Company registration number 03706105 (England and Wales)
KUKRI SPORTS LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
KUKRI SPORTS LTD
COMPANY INFORMATION
Directors
A Ronnie
J Simpson
(Appointed 1 April 2024)
Secretary
N Abram
Company number
03706105
Registered office
Landmark House
Station Road
Cheadle Hulme
Cheshire
SK8 7BS
Auditor
Hart Shaw LLP
Europa Link
Sheffield Business Park
Sheffield
S9 1XU
Business address
171 Brierley Road
Walton Summit Centre
Preston
PR5 8AH
KUKRI SPORTS LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 26
KUKRI SPORTS LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2024
- 1 -
The directors present the strategic report for the year ended 31 January 2024.
Principal activities
The Company’s principal activity was that of a holding Company for various worldwide subsidiaries. The Company allows the subsidiaries to use the Kukri name and brand, and various staff are employed whose work covers all subsidiaries activities. The subsidiaries are charged a management fee for costs incurred by the Company.
Review of the business
The company continues to make a margin on the recovery of its costs from the other group companies.
In assessing the performance of the Company, the Directors make us of the following Key Performance Indicators:
2024
2023
£
£
Management charge income
1,419,790
1,289,343
Principal risks and uncertainties
The principal risks and uncertainties of Kukri Sports Limited are tied to its trading subsidiaries in which it holds a direct investment. Kukri GB Limited is the main trading company and so the risks set out below are specific to this company.
Any business undertaking will involve some risk with many risk factors common to any business regardless of what sector is operates in. However, the Directors consider that certain risks and uncertainties are more specific to the Company and the sport retail sector in which it operates. These risks and uncertainties include the following:
ability to source cost effective supplies from overseas;
the location and influence of competitors;
general economic factors; and
seasonality.
The Directors continue to endeavour to manage these risks and uncertainties to the extend possible within the business.
Future plans
The Directors remain optimistic about the future growth of the Company. The focus of the Company is to continue to provide a support function for the Kukri Group as a whole, as we continue to expand our client base and promote the Kukri brand.
Other information and explanations
From 20 December 2023, Kukri Sports Ltd was purchased and wholly owned by Kukri Holdings Limited. Prior to this date, the company was 75% owned by JD Sports Fashion Plc.
Promoting the success of the company
This statement sets out how the Directors have approached and met their responsibilities under section 172 Companies Act 2006 and, in particular, how the Directors have satisfied themselves that they have acted in a way which is most likely to promote the success of the Company for the benefit of its members as a whole and having regard for stakeholders interests.
As such, the Directors have considered (amongst other things) the likely consequences of any decision in the long term. The Directors give significant consideration via the assessment of various board papers to the likely long term impact to the Company of any decisions made. It is the Directors' ultimate objective to deliver long term sustainable earnings growth.
KUKRI SPORTS LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 2 -
Furthermore, the Directors have considered:
the interests 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 business relationships with suppliers, customers and others;
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.
A Ronnie
Director
17 October 2024
KUKRI SPORTS LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JANUARY 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 January 2024.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
R Schultz
(Resigned 20 December 2023)
D Platt
(Appointed 2 November 2023 and resigned 20 December 2023)
A Ronnie
N J Greenhalgh
(Resigned 3 October 2023)
J Simpson
(Appointed 1 April 2024)
Auditor
The auditor, Hart Shaw LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
A Ronnie
Director
17 October 2024
KUKRI SPORTS LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 JANUARY 2024
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
KUKRI SPORTS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF KUKRI SPORTS LTD
- 5 -
Opinion
We have audited the financial statements of Kukri Sports Ltd (the 'company') for the year ended 31 January 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 January 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
KUKRI SPORTS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF KUKRI SPORTS LTD
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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:
At the planning stage we identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience and through discussion with the directors and other management, as required by auditing standards. The potential effect of any laws and regulation on the financial statements can vary considerably. There are laws and regulations that directly affect the financial statements (e.g. the Companies Act) as well as many other operational laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements. Owing to the size, nature and complexity of the organisation and the applicable laws and regulations to which it must adhere, the risk of material misstatement was deemed to be low, therefore the procedures performed by the audit team were limited to:
Communicating identified laws and regulations at planning throughout the audit team to remain alert to any indications of non-compliance throughout the audit.
