Company Registration No. 03613529 (England and Wales)
CARMEL CLOTHING LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
CARMEL CLOTHING LIMITED
COMPANY INFORMATION
Directors
D Edwards
R Elias
D Jacobs
S Blayne
C Adshead
H Fox
(Appointed 11 December 2024)
Secretary
R Elias
Company number
03613529
Registered office
Unit 1, 55-57 Holmes Road
London
NW5 3AN
England
Auditor
HW Fisher Audit
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
CARMEL CLOTHING LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Directors' responsibilities statement
6
Independent auditor's report
7 - 9
Group statement of comprehensive income
10
Group balance sheet
11
Company balance sheet
12
Group statement of changes in equity
13
Company statement of changes in equity
14
Group statement of cash flows
15
Notes to the financial statements
16 - 36
CARMEL CLOTHING LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

Fair review of the business

Carmel Clothing is a global design, fashion, and manufacturing brand supplying retailers around the world through a network of international offices. Working closely with customers we engineer and create products through focused design and innovative sourcing. As a complete one-stop supplier solution we offer key fashion trends against all product divisions within ladies and childrens wear areas. A strong track record and financial stability even in the most uncertain times have given our customers and suppliers confidence in aligning themselves with Carmel. We will continue to deliver the perfect supply solution to all our customers underpinned by key elements:

 

Principal risks and uncertainties

The retail climate continues to be challenging, and as such, risk management continues to underpin the Carmel business strategy. We have continued to build on our key strategic partnerships with customers, factories and suppliers. This has enabled us to secure our trading position in a systematic and solution focused manner.

 

 

Financial Risk Management

The board of directors recognise that there is a strategic risk from market disruption within the industry. The proper controls have been established and these are monitored regularly to ensure that we minimise any potential disruption to the business. This includes offering our customers short, medium, and long lead time production from a variety of production bases and diversification of product. We retain the support of our funders to support liquidity and this is supported by advanced cash flow management.

 

Credit Policy

The company has policies that require the appropriate credit checks on new and existing customers. This is monitored on a monthly basis. Where appropriate a credit insurance policy is put in place and again exposure is monitored formally by the CFO and CEO on a monthly basis. Limits of exposure for each customer are set and must be adhered to by the sales division.

 

Foreign Currency Policy

The vast majority of the company’s income and expenditure is in USD and this protects the company against currency fluctuations. Where appropriate currency is hedged forward to again protect against any currency fluctuations.

Key performance indicators

 

          2023 2022

Turnover             $78,420,403    $94,465,590

Gross profit         $10,892,133    $13,309,861

Operating profit          $2,392,236     $3,314,689

Shareholder Funds         $20,161,619    $20,447,535

 

CARMEL CLOTHING LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Promoting the success of the company

Statement by the directors in performance of their statutory duties in accordance with s172 (1) Companies Act 2006

The Directors in line with their duties under s172 of the Companies Act 2006 always act in accordance with a commitment to promote the success of the company. As part of any decision-making process: the long-term impact on key stakeholders which includes our employees in all offices, factories, suppliers, customers, regulators, and funders are fully considered. An understanding of key stakeholder's business environment, goals and challenges are essential to fully analyse the impact of any decision, and this is achieved by engaging directly and strong communication. The Directors also identify principal risks facing the business on an ongoing basis, approaching decision making underpinned by risk management and core values to ensure strong financial results are achieved.

Carmel's Board has a clear framework for managing the business and decision making. When making decisions, each Director ensures that they act in the way they consider, in good faith, that would most likely promote the Company's success.

(a) The likely consequences of any decision in the long term

The directors understand the business and the evolving environment in which the company operates. Teams work globally to ensure all factors are considered fully, and any restructuring and system investments are designed to strengthen the company’s position and longevity.

(b) The interests of the company's employees

The directors recognise that the success of the business depends on attracting, retaining, and motivating high quality employees. The directors consider the implications of decisions which may affect their perception as a responsible employer, on determining remuneration and benefits, and on providing a healthy and safe workplace environment. The Carmel Culture is an integral part of the company’s success, and this includes training, development, and promotion opportunities for all staff as well as a holistic approach to staff management providing mentoring and support as required. Promotion from within is the first choice and continues to motivate and inspire as well as making good business sense.

(c) The need to foster business relationships with suppliers, customers, and key stakeholders

The directors seek to promote strong mutually beneficial relationships with customers, factories, suppliers, regulators, and authorities. Such general principles are critical in the delivery of the company’s strategy. All directors are involved in the building of key relationships globally and this is overseen by the CEO and forms part of monthly/quarterly board updates. This includes meetings at director level with all partners on a regular basis as well as strong local relationships facilitated by the presence of Carmel Senior Managers at our international offices.

(d) The impact of the company's operations on the community and the environment

The company is committed to understanding the interests of these stakeholder groups. The directors receive information on these topics on a periodic basis to provide relevant information for specific board decisions. We also ensure that all our global offices primarily employ local staff. This includes working with local organisations to promote ethical and sustainable trading. Carmel set up its own charity ‘The Carmel Foundation’ which was launched in 2019 as part of its commitment to impact the community positively.

