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Registered number: 06027737










N. PEAL (RETAIL) LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 
N. PEAL (RETAIL) LIMITED
 

COMPANY INFORMATION


Director
Mr A N C Holdsworth 




Company secretary
Mr I Taylor



Registered number
06027737



Registered office
The Vineries Broughton Hall
Broughton

Skipton

BD23 3AE




Independent auditors
Sagars Accountants Ltd

Gresham House

5-7 St Paul's Street

Leeds

LS1 2JG





 
N. PEAL (RETAIL) LIMITED
 

CONTENTS



Page
Strategic Report
1 - 3
Director's Report
4
Director's Responsibilities Statement
5
Independent Auditors' Report
6 - 9
Statement of Income and Retained Earnings
10
Statement of Financial Position
11
Notes to the Financial Statements
12 - 25


 
N. PEAL (RETAIL) LIMITED
 

STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction

The director presents his strategic report together with the audited financial statements for the year to the 31st of December 2023. 
The company was established in 2006 and has become a multi-channel retail business renowned for high quality cashmere under the N.Peal brand. The principal activity of the company throughout the year was the design and sale of luxury cashmere clothing.
The company operates through the following channels:
- Retail stores: the brand operates 12 stores across the UK, USA, Germany and Ireland 
- Online: the brand operates a scalable and growing web business in three currencies (UK£, US$ and Euro€)
- Wholesale: the brand operates as a wholesaler to selected brands

Business review
 
The director is pleased to report another year of strong growth across with business with sales of £23.8m (2022:£20.8m) up 14% on the previous year.  Investment in senior management and the company infrastructure has continued, in order to prepare the Group for the next phase of growth over the coming five years.
During the year, the director made significant progress in implementing its strategies by: 
- Investment in the update of the Harriet Street store in June 2023.
- Delivering significant growth across our Retail Portfolio.  Maintaining growth in the Ecommerce channel, by replacing the sales generated by the latest Bond movie. Sales peaked in 2021 and continued into 2022 and 2023, on a diminishing basis.  
- Development of new brand collaborations with third parties.
- Investment in new Product Categories 
- Investment in Head Office management team and developing & improving processes and systems.

Page 1

 
N. PEAL (RETAIL) LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Principal risks and uncertainties

The Directors understand the need for robust risk management and continue to monitor trading performance on a regular basis.
The Directors consider the following matters to be the principal risks and uncertainties to the Company:
• Economic Climate: As a luxury retail business, N.Peal will always be exposed to the impact of local economic conditions within the markets in which it operates. As the company expands further globally, the impact of any local concern will become less significant for the group as a whole.
• Production risk: The Company continues to build its business through all of its channels to mitigate the effect of each channel and develop a broad range of products to mitigate the decline of individual product categories.
• Foreign Currency Risk: International manufacturers are part of our supply chain so the business is exposed to currency movements in USD and EUR. To mitigate this risk, the business hedges some of its exposure, monitors exchange rates and reviews its overall exchange exposure on a regular basis.
• The principal internal risk arises from the growth of the business putting pressure on key resources. The Company depends on its ability to manage its people and infrastructure. The Company regularly reviews its future requirements for people, space and systems to understand the impact on the business.
• The management of the supply chain from sourcing through to the Company's distribution center is key to the business. The Company continually reviews the management of product delivery to ensure any problems are managed appropriately and in a timely manner.
• Brexit: Although the exit from the EU is now complete, there remains some uncertainty about the impact on long term trading relationships and there was an increase in freight costs into the EU from the start of 2021. The Company has developed an updated distribution model to mitigate these risks and we do not believe there is any significant overall risk to our business model.

Financial key performance indicators
 
The key KPI’s for the business are:
- Adjusted Earnings Before Interest, Tax, Depreciation, Amortisation and Exceptional Items (EBITDA) 
- Gross margin % and margin growth.
- Like for Like (LFL) growth in retail and on-line sales.
For the year ended 31 December 2023:
- Adjusted EBITDA was £2.4.m (2022: £2.08m). 
- Gross margin% was 45.9% (2022: 44.3%)
- LFL increase in sales was +11.4% across the business.
The director feels that the business is in a strong position for the next phase of growth. 

