Company registration number 01059087 (England and Wales)
PENTHOUSE CARPETS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
PENTHOUSE CARPETS LIMITED
COMPANY INFORMATION
Directors
M Muschamp
SA Jackson
JR Gamble
SCY Yu
Sa Jackson
M Muschamp
Company number
01059087
Registered office
Buckley Carpet Mill, Buckley Rd
Lancs
Rochdale
OL12 9DU
Auditor
BK Plus Audit Limited
Sterling House
501 Middleton Road
Chadderton
Oldham
Lancashire
OL9 9LY
PENTHOUSE CARPETS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 22
PENTHOUSE CARPETS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2024
- 1 -
The directors present the strategic report for the year ended 30 June 2024.
Review of the business
The harsh trading environment of the previous year has continued into this financial year, consumers remain reluctant to spend on non-essential household goods such as flooring products, and with the domestic housing market not improving the demand for soft flooring remains in a decline. It is without doubt that the industry is suffering from economic volatility; many independent retailers faced financial struggles as evidence in the number of store closures in this financial year compared to the previous year, and contrast it with number of new stores opening. Therefore, it is no surprise that the company’s turnover fell by 5%. Nevertheless, the company remains in good financial health. The directors are pleased to report an operating profit of £87,094 (2023 - profit of £326,025).
At the year end, the company had shareholders' funds of £9,968,869 (2023 - £9,883,193), including distributable reserves of £7,218,042 (2023 - £7,086,876). The company's current assets exceeded its current liabilities by £5,742,934 (2023 - £5,719,186).
Principal risks and uncertainties
The board maintains a policy of continuous identification and review but recognises that a number of risks and uncertainties lies beyond its control.
The key risks and uncertainties which could affect the company's business include cost and availability of raw materials, competition, IT failure, general economic conditions, legislative and regulatory risks, and current cost living crisis. The company recognises that there will be other unknown risks.
Key performance indicators
Future development
The company, in partnership with its suppliers, will continue to offer a modern, fashionable, and appealing product to our customers. Development of designs and colours, as well as rejuvenating existing product is under continuous review. The policy of communication, developing and fostering close relationships with our customers has not changed, and is vital to the company’s trading success.
Matters of strategic importance
The strategic focus is to continue to place the company in a competitive, secure and stable position; maintain and improve services for our customers; maintain stock levels to meet demand; improve the distribution of products; maintain the depth and breadth of our point-of-sales displays; and careful management of the company’s liquidity in the face of an uncertain economic climate.
The identifiable constraints to trade for the business is the intensely competitive floorcovering market, the uncertain economy and the changing cost of raw materials, energy, transportation, general operating overheads. As ever it is important for the organisation to remain flexible and able to adapt to any adverse market conditions. The directors do not believe the trading environment will change, nevertheless, the company has immense confidence in its products, personnel, and customer service.
SCY Yu
Director
12 February 2025
PENTHOUSE CARPETS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2024
- 2 -
The directors present their annual report and financial statements for the year ended 30 June 2024.
Principal activities
The principal activity of the company continued to be that of carpet manufacturing.
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
M Muschamp
SA Jackson
JR Gamble
SCY Yu
Sa Jackson
M Muschamp
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.
In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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 the review of the business, future developments, principal risks and uncertainties and key performance indicators.
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.
PENTHOUSE CARPETS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 3 -
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
SCY Yu
Director
12 February 2025
PENTHOUSE CARPETS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PENTHOUSE CARPETS LIMITED
- 4 -
Opinion
We have audited the financial statements of Penthouse Carpets Limited (the 'company') for the year ended 30 June 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 30 June 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
PENTHOUSE CARPETS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PENTHOUSE CARPETS LIMITED (CONTINUED)
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Based on our understanding of the company, we identified that the principal risks of non-compliance related to those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006 and FRS 102. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to manipulate financial results and management bias in accounting estimates. Appropriate audit procedures were therefore performed to address those risks including testing journal entries and challenging assumptions and judgements made by management in their significant accounting estimates. There are inherent limitations in the audit procedures described above and the further removed noncompliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
PENTHOUSE CARPETS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PENTHOUSE CARPETS LIMITED (CONTINUED)
- 6 -
As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
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.
