Registered number: 01144907
FOX INTERNATIONAL GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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FOX INTERNATIONAL GROUP LIMITED
COMPANY INFORMATION
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L Waterman (appointed 20 April 2023)
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G Quinn (appointed 8 August 2023)
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Third Floor, Priory Place
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FOX INTERNATIONAL GROUP LIMITED
CONTENTS
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Independent Auditor's Report
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Statement of Comprehensive Income
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Statement of Financial Position
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Statement of Changes in Equity
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Notes to the Financial Statements
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FOX INTERNATIONAL GROUP LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The Directors present their Strategic Report and the audited financial statements of the Company for the year ended 31 December 2023.
The objective of Fox International Group Limited remains to produce innovative and unique fishing equipment and accessories which make a difference to the Company's customers. To achieve this, the Company's strategy is of continuous investment in research and development and tooling for new products.
The business saw another successful year despite ongoing global challenges. The focus of the year saw efforts to liquidate the significant build of stock that had resulted as a function of the supply chain disruption seen during the post Covid period. This involved significant discounting which resulted in a drop in turnover in the period of 7% however, the business continued to keep close control over purchase costs meaning the gross margin percentage was maintained at 43% year on year, despite the gross margin being impacted by a £241k loss on foreign exchange this year compared to a £1.6m gain in 2022.
Administrative costs were significantly higher this year due to an unfavourable foreign exchange movement on the company’s foreign exchange contracts at the year end, the run off of increased freight and storage costs incurred due to the pandemic that had been capitalised into stock and released throughout the year, plus fees borne by the company relating to wider Group restructuring activities, which were slightly offset by a reduction in demurrage and offsite storage related to supply chain disruption incurred in the prior year.
The increase in net assets £57.7m (2022: £54.5m) reflects a strong year's activity. Cash was generated by the reduction of the stock levels by 43% to £18m (2022: £32m) and was passed to the wider Group which resulted in an increase in the intercompany debtor balance.
Design, innovation and the introduction of new products continues to be critical to the business success. The Company continues to invest considerable amounts in research and development in advance of products coming to market. The popularity of the new products, plus the acceptance of them by anglers, is the number one objective of the Company. To continually generate this increase in demand the business invests heavily in producing and editing high quality video content. The continued strong financial performance in the year is evidence of the success of our design and innovation.
The directors are pleased with the performance of the Company in the year. The 29% reduction in EBITDA was a result of the one off costs mentioned above.
Principal risks and uncertainties
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Sporting goods are non-essential items and as such the business is susceptible to general macro-economic forces. As an outdoor pursuit, angling is also seasonal and severe weather can also impact sales. The Company's approach to mitigate these risks is to broaden its geographical market presence in order to reduce exposure to these factors on a regional basis.
The majority of the Company's revenue is in Euros and British Pounds, whilst the main purchasing currency is US Dollars. Fluctuations in exchange rates can have a significant impact on the business and as a result management have a formal strategy in place to manage foreign exchange risk. This represents a key challenge to the business in addition to maintaining stability through ever changing global uncertainty, supply chain disruption and steering through economic headwinds such as inflation and interest rate pressures.
The availability of skilled labour is a potential challenge to the Company. We provide training and development opportunities to upskill current employees as well as employing a robust recruitment strategy to attract and retain skilled labour.
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FOX INTERNATIONAL GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Management seek to ensure that the risk of loss of data and business interruption due to failures in IT security is mitigated to the greatest extent possible through the use of monitored Anti-Virus software, secure back up systems and regular review and enhancement of IT systems and policies.
The Directors are pleased with the continued performance of the business and the Directors feel the business is well placed to take on any future challenges.
Financial key performance indicators
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The key performance indicators for the company are turnover, gross profit and EBITDA.
As noted above, turnover of £69.3m (2022: £74.9m) produced a 7% decline year on year as the business discounted some stock lines to bring down the unusually high levels. In continuing to improve our customers’ experience with high quality, excellent value product ranges we aim to increase market share throughout all brands, aiding staff motivation. Target sales are set each year which are measured against actual sales achieved monthly.
The business has maintained strong gross profit margins of 42.7% in the year (2022 – 42.9%).