Future developments
 
The directors expect that turnover for 2024 will show an increase on 2023.  The Company will continue to focus on developing a multi-channel offering with a continued emphasis to growing the online channel to full potential through investment online marketing and continuous development of our ecommerce platform. Marketing efforts remain focused on direct to consumer sales channels. The Company will continue to invest in people, processes and systems to help deliver business growth. 

Page 2

 
N. PEAL (RETAIL) LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


This report was approved by the board on 12 September 2024 and signed on its behalf.



Mr A N C Holdsworth
Director

Page 3

 
N. PEAL (RETAIL) LIMITED
 

 
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

The director presents his report and the financial statements for the year ended 31 December 2023.

Dividends


The particulars of recommended dividends are detailed in the notes to the financial statements. 

Director

The director who served during the year was:

Mr A N C Holdsworth 

Disclosure of information to auditors

The director at the time when this Director's Report is approved has confirmed that:
 
so far as he is aware, there is no relevant audit information of which the Company's auditors are unaware, and

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

Post balance sheet events

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

Auditors

The auditorsSagars Accountants Ltdwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 12 September 2024 and signed on its behalf.
 





Mr A N C Holdsworth
Director

Page 4

 
N. PEAL (RETAIL) LIMITED
 

DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023

The director is responsible for preparing the Strategic Report, the Director's Report and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the director must not approve the financial statements unless he is 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 director is required to:

select suitable accounting policies for the Company's financial statements 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 director is 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 to enable him to ensure that the financial statements comply with the Companies Act 2006He is 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.

Page 5

 
N. PEAL (RETAIL) LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF N. PEAL (RETAIL) LIMITED
 

Opinion


We have audited the financial statements of N. Peal (Retail) Limited (the 'Company') for the year ended 31 December 2023, which comprise the Statement of Income and Retained Earnings, the Statement of Financial Position and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the 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.


Basis for opinion


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


Conclusions relating to going concern


In auditing the financial statements, we have concluded that the director's 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 director with respect to going concern are described in the relevant sections of this report.


Other information


The other information comprises the information included in the Annual report other than the financial statements and our Auditors' Report thereon. The director is responsible for the other information contained within the Annual reportOur opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.


We have nothing to report in this regard.


Page 6

 
N. PEAL (RETAIL) LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF N. PEAL (RETAIL) LIMITED (CONTINUED)


Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the Strategic Report and the Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Director's Report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Director's 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 director's remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of the director
 

As explained more fully in the Director's Responsibilities Statement set out on page 5, the director is 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 director determines 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 director is 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 director either intends to liquidate the Company or to cease operations, or have no realistic alternative but to do so.


Page 7

 
N. PEAL (RETAIL) LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF N. PEAL (RETAIL) LIMITED (CONTINUED)


Auditors' responsibilities for the audit of the financial statements
 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: timing of recognition of contract income and posting of unusual journals along with complex transactions. We discussed these risks with client management, designed audit procedures to test the timing of contract income, tested a sample of journals, selected on a risk basis, to confirm they were appropriate and reviewed areas of judgement and estimation for indicators of management bias to address these risks.
The organisation is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified health and safety as the area most likely to have such an effect. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any.


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 is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:


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. 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.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the director.
Conclude on the appropriateness of the director's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors' Report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditors' Report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a
Page 8

 
N. PEAL (RETAIL) LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF N. PEAL (RETAIL) LIMITED (CONTINUED)


manner that achieves fair presentation.


We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.


Use of our report
 

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





Helen Daniels LLB FCA CTA (Senior Statutory Auditor)
  
for and on behalf of
Sagars Accountants Ltd
 
Statutory Auditor
  
Gresham House
5-7 St Paul's Street
Leeds
LS1 2JG

16 September 2024
Page 9

 
N. PEAL (RETAIL) LIMITED
 

STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

  

Turnover
 4 
23,833,385
20,828,956

Cost of sales
  
(12,883,807)
(11,591,418)

Gross profit
  
10,949,578
9,237,538

Administrative expenses
  
(8,901,017)
(7,509,296)

Other operating income
 5 
84,618
7,547

Operating profit
 6 
2,133,179
1,735,789

Interest payable and similar expenses
 10 
(164,920)
(66,527)

Profit before tax
  
1,968,259
1,669,262

Tax on profit
 11 
(545,840)
(251,942)

Profit after tax
  
1,422,419
1,417,320

  

  

Retained earnings at the beginning of the year
  
5,137,167
5,219,847

  
5,137,167
5,219,847

Profit for the year
  
1,422,419
1,417,320

Dividends declared and paid
  
(250,000)
(1,500,000)

Retained earnings at the end of the year
  
6,309,586
5,137,167
There were no recognised gains and losses for 2023 or 2022 other than those included in the statement of income and retained earnings.