(e) The desirability of the company maintaining a reputation for high standards of business conduct

The directors recognise the importance of acting in ways which promote high standards of business conduct both within and outside the office. The board annually reviews and approves clear operating frameworks for conduct, and this is highlighted in a Carmel Staff Manual and Code of Conduct. This applies to conduct within the business and in relationship to conduct with key stakeholders of the business including factories, suppliers, and financial partners.

(f) The need to act fairly as between members of the company

 

The directors aim to act fairly between the company’s members when delivering the company’s strategy and board decisions are made at arms length. This is reviewed when we set our annual strategy at the beginning of each year at Board Level and is overseen by the CEO and CFO on an ongoing basis.

CARMEL CLOTHING LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

On behalf of the board

S Blayne
Director
14 February 2025
CARMEL CLOTHING LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company and group continued to be that of a global fashion design and manufacturing brand; providing a supplier solution for retailers world-wide specialising in women, men and children's fashion across all product areas including outerwear, tailoring, softs and jersey.

Branches

Carmel's foreign branches are listed as follows:

- Carmel Clothing Limited - Vietnam Representative Office (Vietnam)

- Carmel Clothing Limited - (Liaison Office) (Sri Lanka)

- Carmel Clothing Limited - Reprezentanta (Romania)

- Carmel Clothing Limited - Representative (Bangladesh)

Results and dividends

The results for the year are set out on page 10.

Ordinary dividends were paid amounting to $653,233. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

D Edwards
R Elias
D Jacobs
E Marlow
(Resigned 11 December 2024)
S Blayne
C Adshead
H Fox
(Appointed 11 December 2024)
Stakeholders relationship

The directors engagement with customers, factories, suppliers, the regulators and authorities are critical in the delivery of the company's strategy. All directors are involved in building key relationships globally and this is overseen by the CEO and forms part of monthly/quarterly board updates. See s172 statement for further detail.

Future developments

Our future plans for the business will see an expansion of commodity types and production options, as well as working with new customers and new divisions within existing customers.

Energy and carbon report

As the group has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.

Strategic report

The truegroup has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group'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 it's financial risk management objectives and policies.

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 auditor of the company 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 auditor of the company is aware of that information.

CARMEL CLOTHING LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
On behalf of the board
S Blayne
Director
14 February 2025
CARMEL CLOTHING LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -

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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

CARMEL CLOTHING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CARMEL CLOTHING LIMITED
- 7 -

Disclaimer of opinion

We were engaged to audit the financial statements of Carmel Clothing Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group 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 FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

We do not express an opinion on the accompanying financial statements of the Company. Because of the significance of the matters described in the Basis for Disclaimer of Opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.

Basis for Disclaimer of Opinion

During the course of our audit, it was brought to our attention by the directors that between January 2020 and December 2023, $3.0million of payments were made to directors which had been posted to the profit and loss account mostly as purchases. These financial statements now reflect the corrections made to the directors’ current account, and the current and the prior year profit and loss accounts, together with an estimate of additional tax payable (including interest and penalties) for amounts of $2.8m (2022: $2.2m as detailed in note 29). As of the date of our audit report, the directors had not done a full review of expenses and agreed the tax amounts payable to HMRC. We were unable to confirm or verify by alternative means the completeness of the figure of $3.0million and the tax estimate of $2.8m (2022: $2.2m).

 

Additionally:

 

As a result of these matters, we were unable to determine whether any further adjustments might have been found necessary in respect of the profit and loss account, and the elements making up the statement of comprehensive income, the statement of changes in equity and the cash flow statement.

 

Furthermore, we have not been able to verify that the Group’s energy consumption was less than 40,000 kWh of energy in this reporting period, and therefore whether the Group has complied with the reporting requirements of Streamlined Energy and Carbon Reporting (SECR) regulations.

Other information

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.

 

Because of the significance of the matter described in the basis of disclaimer opinion section of our report, we have been unable to report whether the other information have material uncertainties or misstatements.

CARMEL CLOTHING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CARMEL CLOTHING LIMITED
- 8 -

Opinions on other matters prescribed by the Companies Act 2006

Because of the significance of the matter described in the basis for disclaimer of opinion section of our report, we have been unable to form an opinion, whether based on the work undertaken in the course of the audit:

Matters on which we are required to report by exception

Notwithstanding our disclaimer of an opinion on the financial statements, in the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit performed subject to the pervasive limitation described above, we have not identified material misstatements in the strategic report and the directors' report.

 

Arising from the limitation of our work referred to above:

 

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

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 parent 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.

As part of our planning process:

CARMEL CLOTHING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CARMEL CLOTHING LIMITED
- 9 -

The key procedures we plan to undertake to detect irregularities including fraud during the course of the audit included:

Because of the significance of the matters described in the basis of disclaimer section of our report, we have been unable to form an opinion on whether the procedures listed above would lead to the detection of irregularities (including fraud). The primary responsibility of the prevention and detection of irregularities and fraud rests with the directors.

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.