EBITDA for the year ended 31 December 2023 was £7.5m (2022 - £10.6m). EBITDA as a percentage of turnover has decreased from 14% to 11%. The drop in EBITDA is largely due to administrative costs being significantly higher this year due to foreign exchange losses in the year (compared to gains in the previous year) and the unfavorable movements on the Company’s foreign exchange forward contract valuations..
To ensure maximum value is delivered on behalf of stakeholders to the business, EBITDA targets are set and reviewed regularly.
Stock levels are reviewed on an ongoing basis, thereby highlighting any potential problems in relation to shortages of stock or ageing stocks. Stock turn also remains a key indicator of buying efficiencies. Management is happy that the level of stock has returned to a more normal level and is actively looking to improve supply chain efficiencies and the quality and availability of stock to its customer base.
Directors' S172 statement of compliance with duty to promote the success of the Company
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The directors of the Company, as those of all UK companies, must act in accordance with a set of general duties. These duties are detailed in the Companies Act 2006 and include a duty to promote the success of the Company.
The directors consider it crucial that the Company maintains a reputation for the highest standards of business conduct and are responsible for setting, reviewing and upholding the culture, values, standards, ethics and reputation of the Company to ensure obligations to key stakeholders are met. By using the core values of the business, we seek to sustain and develop strong, stable, profitable partnerships with all our customers, employees and suppliers by providing outstanding products.
During the period, the directors consider that they have at all times acted in a way, and have made decisions, that would most likely promote the success of the Company and for the benefit of its members as a whole, and in making those decisions have had particular regard to:
- the likely consequence of any decision in the long term;
- the interest of the Company's employees;
- the need to foster the Company's business relationships with suppliers, customers and others;
- the impact of the Company's operations on the community and the environment;
- the desirability of the Company maintaining a reputation for high standards of business conduct; and
- the need to act fairly between members of the Company.
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FOX INTERNATIONAL GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The engagement of key stakeholders is summarised as follows:
Our people
We have a range of mechanisms whereby we engage with and seek feedback from all our employees. We want to work hand in hand with them to ensure that the Company is an inspiring place to work and maximise their involvement and contribution to the business.
Business relationships
We regularly engage with both existing and future customers both seeking feedback from them and providing them with details of future products. We value all of our suppliers and have many mutually beneficial business relationships.
Community and environment
We try to be a positive influence in the life of the communities in which we operate, for example encouraging children to get involved in fishing, and strive to minimise our impact on the environment as much as possible. We operate from modern premises which have been built and fitted to high energy saving standards.
Shareholders
We ensure that we keep our shareholders regularly updated on developments through detailed monthly reporting and bi-monthly board meetings at which the UK CEO presents.
This report was approved by the board and signed on its behalf.
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FOX INTERNATIONAL GROUP LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
The principal activity of Fox International Group Limited is to produce innovative, high quality performance products that have been designed by anglers for anglers.
The profit for the year, after taxation, amounted to £3,187,360 (2022 - £6,698,173).
A dividend of £Nil was declared in the year (2022 - £Nil).
The directors who served during the year and up to the date of signing these financial statements were:
I Astley (resigned 1 February 2023)
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P Reeves (resigned 29 September 2023)
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L Waterman (appointed 20 April 2023)
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G Quinn (appointed 8 August 2023)
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Financial risk management objectives and policies
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The four key risks the Company monitors are interest rate risk, liquidity risk, credit risk and foreign exchange risk.
Interest rate risk
The Company finances its operations through a mixture of retained profits and borrowings from group companies thus minimising exposure to interest rate risk from external borrowings.
Liquidity risk
The repayments terms of the intercompany balances have been structured to be serviced from cash generated by operating activities.
Credit risk
The credit rating of significant customers is monitored regularly.
Foreign exchange risk
Presently a high proportion of the company's purchases are in US Dollars (USD). Significant exchange rate fluctuations could materially impact the company's performance. This risk is mitigated by at group level by entering into forward contracts based on forecast transactions to achieve or better these rates.
Research and development activities
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The Company is continually researching and developing new products for use in its principal activity. During the year, the Company charged amounts of £199,285 to profit and loss and capitalised £589,324 (2022 - £141,320 charged and £455,981 capitalised) relating to research and development.