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as non-compliance with laws and regulations.
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
KUKRI SPORTS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF KUKRI SPORTS LTD
- 7 -
We have assessed the overall susceptibility of the financial statements to material misstatement due to fraud. Management override is the most likely way in which fraud might present itself and as such is inherently high risk on any audit. Management override, which may cause there to be a material misstatement within the financial statements, may present itself in a number of ways, for example:
Override of internal controls (e.g. segregation of duties)
Entering into transactions outside the normal course of business, especially with related parties
Fraudulent revenue recognition, including fictitious sales and sales being recorded in the wrong period.
Presenting bias in accounting judgements and estimates, particularly ones that are key to the business.
In order to reduce the risk of material misstatement to an acceptable level, numerous audit procedures were performed including:
Enquiry of management as to whether they had any knowledge of any actual or suspected fraud
Review of material journal entries made throughout the period as well as those made to prepare the financial statements
Review the underlying rationale behind transactions in order to assess whether they were outside the normal course of business
Increased substantive testing across material income streams
Assessing whether management's judgements and estimates indicated potential bias, particularly those disclosed in the "Critical accounting estimates and judgements" section of the accounting policies.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected material misstatements in the financial statements, even though we have performed our audit in accordance with auditing standards. Furthermore, as with all audits, there is a higher risk of irregularities (especially those relating to fraud) being undetected, as these may involve the override of internal controls, collusion, intentional omissions and misrepresentations etc. We are not responsible for preventing non-compliance or fraud and therefore cannot be expected to detect all instances of such. Our audit was not designed to identify misstatements or other irregularities that would not be considered to be material to the financial statements. The further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Adam Shield
Senior Statutory Auditor
For and on behalf of Hart Shaw LLP
29 October 2024
Chartered Accountants
Statutory Auditor
Europa Link
Sheffield Business Park
Sheffield
S9 1XU
KUKRI SPORTS LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JANUARY 2024
- 8 -
2024
2023
as restated
Notes
£
£
Turnover
3
1,419,790
1,289,343
Administrative expenses
(1,333,091)
(1,224,195)
Operating profit
4
86,699
65,148
Interest receivable and similar income
8
84,708
Interest payable and similar expenses
9
(77,189)
(62,154)
Group loan impairment
10
-
(21,598)
Profit before taxation
9,510
66,104
Tax on profit
11
(7,591)
6,749
Profit for the financial year
1,919
72,853
The profit and loss account has been prepared on the basis that all operations are continuing operations.
KUKRI SPORTS LTD
BALANCE SHEET
AS AT
31 JANUARY 2024
2024-01-31
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Intangible assets
12
18,925
29,288
Tangible assets
13
3,919
5,769
Investments
14
11,901,293
11,901,293
11,924,137
11,936,350
Current assets
Debtors
16
664,366
403,085
Cash at bank and in hand
117,445
664,366
520,530
Creditors: amounts falling due within one year
17
(2,319,313)
(2,189,609)
Net current liabilities
(1,654,947)
(1,669,079)
Net assets
10,269,190
10,267,271
Capital and reserves
Called up share capital
21
11,881,622
11,881,622
Share premium account
329,257
329,257
Capital contribution
789,996
789,996
Profit and loss reserves
(2,731,685)
(2,733,604)
Total equity
10,269,190
10,267,271
The financial statements were approved by the board of directors and authorised for issue on 17 October 2024 and are signed on its behalf by:
A Ronnie
Director
Company registration number 03706105 (England and Wales)
KUKRI SPORTS LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2024
- 10 -
Share capital
Share premium account
Capital contribution
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 February 2022
11,881,622
329,257
789,996
(2,806,457)
10,194,418
Year ended 31 January 2023:
Profit and total comprehensive income
-
-
-
72,853
72,853
Balance at 31 January 2023
11,881,622
329,257
789,996
(2,733,604)
10,267,271
Year ended 31 January 2024:
Profit and total comprehensive income
-
-
-
1,919
1,919
Balance at 31 January 2024
11,881,622
329,257
789,996
(2,731,685)
10,269,190
KUKRI SPORTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
- 11 -
1
Accounting policies
Company information
Kukri Sports Ltd is a private company, limited by shares and incorporated in England and Wales. The registered office is Landmark House, Station Road, Cheadle Hulme, Cheshire, SK8 7BS.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
Kukri Sports Ltd is a wholly owned subsidiary of Kukri Holdings Limited and the results of Kukri Sports Ltd are included in the consolidated financial statements of Kukri Holdings Limited which are available from Landmark House, Station Road, Cheadle Hulme, Cheshire, SK8 7BS.