Use of our report

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

Mandy Janes (Senior Statutory Auditor)
For and on behalf of HW Fisher Audit
Chartered Accountants
Statutory Auditor
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
17 February 2025
CARMEL CLOTHING LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
as restated
Notes
$
$
Turnover
3
78,420,403
94,465,590
Cost of sales
(67,528,270)
(81,155,729)
Gross profit
10,892,133
13,309,861
Administrative expenses
(8,510,767)
(9,702,883)
Other operating income
10,870
-
Exceptional item
4
-
0
(292,289)
Operating profit
5
2,392,236
3,314,689
Interest receivable and similar income
9
70,368
46,289
Interest payable and similar expenses
10
(1,856,611)
(1,352,167)
Profit before taxation
605,993
2,008,811
Tax on profit
11
(184,051)
(413,687)
Profit for the financial year
421,942
1,595,124
Other comprehensive income
Revaluation of tangible fixed assets
-
0
(987,796)
Currency translation differences
(54,625)
23,997
Tax relating to other comprehensive income
-
0
125,193
Total comprehensive income for the year
367,317
756,518
Profit for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.
CARMEL CLOTHING LIMITED
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
as restated
Notes
$
$
$
$
Fixed assets
Tangible assets
14
13,229,424
13,202,984
Current assets
Stocks
17
26,820,718
32,689,133
Debtors
18
18,063,570
12,913,741
Cash at bank and in hand
847,512
1,440,562
45,731,800
47,043,436
Creditors: amounts falling due within one year
19
(37,149,607)
(37,419,914)
Net current assets
8,582,193
9,623,522
Total assets less current liabilities
21,811,617
22,826,506
Creditors: amounts falling due after more than one year
20
(781,250)
(1,510,223)
Provisions for liabilities
Deferred tax liability
22
868,748
868,748
(868,748)
(868,748)
Net assets
20,161,619
20,447,535
Capital and reserves
Called up share capital
24
2,729,800
2,729,800
Revaluation reserve
25
2,541,169
2,541,169
Profit and loss reserves
14,890,650
15,176,566
Total equity
20,161,619
20,447,535
The financial statements were approved by the board of directors and authorised for issue on 14 February 2025 and are signed on its behalf by:
S  Blayne
Director
CARMEL CLOTHING LIMITED
COMPANY BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 12 -
2023
2022
as restated
Notes
$
$
$
$
Fixed assets
Tangible assets
14
13,217,306
13,190,866
Investments
15
123
123
13,217,429
13,190,989
Current assets
Stocks
17
13,382,502
18,630,876
Debtors
18
15,911,174
17,307,255
Cash at bank and in hand
795,660
1,436,587
30,089,336
37,374,718
Creditors: amounts falling due within one year
19
(22,760,277)
(29,088,714)
Net current assets
7,329,059
8,286,004
Total assets less current liabilities
20,546,488
21,476,993
Creditors: amounts falling due after more than one year
20
(781,250)
(1,510,223)
Provisions for liabilities
Deferred tax liability
22
868,748
868,748
(868,748)
(868,748)
Net assets
18,896,490
19,098,022
Capital and reserves
Called up share capital
24
2,729,800
2,729,800
Revaluation reserve
25
2,541,169
2,541,169
Profit and loss reserves
13,625,521
13,827,053
Total equity
18,896,490
19,098,022

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was $451,701 (2022 - $878,721 profit).

The financial statements were approved by the board of directors and authorised for issue on 14 February 2025 and are signed on its behalf by:
S  Blayne
Director
Company Registration No. 03613529
CARMEL CLOTHING LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
$
$
$
$
As restated for the period ended 31 December 2022:
Balance at 1 January 2022
2,729,800
2,847,268
13,533,527
19,110,595
Effect of change in accounting policy
-
-
580,422
580,422
As restated
2,729,800
2,847,268
14,113,949
19,691,017
Year ended 31 December 2022:
Profit for the year
-
-
1,595,124
1,595,124
Other comprehensive income:
Revaluation of tangible fixed assets
-
(987,796)
-
(987,796)
Currency translation differences
-
-
23,997
23,997
Tax relating to other comprehensive income
-
125,193
-
0
125,193
Total comprehensive income for the year
-
(862,603)
1,619,121
756,518
Transfers
-
556,504
(556,504)
-
Balance at 31 December 2022
2,729,800
2,541,169
15,176,566
20,447,535
Year ended 31 December 2023:
Profit for the year
-
-
421,942
421,942
Other comprehensive income:
Currency translation differences
-
-
(54,625)
(54,625)
Total comprehensive income for the year
-
-
367,317
367,317
Dividends
12
-
-
(653,233)
(653,233)
Balance at 31 December 2023
2,729,800
2,541,169
14,890,650
20,161,619
CARMEL CLOTHING LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
$
$
$
$
As restated for the period ended 31 December 2022:
Balance at 1 January 2022
2,729,800
2,847,268
12,924,414
18,501,482
Effect of change in accounting policy
-
-
580,422
580,422
As restated
2,729,800
2,847,268
13,504,836
19,081,904
Year ended 31 December 2022:
Profit for the year
-
-
878,721
878,721
Other comprehensive income:
Revaluation of tangible fixed assets
-
(987,796)
-
(987,796)
Tax relating to other comprehensive income
-
125,193
-
0
125,193
Total comprehensive income for the year
-
(862,603)
878,721
16,118
Transfers
-
556,504
(556,504)
-
Balance at 31 December 2022
2,729,800
2,541,169
13,827,053
19,098,022
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
451,701
451,701
Dividends
12
-
-
(653,233)
(653,233)
Balance at 31 December 2023
2,729,800
2,541,169
13,625,521
18,896,490
CARMEL CLOTHING LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
2023
2022
as restated
Notes
$
$
$
$
Cash flows from operating activities
Cash generated from operations
30
3,078,035
1,284,995
Interest paid
(1,856,611)
(1,352,167)
Income taxes refunded
436,169
76,830
Net cash inflow from operating activities
1,657,593
9,658
Investing activities
Purchase of tangible fixed assets
(165,430)
(299,046)
Proceeds on disposal of tangible fixed assets
-
1,811,702
Receipts arising from loans made
-
(801,888)
Interest received
70,368
46,289
Net cash (used in)/generated from investing activities
(95,062)
757,057
Financing activities
Repayment of bank loans
(1,447,723)
(1,042,038)
Dividends paid to equity shareholders
(653,233)
-
Net cash used in financing activities
(2,100,956)
(1,042,038)
Net decrease in cash and cash equivalents
(538,425)
(275,323)
Cash and cash equivalents at beginning of year
1,440,562
1,691,888
Effect of foreign exchange rates
(54,625)
23,997
Cash and cash equivalents at end of year
847,512
1,440,562
CARMEL CLOTHING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
1
Accounting policies
Company information

