Company registration number 03077364 (England and Wales)
CARPET AND LATEX INTERNATIONAL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
CARPET AND LATEX INTERNATIONAL LIMITED
COMPANY INFORMATION
Director
Mr M D Greenhalgh
Company number
03077364
Registered office
Unit 35
Bradley Fold Trading Estate
Bradley Fold Road
Bolton
Auditor
Barlow Andrews LLP
Carlyle House
78 Chorley New Road
Bolton
CARPET AND LATEX INTERNATIONAL LIMITED
CONTENTS
Page
Strategic report
1 - 2
Director's report
3
Director's responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 23
CARPET AND LATEX INTERNATIONAL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2024
- 1 -
The director presents the strategic report for the year ended 31 July 2024.
Principal activities
Carpet and Latex International Limited provide formulated water based latex compounds for the textile and floor coverings sector. The company provides products and industry leading technical service and support to all its customer base.
Company objectives and strategy
To offer customers the best cost per performance products in the industry,
To provide customers with the highest level of supplier confidence,
To implement integrated management systems to uphold their claims.
The company is accredited with the following:
ISO 9001 Certification - Quality Management System,
ISO 14001 Certification - Environmental Management System,
ISO 45001 Certification – Occupational H&S Management System.
Review of the business
The key performance indicators for the company are as follows:
2024
2023
£
£
Turnover
15,422,764
15,429,104
Profit before taxation
2,070,071
995,291
Gross profit margin
21.46%
14.46%
Net current assets
3,555,684
3,118,993
Profit and loss reserves
3,764,091
3,214,127
Debtors days
74
66
The year has been both challenging and rewarding in equal measure.
Carpet and Latex International Limited (CLI) maintains its market leading position in the UK textile and floor coverings despite a continued downturn in this sector over the last two years. The industry has fallen victim to the current macro-economics being employed which have ensured consumer confidence stays low and disposable income remains at a premium. However, CLI has responded by flexibly revising core business forecasts throughout the year to roll with the unfolding situation, even extending its rollout to Q4-2025 in line with current thinking around an upturn.
On the other hand, diversification into specialty products continues to be the highlight of company’s performance and is progressively building into a solid, more predictable sales platform. As our commercial knowledge in this sector develops, we encounter more and more additional product opportunities in alternative, but associated sectors. These new opportunities not only compliment but will grow alongside the newly acquired business. It is early days but exciting times as this could lead to a synergistic impact on future sales and business development.
CLI remains “hands on” in all aspects of cost management, determined to remain competitive and a reliable support to its customer base. An approach and discipline not lost or overlooked by our customer’s particularly in current trading conditions and has strengthened our relationship with all.
Stock holding is strictly regulated and strategically reviewed. The business has focused on supplier partnering designed to mitigate outages and lead times, which will enable stock levels to be reduced to a more desirable stock turnover metric in the future, further improving cash flow and the well-being of the business.
Consolidation of large multi-national upstream suppliers continues, but at a slower and far less intrusive rate. The consequential result is lower volatility, which if it prevails and remains independent of world affairs, will produce a prolonged and stable trading environment that will benefit CLI’s dedication to customer focus and long-term commercial partnering.
CARPET AND LATEX INTERNATIONAL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 2 -
Principal risks and uncertainties
The directors consider that the company is subject to general risks and uncertainties experienced in the general course of business. The principal risks and uncertainties affecting the company and most businesses have been identified as:
Macro-economics - BOE base rate restrictions & inflation control continue to adversely impact consumer confidence with direct implications on core business.
Supply logistics - Upstream supplier consolidations leading to extended lead times and intermittent raw material outages.
World affairs – Ukraine, Gaza, Suez.
Future development and performance
The company boasts a strong management team with a strategic balance of both youth and experience.
Excluding the directors CLI has a team of 5 individuals responsible for much of the day to day running of the business.
Including the directors CLI has 4 industry specialists with over 160 years of technical expertise and CLI continue to be the most innovative company in its field.
The company look to build upon its continued success with further investment into a new manufacturing unit facilitating expansion into new markets.
Key performance indicators
The directors are satisfied that there is continuity in the positive momentum achieved in previous financial years. Specifically, the growth and diversification into specialty products which has made up for the shortfall in core business. Strategic goals are being upheld and the continued expansion of the CLI brand remains the primary objective.