KUKRI SPORTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 12 -
1.2
Going concern
The Directors have assessed the ability of the Company to continue as a going concern and are confident in its capacity to do so. Although the Company is in a net current liability position as of 31 January 2024, this is primarily due to intercompany balances it owes to its subsidiaries, which eliminate upon consolidation at the group level.true
The Company’s principal activity has historically been that of a holding Company for various worldwide subsidiaries. The Company allows the subsidiaries to use the Kukri name and brand and employs various staff members whose work covers all subsidiaries activities. The subsidiaries are charged a management fee to cover the costs incurred by the Company.
The Directors have reviewed the Group’s financial projections and cash flow forecasts for the foreseeable future, considering the Company’s relationship with its subsidiaries. Based on this review, the Directors have concluded that the Company has adequate financial resources from its subsidiaries trading activities, to ensure that it will that it will have sufficient resources to meet its obligations as they fall due.
As a result, the Directors believe it is appropriate to prepare the financial statements on a going concern basis. This assessment reflects the expectation that most Group entities will continue to trade profitably, and that there are no material uncertainties that may cast significant doubt on the Company’s ability to continue as a going concern for at least 12 months from the date of approval of these financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Patents & licences
Straight line basis over the life of the patent & licences
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
KUKRI SPORTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 13 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and equipment
25% on a straight line basis
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
KUKRI SPORTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 14 -
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
KUKRI SPORTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 15 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
KUKRI SPORTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 16 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Following the change in ownership certain prior year amounts have been reclassified for consistency with the current year presentation. In the directors' opinion this more fairly presents the company's trading results. These reclassifications had no effect on the reported results of operations. A presentational adjustment was made between operating income and turnover, with amounts reported in the 31 January 2023 financial statements being £1,289,343 and £nil respectively.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
In the director's opinion, there are no estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities.
KUKRI SPORTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 17 -
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by geographical market
UK
974,617
826,969
Rest of the world
445,173
462,374
1,419,790
1,289,343
2024
2023
£
£
Other revenue
Dividends received
-
84,708
4
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Exchange losses
9,258
24,292
Depreciation of owned tangible fixed assets
3,405
4,223
Amortisation of intangible assets
11,726
18,790
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
7,230
6,950
For other services
All other non-audit services
2,910
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Sales and distribution
14
11
Administration
12
13
Total
26
24
KUKRI SPORTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
6
Employees
(Continued)
- 18 -
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
971,483
917,692
Social security costs
105,489
75,181
Pension costs
19,500
16,013
1,096,472
1,008,886
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
135,750
76,500
Throughout the financial year, the directors, Platt, Schultz and Greenhalgh were employed by other group companies and therefore any remuneration is borne by those group companies.
Additional to the above, amounts of £7,113 (2023: £85,350) were paid to another group company for the shared costs of one director's remuneration.