All of the activities of the company are from continuing operations.
There was no other comprehensive income for 2023. (2022: £NIL).

The notes on pages 12 to 25 form part of these financial statements.

Page 10

 
N. PEAL (RETAIL) LIMITED
REGISTERED NUMBER: 06027737

STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 13 
5,990
13,625

Tangible assets
 14 
426,679
634,595

Investments
 15 
1,082
1,082

  
433,751
649,302

Current assets
  

Stocks
 16 
5,017,553
5,615,392

Debtors: amounts falling due within one year
 17 
3,550,316
2,856,610

Cash at bank and in hand
  
3,513,182
2,382,661

  
12,081,051
10,854,663

Creditors: amounts falling due within one year
 18 
(5,156,215)
(5,537,797)

Net current assets
  
 
 
6,924,836
 
 
5,316,866

Total assets less current liabilities
  
7,358,587
5,966,168

Creditors: amounts falling due after more than one year
 19 
(584,000)
(364,000)

  

Net assets
  
6,774,587
5,602,168


Capital and reserves
  

Called up share capital 
 21 
1
1

Capital redemption reserve
 22 
465,000
465,000

Profit and loss account
 22 
6,309,586
5,137,167

  
6,774,587
5,602,168


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 12 September 2024.




Mr A N C Holdsworth
Director

The notes on pages 12 to 25 form part of these financial statements.

Page 11

 
N. PEAL (RETAIL) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

The principal activity of the company during the year was that of retailing of clothing. The company is a private company limited by shares, registered in England and Wales (No. 06027737). The address of the registered office is The Vineries Broughton Hall, Broughton, Skipton, North Yorkshire, BD23 3AE.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

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

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Water Sprite Limited as at 31st December 2023 and these financial statements may be obtained from The Vineries Broughton Hall, Broughton, Skipton, North Yorkshire, BD23 3AE.

 
2.3

Going concern

The Company is exposed to trading risk in a competitive retail sector. The Company is susceptible to a possible downturn in consumer spending, influenced by factors such as a reduction in disposable income and increases in interest rates. Despite these risks and having assessed the Company's financial position, budgets and cashflow forecasts for the period ending 31 July 2025, the Director has a reasonable expectation that the Company has adequate resources to continue in operational existence for more than a year from the signing of these accounts. Accordingly, the Director continues to adopt the going concern basis of accounting in preparing the financial statements.
The director has further considered the risks and uncertainties facing the company in the Strategic Report.

Page 12

 
N. PEAL (RETAIL) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.4

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

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

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

  
2.5

Revenue recognition

Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts and Value Added Tax.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably.

 
2.6

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.7

Leased assets: the Company as lessee

Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to profit or loss so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.

 
2.8

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of Income and Retained Earnings in the same period as the related expenditure.

Page 13

 
N. PEAL (RETAIL) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.9

Pensions

Defined contribution pension plan

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

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

 
2.10

Taxation

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

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

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

 
2.11

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 Amortisation is provided on the following bases:

Software
-
33%
straight line

 
2.12

Tangible fixed assets

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

Page 14

 
N. PEAL (RETAIL) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.12
Tangible fixed assets (continued)

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

Depreciation is provided on the following basis:

Long-term leasehold property
-
20%, 33% and 100%
Motor vehicles
-
33%
Fixtures and fittings
-
20%, 25% and 100%
Office equipment
-
33%, 50% and 100%

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

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

 
2.13

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

  
2.14

Impairment of fixed assets

A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.
For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets.
For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units.

  
2.15

Stocks

Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell, after making due allowance for obsolete and slow moving stock. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.

 
2.16

Financial instruments

A financial asset or a financial liability is recognised only when the entity becomes a party to the contractual provisions of the instrument.
Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.
 