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FOX INTERNATIONAL GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Qualifying third party indemnity provisions
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An indirect parent company, Rather Outdoors Corporation, maintains liability insurance for the Company's Directors and Officers. The insurance cover does not provide cover in the event a Director or Officer is proved to have acted fraudulently or dishonestly. The indemnity is categorised as a ‘qualifying third-party indemnity’ for the purposes of the Companies Act 2006 and will continue in force for the benefit of Directors and Officers on an ongoing basis.
Branches outside the United Kingdom
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The Company has a branch in Belgium.
Matters covered in the Strategic Report
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Information on engagement with key stakeholders and the key risks and uncertainties of the Company is contained within the Strategic Report as permitted by S414C paragraph 11 of the Companies Act 2006.
Statement of directors' responsibilities in respect of the financial statements
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The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare audited financial statements for each financial year. Under that law the directors have prepared 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 judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. The directors 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.
Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and
∙the director 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.
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FOX INTERNATIONAL GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
At the date of approval of the financial statements the directors have considered the continued challenges posed by the uncertainties of the ongoing war in Ukraine and Red Sea disruption and the resultant impact on business conditions in Europe.
The business continues to be impacted by delays in the supply chain seen as a result of the disruption to shipping through the Red Sea and is working hard to maintain stock levels and availability.
Sporting goods are non-essential items and as such the business is susceptible to general macro-economic forces. As an outdoor pursuit, angling is also seasonal and severe weather can also impact sales. The Company's approach to mitigate these risks is to broaden its geographical market presence in order to reduce exposure to these factors on a regional basis.
The directors make an estimate of the future performance of the Company in order to prepare the financial statements on a going concern basis. When assessing future performance, the directors consider financial projections which reflect current and expected market conditions. Based on the consideration of financing facilities, and after modelling of severe but plausible scenarios on forecasted cash flows and considering the progress of the Company, the directors have a reasonable expectation that the Company will be able to execute their plans such that they will have adequate resources to continue in operational existence for the foreseeable future and for a period of at least 12 months from the date of approval of these financial statements.
As part of their assessment on going concern, the directors of Maui Bidco Limited have obtained confirmation in writing from the holders of the 6.125% unsecured loan notes that they will not seek contractual payments of interest in cash if the Maui Bidco group is unable to make these payments. Maui Bidco Limited is primarily reliant on the operating cashflows of Fox International Group Limited to make these payments, and as such that confirmation is required to enable the directors to conclude in respect of the going concern status of both entities.
The auditors, RSM UK Audit LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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FOX INTERNATIONAL GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FOX INTERNATIONAL GROUP LIMITED
We have audited the financial statements of Fox International Group Limited (the 'Company') for the year ended 31 December 2023, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, 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 FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
∙give a true and fair view of the state of the Company's affairs as at 31 December 2023 and of its profit for the year then ended;
∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
∙have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
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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.
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FOX INTERNATIONAL GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FOX INTERNATIONAL GROUP LIMITED (CONTINUED)
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.
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the 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.
Matters on which we are required to report by exception
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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 directors' remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
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FOX INTERNATIONAL GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FOX INTERNATIONAL GROUP LIMITED (CONTINUED)
Responsibilities of directors
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As explained more fully in the Directors' Responsibilities Statement set out on page 5, 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
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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.
The extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain sufficient appropriate audit evidence regarding compliance with laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements, to perform audit procedures to help identify instances of non-compliance with other laws and regulations that may have a material effect on the financial statements, and to respond appropriately to identified or suspected non-compliance with laws and regulations identified during the audit.
In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatement of the financial statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud through designing and implementing appropriate responses and to respond appropriately to fraud or suspected fraud identified during the audit.
However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:
∙obtained an understanding of the nature of the industry and sector, including the legal and regulatory framework that the company operates in and how the company is complying with the legal and regulatory framework;
∙inquired of management, and those charged with governance, about their own identification and assessment of the risks of irregularities, including any known actual, suspected or alleged instances of fraud;
∙discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the financial statements may be susceptible to fraud.
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FOX INTERNATIONAL GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FOX INTERNATIONAL GROUP LIMITED (CONTINUED)
As a result of these procedures we consider the most significant laws and regulations that have a direct impact on the financial statements are FRS 102, the Companies Act 2006 and tax compliance regulations. We performed audit procedures to detect non-compliances which may have a material impact on the financial statements which included reviewing financial statement disclosures, inspecting correspondence with local tax authorities and evaluating advice received from external tax advisors.
