The directors present the strategic report for Wilkie Technical Textiles (Holding Company) Limited ("the company") and its subsidiaries (collectively "the group"), for the year ended 30 June 2024.
The company has acted as a holding company and has incurred administration expenses and management fee income associated with this. There were no dividends received from wholly owned subsidiaries.
Wilkie Technical Textiles (Holding Company) Ltd applies Advance Textile Technology to create industry-leading solutions for a wide variety of customers end uses. The group has a key focus in product development and implementing operational excellence throughout the manufacturing operations.
The group manufactures in our sites in Scotland, China and USA. The group also has sales offices in the USA and Japan. In the year 2024 the group completed an asset acquisition in the USA adding an additional manufacturing site, whilst bringing state of the art technical coating technology into the group product offering.
Key focus markets of the group continue to be within UK, Europe, USA, Middle East and Africa.
Trading results
Revenues have decreased year on year to £44,077,097 from £51,211,122 in 2023. Market and trading conditions where challenging across the UK, US and Europe in the leading sectors we supply. We ended the year with an acquisition of assets from the Bradford Inc group which expands the Wilkie Manufacturing footprint into North America.
The average workforce of 2024 – 325 up from 2023 - 304.
Loss before tax of £362,788 was recorded in the year ended 30 June 2024 compared to a profit of £1,440,333 in the year ended 30 June 2023.
Strategically we initiated significant project work and associated resources which culminated in the acquisition of the majority shareholding in Michelin Scotland Innovation Parc in Dundee, Scotland. This has seen the overhead costs within the year increase compared to prior year with reduced revenue. The business views this as a strategic investment in securing a new site which is a core element of our long-term growth plan and strategy.
At a global level the business has invested in a restructuring of the C-suite leadership team adding clarity and strength to the strategic alignment of the business.
The loss after tax was £478,696 for the year ended 30 June 2024 compared to a profit after tax of £1,326,943 for the year ended 30 June 2023. Net assets were £12.9m at 30 June 2024 (2023: £13.6m).
Key Performance Indicators
The Board of Directors use the following KPI’s to assess and manage business performance.
This Year Last Year
Turnover Growth (13.9%) 41%
Gross Margin 19.0% 15.9%
Operating Margin 1.2% 4.3%
Net Debt: EBITDA 4.9x 3.6x
Going concern
Since the financial year-end the group is trading as expected. The directors have maintained a focus on delivering our five-year growth plan and ensuring the group has adequate resources to operate.
The directors continue to review the trading environment, regularly update the group forecast and analyse different potential scenario’s for the future which include sensitivities on the impact of energy prices, the labour market, inflationary pressures, global politics and other changes in the world economy. These forecasts demonstrate that the group is forecast to be profitable for the current year and beyond and generate positive cashflows. The group has sufficient cash reserves to enable the group to meet its obligations as they fall due for at least the next 12 months from the date of signing these financial statements.
Therefore, the directors are satisfied that the group has adequate resources to continue to operate for the foreseeable future and therefore continue to adopt the going concern basis for preparing these financial statements.
The going concern disclosure is an area of judgement and, due principally to the energy crisis and inflationary environment, the level of uncertainty is higher than normal. The directors have addressed this uncertainty by the level of work performed in assessing the group’s ability to continue as a going concern including the number of sensitivities performed and the analysis of a “worst case” outturn which showed the group has sufficient cash reserves to meet its obligations.
Future Developments
The directors plan to maintain the management policies to significantly grow the business in coming years, in particular to evolve the product offering to meet the needs of our customers and new markets moving forward.
The banking facilities have been successfully renewed post year-end with extensions across facilities to enable the expansion of the group.
Principal Risks and Uncertainties
Inflation
Commodity driven volatility eased through 2024 with isolated instances. The business has seen material prices stabilise and continued to monitor the freight costs.
We continue to monitor the energy market as this continues to be a major driver of uncertainty for the business, both in terms of our operations, but also those of our suppliers, customers and the impact of energy prices on our employees.
Labour costs continue to increase at rates beyond CPI in the UK. We continue to review pay and conditions to ensure the balance between business needs and those of our employees are protected.