Mr M D Greenhalgh
Director
18 October 2024
CARPET AND LATEX INTERNATIONAL LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 JULY 2024
- 3 -
The director presents his annual report and financial statements for the year ended 31 July 2024.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £1,000,000. The director does not recommend payment of a further dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Mr M D Greenhalgh
Auditor
In accordance with the company's articles, a resolution proposing that Barlow Andrews LLP be reappointed as auditor of the company will be put at a General Meeting.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments.
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr M D Greenhalgh
Director
18 October 2024
CARPET AND LATEX INTERNATIONAL LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 JULY 2024
- 4 -
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
CARPET AND LATEX INTERNATIONAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF CARPET AND LATEX INTERNATIONAL LIMITED
- 5 -
We have audited the financial statements of Carpet and Latex International Limited (the 'company') for the year ended 31 July 2024 which comprise the profit and loss account, the balance sheet, the statement of changes in equity, the statement of cash flows 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, except for the possible effects of the matter described in the basis for qualified opinion section of our report, the financial statements:
give a true and fair view of the state of the company's affairs as at 31 July 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.
Basis for qualified opinion
The financial statements of the company for the year ended 31 July 2022 did not require an audit, thus we did not observe the counting of physical inventories at the end of that year. We were unable to satisfy ourselves by alternative means concerning the inventory quantities of £1,812,002 held at 31 July 2022. Consequently, we were unable to determine whether there was any consequential effect on the cost of sales for the year end 31 July 2023. Our audit opinion on the financial statements for the year ended 31 July 2023 was modified accordingly. Our opinion on the current period's financial statements is also modified because of the possible effects of this matter on the comparability of the current period's figures and the corresponding figures.
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 qualified opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is 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, however, we draw your attention to the basis for qualified opinion section of this report.
CARPET AND LATEX INTERNATIONAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF CARPET AND LATEX INTERNATIONAL LIMITED (CONTINUED)
- 6 -
Opinions on other matters prescribed by the Companies Act 2006
Except for the possible effects of the matter described in the basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
Except for the matter described in the basis for qualified opinion section of our report, in the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of director
As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the director is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or has 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with the director and other management, and from our commercial knowledge and experience of the manufacturing sector;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and health and safety legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
CARPET AND LATEX INTERNATIONAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF CARPET AND LATEX INTERNATIONAL LIMITED (CONTINUED)
- 7 -
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions; and
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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.
Alison Cornes
Senior Statutory Auditor
For and on behalf of Barlow Andrews LLP
18 October 2024
Chartered Accountants
Statutory Auditor
Carlyle House
78 Chorley New Road
Bolton
CARPET AND LATEX INTERNATIONAL LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 JULY 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
15,422,764
15,429,104
Cost of sales
(12,113,624)
(13,198,695)
Gross profit
3,309,140
2,230,409
Administrative expenses
(1,202,361)
(1,139,834)
Operating profit
4
2,106,779
1,090,575
Interest receivable and similar income
8
8,859
2,243
Interest payable and similar expenses
9
(45,567)
(97,527)
Profit before taxation
2,070,071
995,291
Tax on profit
10
(520,107)
(61,785)
Profit for the financial year
1,549,964
933,506
The profit and loss account has been prepared on the basis that all operations are continuing operations.
There is no other comprehensive income for the year. The total comprehensive income is the profit for the financial year shown above.