The most significant laws and regulations that have an indirect impact on the financial statements are those in relation to health and safety. We performed audit procedures to inquire of management whether the company is in compliance with these law and regulations and completed searches for any reportable health and safety incidents in the public domain.
The audit engagement team identified the risk of management override of controls and existence of revenue transactions as the areas where the financial statements were most susceptible to material misstatement due to fraud. Audit procedures performed included but were not limited to testing manual journal entries and other adjustments and evaluating the business rational in relation to significant, unusual transactions and transactions entered into outside the normal course of business, and the corroboration of a sample of revenue transactions to supporting documentation in addition to reviewing a sample of revenue transactions that were outside of the expected revenue cycle.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at http://www.frc.org.uk /auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditor's Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Kerry Norman (Senior Statutory Auditor)
for and on behalf of
RSM UK Audit LLP, Statutory Auditor
Chartered Accountants
Third Floor, Priory Place
New London Road
Chelmsford
Essex
CM2 0PP
30 September 2024
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FOX INTERNATIONAL GROUP LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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Interest payable and similar expenses
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Profit for the financial year
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Other comprehensive income for the year
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Currency translation differences
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Other comprehensive income for the year
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Total comprehensive income for the year
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The notes on pages 14 to 36 form part of these financial statements.
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FOX INTERNATIONAL GROUP LIMITED
REGISTERED NUMBER: 01144907
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Share based payments reserve
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 14 to 36 form part of these financial statements.
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FOX INTERNATIONAL GROUP LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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Share based payments reserve
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Comprehensive income for the year
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Currency translation differences
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Total comprehensive income for the year
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Share options in Rather Outdoors Corporation
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Comprehensive income for the year
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Currency translation differences
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Total comprehensive income for the year
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Share options in Rather Outdoors Corporation
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The notes on pages 14 to 36 form part of these financial statements.
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FOX INTERNATIONAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Fox International Group Limited is a private company, limited by shares, incorporated in England and Wales under the Companies Act 2006. The address of the registered office is given on the Company information page and the nature of the Company's operations and its principal activities are set out in the Strategic Report.
2.Accounting policies
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Basis of preparation of financial statements
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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, including the provisions of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The financial statements are presented in Pounds Sterling which is the functional currency of the Company and are rounded to the nearest £.
The following principal accounting policies have been applied consistently throughout the year.
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Financial Reporting Standard 102 - reduced disclosure exemptions
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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", as a result of being a qualifying entity:
∙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 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Maui Bidco Limited as at 31 December 2023 and these financial statements may be obtained from Companies House.
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Exemption from preparing consolidated financial statements
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The Company is a parent Company that is also a subsidiary included in the consolidated financial statements of its immediate parent undertaking established under UK law and is therefore exempt from the requirement to prepare consolidated financial statements under section 400 of the Companies Act 2006.
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FOX INTERNATIONAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
At the date of approval of the financial statements the directors have considered the continued challenges posed by the uncertainties of the ongoing war in Ukraine and Red Sea disruption and the resultant impact on business conditions in Europe.
The business continues to be impacted by delays in the supply chain seen as a result of the disruption to shipping through the Red Sea and is working hard to maintain stock levels and availability.
Sporting goods are non-essential items and as such the business is susceptible to general macro-economic forces. As an outdoor pursuit, angling is also seasonal and severe weather can also impact sales. The Company's approach to mitigate these risks is to broaden its geographical market presence in order to reduce exposure to these factors on a regional basis.
The directors make an estimate of the future performance of the Company in order to prepare the financial statements on a going concern basis. When assessing future performance, the directors consider financial projections which reflect current and expected market conditions. Based on the consideration of financing facilities, and after modelling of severe but plausible scenarios on forecasted cash flows and considering the progress of the Company, the directors have a reasonable expectation that the Company will be able to execute their plans such that they will have adequate resources to continue in operational existence for the foreseeable future and for a period of at least 12 months from the date of approval of these financial statements.