Carbon Neutrality
A key element of our Carbon Neutral sustainability strategy will be realised with the acquisition and move to the new site at Michelin Scotland Innovation Parc for the UK business.
We are actively engaged in a number of national R&D projects related to sustainable textiles and recycling technologies in the UK.
The move to carbon neutrality is becoming a larger area of focus for the subsidiaries of the group, with polymers being the starting point of most raw materials. The subsidiaries are actively engaging in opportunities to reduce their direct carbon footprint. A significant portion of the products manufactured by Wilkie play a key role in reducing pollutants entering the air and the subsidiaries are actively involved within the industry in seeking greener alternatives within the supply chain.
The directors are aware of their duty under s.172 of the Companies Act 2006 to act in the way which they consider, in good faith, would be most likely to promote the success of the company and its subsidiaries (collectively known as "the group") for the benefit of its members as a whole and, in doing so, to have regard (amongst other matters) to:
The likely consequences of any decision in the long term;
The interests of the group’s employees;
The need to foster the group’s relationships with suppliers, customers and others;
The impact of the group’s operations on the community and the environment; and
The desirability of the group maintaining a reputation for high standards of business conduct.
The directors work to promote the success of the group, by considering the impact that their decisions may have on the group, along with the group’s stakeholders. The issues and factors which have guided the directors’ decisions are outlined in the ‘review of business’ and the ‘principal risks and uncertainties’ sections within this report.
Reputation is of key importance to the group and the directors always consider the reputational impact in taking decisions and encourage high standards of business conduct.
The group’s key stakeholders include, but are not limited to:
Employees;
Customers;
Suppliers;
Local communities and environment in which the group is based; and
Shareholders.
The directors of the group promote good governance, which is key to drive the success of the group. The directors also aim to achieve the overall strategic objectives of the group, as well as continuing good relationships with all key stakeholders who are critical to the long-term success of the group. Opportunities for further professional and career development are on offer for employees through relevant training courses and qualifications.
Having regard to employees’ interests
The directors attach great importance to the skills and experience of the management and employees of the group. Their aim is to retain the best talent and believes that they will benefit from the opportunities within the group.
The directors are committed to consulting, as appropriate, with relevant employees and employee representatives on a regular basis and has worked hard to ensure effective communication with all employees during the year.
The group has a number of initiatives including a commitment to create a working environment where everyone has the opportunity to learn, develop and contribute to the success of the group, whilst working within a common set of values. Regular updates on business performance KPIs through various channels are provided and an element of employee reward is linked to the financial success of the group, amongst other appraisal criteria. Appropriate whistleblowing procedure are available that employees are comfortable using.
Fostering business relationships
The group aims to be to the first choice for customers’ needs, enabling them to enjoy the full value of their relationship with the business. The group builds long term customer relationships by providing unrivalled levels of service and an offering which is unmatched in its flexibility. We maintain strong relationships across our supply chain through regular contact and meetings with our suppliers. We encourage our customers and suppliers to raise any issues or concerns they have over their relationship with the group, incorporating all aspects (legal, commercial, operational etc.) and offering dedicated points of contact within our team to promote the building of long-term business relationships.
These relationships contribute to the group’s competitive advantage. They not only enable us to execute our strategy efficiently, but also help customers and suppliers plan their business, managing cash flow and production. The group also engages actively with suppliers to make sure they fully comply with our code of conduct for suppliers and partners, which includes provisions on human rights and environmental standards.
Impact on community and environment
The group values the communities in which it operates, and its aim is for its business activities to have a positive impact on them.
The group will continue to promote green technology and initiatives to protect our environment, as well as being a contributor to the economies it operates in. We continue to seek to reduce the environmental impact of our business. The business is committed to delivering a corporate social responsibility strategy that sets the overall aim to be environmentally responsible, a good neighbour and a great place to work.
Shareholders
The shareholders actively work within the business in order to support strategic aims and ultimately provide a sustainable business for the benefit of all stakeholders.
Maintaining high standards of business conduct
The directors are committed to operating the group in a responsible manner, operating with high standards of business conduct and good governance.