CARPET AND LATEX INTERNATIONAL LIMITED
BALANCE SHEET
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
12
281,845
173,680
Current assets
Stocks
13
1,081,777
960,232
Debtors
14
5,000,267
4,969,753
Cash at bank and in hand
794,641
408,087
6,876,685
6,338,072
Creditors: amounts falling due within one year
15
(3,321,001)
(3,219,079)
Net current assets
3,555,684
3,118,993
Total assets less current liabilities
3,837,529
3,292,673
Creditors: amounts falling due after more than one year
16
(43,340)
(74,773)
Provisions for liabilities
Deferred tax liability
18
(29,098)
(2,773)
(29,098)
(2,773)
Net assets
3,765,091
3,215,127
Capital and reserves
Called up share capital
20
1,000
1,000
Profit and loss reserves
3,764,091
3,214,127
Total equity
3,765,091
3,215,127
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved and signed by the director and authorised for issue on 18 October 2024
Mr M D Greenhalgh
Director
Company registration number 03077364 (England and Wales)
CARPET AND LATEX INTERNATIONAL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2024
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 August 2022
1,000
2,780,621
2,781,621
Year ended 31 July 2023:
Profit and total comprehensive income
-
933,506
933,506
Dividends
11
-
(500,000)
(500,000)
Balance at 31 July 2023
1,000
3,214,127
3,215,127
Year ended 31 July 2024:
Profit and total comprehensive income
-
1,549,964
1,549,964
Dividends
11
-
(1,000,000)
(1,000,000)
Balance at 31 July 2024
1,000
3,764,091
3,765,091
CARPET AND LATEX INTERNATIONAL LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JULY 2024
- 11 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
1,928,998
704,771
Interest paid
(45,567)
(97,527)
Income taxes paid
(290,565)
(150,521)
Net cash inflow from operating activities
1,592,866
456,723
Investing activities
Purchase of tangible fixed assets
(195,505)
(16,291)
Proceeds from disposal of tangible fixed assets
30,100
57,000
Interest received
8,859
2,243
Net cash (used in)/generated from investing activities
(156,546)
42,952
Financing activities
Net movement of finance leases obligations
(49,766)
24,448
Dividends paid
(1,000,000)
(500,000)
Net cash used in financing activities
(1,049,766)
(475,552)
Net increase in cash and cash equivalents
386,554
24,123
Cash and cash equivalents at beginning of year
408,087
383,964
Cash and cash equivalents at end of year
794,641
408,087
CARPET AND LATEX INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
- 12 -
1
Accounting policies
Company information
Carpet and Latex International Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 35, Bradley Fold Trading Estate, Bradley Fold Road, Bolton.
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.
1.2
Going concern
Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods provided in the normal course of business, and is shown net of VAT. Sales are recognised at the point at which the company has fulfilled its contractual obligations and the risks and rewards attached to the product have been transferred to the customer.
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 delivery), 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.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold improvements
10% straight line
Plant and equipment
20% straight line
Fixtures and fittings
20% straight line
Motor vehicles
25% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
CARPET AND LATEX INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 13 -
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ 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.
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.
CARPET AND LATEX INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 14 -
Basic financial liabilities
Basic financial liabilities, including trade creditors, 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.
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
CARPET AND LATEX INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 15 -
1.13
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the profit or loss statement so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
1.14
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is 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.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
15,262,959
15,356,127
Europe
159,805
72,977
15,422,764
15,429,104
2024
2023
£
£
Other revenue
Interest income
8,859
2,243
CARPET AND LATEX INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 16 -
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(3,046)
7,225
Depreciation of owned tangible fixed assets
51,750
39,556
Depreciation of tangible fixed assets held under finance leases
32,549
24,489
Profit on disposal of tangible fixed assets
(27,059)
(38,388)
Operating lease charges
71,321
68,353
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
17,650
16,500
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Directors
1
1
Administration
8
8
Manufacturing
8
8
Total
17
17
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
805,453
642,144
Social security costs
93,432
78,577
Pension costs
57,698
57,407
956,583
778,128
CARPET AND LATEX INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 17 -
7
Director's remuneration
2024
2023
£
£
Remuneration for qualifying services
189,427
182,611
Company pension contributions to defined contribution schemes
39,591
15,958
229,018
198,569
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 1).