As part of their assessment on going concern, the directors of Fox International Group Limited have obtained confirmation in writing from the holders of the 6.125% unsecured loan notes that they will not seek contractual payments of interest in cash if the Maui Bidco group is unable to make these payments. Maui Bidco Limited is primarily reliant on the operating cashflows of Fox International Group Limited to make these payments, and as such that confirmation is required to enable the directors to conclude in respect of the going concern status of both entities.
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP. The Company's results include branches whose functional currencies are USD and Euros.
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.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
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FOX INTERNATIONAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Foreign currency translation (continued)
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Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
The results of the overseas branches are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.
The Company turnover mainly comprises the sale of fishing equipment to retailers. Turnover is recognised when the customer obtains control of the goods, which is generally at the time of delivery and the time when the performance obligation of the Company has been satisfied. Turnover is recognised exclusive of sales taxes and discounts allowed.
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Operating leases: the Company as lessee
|
Rentals paid under operating leases are charged to the Statement of Comprehensive Income 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.
The Company continually incurs research costs on its core products and product development expenditure. Expenditure on internally developed assets is capitalised if it can be demonstrated that it is technically feasible to develop the product to provide future economic benefits, adequate resources are available to complete the development, there is an intention to complete the project and expenditure on the project can be measured reliably.
Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.
Interest income is recognised in profit or loss using the effective interest method.
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FOX INTERNATIONAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Finance leases and hire purchase contracts
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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.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
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.
Rather Outdoors Corporation provides share-based payment arrangements to certain employees of the Company. Equity-settled arrangements are measured at fair value (excluding the effect of non market based vesting conditions) at the date of the grant.
The fair value is expensed on a straight-line basis over the vesting period. The amount recognised as an expense is adjusted to reflect the actual number of shares that will vest.
Where equity-settled arrangements are modified, and are of benefit to the employee, the incremental fair value is recognised over the period from the date of modification to date of vesting.
Where a modification is not beneficial to the employee there is no change to the charge for share-based payment. Settlements and cancellations are treated as an acceleration of vesting and the unvested amount is recognised immediately in the Statement of Comprehensive Income.
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FOX INTERNATIONAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. 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 is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
Intangible assets are initially recognised at cost. After recognition intangible assets are measured at cost less any accumulated amortisation and impairment losses. intangible development assets are amortised over their estimated useful lives of three years.
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.
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:
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20%, 25% and 33% straight line
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10%, 15% and 33% straight line
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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.
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FOX INTERNATIONAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Investments in subsidiaries are measured at cost less accumulated impairment.
Impairment charges are recognised if events or changes in circumstances indicate that the carrying value may not be recoverable.
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 weighted average basis, including freight. Work in progress and finished goods include labour and attributable overheads.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.
Classification of financial liabilities
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the reporting date.
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FOX INTERNATIONAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Financial instruments (continued)
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Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position when there is an 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.
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 group after deducting all of its liabilities.
Basic financial liabilities including trade, group and other payables (including accruals) and bank loans are initially measured at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest.
Financial liabilities are derecognised when, and only when, the group's contractual obligations are discharged, cancelled, or they expire.
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument. In which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
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FOX INTERNATIONAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Judgments in applying accounting policies and key sources of estimation uncertainty
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Critical accounting estimates
Impairment of investments
Investments in subsidiaries are initially recognised at cost and are assessed annually to consider whether any impairment to the asset is required. The assessment is based on historic performance and expectations of future performance and therefore requires estimates and assumptions to be applied by management each year.
Valuation of share-based payments
The wider group operates a management incentive plan through which ordinary shares in Rather Outdoors Corporation are issued to key management personnel. The directors are required to measure the fair value of the shares at the date of issue using an appropriate methodology. The directors use a Black Scholes pricing model and apply their judgement to the various inputs into the model including an estimate of the exit date of the plan, the risk free rate and asset volatility.
Other areas of estimation uncertainty
Carrying value of debtors
Management apply judgement in providing an appropriate amount for discounts and providing for bad debts. In estimating the discounts, management consider the contractual level of discount available and the payment history of the customer. In deciding an appropriate level of provision for bad debts, management review the sales ledger for amounts which are overdue and consider payment history on a customer by customer basis and the financial position of the customer if required.