Carmel Clothing Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Unit1, 55-57 Holmes Road, London, England, NW5 3AN.

 

The group consists of Carmel Clothing Limited and all of its subsidiaries.

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 U.S dollar, 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, modified to include the revaluation of freehold properties at fair value. The principal accounting policies adopted are set out below.

The 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 for parent company information presented within the consolidated financial statements:

 

1.2
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Carmel Clothing Limited together with the entity controlled by the parent company (its subsidiary).

 

All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with the parent.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

The subsidiary is consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

CARMEL CLOTHING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.3
Going concern

The Board of Directors have reviewed and assessed the group as a going concern both in terms of funding, performance, and forward orders.

While the current global economic climate continues to present challenges, during 2023 the Carmel group continued to maximise opportunities with existing and new customers; as well as the introduction of new divisions and product types to secure business levels going forward.

A risk management framework continues to feature at the core the group's business strategy, and this is reflected by a range of customers, suppliers, and production sources. A positive and strong presence continues in each production base, and manifests in continued support from factories throughout a successful global production base. A focus on efficiency, IT development and continued management and control of overheads ensures optimum results.

The group remains supported by its lenders and financial partners both currently and for future growth. The group is in a strong position to secure future business and maximise opportunities.

The directors are therefore confident that the group can continue as a going concern for a period of at least twelve months from the date of approval of these financial statements.

1.4
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.

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.

1.5
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 of assets less their residual values over their useful lives on the following bases:

Computer Software
25% straight line
1.6
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 land and buildings- short term
Over the term of the lease
Leasehold land and buildings
2% Straight line
Plant and equipment
25% Reducing balance
Fixtures and fittings
25% Reducing balance

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 recognised in the profit and loss account.

CARMEL CLOTHING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
An annual transfer is made between the revaluation reserve and profit and loss reserve representing the excess depreciation arriving on revalued assets.
1.7
Fixed asset investments

In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.8
Impairment of fixed assets

At each reporting period end date, the group 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.

1.9
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

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.

1.10
Financial instruments

The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and 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.

CARMEL CLOTHING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
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 group 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 group after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans and loans from fellow group companies 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.

 

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.11
Equity instruments

Equity instruments issued by the group 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 group.

1.12
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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

CARMEL CLOTHING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
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 if, and only if, there is 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.

1.13
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.

1.14
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.15
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

1.16
Foreign exchange

Transactions in currencies other than U.S. dollar 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. Gains and losses as a result of a change in presentational currency are recognised in other operating income.

CARMEL CLOTHING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
2
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Recoverability of amounts due from group undertakings

As at 31 December 2023 there are amounts due from subsidiary undertakings of $4,682,923 (2022: $6,912,316) to the parent company. The directors have assessed the recoverability of this balance based on the trading results and forecasts and deem that the amount is fully recoverable on the basis that the group companies are profitable.

Recoverability of other debtors

Included within other debtors is a balance of $1,263,096 (2022: $1,321,317) due to the group from related parties. The directors have assessed the recoverability of this balance based on the trading results and forecasts and deem that the amount is fully recoverable on the basis that the brand is in the early stages of development and the expectation that the company will become more profitable in the future.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Valuation of long leasehold properties

Determining the fair value of the company's long leasehold properties involves an element of estimation. The directors manage the resulting estimation uncertainty by reviewing values on a property on a property by property basis and referring to available market evidence, including rental yields and realised sales values for similar properties. Independent valuers are involved on a regular basis to ensure the value of the properties are materially correct. Currently the leasehold properties are valued at $12,800,333 the market prices would have to move by 12% to have material impact on the financial statements.

Stock impairment and provisions

Inventories are held at lower of cost and net realisable value. Net realisable value includes, where necessary, provisions for

slow moving and obsolete stocks. Calculation of these provisions require judgements to be made, which include forecasting

consumer demand, competitive and economic environment and inventory loss trends.

Provisions for tax penalties and interest

During the period from January 2020 to December 2023, payments to directors totalling $3.0m were incorrectly posted to the profit and loss account. An estimate of additional tax payable (including interest and penalties) has been made for amounts of $2.8m. This figure includes estimated s455 tax of $1.06m on the overdrawn loan accounts. The directors have calculated interest due on late paid taxation based on HMRC interest rates for each of the respective periods, as well as an estimate of a 70% penalty for both corporation tax and s455 tax.

