Company registration number 01029047 (England and Wales)
HAWORTH SCOURING COMPANY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
HAWORTH SCOURING COMPANY LIMITED
COMPANY INFORMATION
Directors
Mr T L Holgate
Mr D A Isbecque
Mr K H Sævik
Ms K Ireland
Ms S Meling
Mr R Norris
Mr R G Fjeldheim
(Appointed 12 June 2023)
Mr P Stride
(Appointed 12 June 2023)
Secretary
Mr D A Isbecque
Company number
01029047
Registered office
Cashmere Works
Birksland Street
Bradford
West Yorkshire
BD3 9SX
Auditor
Azets Audit Services Limited
12 King Street
Leeds
LS1 2HL
HAWORTH SCOURING COMPANY LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 22
HAWORTH SCOURING COMPANY 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.
Business review
The business remains a market leading early stage wool processor and operates in a challenging environment. It is pleasing to report a stronger trading year, despite higher energy prices and other inflationary pressures. The business is committed to implementing BAT strategies and remains focussed on minimising operating costs. Investments are targeted at environmentally and sustainable improvements to reduce carbon footprint and to decrease the cost of energy and effluent. A CHP was successfully commissioned during the year to generate the electricity required by the site.
The directors report a turnover of £10,028,620 for the year ended 31 December 2023 compared to a turnover of £7,956,228 for the year ended 31 December 2022. The profit before tax for the year of £317,276 compares with a loss before tax of £598,886 for the prior year.
Advances towards net zero remain a high priority and the company is looking to make further improvements, leaving it well placed to meet future challenges.
Principal risks and uncertainties
The company is exposed to a number of risks.
Wool scoured by the company is delivered across the global market. The global economy and consumer demand have fluctuated over the past few years, ultimately affecting volume through the site. The company has successfully navigated its way through times of high and low volumes and therefore have strategies in place to deal with this uncertainty.
Financial key performance indicators
The key performance indicators used by the directors to measure the performance of the company are the gross and operating margins. They are considered to represent the level of throughput and efficiency of operations. These are reviewed on a continual basis, to ensure that targets and budgets are being met.
Going concern
The company had net current liabilities of £2,608,185 (2022 - £3,015,479) at the reporting date.
The company is a member of the group headed by Curtis Wool Direct Holdings Limited with all cash and funding historically managed centrally across the group. As the going concern of the company is dependent on that of the wider group, it has been assessed at the group level. The directors of the group have monitored the impact of the cost of inflation and the effects of global events on the group’s financial projections, cash flows and the wider going concern status. There have not been any significant issues and there are none foreseen that will reduce the ability to provide its ongoing support to the company. Curtis Wool Direct Holdings Limited has provided confirmation to the directors of the company that these arrangements will continue for the foreseeable future. The directors have had regard to these confirmations, as well as the overall going concern assessment in respect of the group.
The directors have reviewed the budgets and forecasts for the foreseeable future and conclude that the company has the ability to continue as a going concern.
Mr T L Holgate
Director
29 April 2024
HAWORTH SCOURING 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 is that of wool scouring.
Results and dividends
The results for the year are set out on page 8.
No interim 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:
Mr T L Holgate
Mr D A Isbecque
Mr D N Gisbourne
(Resigned 5 April 2024)
Mr E S Høeg
(Resigned 5 April 2024)
Mr K H Sævik
Ms K Ireland
Ms S Meling
Mr R Norris
Mr R G Fjeldheim
(Appointed 12 June 2023)
Mr P Stride
(Appointed 12 June 2023)
Mr K P Daugaard
(Resigned 12 June 2023)
Qualifying third party indemnity provisions
The group 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.
Financial instruments
The company does not actively use financial instruments as part of its risk management. It is exposed to the usual credit risk and cash flow risk associated with selling on credit and manages this through credit control procedures. The nature of its financial instruments means that they are not subject to a price risk or liquidity risk.
Auditor
The auditor, Azets Audit Services Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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.
HAWORTH SCOURING COMPANY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
On behalf of the board
Mr T L Holgate
Director
29 April 2024
HAWORTH SCOURING 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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
HAWORTH SCOURING COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HAWORTH SCOURING COMPANY LIMITED
- 5 -
Opinion
We have audited the financial statements of Haworth Scouring Company 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 loss 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.
HAWORTH SCOURING COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HAWORTH SCOURING COMPANY LIMITED
- 6 -
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.