Page 15

 
N. PEAL (RETAIL) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.16
Financial instruments (continued)

Debt instruments are subsequently measured at amortised cost.
Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately.
For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets are either assessed individually or grouped on the basis of similar credit risk characteristics.

 
2.17

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. Details of these judgements are set out in the accounting policies.


4.


Turnover

An analysis of turnover by class of business is as follows:


2023
2022
£
£

Sale of goods
23,833,385
20,828,956

23,833,385
20,828,956


Analysis of turnover by country of destination:

 
2022
£
£

United Kingdom
17,404,450
14,537,373

Overseas sales
6,428,935
6,291,583

23,833,385
20,828,956


Page 16

 
N. PEAL (RETAIL) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

5.


Other operating income

2023
2022
£
£

Profit on disposal of tangible assets
84,618
7,547

84,618
7,547



6.


Operating profit

The operating profit is stated after charging/crediting:

2023
2022
£
£

Tangible fixed assets - depreciation
435,945
281,550

Intangible fixed assets - amortisation
7,635
59,097

Exchange differences
22,640
(19,527)


7.


Auditors' remuneration

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


2023
2022
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
17,030
8,450

The Company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent Company.

Page 17

 
N. PEAL (RETAIL) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

8.


Employees

Staff costs, including director's remuneration, were as follows:


2023
2022
£
£

Wages and salaries
3,373,780
2,891,610

Cost of defined contribution scheme
2,065
2,065

3,375,845
2,893,675


The average number of employees, including the director, during the year was as follows:


        2023
        2022
            No.
            No.







Distribution staff
61
70



Administrative staff
24
16



Management staff
1
6

86
92


9.


Director's remuneration

2023
2022
£
£

Director's emoluments
77,187
77,372

Company contributions to defined contribution pension schemes
2,065
2,065

79,252
79,437



10.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
164,920
66,527

164,920
66,527

Page 18

 
N. PEAL (RETAIL) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

11.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
536,459
255,500

Adjustments in respect of previous periods
9,381
(3,558)


545,840
251,942


Total current tax
545,840
251,942

Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 23.52% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
1,968,259
1,669,262


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.52% (2022 - 19%)
462,945
317,160

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
1,908
809

Capital allowances for year in excess of depreciation
7,241
(19,100)

Adjustments to tax charge in respect of prior periods
9,381
1,803

Movement in deferred tax not recognised
68,413
(48,730)

Remeasurement of deferred tax for changes in tax rates
(4,048)
-

Total tax charge for the year
545,840
251,942


Factors that may affect future tax charges

The standard rate of corporation tax in the UK increased from 1 April 2023 to 25% on profits greater than £250,000.

Page 19

 
N. PEAL (RETAIL) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

12.


Dividends

2023
2022
£
£


Dividends on equity shares
250,000
1,500,000

250,000
1,500,000


13.


Intangible assets




Computer software

£



Cost


At 1 January 2023
212,420



At 31 December 2023

212,420



Amortisation


At 1 January 2023
198,795


Charge for the year on owned assets
7,635



At 31 December 2023

206,430



Net book value



At 31 December 2023
5,990



At 31 December 2022
13,625



Page 20

 
N. PEAL (RETAIL) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

14.


Tangible fixed assets





Long-term leasehold property
Motor vehicles
Fixtures and fittings
Office equipment
Total

£
£
£
£
£



Cost or valuation


At 1 January 2023
459,918
19,000
2,064,565
447,112
2,990,595


Additions
-
-
303,617
32,635
336,252


Disposals
-
-
(268,901)
(9,000)
(277,901)



At 31 December 2023

459,918
19,000
2,099,281
470,747
3,048,946



Depreciation


At 1 January 2023
429,732
19,000
1,547,707
359,561
2,356,000


Charge for the year on owned assets
3,902
-
377,085
54,958
435,945


Disposals
-
-
(164,369)
(5,309)
(169,678)



At 31 December 2023

433,634
19,000
1,760,423
409,210
2,622,267



Net book value



At 31 December 2023
26,284
-
338,858
61,537
426,679



At 31 December 2022
30,186
-
516,858
87,551
634,595


15.