Stock provision
Stock is carried at the lower of cost and net realisable value. In determining if there is a requirement for a provision to reduce to net realisable value and deciding on an appropriate level of provision, management consider recent and the post year end sales history of the item of stock.
Useful economic life of tangible fixed assets
Tangible assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual lives are reassessed annually and may vary depending on a number of factors. In reassessing 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 asset and the projected disposal values.
Useful economic life of intangible fixed assets
Intangible assets are amortised over their useful lives which are reassessed annually to consider whether any impairment to the asset is required.
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FOX INTERNATIONAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The whole of the turnover is attributable to the principal activity of the Company.
Analysis of turnover by country of destination:
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Management charges to subsidiary and other related companies
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The operating profit is stated after charging/(crediting):
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Research & development charged as an expense
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Foreign exchange losses/(gains)
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Depreciation - on owned assets
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Depreciation - on assets under finance leases / hire purchase
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Amortisation of intangible assets
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(Profit)/Loss on disposal of tangible fixed assets
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(Gain)/Loss on fair value of derivatives
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FOX INTERNATIONAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Fees payable to the Company's auditors and their associates for the audit of the Company's financial statements
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Staff costs, including directors' remuneration, were as follows:
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Cost of share based payments
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the year was as follows:
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FOX INTERNATIONAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Company contributions to defined contribution pension schemes
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During the year retirement benefits were accruing to 3 directors (2022 - 3) in respect of defined contribution pension schemes.
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The highest paid director received remuneration of £191,940 (2022 - £418,831).
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The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £8,964 (2022 - £10,833).
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Interest payable and similar expenses
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Finance leases and hire purchase contracts
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FOX INTERNATIONAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Current tax on profits for the year
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Adjustments in respect of previous periods
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Foreign tax on income for the year
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Foreign tax in respect of prior periods
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Origination and reversal of timing differences
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Adjustment in respect of prior periods
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Effect of changes in tax rates
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Taxation on profit on ordinary activities
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FOX INTERNATIONAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
11.Tax on profits (continued)
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Factors affecting tax charge for the year
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The tax assessed for the year is lower than (2022 - lower than) the standard rate of corporation tax in the UK of 23.52% (2022 - 19%). The differences are explained below:
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.52% (2022 - 19%)
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Expenses not deductible for tax purposes
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Adjustments to tax charge in respect of prior periods
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Other differences leading to an increase (decrease) in the tax charge
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Total tax charge for the year
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Factors that may affect future tax charges
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The Finance Act 2021 includes an increase in the rate of corporation tax from 19% to 25% with effect from 1 April 2023.
|
FOX INTERNATIONAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Charge for the year on owned assets
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FOX INTERNATIONAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
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FOX INTERNATIONAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Investments in subsidiary companies
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Other fixed asset investments
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FOX INTERNATIONAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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The following were subsidiary undertakings of the Company:
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Fox International Limited
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Fox Design International Limited
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Manufacturer of fishing lures
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Manufacturer of fishing goods
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Spomb International Limited
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Holds intellectual property
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Kunshan Oceanview Leisure Sports Products LLC
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Preston Innovations Europe BV
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Production of fishing products
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The registered office of Salmo Sp. Zoo. is Drzewna 1, 11-036 Gietrzwald, Poland.
The registered office of Preston Innovations Europe BV is Dennenlaan 3A, 2340 Beerse, Belgium.
The registered office of Kunshan Oceanview Leisure Sports Products LLC is No 4 Building, 88 Baifu Road, Kunshan Development Zone, Jiangsu Province, China.
The registered office of all other subsidiaries is 1 Myrtle Road, Warley, Brentwood, Essex, CM14 5EG.
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Finished goods for resale
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The carrying value of stocks are stated net of impairment losses totalling £500,021 (2022 - £569,705). A credit (2022 - credit) of impairment losses totalling £158,193 (2022 - £175,358) was recognised in profit and loss.
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FOX INTERNATIONAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Debtors: amounts falling due within one year
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Amounts owed by group undertakings
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Prepayments and accrued income
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Trade debtors are stated net of provisions for bad debts of £402,791 (2022 - £175,091). Bad debt losses, after taking into account recovered but previously provided debts, totalled £202,380 (2022 - £83,199) and were recognised in profit and loss.
Amounts owed by group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.