HAWORTH SCOURING COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HAWORTH SCOURING COMPANY LIMITED
- 7 -
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
HAWORTH SCOURING COMPANY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
10,028,620
7,956,228
Cost of sales
(6,926,790)
(6,417,927)
Gross profit
3,101,830
1,538,301
Administrative expenses
(2,588,594)
(2,091,671)
Operating profit/(loss)
4
513,236
(553,370)
Interest payable and similar expenses
6
(195,960)
(45,516)
Profit/(loss) before taxation
317,276
(598,886)
Tax on profit/(loss)
7
(552,178)
40,481
Loss for the financial year
(234,902)
(558,405)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
HAWORTH SCOURING COMPANY LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
8
6,315,686
6,378,160
Current assets
Stocks
9
112,808
156,945
Debtors
10
1,089,395
2,345,016
Cash at bank and in hand
902
1,085
1,203,105
2,503,046
Creditors: amounts falling due within one year
11
(3,811,290)
(5,518,525)
Net current liabilities
(2,608,185)
(3,015,479)
Total assets less current liabilities
3,707,501
3,362,681
Provisions for liabilities
Deferred tax liability
12
854,722
275,000
(854,722)
(275,000)
Net assets
2,852,779
3,087,681
Capital and reserves
Called up share capital
14
2,500
2,500
Profit and loss reserves
2,850,279
3,085,181
Total equity
2,852,779
3,087,681
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. 01029047
HAWORTH SCOURING COMPANY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
2,500
3,643,586
3,646,086
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
(558,405)
(558,405)
Balance at 31 December 2022
2,500
3,085,181
3,087,681
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
(234,902)
(234,902)
Balance at 31 December 2023
2,500
2,850,279
2,852,779
HAWORTH SCOURING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information
Haworth Scouring Company Limited is a private company limited by shares incorporated in England and Wales. The registered office is Cashmere Works, Birksland Street, Bradford, West Yorkshire, BD3 9SX.
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
The company had net current liabilities of £2,608,185 (2022 - £3,015,479) at the reporting date.true
The company is a member of the group headed by Curtis Wool Direct Holdings Limited with all cash and funding historically managed centrally across the group. As the going concern of the company is dependent on that of the wider group, it has been assessed at the group level. The directors of the group have monitored the impact of the cost of inflation and the effects of global events on the group’s financial projections, cash flows and the wider going concern status. There have not been any significant issues and there are none foreseen that will reduce the ability to provide its ongoing support to the company. Curtis Wool Direct Holdings Limited has provided confirmation to the directors of the company that these arrangements will continue for the foreseeable future. The directors have had regard to these confirmations, as well as the overall going concern assessment in respect of the group.
The directors have reviewed the budgets and forecasts for the foreseeable future and conclude that the company has the ability to continue as a going concern.
HAWORTH SCOURING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.3
Turnover
Turnover comprises revenue recognised by the company in respect of scouring services supplied during the year, exclusive of Value Added Tax and trade discounts.
Turnover is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on the completion of scouring services rendered; when the turnover can be reliably measured; when it is probable that future economic benefits will flow to the company and when specific company criteria have been met.
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:
Freehold property
2.5% straight line
Plant, Machinery and Fixtures
5 - 20% straight line
Computer equipment
33% straight line
Motor vehicles
25% straight line
Assets in the course of construction are not depreciated.
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 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.
HAWORTH SCOURING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.6
Stocks
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated net realisable value is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, 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 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.
HAWORTH SCOURING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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, 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.
HAWORTH SCOURING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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.
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.
1.11
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
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.
HAWORTH SCOURING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.14
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Impairment of fixed assets
Determine whether there are indications of impairment of the company's tangible assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset and where it is a component of a larger cash‑generating unit, the viability and expected future performance of that unit. No impairment has been identified in the year ended 31 December 2023.
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.
Tangible fixed assets (see note 8)
Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re‑assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of an asset and projected disposal values.
3
Turnover
Turnover in the current and previous financial years is wholly attributable to the principal activity of the company and arose solely within the United Kingdom.