 

The directors have recognised the s455 tax as corporation tax recoverable on the basis that the overdrawn directors' current account has been cleared by way of bonus' post year end.

CARMEL CLOTHING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
3
Turnover and other revenue
2023
2022
$
$
Turnover analysed by class of business
Sale of Goods
78,420,403
94,465,590
2023
2022
as restated
$
$
Other significant revenue
Interest income
70,368
46,289
2023
2022
$
$
Turnover analysed by geographical market
United Kingdom
30,872,297
36,157,512
Rest of Europe
36,665,579
43,400,471
Rest of the World
10,882,527
14,907,607
78,420,403
94,465,590
4
Exceptional item
2023
2022
as restated
$
$
Expenditure
Penalties on corporation tax and s455 tax
-
292,289

Exceptional items relate to estimates of penalties on corporation tax and s455 tax of $nil (2022: $292,289). Penalties on corporation tax have been recognised of $nil (2022: $91,060) and s455 tax have been recognised of $nil (201,229). Further details as to the nature of the estimate for the penalties can be see in Note 29.

5
Operating profit
2023
2022
as restated
$
$
Operating profit for the year is stated after charging/(crediting):
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
(147,406)
59,046
Depreciation of owned tangible fixed assets
138,990
150,374
(Profit)/loss on disposal of tangible fixed assets
-
342,358
Operating lease charges
282,292
229,426

Exchange differences recognised in profit or loss during the year amounted to a loss of $345,834 (2022: profit of $1,071,456).

CARMEL CLOTHING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
6
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
$
$
For audit services
Audit of the financial statements of the group and company
82,758
64,922
For other services
All other non-audit services
3,000
3,000
7
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
UK
49
55
48
54
Vietnam
101
107
101
107
Romania
3
4
3
4
Sri Lanka
7
10
7
10
Total
160
176
159
175

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
as restated
as restated
$
$
$
$
Wages and salaries
5,261,519
5,844,766
5,245,318
5,832,666
Social security costs
397,459
456,518
395,669
455,181
Pension costs
49,244
39,680
49,244
39,680
5,708,222
6,340,964
5,690,231
6,327,527

Wages and salaries includes an amount of $1,810,461 (2022: $1,994,712) in respect of salaries paid to employees in Vietnam, Romania and Sri Lanka. These salaries do not attract social security or pension costs in the UK.

8
Directors' remuneration
2023
2022
$
$
Remuneration for qualifying services
1,263,598
1,416,683
CARMEL CLOTHING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
8
Directors' remuneration
(Continued)
- 24 -
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2023
2022
$
$
Remuneration for qualifying services
271,066
359,698
9
Interest receivable and similar income
2023
2022
as restated
$
$
Interest income
Other interest income
70,368
46,289
10
Interest payable and similar expenses
2023
2022
as restated
$
$
Interest on bank overdrafts and loans
228,611
194,978
Other interest on financial liabilities
1,436,227
1,085,627
Other interest
191,773
71,562
Total finance costs
1,856,611
1,352,167
11
Taxation
2023
2022
as restated
$
$
Current tax
UK corporation tax on profits for the current period
184,051
261,040
Tax relating to prior year adjustments recognised in profit or loss
-
0
130,085
Total current tax
184,051
391,125
Deferred tax
Origination and reversal of timing differences
-
0
22,562
Total tax charge
184,051
413,687
CARMEL CLOTHING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
11
Taxation
(Continued)
- 25 -

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:

2023
2022
$
$
Profit before taxation
605,993
2,008,811
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
142,530
381,674
Tax effect of expenses that are not deductible in determining taxable profit
25,665
10,898
Permanent capital allowances in excess of depreciation
(93,072)
(28,547)
Depreciation on assets not qualifying for tax allowances
32,690
23,210
Other adjustments
76,238
3,890
Deferred tax movements
-
22,562
Taxation charge
184,051
413,687

In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

2023
2022
$
$
Deferred tax arising on:
Revaluation of property
-
(125,193)
12
Dividends
2023
2022
Recognised as distributions to equity holders:
$
$
Final paid
653,233
-
13
Intangible fixed assets
Group
Computer Software
$
Cost
At 1 January 2023 and 31 December 2023
552,954
Amortisation and impairment
At 1 January 2023 and 31 December 2023
552,954
CARMEL CLOTHING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
13
Intangible fixed assets
(Continued)
- 26 -
Carrying amount
At 31 December 2023
-
0
At 31 December 2022
-
0
Company
Computer Software
$
Cost
At 1 January 2023 and 31 December 2023
552,954
Amortisation and impairment
At 1 January 2023 and 31 December 2023
552,954
Carrying amount
At 31 December 2023
-
0
At 31 December 2022
-
0
14
Tangible fixed assets
Group
Leasehold land and buildings
Plant and equipment
Fixtures and fittings
Total
$
$
$
$
Cost or valuation
At 1 January 2023
12,798,718
1,233,369
865,096
14,897,183
Additions
1,615
163,815
-
0
165,430
At 31 December 2023
12,800,333
1,397,184
865,096
15,062,613
Depreciation and impairment
At 1 January 2023
-
0
903,527
790,672
1,694,199
Depreciation charged in the year
-
0
123,414
15,576
138,990
At 31 December 2023
-
0
1,026,941
806,248
1,833,189
Carrying amount
At 31 December 2023
12,800,333
370,243
58,848
13,229,424
At 31 December 2022
12,798,718
329,842
74,424
13,202,984
CARMEL CLOTHING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
14
Tangible fixed assets
(Continued)
- 27 -
Company
Leasehold land and buildings
Plant and equipment
Fixtures and fittings
Total
$
$
$
$
Cost or valuation
At 1 January 2023
12,798,718
1,233,369
852,978
14,885,065
Additions
1,615
163,815
-
0
165,430
At 31 December 2023
12,800,333
1,397,184
852,978
15,050,495
Depreciation and impairment
At 1 January 2023
-
0
903,527
790,672
1,694,199
Depreciation charged in the year
-
0
123,414
15,576
138,990
At 31 December 2023
-
0
1,026,941
806,248
1,833,189
Carrying amount
At 31 December 2023
12,800,333
370,243
46,730
13,217,306
At 31 December 2022
12,798,718
329,842
62,306
13,190,866