8
Interest receivable and similar income
2024
2023
£
£
Income from fixed asset investments
Income from shares in group undertakings
84,708
9
Interest payable and similar expenses
2024
2023
£
£
Interest payable to group undertakings
77,189
62,154
10
Amounts written off investments
2024
2023
£
£
Group loan impairment
(21,598)
KUKRI SPORTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 19 -
11
Taxation
2024
2023
£
£
Current tax
Adjustments in respect of prior periods
4,356
(8,960)
Deferred tax
Origination and reversal of timing differences
3,235
2,211
Total tax charge/(credit)
7,591
(6,749)
The actual charge/(credit) for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit before taxation
9,510
66,104
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2023: 19.00%)
1,807
12,560
Tax effect of expenses that are not deductible in determining taxable profit
150
4,263
Tax effect of income not taxable in determining taxable profit
(16,095)
Change in unrecognised deferred tax assets
1,844
Adjustments in respect of prior years
4,356
(10,123)
Research and development tax credit
(8)
Deferred tax
810
Effect of higher deferred tax rate
1,278
Taxation charge/(credit) for the year
7,591
(6,749)
KUKRI SPORTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 20 -
12
Intangible fixed assets
Patents & licences
£
Cost
At 1 February 2023
134,566
Additions
1,363
At 31 January 2024
135,929
Amortisation and impairment
At 1 February 2023
105,278
Amortisation charged for the year
11,726
At 31 January 2024
117,004
Carrying amount
At 31 January 2024
18,925
At 31 January 2023
29,288
13
Tangible fixed assets
Plant and equipment
£
Cost
At 1 February 2023
249,071
Additions
1,555
At 31 January 2024
250,626
Depreciation and impairment
At 1 February 2023
243,302
Depreciation charged in the year
3,405
At 31 January 2024
246,707
Carrying amount
At 31 January 2024
3,919
At 31 January 2023
5,769
14
Fixed asset investments
2024
2023
Notes
£
£
Investments in subsidiaries
15
11,901,293
11,901,293
KUKRI SPORTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
14
Fixed asset investments
(Continued)
- 21 -
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 February 2023 & 31 January 2024
11,985,000
Impairment
At 1 February 2023 & 31 January 2024
83,707
Carrying amount
At 31 January 2024
11,901,293
At 31 January 2023
11,901,293
KUKRI SPORTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 22 -
15
Subsidiaries
Details of the company's subsidiaries at 31 January 2024 are as follows:
Name of undertaking
Country
Class of
% Held
shares held
Direct
Kukri Australia PTY Limited
Australia
Class A $1 shares
100.00
Kukri NZ Limited
New Zealand
Class A $1 shares
75.00
Kukri Sports Canada Inc.
Canada
Class A $1 shares
75.00
Kukri Sports Middle East DMCC
UAE
Class A 1 AED shares
100.00
Kukri PTE Limited
Singapore
Class A $1 shares
100.00
Kukri Sports Ireland Limited
Ireland
Class A 1 EUR shares
100.00
Kukri (Asia) Limited
Hong Kong
Class A $1 shares
100.00
Kukri GB Limited
UK
Ordinary £1 shares
100.00
Frank Harrison Limited
UK
Ordinary £1 shares
90.00
Kukri Events Limited
UK
Ordinary £1 shares
100.00
Squirrel Sports Limited
UK
Ordinary £1 shares
100.00
Registered office addresses:
Kukri Australia PTY Limited
Registered Level 10, 12 Creek Street, Brisbane, QLD 4000
Kukri NZ Limited
Registered Unit 2, 45 The Boulevard, Te Rapa Park, Hamilton New Zealand
Kukri Sports Canada Inc.
Registered 106-1533 Broadway St, Port Coquitlam, British Columbia, V3C 6P3
Kukri Sports Middle East DMCC
Registered Unit No OF208, The Box Self Storage, DMCC-EZ3-03, DMCC Free Zone - Enterprise Zone 3, Dubai UAE
Kukri PTE Limited
Registered 9 Raffles Place 26-01, Republic Plza, Singapore 048619
Kukri Sports Ireland Limited
Registered C/o Eugene F Collins Solicitors, Temple Chambers, 3 Burlington Road, Dublin 4
Kukri (Asia) Limited
Registered Unit 4, 27th Floor, Global Trade Square, 21 Wong Chuk Hang Road, Hong Kong
Kukri GB Limited
Registered Landmark House, Station Road, Cheadle Hulme, Cheshire, SK8 7BS
Frank Harrison Limited
Registered Landmark House, Station Road, Cheadle Hulme, Cheshire, SK8 7BS
Kukri Events Limited
Registered Landmark House, Station Road, Cheadle Hulme, Cheshire, SK8 7BS
Squirrel Sports Limited
Registered Landmark House, Station Road, Cheadle Hulme, Cheshire, SK8 7BS
KUKRI SPORTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 23 -
16
Debtors
2024
2023
Amounts falling due within one year:
£
£
Amounts owed by group undertakings
563,047
309,874
Other debtors
11,870
4,317
Prepayments and accrued income
72,049
68,259
646,966
382,450
2024
2023
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 19)
17,400
20,635
Total debtors
664,366
403,085
The amounts owed by group undertakings are unsecured, interest free and repayable on demand.