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
6,273
2,243
Other interest income
2,586
Total income
8,859
2,243
9
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
-
28,672
Interest on invoice finance arrangements
36,727
56,584
36,727
85,256
Other finance costs:
Interest on finance leases and hire purchase contracts
8,840
3,139
Other interest
9,132
45,567
97,527
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
493,782
206,877
Adjustments in respect of prior periods
(116,312)
Total current tax
493,782
90,565
CARPET AND LATEX INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
10
Taxation
2024
2023
£
£
(Continued)
- 18 -
Deferred tax
Origination and reversal of timing differences
26,325
1,117
Changes in tax rates
120
Adjustment in respect of prior periods
(30,017)
Total deferred tax
26,325
(28,780)
Total tax charge
520,107
61,785
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit before taxation
2,070,071
995,291
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 21.01%)
517,518
209,066
Tax effect of expenses that are not deductible in determining taxable profit
1,964
(652)
Permanent capital allowances in excess of depreciation
(25,700)
(1,537)
Under/(over) provided in prior years
(116,312)
Deferred tax adjustments in respect of prior years
(30,017)
Movements in deferred tax
26,325
1,237
Taxation charge for the year
520,107
61,785
11
Dividends
2024
2023
£
£
Final paid
1,000,000
500,000
CARPET AND LATEX INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 19 -
12
Tangible fixed assets
Leasehold improvements
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 August 2023
459,859
152,859
612,718
Additions
62,800
128,546
4,159
195,505
Disposals
(74,990)
(74,990)
At 31 July 2024
62,800
588,405
4,159
77,869
733,233
Depreciation and impairment
At 1 August 2023
375,304
63,734
439,038
Depreciation charged in the year
3,648
47,825
277
32,549
84,299
Eliminated in respect of disposals
(71,949)
(71,949)
At 31 July 2024
3,648
423,129
277
24,334
451,388
Carrying amount
At 31 July 2024
59,152
165,276
3,882
53,535
281,845
At 31 July 2023
84,555
89,125
173,680
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2024
2023
£
£
Motor vehicles
53,535
89,125
13
Stocks
2024
2023
£
£
Raw materials and consumables
923,049
838,358
Finished goods and goods for resale
158,728
121,874
1,081,777
960,232
CARPET AND LATEX INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 20 -
14
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
3,111,569
2,776,699
Amounts owed by group undertakings
1,718,454
2,152,840
Other debtors
13,450
4,958
Prepayments and accrued income
156,794
35,256
5,000,267
4,969,753
15
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Obligations under finance leases
17
10,044
28,377
Trade creditors
1,994,526
1,550,778
Amounts owed to group undertakings
41,221
55,149
Corporation tax
293,782
90,565
Other taxation and social security
385,748
398,602
Other creditors
440,443
990,005
Accruals and deferred income
155,237
105,603
3,321,001
3,219,079
Included within other creditors is an amount of £440,443 which is secured by a debenture over all the assets of the company.
16
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Obligations under finance leases
17
43,340
74,773
17
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
10,044
28,377
In two to five years
43,340
74,773
53,384
103,150
Finance lease payments represent rentals payable by the company for certain items of motor vehicles. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
CARPET AND LATEX INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 21 -
18
Deferred taxation
The following are the major deferred tax liabilities recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
29,098
2,773
2024
Movements in the year:
£
Liability at 1 August 2023
2,773
Charge to profit or loss
26,325
Liability at 31 July 2024
29,098
19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
57,698
57,407
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.
20
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,000
1,000
1,000
1,000
The holders of Ordinary shares are entitled to one vote per share at meetings of the Company. All Ordinary shares rank equally with regards to the Company's residual value.
21
Financial commitments, guarantees and contingent liabilities
The company is party to cross guarantees given to its bankers in respect of loan facilities.
The terms of the agreement provide cross guarantees between Carpet & Latex Holdings Ltd and Carpet and Latex International Limited. The amount outstanding under this facility, excluding any balance held in this company at 31 July 2024 was £233,832 (2023: £395,980).
CARPET AND LATEX INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 22 -
22
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
32,436
23,532
Between two and five years
49,006
27,060
81,442
50,592
23
Capital commitments
Amounts contracted for but not provided in the financial statements:
2024
2023
£
£
Acquisition of tangible fixed assets
93,210
-
24
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel (including directors) is as follows.
2024
2023
£
£
Aggregate compensation
425,727
307,960
25
Directors' transactions
During the year the company repaid the loan account of £98,801 to a former director who resigned 8 November 2022.
26
Ultimate controlling party
The parent undertaking is Carpet & Latex Holdings Ltd, a company registered in England and Wales. The registered office is Bradley Fold Trading Estate, Bolton.
CARPET AND LATEX INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 23 -
27
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
1,549,964
933,506
Adjustments for:
Taxation charged
520,107
61,785
Finance costs
45,567
97,527
Investment income
(8,859)
(2,243)
Gain on disposal of tangible fixed assets
(27,059)
(38,388)
Depreciation and impairment of tangible fixed assets
84,299
64,045
Movements in working capital:
(Increase)/decrease in stocks
(121,545)
851,770
Increase in debtors
(30,514)
(1,888,505)
(Decrease)/increase in creditors
(82,962)
625,274
Cash generated from operations
1,928,998
704,771
28
Analysis of changes in net funds
1 August 2023
Cash flows
31 July 2024
£
£
£
Cash at bank and in hand
408,087
386,554
794,641
Obligations under finance leases
(103,150)
49,766
(53,384)
304,937
436,320
741,257
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