The carrying value of land and buildings comprises:

Group
Company
2023
2022
2023
2022
$
$
$
$
Long leasehold
12,633,115
13,962,849
12,633,115
13,962,849
Short leasehold
167,218
225,066
167,218
225,066
12,800,333
14,187,915
12,800,333
14,187,915

Leasehold property at Holmes Road, London NW5 3AN, and the property in Vietnam were revalued as at 31 December 2022 by respective independent valuers not connected to the company. The valuation was undertaken on the basis of market value, conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties. The directors have considered the valuation of the properties as of 31 December 2023 and do not consider the valuation to materially differ to that at 31 December 2022.

 

Leasehold land and buildings are carried at valuation. If land and buildings were measured using the cost model, the carrying amounts would have been approximately $9,362,667 (2022: $9,370,612), being cost $9,556,529 (2022: $9,554,914) and depreciation $193,863 (2022: $184,302).

15
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
$
$
$
$
Investments in subsidiaries
16
-
0
-
0
123
123
CARMEL CLOTHING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
15
Fixed asset investments
(Continued)
- 28 -
Movements in fixed asset investments
Company
Shares in group undertakings
$
Cost or valuation
At 1 January 2023 and 31 December 2023
123
Carrying amount
At 31 December 2023
123
At 31 December 2022
123
16
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Carmel Clothing Europe Limited
Office No. 320 Ormond Building, 31-36 Ormond Quay Upper Dublin 7, Republic of Ireland.
Global fashion design and manufacturing
Ordinary Shares
100
17
Stocks
Group
Company
2023
2022
2023
2022
$
$
$
$
Raw materials and consumables
3,370,274
6,254,208
1,919,092
3,540,632
Work in progress
9,933,963
10,814,552
4,905,055
5,661,791
Finished goods and goods for resale
13,516,481
15,620,373
6,558,355
9,428,453
26,820,718
32,689,133
13,382,502
18,630,876
18
Debtors
Group
Company
2023
2022
2023
2022
as restated
as restated
Amounts falling due within one year:
$
$
$
$
Trade debtors
12,672,063
8,075,571
6,302,762
6,018,886
Corporation tax recoverable
1,111,296
839,621
1,111,296
839,621
Amounts owed by group undertakings
-
-
4,682,923
6,912,316
Other debtors
4,098,001
3,820,833
3,663,500
3,390,399
Prepayments and accrued income
182,210
177,716
150,693
146,033
18,063,570
12,913,741
15,911,174
17,307,255
CARMEL CLOTHING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
18
Debtors
(Continued)
- 29 -

Included within other debtors is $2,783,330 (2022: $2,324,620) relating to overdrawn directors' current account. This was cleared by 31 December 2024 by way of bonus' post year end.

 

The directors have recognised the s455 tax as corporation tax recoverable on the basis that the overdrawn directors' current account has been cleared post year end.

19
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
as restated
as restated
Notes
$
$
$
$
Bank loans
21
781,250
1,500,000
781,250
1,500,000
Trade creditors
17,947,302
20,458,474
7,632,392
13,853,742
Corporation tax payable
3,014,337
2,665,792
3,014,337
2,651,944
Other taxation and social security
436,646
510,546
432,737
509,690
Other creditors
14,865,562
12,168,092
10,815,051
10,476,328
Accruals and deferred income
104,510
117,010
84,510
97,010
37,149,607
37,419,914
22,760,277
29,088,714

Other creditors includes an amount of $14,850,108 (2022: $11,994,778), due in respect of a receivables and inventory discounting agreements. These balances are secured by a fixed and floating charge over the leasehold property held at Holmes Road, London, NW5 3AN. The company is not permitted to pledge these assets as security for other borrowings or sell them to another entity.

20
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
$
$
$
$
Bank loans and overdrafts
21
781,250
1,510,223
781,250
1,510,223
21
Loans and overdrafts
Group
Company
2023
2022
2023
2022
$
$
$
$
Bank loans
1,562,500
3,010,223
1,562,500
3,010,223
Payable within one year
781,250
1,500,000
781,250
1,500,000
Payable after one year
781,250
1,510,223
781,250
1,510,223
CARMEL CLOTHING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
21
Loans and overdrafts
(Continued)
- 30 -

Bank loans bear interest at 4.75% and 4.15% plus the Bank of England base rate for each of the respective loans and have respective repayment dates of 31 October 2025.