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 June 2024.
The results for the year are set out on page 12.
Ordinary interim dividends were paid amounting to £112,710 (2023 - £67,710). The directors do not recommend payment of a final dividend (2023: £nil).
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The auditor, Johnston Carmichael LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Streamlined Energy and Carbon Report (SECR)
The company is an investment holding company for a number of subsidiaries (collectively known as “the group”) with no active trade or employees. Although the group qualifies as large and as such is potentially required to disclose SECR, none of its subsidiaries are required to make their own SECR disclosures, either because they do not meet the individual size criteria or are non-UK based subsidiaries. The company’s energy use was less than 40,000 kwh during the year. As such, the group is exempt from reporting on energy and carbon.
Principal risk and uncertainties
Financial risk management objectives and policies
The group’s activities expose it to a number of financial risks including cash flow, credit and liquidity risks. These specific risks, their impact on the group and how these risks are mitigated are dealt with below. The group uses derivatives to manage financial risk in respect of cash flow risk from time to time.
Cash flow risk
The group’s activities expose it to the financial risk of changes in foreign currency exchange rates and interest rates. The group may consider the use foreign exchange forward contracts to hedge its exposures where appropriate and will also seek to naturally hedge through the matching of the same foreign currency receipts and payments. Where possible, interest bearing liabilities are held at fixed rates to ensure certainty of cash flows. Where rates are variable, management seek to ensure the best rates are negotiated and consider future movements in factors like base rate. Management will also consider interest rate swaps as a method of managing interest rate risk.
We have audited the financial statements of Wilkie Technical Textiles (Holding Company) Limited (‘the parent company’) and its subsidiaries (‘the group’) for the year ended 30 June 2024, which comprise the Group Profit and Loss Account, Group Statement of Comprehensive Income, Group Balance Sheet, Company Balance Sheet, Group Statement of Changes in Equity, Company Statement of Changes in Equity, Group Statement of Cash Flows and notes to the group 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).
Basis for 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 group or parent 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.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
The information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
The Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.
With regards to component auditors, we assessed their competence and capabilities to identify or recognise non-compliance with laws and regulations by considering their credentials, the experience of their team and our previous experience of them.
All engagement team members were briefed on relevant identified laws and regulations and potential fraud risks at the planning stage of the audit. Engagement team members were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
We communicated with component auditors and gathered their risk assessment in relation to the non-compliance of laws and regulations and any subsequent findings through the use of group audit instructions and group audit questionnaires.
We obtained an understanding of the legal and regulatory frameworks that are applicable to the group and the parent company and the sector in which they operate, focusing on those provisions that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include:
Companies Act 2006;
Health and Safety Standards ;
Corporation Tax Legislation UK and China; and
UK Generally Accepted Accounting Practice.
We gained an understanding of how the group and the parent company are complying with these laws and regulations by making enquiries of management and those charged with governance including management and those charged with governance of component entities where necessary. We corroborated these enquiries through our review of submitted returns, external inspections, relevant correspondence with regulatory bodies and board meeting minutes and through discussions with component auditors.
We assessed the susceptibility of the group’s and parent company’s financial statements to material misstatement, including how fraud might occur, by meeting with management and those charged with governance to understand where it was considered there was susceptibility to fraud. This evaluation also considered how management and those charged with governance were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management and those charged with governance oversee the implementation and operation of controls. In areas of the financial statements where the risks were considered to be higher, we performed procedures to address each identified risk. We identified a heightened fraud risk in relation to:
Management override of controls; and
Revenue recognition
In addition to the above, the following procedures were performed to provide reasonable assurance that the financial statements were free of material fraud or error:
Reviewing minutes of meetings of those charged with governance for reference to: breaches of laws and regulation or for any indication of any potential litigation and claims; and events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud;
Reviewing the level of and reasoning behind the group’s and parent company’s procurement of legal and professional services
Performing audit procedures over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing judgements made by management in their calculation of accounting estimates for potential management bias;
Performing audit work procedures confirming the completeness of revenue recognised within the financial statements, including tracing a sample of sales from the point of initiation through to the sales ledger ensuring sales have been accurately recorded, and performing cut-off procedures across the year end;
Extent to which the audit was considered capable of detecting irregularities, including fraud (continued)
Overseeing and reviewing the work and reporting completed by component auditors, including direct review of working papers addressing areas assessed as having a heightened risk of fraud;
Completion of appropriate checklists and use of our experience to assess the group’s and parent company’s compliance with the Companies Act 2006; and
Agreement of the financial statement disclosures to supporting documentation.