Fixed asset investments





Investments in subsidiary companies

£



Cost or valuation


At 1 January 2023
1,082



At 31 December 2023
1,082




The company owns 100% of the issued share capital of Blue Sky Cashmere Ltd, a company incorporated in England on 2 December 2014. 
The company owns 100% of the ordinary share capital of N.Peal (USA) inc., a company incorporated in the United States of America on 26 January 2016. 


Page 21

 
N. PEAL (RETAIL) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

16.


Stocks

2023
2022
£
£

Finished goods and goods for resale
5,017,553
5,615,392

5,017,553
5,615,392



17.


Debtors

2023
2022
£
£


Trade debtors
569,794
465,809

Amounts owed by group undertakings
1,332,263
1,198,575

Other debtors
709,353
219,177

Prepayments and accrued income
938,906
973,049

3,550,316
2,856,610



 The Intercompany balance is made up of transactions with N Peal USA, Blue Sky Cashmere Limited & Inner Mongolia Pure Peal Trading Co. These are working capital related debt.

Page 22

 
N. PEAL (RETAIL) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

18.


Creditors: Amounts falling due within one year

2023
2022
£
£

Bank overdrafts
-
636,390

Bank loans
-
182,000

Trade creditors
831,105
920,417

Amounts owed to group undertakings
1,780,935
1,038,625

Corporation tax
261,635
255,500

Other taxation and social security
653,047
1,118,931

Other creditors
85,912
426,966

Accruals and deferred income
1,543,581
958,968

5,156,215
5,537,797


The following liabilities were secured: Liabilities of £584,000 (2022: £636,390) disclosed within bank overdrafts and £NIL (2022: £182,000 disclosed within bank loans falling due within one year were secured by the company. 
The bank has a legal right of set-off incorporated in an unlimited multilateral guarantee with the Company and Water Sprite Limited.
Amounts owed to group undertakings includes a secured amount of £1,757,118 (2022: £1,024,246) due to Water Sprite Limited. This is secured by way of a fixed and floating charge over all current and future assets of the company.


19.


Creditors: Amounts falling due after more than one year

2023
2022
£
£

Bank loans
584,000
364,000

584,000
364,000


The following liabilities were secured: Liabilities of £584,000 (2022: £364,000) disclosed within bank loans falling due after more than one year are secured by the company.
HSBC bank borrowings are secured by a debenture including a fixed and floating charge over all current and future assets of the company. The bank also has a legal right of set-off incorporated in an unlimited multilateral guarantee with the Company and Water Sprite Limited

Page 23

 
N. PEAL (RETAIL) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

20.


Loans


Analysis of the maturity of loans is given below:


2023
2022
£
£

Amounts falling due within one year

Bank loans
-
182,000


-
182,000

Amounts falling due 1-2 years

Bank loans
584,000
182,000


584,000
182,000

Amounts falling due 2-5 years

Bank loans
-
182,000


-
182,000


584,000
546,000



21.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



1 (2022 - 1) Ordinary share of £1.00
1
1



22.


Reserves

Capital redemption reserve

Capital redemption reserve - This reserve records the nominal value of shares repurchased by the company.

Profit and loss account

Profit and loss account - This reserve records retained earnings and accumulated losses.

Page 24

 
N. PEAL (RETAIL) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

23.


Commitments under operating leases

At 31 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£


Not later than 1 year
2,310,540
1,116,188

Later than 1 year and not later than 5 years
7,112,120
2,608,867

Later than 5 years
833,271
3,244,583

10,255,931
6,969,638


24.Contingencies

Under the terms of an unlimited cross guarantee the company has guaranteed the bank borrowings of the parent company Water Sprite Limited. The amount is unlimited and is secured by a fixed and floating charge over the assets of the company. Water Sprite Limited did not have any bank borrowings at the year end.
Under the terms of a lease agreement signed by N Peal (USA) Inc. the company has agreed to act as a guarantor on the lease. The amount is limited to the amounts owed under the lease agreement.


25.


Transactions with directors

The company was under the control of Mr A Holdsworth throughout the current and previous year. Mr A Holdsworth is the managing director.
Included in Debtors is £168,247 due from Mr A Holdsworth (2022: Creditor balance of £426,966).


26.


Controlling party

The company was a wholly owned subsidiary of Water Sprite Limited throughout the current and previous year. Water Sprite Limited is the smallest and largest consolidating entity.


Page 25