Dominic Huxley ACA (Senior Statutory Auditor)
For and on behalf of BK Plus Audit Limited, Statutory Auditor
Chartered Certified Accountants
Sterling House
501 Middleton Road
Chadderton
Oldham
Lancashire
OL9 9LY
12 February 2025
PENTHOUSE CARPETS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
- 7 -
2024
2023
Notes
£
£
Turnover
3
14,220,054
14,950,668
Cost of sales
(10,966,164)
(11,468,134)
Gross profit
3,253,890
3,482,534
Distribution costs
(2,219,004)
(2,208,225)
Administrative expenses
(954,592)
(955,084)
Other operating income
6,800
6,800
Operating profit
4
87,094
326,025
Interest receivable and similar income
7
43,891
21,709
Interest payable and similar expenses
8
(1,278)
(1,440)
Profit before taxation
129,707
346,294
Tax on profit
9
(44,031)
(256,827)
Profit for the financial year
85,676
89,467
Other comprehensive income
Revaluation of tangible fixed assets
1,877,500
Tax relating to other comprehensive income
(469,375)
Total comprehensive income for the year
85,676
1,497,592
The profit and loss account has been prepared on the basis that all operations are continuing operations.
PENTHOUSE CARPETS LIMITED
BALANCE SHEET
- 8 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
5,282,762
5,199,816
Current assets
Stocks
12
4,497,238
4,791,239
Debtors
13
1,568,430
1,780,035
Cash at bank and in hand
1,926,523
1,383,697
7,992,191
7,954,971
Creditors: amounts falling due within one year
14
(2,249,257)
(2,235,785)
Net current assets
5,742,934
5,719,186
Total assets less current liabilities
11,025,696
10,919,002
Creditors: amounts falling due after more than one year
15
(9,333)
(16,133)
Provisions for liabilities
Deferred tax liability
17
1,047,494
1,019,676
(1,047,494)
(1,019,676)
Net assets
9,968,869
9,883,193
Capital and reserves
Called up share capital
20
200,127
200,127
Share premium account
2,511
2,511
Revaluation reserve
2,547,939
2,593,429
Capital redemption reserve
250
250
Profit and loss reserves
7,218,042
7,086,876
Total equity
9,968,869
9,883,193
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 12 February 2025 and are signed on its behalf by:
SCY Yu
Director
Company registration number 01059087 (England and Wales)
PENTHOUSE CARPETS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
- 9 -
Share capital
Share premium account
Revaluation reserve
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
£
Balance at 1 July 2022
200,127
2,511
1,316,702
250
6,881,100
8,400,690
Year ended 30 June 2023:
Profit
-
-
-
-
89,467
89,467
Other comprehensive income:
Revaluation of tangible fixed assets
-
-
1,877,500
-
-
1,877,500
Tax relating to other comprehensive income
-
-
(469,375)
-
(469,375)
Total comprehensive income
-
-
1,408,125
-
89,467
1,497,592
Dividends
10
-
-
-
-
(15,089)
(15,089)
Transfers
-
-
(131,398)
-
131,398
-
Balance at 30 June 2023
200,127
2,511
2,593,429
250
7,086,876
9,883,193
Year ended 30 June 2024:
Profit and total comprehensive income
-
-
-
-
85,676
85,676
Transfers
-
-
(45,490)
-
45,490
-
Balance at 30 June 2024
200,127
2,511
2,547,939
250
7,218,042
9,968,869
PENTHOUSE CARPETS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
- 10 -
1
Accounting policies
Company information
Penthouse Carpets Limited is a private company limited by shares incorporated in England and Wales. The registered office is Buckley Carpet Mill, Buckley Rd, Lancs, Rochdale, OL12 9DU.
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, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Penthouse Carpets Holdings Limited. These consolidated financial statements are available from its registered office, Buckley Carpet Mill, Buckley Road, Rochdale, OL12 9DU.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue 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 and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
PENTHOUSE CARPETS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 11 -
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.
1.4
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 land and buildings
40 years straight line
Plant and machinery
10-20 years straight line
Fixtures and fittings
3-6 years straight line
Motor vehicles
3 years 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.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
PENTHOUSE CARPETS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 12 -
1.6
Stocks
Stocks are stated at the lower of cost and net realisable value. Cost includes all costs incurred in bringing each product to its present location and condition, as follows:
Raw materials – purchase cost on a first-in, first-out basis
Work in progress and finished goods – cost of direct materials and labour plus attributable overheads based on a normal level of activity.
Net realisable value is based on estimated selling price less any further costs expected to be incurred to completion and disposal.
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, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
PENTHOUSE CARPETS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 13 -
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.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
PENTHOUSE CARPETS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 14 -
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.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Fair value is determined using an appropriate pricing model. All market conditions and non-vesting conditions are taken into account when estimating the fair value of the shares or share options. As long as all other vesting conditions are satisfied, no adjustment is made irrespective of whether market or non-vesting conditions are met.
PENTHOUSE CARPETS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 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 profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
1.14
Government grants
Government grants are recognised at the fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and the grants will be received.
Government grants are recognised using the accrual model.
Under the accrual model, government grants relating to revenue are recognised on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs are recognised in income in the period in which it becomes receivable.
Grants relating to assets are recognised in income on a systematic basis over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income and not deducted from the carrying amount of the asset.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
In the opinion of the directors no significant judgements have been made by management in preparing these financial statements in applying the accounting policies. Management have had to make estimates relating to stock and debtor provisioning based on information available to them.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
14,031,398
14,793,213
Overseas
188,656
157,455
14,220,054
14,950,668
PENTHOUSE CARPETS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
3
Turnover and other revenue
(Continued)
- 16 -
2024
2023
£
£
Other revenue
Interest income
43,891
21,709
Grants received
6,800
6,800
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(6,800)
(6,800)
Fees payable to the company's auditor for the audit of the company's financial statements
11,650
11,450
Depreciation of owned tangible fixed assets
283,511
231,565
Profit on disposal of tangible fixed assets
(37,625)
(33,009)
Operating lease charges
66,012
62,316
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Production staff
39
43
Distribution staff
10
12
Administrative staff
24
24
Total
73
79
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
2,449,675
2,503,204
Social security costs
238,074
252,529
Pension costs
173,294
152,648
2,861,043
2,908,381
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
293,263
316,888
PENTHOUSE CARPETS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
6
Directors' remuneration
(Continued)
- 17 -
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2023 - 3).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
104,930
105,007
Company pension contributions to defined contribution schemes
48,055
37,481
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
43,891
21,709
8
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
77
-
Interest on finance leases and hire purchase contracts
1,201
1,440
1,278
1,440
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
16,213
90,745
Adjustments in respect of prior periods
(858)
Total current tax
16,213
89,887
Deferred tax
Origination and reversal of timing differences
27,818
166,940
Total tax charge
44,031
256,827
PENTHOUSE CARPETS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
9
Taxation
(Continued)
- 18 -
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
129,707
346,294
Expected tax charge based on the standard rate of corporation tax in the UK of 21.52% (2023: 20.50%)
27,913
70,976
Tax effect of expenses that are not deductible in determining taxable profit
31,281
76,936
Adjustments in respect of prior years
(858)
Effect of change in corporation tax rate
121,062
Revaluation reserve
(15,163)
(11,289)
Taxation charge for the year
44,031
256,827
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:
2024
2023
£
£
Deferred tax arising on:
Revaluation of property
-
469,375
10
Dividends
2024
2023
£
£
Interim paid
15,089
PENTHOUSE CARPETS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 19 -
11
Tangible fixed assets
Leasehold land and buildings
Plant and machinery
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 July 2023
4,450,000
3,436,228
947,754
448,092
9,282,074
Additions
266,478
4,753
95,226
366,457
Disposals
(132,583)
(132,583)
At 30 June 2024
4,450,000
3,702,706
952,507
410,735
9,515,948
Depreciation and impairment
At 1 July 2023
2,861,196
947,377
273,685
4,082,258
Depreciation charged in the year
89,000
97,169
509
96,833
283,511
Eliminated in respect of disposals
(132,583)
(132,583)
At 30 June 2024
89,000
2,958,365
947,886
237,935
4,233,186
Carrying amount
At 30 June 2024
4,361,000
744,341
4,621
172,800
5,282,762
At 30 June 2023
4,450,000
575,032
377
174,407
5,199,816
A revaluation of the long leasehold property was carried out on 26 January 2023 by Barton Property Consultancy Ltd, Chartered Surveyors on an open market basis.
The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:
Long leasehold property
2024
2023
£
£
Cost
1,802,901
1,802,901
Accumulated depreciation
(839,152)
(810,806)
Carrying value
963,749
992,095
12
Stocks
2024
2023
£
£
Raw materials and consumables
979,654
1,061,953
Work in progress
101,397
120,055
Finished goods and goods for resale
3,416,187
3,609,231
4,497,238
4,791,239
PENTHOUSE CARPETS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 20 -
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,272,565
1,388,912
Prepayments and accrued income
295,865
391,123
1,568,430
1,780,035
14
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Obligations under finance leases
16
23,582
Trade creditors
1,294,851
1,118,128
Amounts owed to group undertakings
118,325
118,325
Corporation tax
16,214
90,745
Other taxation and social security
313,561
251,966
Government grants
18
6,800
6,800
Accruals and deferred income
499,506
626,239
2,249,257
2,235,785
Obligations due under hire purchase agreements are secured on the assets to which they relate.
15
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Government grants
18
9,333
16,133
Obligations due under hire purchase agreements are secured on the assets to which they relate.
16
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
23,582
PENTHOUSE CARPETS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 21 -
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
201,794
158,751
Revaluations
849,313
864,476
Retirement benefit obligations
(3,613)
(3,551)
1,047,494
1,019,676
2024
Movements in the year:
£
Liability at 1 July 2023
1,019,676
Charge to profit or loss
27,818
Liability at 30 June 2024
1,047,494
18
Government grants
2024
2023
£
£
Arising from government grants
16,133
22,933
Included in the financial statements as follows:
Current liabilities
6,800
6,800
Non-current liabilities
9,333
16,133
16,133
22,933
19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
173,294
152,648
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.
PENTHOUSE CARPETS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 22 -
20
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
200,000
200,000
200,000
200,000
US $1 Ordinary shares of 63.5p each
200
200
127
127
200,200
200,200
200,127
200,127
21
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
52,368
54,251
Between two and five years
159,748
180,879
In over five years
18,950
52,070
231,066
287,200
22
Capital commitments
Amounts contracted for but not provided in the financial statements:
2024
2023
£
£
Acquisition of tangible fixed assets
-
90,000
23
Ultimate controlling party
The Penthouse Carpets Holdings Limited Employee Benefit Trust is the ultimate controlling party by virtue of their interest in the majority of the share capital of the parent company, Penthouse Carpets Holdings Limited.
At the year end the ultimate parent company was Penthouse Carpets Holdings Limited, a company registered in England and Wales. The results of the company are included within the consolidated financial statements of Penthouse Carpets Holdings Limited, copies of which can be obtained from Companies House. The parent company's registered office is Buckley Carpet Mill, Buckley Road, Rochdale, OL12 9DU.
The following are the parents of the largest and smallest groups in which this company's results are consolidated:
Largest group
Penthouse Carpets Holdings Limited
Smallest group
Penthouse Carpets Holdings Limited
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