HAWORTH SCOURING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
4
Operating profit/(loss)
2023
2022
Operating profit/(loss) for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
8,675
7,733
Depreciation of owned tangible fixed assets
482,087
362,837
(Profit)/loss on disposal of tangible fixed assets
(1,500)
49
Operating lease charges
86,338
144,897
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
3
5
Production
54
54
Total
57
59
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,051,459
2,145,248
Social security costs
210,367
208,380
Pension costs
56,462
49,278
2,318,288
2,402,906
6
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
101,422
-
Other interest on financial liabilities
94,538
45,516
195,960
45,516
7
Taxation
2023
2022
£
£
Current tax
Adjustments in respect of prior periods
(27,544)
HAWORTH SCOURING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Taxation
2023
2022
£
£
(Continued)
- 18 -
Deferred tax
Origination and reversal of timing differences
820,287
(31,376)
Changes in tax rates
(9,046)
Adjustment in respect of prior periods
(240,565)
(59)
Total deferred tax
579,722
(40,481)
Total tax charge/(credit)
552,178
(40,481)
The actual charge/(credit) 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
317,276
(598,886)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
74,623
(113,788)
Tax effect of expenses that are not deductible in determining taxable profit
365
Tax effect of income not taxable in determining taxable profit
(1,484)
Adjustments in respect of prior years
(27,544)
(2,733)
Effect of change in corporation tax rate
(9,046)
Group relief
701,804
69,094
Depreciation on assets not qualifying for tax allowances
(4,913)
17,535
Deferred tax adjustments in respect of prior years
(240,565)
(59)
Change in provisions tax rate
48,545
Deduction for land remediation expenditure
(137)
Taxation charge/(credit) for the year
552,178
(40,481)
HAWORTH SCOURING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
8
Tangible fixed assets
Freehold property
Assets under construction
Plant, Machinery and Fixtures
Computer equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 January 2023
5,309,302
2,584,411
11,789,305
280,644
40,913
20,004,575
Additions
20,208
393,178
6,227
419,613
Transfers
(2,604,619)
2,599,138
5,481
At 31 December 2023
5,309,302
14,781,621
292,352
40,913
20,424,188
Depreciation and impairment
At 1 January 2023
2,642,441
10,691,969
255,154
36,851
13,626,415
Depreciation charged in the year
120,467
350,379
9,616
1,625
482,087
At 31 December 2023
2,762,908
11,042,348
264,770
38,476
14,108,502
Carrying amount
At 31 December 2023
2,546,394
3,739,273
27,582
2,437
6,315,686
At 31 December 2022
2,666,861
2,584,411
1,097,336
25,490
4,062
6,378,160
9
Stocks
2023
2022
£
£
Raw materials and consumables
112,808
156,945
There is no material difference between the replacement cost of stock and the amounts presented above.
10
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
195,126
256,227
Corporation tax recoverable
27,544
Amounts owed by group undertakings
792,593
1,736,481
Other debtors
177,175
Prepayments and accrued income
74,132
175,133
1,089,395
2,345,016
Amounts owed by group undertakings are interest free and repayable on demand.
HAWORTH SCOURING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
11
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Loans owed to group undertakings
1,541,763
1,541,763
Trade creditors
1,095,362
616,244
Amounts owed to group undertakings
191,028
2,519,837
Taxation and social security
356,817
139,767
Other creditors
2,347
12,889
Accruals and deferred income
623,973
688,025
3,811,290
5,518,525
Amounts owed to group undertakings are interest free and repayable on demand.
Interest is charged on loans owed to group undertakings at a rate of base + 0.75% p.a.
12
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
923,736
298,185
Tax losses
(67,902)
-
Other timing differences
(1,112)
(23,185)
854,722
275,000
2023
Movements in the year:
£
Liability at 1 January 2023
275,000
Charge to profit or loss
579,722
Liability at 31 December 2023
854,722
HAWORTH SCOURING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
13
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
56,462
49,278
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.
14
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
2,500
2,500
2,500
2,500
15
Operating lease commitments
Lessee
Operating lease payments represent rentals payable by the company for certain of its properties and assets.
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
21,406
31,653
Between two and five years
58,468
21,938
79,874
53,591
16
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.
17
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 is Nortura SA, a company incorporated in Norway. Consolidated accounts are available from their registered office at 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 Companies House, Crown Way, Cardiff, CF14 3UZ. The registered office of Curtis Wool Direct Holdings Limited is Lawrence House, Dowley Gap Business Park, Bingley, West Yorkshire, BD16 1WA.
HAWORTH SCOURING COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
18
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
113,730
160,064
Company pension contributions to defined contribution schemes
12,661
-
126,391
160,064
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
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