 

The long-term loans are secured by a fixed and floating charge over the leasehold property held at Holmes Road, London, NW5 3AN. The company is not permitted to pledge these assets as security for other borrowings or sell them to another entity.

22
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Liabilities
2023
2022
Group
$
$
Accelerated capital allowances
55,414
55,414
Revaluations
813,334
813,334
868,748
868,748
Liabilities
Liabilities
2023
2022
Company
$
$
Accelerated capital allowances
55,414
55,414
Revaluations
813,334
813,334
868,748
868,748
There were no deferred tax movements in the year.

The deferred tax liability has been calculated at the rate of 25% being the tax rate substantively enacted at the date of the balance sheet.

23
Retirement benefit schemes
2023
2022
Defined contribution schemes
$
$
Charge to profit or loss in respect of defined contribution schemes
49,244
39,680

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

CARMEL CLOTHING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 31 -
24
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
$
$
Issued and fully paid
A Preference shares of 0.01p each
200
200
-
-
B Ordinary shares of 0.01p each
99,000
99,000
14
14
C Ordinary shares of £1 each
19,999,990
19,999,990
2,729,786
2,729,786
20,099,190
20,099,190
2,729,800
2,729,800

Ordinary B and C shares rank pari passu in terms of dividends and voting rights. A preference shares do not carry any voting rights.

25
Revaluation reserve
Group
Company
2023
2022
2023
2022
$
$
$
$
At the beginning of the year
2,541,169
2,847,268
2,541,169
2,847,268
Revaluation surplus arising in the year
-
0
(987,796)
-
0
(987,796)
Deferred tax on revaluation of tangible assets
-
125,193
-
125,193
Transfer to retained earnings
-
556,504
-
556,504
At the end of the year
2,541,169
2,541,169
2,541,169
2,541,169
26
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
$
$
$
$
Within one year
161,033
218,919
161,033
218,919
Between two and five years
387,407
524,355
387,407
524,355
548,440
743,274
548,440
743,274
CARMEL CLOTHING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 32 -
27
Related party transactions

Group and company

There were no other key management personnel other than Directors.

 

During the year, the company made $34,610 (2022: $49,500) of sales to Carmel Brands Limited, a company under common control. As at 31 December 2023, the company was owed $459,799 (2022: $517,757) by Carmel Brands Limited.

 

Group

During the year, the group made $15,739,683 (2022: $17,978,552) of purchases from Carmel Fast Track Limited, a related entity. During the year, the group received management charge income of $123,552 (2022: $141,811) for provision of support and services to Carmel Fast Track Limited. As at 31 December 2023, the group was owed $803,297 (2022: $803,560) by Carmel Fast Track Limited, the balance is included in other debtors.

 

Company

During the year, the company made $9,885,477 (2022: $14,501,137) of purchases from Carmel Fast Track Limited, a related entity. During the year, the company received management charge income of $123,552 (2022: $141,811) for provision of support and services to Carmel Fast Track Limited. As at 31 December 2023, the company was owed $386,994 (2022: $387,225) by Carmel Fast Track Limited, the balance is included in other debtors.

28
Directors' transactions

Group and company

During the year, loans were advanced to the group totaling $97,512 (2022: $183,029). During the year, expenses were paid on behalf of Directors of $991,681 (2022: $975,776) and dividends totaling $653,233 (2022: $nil) were paid in the year in respect of shares held by the company's directors. As at the year end 31 December 2023, three of the directors owed the Group amounts of $2,783,331 (2022: $2,345,565). Interest of $70,368 (2022: $46,290) was charged to the directors in respect of overdrawn DCA balances.

29
Prior period adjustment

During the preparation of the financial statements, management identified errors in the prior period figures. These have been corrected and further details are set out below.

Changes to the balance sheet - group
As previously reported
Adjustment at 1 Jan 2022
Adjustment at 31 Dec 2022
As restated at 31 Dec 2022
Notes
$
$
$
$
Current assets
Debtors due within one year
a, e, f
9,768,126
2,065,427
1,080,188
12,913,741
Creditors due within one year
Taxation
b, c, d
(809,868)
(1,485,005)
(881,465)
(3,176,338)
Net assets
19,668,390
580,422
198,723
20,447,535
Capital and reserves
Profit and loss
14,397,421
580,422
198,723
15,176,566
CARMEL CLOTHING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
29
Prior period adjustment
(Continued)
- 33 -
Changes to the profit and loss account - group
As previously reported
Adjustment
As restated
Period ended 31 December 2022
Notes
$
$
$
Cost of sales
a
(81,805,252)
649,523
(81,155,729)
Administrative expenses
a
(9,695,787)
(7,096)
(9,702,883)
Exceptional items
c, d
-
(292,289)
(292,289)
Interest receivable and similar income
e
-
46,289
46,289
Interest payable and similar expenses
c, d
(1,284,548)
(67,619)
(1,352,167)
Taxation
(283,602)
(130,085)
(413,687)
Profit after taxation
1,396,401
198,723
1,595,124
Reconciliation of changes in equity - company
1 January
31 December
2022
2022
Notes
$
$
Adjustments to prior year
Recognition of personal expenses within directors' current account
a
1,463,211
2,268,684
Recognition of PAYE and NIC payable on salary for UK-resident director
b
-
(120,815)
Additional corporation tax payable following change in profit before tax
c
(301,328)
(431,414)
Estimate of interest due on overdue taxation
c
(12,154)
(29,842)
Estimate of penalties due on corporation tax
c
(210,930)
(301,989)
Estimate of interest due on overdue s455 tax
d
(21,937)
(55,053)
Estimate of penalties on s455 tax
d
(386,506)
(587,735)
Interest receivable on overdrawn directors loan account
e
50,066
96,355
Loss on foreign exchange for retranslation of directors' current account at the year end
f
-
(59,046)
Total adjustments
580,422
779,145
Equity as previously reported
18,501,482
18,318,877
Equity as adjusted
19,081,904
19,098,022
CARMEL CLOTHING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
29
Prior period adjustment
(Continued)
- 34 -
Reconciliation of changes in profit for the previous financial period
2022
$
Adjustments to prior year
Recognition of personal expenses within directors' current account
a
805,474
Recognition of PAYE and NIC payable on salary for UK-resident director
b
(120,815)
Additional corporation tax payable following change in profit before tax
c
(130,085)
Estimate of interest due on overdue taxation
c
(17,689)
Estimate of penalties due on corporation tax
c
(91,060)
Estimate of interest due on overdue s455 tax
d
(33,116)
Estimate of penalties on s455 tax
d
(201,229)
Interest receivable on overdrawn directors loan account
e
46,289
Loss on foreign exchange for retranslation of directors' current account at the year end
f
(59,046)
Total adjustments
198,723
Profit as previously reported
679,998
Profit as adjusted
878,721
Notes to reconciliation
a) Recognition of personal expenses within directors' current account