17
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans and overdrafts
18
44,716
Other borrowings
18
357,302
Trade creditors
284,579
60,259
Amounts owed to group undertakings
1,428,531
2,012,393
Corporation tax
4,356
Other taxation and social security
22,011
Other creditors
96,850
665
Accruals and deferred income
80,968
116,292
2,319,313
2,189,609
Included in amounts owed to group undertakings is £nil (2023 - £1,033,018) which is secured over all assets of the company and is repayable on demand. Of this amount £nil (2023 - £656,534) is interest bearing at 2% above base rate. The remainder of the amounts owed to group undertakings are unsecured, interest free and there are no fixed payment terms.
KUKRI SPORTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 24 -
18
Loans and overdrafts
2024
2023
£
£
Bank overdrafts
44,716
Other borrowings
357,302
402,018
Payable within one year
402,018
The overdraft is secured by an all assets debenture and unlimited guarantee over the company and it's UK subsidiary.
Included within other borrowings is £357,302 (2023 - £nil) which is secured over all assets of the company and is interest bearing at 2% above base rate.
The loan is due to be repaid in full by quarterly instalments of £75,000 by 31 March 2025.
19
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Assets
Assets
2024
2023
Balances:
£
£
Accelerated capital allowances
17,400
20,635
2024
Movements in the year:
£
Asset at 1 February 2023
(20,635)
Charge to profit or loss
3,235
Asset at 31 January 2024
(17,400)
20
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
19,500
16,013
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
KUKRI SPORTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 25 -
21
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Class A ordinary shares of £1 each
2,970,405
2,970,405
2,970,405
2,970,405
Class B ordinary shares of £1 each
8,911,217
8,911,217
8,911,217
8,911,217
11,881,622
11,881,622
11,881,622
11,881,622
The two classes of ordinary shares rank pari passu in most respects, they have equal voting and capital distribution rights but separate rights to dividends. The capital structure of the Company comprises issued share capital, share premium and retained earnings. The policy adopted by the Directors is to seek to improve the capital base of the Company so as to maintain creditor confidence and to sustain future development of the business. There were no changes to the Company's approach to capital management during the year.
22
Financial commitments, guarantees and contingent liabilities
There is a debenture over all assets of the company in relation to borrowings of the company and its subsidiary, Kukri GB Limited. At 31 January 2024 the amount outstanding not included in the balance sheet of the company was £228,930 (2023 - £nil).
23
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
132,740
24
Related party transactions
Transactions with related parties
The company has taken advantage of the exemption from disclosing transactions with wholly owned group members.
From 20 December 2023, Kukri Sports Ltd was purchased and wholly owned by Kukri Holdings Limited. Prior to this date, the company was 75% owned by JD Sports Fashion Plc. During the period, the company entered into the following disclosable transactions with related parties, all which occurred at arm's length.
Income
Payments
2024
2023
2024
2023
£
£
£
£
JD Sports Fashion Plc
-
-
533,334
1,082,823
Source Lab Limited
-
-
7,113
88,032
KUKRI SPORTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
24
Related party transactions
(Continued)
- 26 -
Balances with related parties
The following balances relate to non wholly owned existing or former group companies and have arisen due to various recharges between the companies:
Amounts owed by
Amounts owed to
related parties
related parties
2024
2023
2024
2023
£
£
£
£
Frank Harrison Limited
-
-
26,285
26,285
JD Sports Fashion Plc
-
-
-
1,033,018
Kukri Canada Limited
152,313
70,804
-
-
Kukri New Zealand Limited
185,957
107,528
-
-
Source Lab Limited
-
-
-
14,225
25
Ultimate controlling party
The Company is a subsidiary undertaking of Kukri Holdings Limited, a company incorporated in England and Wales, which is the smallest and largest group in which the Company is a member and for which Group Financial Statements are drawn up. Kukri Holdings Limited is registered in England. Copies of the consolidated financial statements of Kukri Holdings Limited can be obtained from the Company Secretary, Landmark House, Station Road, Cheadle Hulme, Cheshire, SK8 7BS.
A Ronnie is the ultimate controlling party by virtue of his shareholding in Kukri Holdings Limited.
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