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Cash and cash equivalents
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FOX INTERNATIONAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Obligations under finance lease and hire purchase contracts
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Accruals and deferred income
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Amounts owed to group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.
Obligations under finance leases and hire purchase contracts are secured on the assets to which they relate.
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Creditors: Amounts falling due after more than one year
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Net obligations under finance leases and hire purchase contracts
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Obligations under finance leases and hire purchase contracts are secured on the assets to which they relate.
|
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Hire purchase and finance leases
|
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Minimum lease payments under hire purchase fall due as follows:
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FOX INTERNATIONAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Charged to profit or loss
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The deferred tax asset is made up as follows:
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Decelerated capital allowances
|
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The amount of net reversal of deferred tax expected to occur next year is £77,352 (2022 - £22,270).
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Allotted, called up and fully paid
|
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106,831 (2022 - 106,831) Ordinary shares of £0.01 each
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FOX INTERNATIONAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Share premium account
Share premium reflects proceeds generated on issue of shares in excess of their nominal value and is a non-distributable reserve.
Share based payments reserve
The share based payments reserve comprises all current and accumulated profits and loss associated with the Company's share based payments.
Profit and loss account
The profit and loss account represents the cumulative profits and losses, net of dividends paid and other adjustments.
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £102,900 (2022 - £101,097). Contributions totalling £17,494 (2022 - £17,849) were payable to the fund at the reporting date and are included in creditors.
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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:
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Later than 1 year and not later than 5 years
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FOX INTERNATIONAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
26.Other financial commitments
The Company entered into foreign exchange contracts to buy specific amounts of foreign currency in the future at a predetermined exchange rate. Forward exchange contracts are entered into anticipating foreign currency payments for supplier orders. The Company does not use derivative financial instruments for speculative purposes.
As at the period end the net US Dollars to be purchased against Euros under these exchange contracts was $40m (2022 - $Nil).
The directors have obtained a period end valuation of the foreign exchange contracts which states a fair value of £714,752 (2022 - £Nil) in other creditors.
Additionally, Rather Outdoors Corporation refinanced their senior debt facility amounting to $355,403,402 at 31 December 2023 (2022: $359,057,966) with UBS AG and a charge is in place over the assets of the Company in this respect.
During 2023 Rather Outdoors Corporation bought back 940 C1 shares (2022: 26 C1 shares) and 940 C2 shares (2022: 26 C2 shares) from employees who left the business. Rather Outdoors Corporation made a further issue of shares to key management personnel which comprised of 529 Ordinary C1 shares at a price of $167.93 per share (2022: Nil) and 529 Ordinary C2 shares at a price of $84.23 per share (2022: Nil).
C1 shares vest over a five year period contingent on the individuals continued employment within the wider group. The C2 shares vest over three, six and nine year review periods and are contingent on performance benchmarks hurdles being met.
The issued shares are required to be measured at their fair value at their respective issue date. The Black Scholes pricing model was used to determine the fair value of the shares by modelling various uncertain future outcomes and eventualities associated with the shares, based on market inputs as at the respective issue date.
The fair value of future shares to be issued and allocated to employees at the balance sheet date is £1,135,999 (2022 - £2,928,118). The fair value is accounted for on a straight line basis over the vesting period. The total amount charged to the Statement of Comprehensive Income in the period to 31 December 2023 was £343,945 (2022 - £774,832).
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Related party transactions
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The Company has taken advantage of the exemption under FRS102 not to disclose transactions with other wholly owned members of the Group.
During the year, the Company provided a director with samples worth £6,240 free of charge (2022: £Nil), for a combination of business and private use.
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FOX INTERNATIONAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The immediate parent company as at 31 December 2023 is Maui Bidco Limited, a company incorporated and registered in the United Kingdom. The ultimate parent company is Rather Outdoors Corporation with the controlling party being BDT Capital Partners.
The registered office of Rather Outdoors Corporation is 209 Stoneridge Dr, Columbia, SC 29210, United States of America.
The smallest group in which the results of the company are consolidated at 31 December 2023 were Maui Bidco Limited. These consolidated financial statements are available at Companies House. The largest group in which the results of the company are consolidated at 31 December 2023 were Rather Outdoors Corporation. These are not publicly available.
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