During the period between January 2020 and December 2023, directors personal expenses were recognised in the profit and loss account. Adjustments have been made in order to correctly classify these amounts within the directors' current account. Amounts have been reclassified relating to the year ended 31 December 2022 of $805,475 (2021 and prior: $1,463,210).

b) Recognition of PAYE and NIC payable on salary for UK-resident director

One of the directors' had previously been non-UK resident. Following expiry of relief as a result COVID-19 where non-UK residents where unable to return to the country in which they lived, the employee remained in the UK however, PAYE and employer's national insurance was not recognised on the amounts payable to him. Adjustments to recognise additional tax payable, including interest and penalties, of $120,815 (2021 and prior: $nil) have been recognised.

c) Estimation of corporation tax, interest, penalties and S455 tax

The directors' have estimated the effect on profit as outlined in a) and b) above and have estimated the additional corporation tax payable on increased profits not reported. The directors would consider additional corporation tax payable of $130,085 (2021 and prior: $301,328). The director's have also estimated interest due on overdue corporation tax of $17,689 (2021 and prior: $12,154). Penalties of $91,060 (2021 and prior: $210,930) have been calculated based on the assumption of a 70% penalty being applied.

CARMEL CLOTHING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
29
Prior period adjustment
(Continued)
- 35 -
d) Estimation of s455 tax, interest and penalties

After recognition of the adjustments in a) and b) above, the estimated directors' current account as at 31 December 2022 is $2,306,919 (2021: $1,530,228). s455 tax has been calculated on overdrawn directors current account of $839,621 (2021: $552,151). The directors' have recognised the s455 tax within debtors due in less than one year as they consider the balance to be recoverable through future clearance of the directors' current account by way of payment of bonus'.

 

The directors' have estimated interest on late paid s455 tax which has been expensed to the profit and loss account, for amounts of $33,116 (2021 and prior: $21,937). The directors' have also estimated penalties due in relation to s455 tax at $201,229 (2021 and prior: $386,506).

 

Following estimates of tax payable as outlined in notes c) and d), the estimated corporation tax liability as at 31 December 2022 was $2,245,655 (2021: $1,485,005).

e) Interest receivable on overdrawn directors' loan account

The group have charged interest on the overdrawn directors' current account at the official rate of interest per HMRC. Interest receivable has been recognised in the year of $46,289 (2021 and prior: $50,066).

f) Loss on foreign exchange for retranslation of directors' current account at the year end

The group have retranslated the directors' current account as at 31 December 2022 using the interest rate at that date. As a result a loss on foreign exchange has been recognised within administrative expenses of $59,046.

30
Cash generated from group operations
2023
2022
as restated
$
$
Profit for the year after tax
421,942
1,595,124
Adjustments for:
Taxation charged
184,051
413,687
Finance costs
1,856,611
1,352,167
Investment income
(70,368)
(46,289)
(Gain)/loss on disposal of tangible fixed assets
-
342,358
Depreciation and impairment of tangible fixed assets
138,990
150,374
Foreign exchange gains on cash equivalents
-
(432,614)
Movements in working capital:
Decrease/(increase) in stocks
5,868,415
(1,446,007)
(Increase)/decrease in debtors
(5,421,504)
7,788,689
Increase/(decrease) in creditors
99,898
(8,432,494)
Cash generated from operations
3,078,035
1,284,995
CARMEL CLOTHING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 36 -
31
Analysis of changes in net debt - group
1 January 2023
Cash flows
Exchange rate movements
31 December 2023
$
$
$
$
Cash at bank and in hand
1,440,562
(538,425)
(54,625)
847,512
Borrowings excluding overdrafts
(3,010,223)
1,499,950
(52,227)
(1,562,500)
(1,569,661)
961,525
(106,852)
(714,988)
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