracts at the balance sheet date. Losses are provided for in the financial statements. Profits are recognised only when contracts are fulfilled.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.13
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.
CURTIS WOOL DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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
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.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Stock Provision
Stock can be held for several years resulting in a gradual decline in its value. Management have assessed stock at year end and applied a provision factoring in age and the condition of the stock as at the year end. The provision applied is to ensure the stock items are held at the lower of their cost or fair value less costs to sell.
Forward Currency Contracts
The valuation of derivative financial instruments has been estimated using the differential between the spot rate of the currency at the year end and the agreed future rate in the contract.
3
Turnover and other revenue
2023
2022
£
£
Other revenue
Interest income
15,088
5,220
All turnover is derived from the company's activity.
In the opinion of the directors, it would be seriously prejudicial to the interests of the company to disclose an analysis of turnover by geographical area.
CURTIS WOOL DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(470,161)
477,858
Fees payable to the company's auditor for the audit of the company's financial statements
34,500
32,085
Depreciation of owned tangible fixed assets
29,443
31,300
Amortisation of intangible assets
3,750
3,438
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Office and management
12
12
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,019,078
960,780
Social security costs
126,467
124,374
Pension costs
49,331
55,688
1,194,876
1,140,842
6
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
15,088
5,220
7
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
335,376
156,353
Other interest on financial liabilities
3,919
339,295
156,353
CURTIS WOOL DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
302,500
Adjustments in respect of prior periods
98,291
Total current tax
98,291
302,500
Deferred tax
Origination and reversal of timing differences
(12,913)
22,757
Changes in tax rates
7,186
Adjustment in respect of prior periods
(2,470)
2,460
Total deferred tax
(15,383)
32,403
Total tax charge
82,908
334,903
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
2,948,655
2,199,191
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
693,524
417,846
Tax effect of expenses that are not deductible in determining taxable profit
381
1,747
Adjustments in respect of prior years
98,250
2,470
Effect of change in corporation tax rate
(707)
7,186
Group relief
(706,059)
(96,660)
Deferred tax adjustments in respect of prior years
(2,470)
(10)
Fixed asset differences
(11)
2,324
Taxation charge for the year
82,908
334,903
9
Dividends
2023
2022
£
£
Dividends declared, not yet paid
1,380,000
750,000
CURTIS WOOL DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
10
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2023 and 31 December 2023
75,000
Amortisation and impairment
At 1 January 2023
3,438
Amortisation charged for the year
3,750
At 31 December 2023
7,188
Carrying amount
At 31 December 2023
67,812
At 31 December 2022
71,562
11
Tangible fixed assets
Freehold buildings
Plant and machinery
Fixtures, fittings and equipment
Total
£
£
£
£
Cost
At 1 January 2023
619,404
298,932
40,541
958,877
Additions
7,982
7,982
At 31 December 2023
619,404
306,914
40,541
966,859
Depreciation and impairment
At 1 January 2023
152,232
258,896
40,175
451,303
Depreciation charged in the year
12,388
16,689
366
29,443
At 31 December 2023
164,620
275,585
40,541
480,746
Carrying amount
At 31 December 2023
454,784
31,329
486,113
At 31 December 2022
467,172
40,036
366
507,574
12
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Instruments measured at fair value through profit or loss
116,248
78,844
CURTIS WOOL DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
13
Stocks
2023
2022
£
£
Raw materials and consumables
9,689,908
9,460,599
There is no material difference between the replacement cost of stock and the amounts presented above.
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
7,545,144
5,932,872
Corporation tax recoverable
201,709
Amounts owed by group undertakings
1,823,655
1,771,188
Derivative financial instruments
116,248
78,844
Other debtors
533,434
164,448
Prepayments and accrued income
26,568
46,563
10,246,758
7,993,915
Amounts owed by group undertakings are interest free and repayable on demand.
15
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
1,112,815
984,332
Amounts owed to group undertakings
6,525,668
5,708,650
Corporation tax
99,200
Other taxation and social security
132,051
139,739
Other creditors
7,965
16,535
Accruals and deferred income
599,336
443,572
8,377,835
7,392,028
Amounts owed to group undertakings are interest free and repayable on demand.
CURTIS WOOL DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
(10,876)
(9,742)
Short term timing differences
(54,507)
(40,258)
(65,383)
(50,000)
2023
Movements in the year:
£
Asset at 1 January 2023
(50,000)
Credit to profit or loss
(15,383)
Asset at 31 December 2023
(65,383)
17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
49,331
55,688
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.
18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary 'B' shares of £1 each
2,915,711
2,915,711
2,915,711
2,915,711
The shares carry rights to vote, participate in a return of capital and also rights to dividends and distributions.
19
Related party transactions
The company has taken advantage of the exemption available in Section 33.1A of FRS 102 whereby it has not disclosed transactions with the ultimate parent company or any wholly owned subsidiary undertaking of the group.
CURTIS WOOL DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
20
Ultimate controlling party
The immediate parent undertaking of the company is Curtis Wool Direct Holdings Limited, incorporated in England and Wales.
The parent undertaking and ultimate controlling party of the largest group for which consolidated accounts are prepared in Nortura SA, a company incorporated in Norway. Consolidated accounts are available from their registration office PO Box 360, Okern, 0513 Oslo.
The parent undertaking of the smallest group for which consolidated accounts are prepared is Curtis Wool Direct Holdings Limited. Consolidated accounts are available from the Companies House, Crown Way, Cardiff, CF14 3UZ. The registered office of Curtis Wool Direct Holding Limited is Lawrence House, Dowley Gap Business Park, Bingley, West Yorkshire, BD16 1WA.
21
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
524,881
499,237
Company pension contributions to defined contribution schemes
3,963
3,963
528,844
503,200
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
200,280
192,101
During the year retirement benefits were accruing to 3 directors (2022 - 3) in respect of defined contribution pension schemes.
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