Our audit procedures were designed to respond to the risk of material misstatements in the financial statements, recognising that 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 intentional concealment, forgery, collusion, omission or misrepresentation. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.
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.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £77,128 (2023 - profit of £57,414).
Wilkie Technical Textiles (Holding Company) Limited (“the company”) is a private limited company domiciled and incorporated in Scotland. The registered office is Marywell Works, Marywell Brae, Kirriemuir, DD8 4BJ.
The group consists of Wilkie Technical Textiles (Holding Company) Limited and all of its subsidiaries (collectively known as "the group").
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 pound (£).
The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments 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:
The requirement to present a statement of cash flows and related notes;
Certain disclosure requirements in relation to financial instruments; and
The requirement to disclose key management personnel compensation in total.
The consolidated group financial statements consist of the financial statements of the parent company Wilkie Technical Textiles (Holding Company) Limited together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 30 June 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
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.
Since the financial year-end the group is trading as expected. The directors have maintained a focus on delivering our five-year growth plan and ensuring the group has adequate resources to operate.
The directors continue to review the trading environment, regularly update the group forecast and analyse different potential scenario’s for the future which include sensitivities on the impact of energy prices, the labour market, inflationary pressures, global politics and other changes in the world economy. These forecasts demonstrate that the group is forecast to be profitable for the current year and beyond and generate positive cashflows. The group has sufficient cash reserves to enable the group to meet its obligations as they fall due for at least the next 12 months from the date of signing these financial statements.
Therefore, the directors are satisfied that the group has adequate resources to continue to operate for the foreseeable future and therefore continue to adopt the going concern basis for preparing these financial statements.
The going concern disclosure is an area of judgement and, due principally to the energy crisis and inflationary environment, the level of uncertainty is higher than normal. The directors have addressed this uncertainty by the level of work performed in assessing the group’s ability to continue as a going concern including the number of sensitivities performed and the analysis of a “worst case” outturn which showed the group has sufficient cash reserves to meet its obligations.
Turnover represents amounts receivable for sale of technical textiles, engineered products and personal protective clothing net of VAT and trade discounts.
Revenue from the sale of goods is recognised on dispatch of goods, when the significant risks and rewards of ownership of the goods have passed to the buyer, 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.
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.
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.
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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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, 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.
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.
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.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, 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.
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.
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 to their fair value at each balance sheet date. 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. The group does not adopt hedge accounting.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
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.
The tax expense represents the sum of the tax currently payable and deferred 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.
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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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.
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.
Government grants are recognised when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised as income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to profit and loss account.
The financial statements of overseas subsidiary undertakings are translated at the rate of exchange ruling at the balance sheet date. The exchange difference arising on the retranslation of opening net assets is taken to reserves through other comprehensive income. The income and expenditure of foreign operations are translated at an average rate for the period where this rate approximates to the foreign exchange rates ruling at the dates of the transactions. Exchange differences arising from this translation of foreign operations are taken to reserves through other comprehensive income.
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.
The following judgements and accounting estimates have had the most significant effect on amounts recognised in the financial statements.
Cost of stock 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. The standard cost applied is an estimate made by management.
Depreciation is provided based on the estimated useful economic life of each class of asset, which is an estimate made by management. Depreciation is taken to profit and loss in order to write off the asset over its useful economic life.
Amortisation of goodwill is based on a systematic basis over its expected life, which is an estimate made by management. Amortisation of goodwill is taken to the profit and loss in order to amortise goodwill over its expected life.
Management have considered the carrying value of investments at 30 June 2024 (note 14) and, taking into account the net assets and profitability of the underlying entities, have judged that there are no indicators of impairment at the balance sheet date. A full impairment review has not therefore been considered necessary.
There are no other critical judgements or key accounting estimates impact the group or company in the directors' views.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 3).
The actual charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
A change in the UK Corporation tax rate to 25% took effect from 1 April 2023. This change had a consequential effect on the group's tax charge in the prior period with the standard rate of tax in that year reflective of a marginal tax rate arising from the group's period straddling the 19% and 25% tax rates. Deferred tax has been calculated at 25%.
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Bank loans and overdrafts are secured, see note 19 for details.
Obligations under finance leases are secured over the related assets.
Amounts due to group undertakings are interest free and repayable on demand.
Bank loans and overdrafts are secured, see note 19 for details.
Obligations under finance leases are secured over the related assets.
Bank borrowings are secured by a fixed and floating charge over the assets of the company to which they relate. The floating charge also covers an unlimited multilateral guarantee entered into by the company in respect of all the borrowings of certain group subsidiaries.
A guarantee to HSBC exists to cover the bank's guarantee to HM Revenue & Customs in respect of value added tax on imports up to a maximum of £220,000. This guarantee is also covered by the floating charge.
Included within bank loans and overdrafts is a balance of £2,557,020 (2023 - £2,812,084), which is secured over the related debtors.
£7,302,668 (2023 - £6,565,509) of revolving credit facilities are secured over the land and buildings held by the applicable group company.
The group has also entered into various trade loans with a number of banks totalling £4,235,020 (2023 - £4,208,050) which are secured over working capital by the applicable group company with a fixed and floating charge. The loans are repayable at various repayments dates between 4 and 12 months. The interest rate on these loans vary from between 3% to 8.05%.
Finance lease payments represent rentals payable by the group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The net deferred tax charge for the year was £86,179 (2023: £28,243).
The company has no deferred tax asset or liabilities.
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.
Both ordinary shares "A" and "B" have full rights in the company with respect to voting, dividends and distributions.
On 6 November 2019, the company granted qualifying EMI options to two directors, over 12,319 C ordinary shares and 9,058 D ordinary shares respectively. The options have no vesting restrictions, and have a maximum exercise term of 10 years. A Black-Scholes valuation model has been used in order to assess the value of options at the grant date. All 21,377 options, which each have an exercise price of £4.17 per share, remain un-exercised at 30 June 2024.
The share premium account represents any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium.
The other reserve represents accumulated gains and losses on foreign currency translation of foreign subsidiaries from their functional currency.
The profit and loss account is represented by accumulated comprehensive income, less any foreign exchange gains or losses taken to other reserves.
The company has a cross guarantee in place covering the bank borrowings of other group companies. The potential liability to the company at 30 June 2024 was £7,901,782 (2023 - £8,827,649).
Wilkie Technical Textiles (Holding Company) Limited has taken advantage of the exemptions in section 479A to 479C of the Companies Act 2006 by providing a guarantee over Stewart Pinned Products Ltd. (company registration number - SC015031), ENR Dissolution Limited (company registration number - SC184914), Lorica Research Limited (company registration number - 03068784) and Digby Dyke Limited (company registration number - 05262658), meaning that these UK Subsidiaries stated are exempt from an audit for the financial year ended 30 June 2024.
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:
Amounts contracted for but not provided in the financial statements:
On 10 January 2025, the group publicly announced its intention to acquire a majority shareholding in the Michelin Scotland Innovation Parc (MSIP), Dundee. While the exact details of the acquisition are still to be finalised at the time of authorising these financial statements, the announcement highlights the group's strategic plans for growth. Additionally, the acquisition is expected to result in the relocation of its operations from the group's current base in Kirriemuir to Dundee.
The remuneration of key management personnel is as follows.
The company has taken advantage of the exemption within FRS 102 Section 33 paragraph 33.1A from the requirement to disclose transactions with other wholly owned companies in the same group.
Dividends totalling £112,709 (2023 - £67,710) were paid in the year in respect of shares held by the company's directors.
Details of the company's subsidiaries at 30 June 2024 are as follows: