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Registered number:
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Cleland McIver Limited
Company Information
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Cleland McIver Limited
Contents
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Cleland McIver Limited
Strategic Report
For the year ended 30 September 2024
The directors present their strategic report for the year ended 30 September 2024.
Cleland continue to design, develop, and innovate products for the Dunelm Home.
The strategy of the company and its principles remain to support Dunelm, exclusively servicing all platforms of opportunity, co-ordinated imported ranges with UK production. We continue to invest in our operational sites and loyal supply chain which offer fast track overseas supply. Turnover in the year was £75.9m (2023: £80.4m), a decrease of 5.6%. Inflation and higher borrowing rates have increased pressure on consumers and businesses. Despite this, we have continued to invest in our product offering to offer Dunelm’s customers a more extensive range. Dunelm continue to open new stores across the UK, and we expect this to continue into the next financial year. With this in mind, we anticipate a return to turnover growth in 2025. Gross profit margin has improved to 24.2% (2023: 23.7%). This is despite a year of increased freight costs due to ongoing conflicts and has required tight cost controls throughout the business. A loss of £4.1m (2023: £3.0m) was recorded in the Statement of Comprehensive Income. Largely due to a fair value adjustment on the forward contracts in place, following increases in the GBP:USD exchange rate at the year end. Higher base interest rates, along with a new bank loan to fund the investment detailed below, have increased interest costs in the year by 10.3% on last year. We anticipate that base rates will reduce during the next financial year. Further information on the new bank loan can be found in note 21. During the year, we began the process of consolidating our three operational sites into one, purpose-built site. This has meant incurring exceptional costs outside of the business norm. These costs totalled £522k and have been reported separately in our financial statements. As the project will run over two financial years, there will be further exceptional costs next financial year. Subsequent to the year end, the Company has completed the sale of one of the operational sites, the financial impact of this will be included in the results of the next financial year. Profit after Tax was £1.2m (2023: £2.2m). Despite the disappointing reduction in PAT, we are optimistic about the coming year. Improving consumer confidence, alongside an increased product offering should bolster sales. Whilst the investment in our new operational site should allow us to achieve efficiencies that we’ve not been able to achieve before. Cost control remains pivotal to future success and is a focus throughout the business. Stock has fallen by 12.6% from prior year to £13.6m. The Company is showing a net current liability position at 30 September 2024 of £1.3m (2023: net current assets of £7.9m), largely a result of the fair value of forward contracts, which are shown as a £6.1m liability at year end (2023: asset of £660k), which as noted above is due to the GBP:USD exchange rate. The Company has a healthy net assets potion of £10.2m net assets at the year end (2023: £14.7m) and the balance sheet remains strong, despite the challenges discussed above.
Page 1
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Cleland McIver Limited
Strategic Report (continued)
For the year ended 30 September 2024
The Home Furnishing market remains extremely competitive with the key areas being volatility of currency, commodity, and freight. We have worked collectively with Dunelm and our supply chain to creatively support sustainable solutions to meet customer expectations whilst maintaining demand.
Loyal suppliers and an ever-improving Cleland Team enable us to be diverse in our product offer and ways of working to adapt to an ever-improving business that expects a high level of customer service. Cleland’s colleague long-term service plan and capability incentive scheme gives a genuine reason to stay and develop to support the business passion for succession. The more you learn the more you earn. Cleland’s family values are an extremely important part of our one team work ethic.
The Company's financial key performance indicators comprise turnover, gross profit and cash flow which are all discussed in the business review above.
The Company has several non-financial KPI’s that are used to measure performance. Customer service level, measured as the number of orders that are stocked and distributed, is tracked daily. This allows us to track performance against targets set out in service level agreements with customers. A supplier scorecard is used to monitor supplier performance against different targets. This helps to ensure that standards are maintained and helps to strengthen relationships with suppliers. Health and Safety KPI’s are of particular focus and the recording and measurement of accidents and near misses allow us to identify potential issues early and put solutions in place. An employee engagement survey is undertaken annually to gauge opinions on how employees feel about the company and to understand what is being done well and what can be improved on.
The Board Of Directors will continue to invest in a robust, structured and Strong Senior Management Team alongside improved processes and systems, we continue to drive sustainability across our business and product offer .
A well organised and structured journey plan supports the business potential, an open and honest approach to the efficiency standards across the business enables us to support efficiency potential . Cleland will continuously invest in IT, Operation and Stock Management Systems to complement our “Better Informed creates better Decisions” culture.
The Directors' compliance with their duty to promote the success of the company is disclosed in detail within the Directors' Report.
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Cleland McIver Limited
Strategic Report (continued)
For the year ended 30 September 2024
This report was approved by the board and signed on its behalf.
Page 3
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Cleland McIver Limited
Directors' Report
For the year ended 30 September 2024
The directors present their report and the financial statements for the year ended 30 September 2024.
The directors are responsible for preparing the strategic report, the directors' report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to 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.
The profit for the year, after taxation, amounted to £1,190,023 (2023:£2,213,774).
Dividends of £450,000 (2023: £200,000) were paid during the year. The directors do not recommend the payment of a final dividend.
The directors who served during the year were:
Details of future developments are disclosed in the Strategic Report.
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Cleland McIver Limited
Directors' Report (continued)
For the year ended 30 September 2024
The Board of Directors, in line with their duties under s172 of the Companies Act 2006, act in a way they consider would be most likely to promote the success of the Company for the benefit of its members as a whole.
The Board will consider a range of matters when looking at the long term success of the business, and therefore strategic decisions will fully consider the factors associated with s172. Our employee stakeholders were fundamental to the significant decisions made in the year, with the aim of strengthening the opportunity for long term business success and therefore job security. Employee communication is also made formally and informally on a regular basis through noticeboards and a variety of other means. The business engages with its customer from the new product development phase through to subsequent account management. Meanwhile our production sites are accessible for quality audits, and similarly the same high standards are applied by the company to ensure the suitability and technical capability of our supply partners. The company is focused on managing and reducing its carbon footprint and energy reduction through a variety of measures on an ongoing basis. In the community, the business continually employs local skills, and has supported a variety of local causes. Shareholder value remains at the core of all strategic decision making.
This information was compiled by the Directors.
Management have chosen the metric of CO2e per turnover as the most appropriate way to track energy efficiency, calculated as kg of CO2 generated divided by turnover. For the year ended 30 September 2024, this was 0.359% (2023: 0.410%).
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Cleland McIver Limited
Directors' Report (continued)
For the year ended 30 September 2024
In January 2025, the Company completed the sale of one of their operational sites, as disclosed in the Strategic Report. There have been no other significant events affecting the Company since the year end
The auditors, Hurst Accountants Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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Cleland McIver Limited
Independent Auditors' Report to the Members of Cleland McIver Limited
We have audited the financial statements of Cleland McIver Limited (the 'Company') for the year ended 30 September 2024, which comprise the statement of comprehensive income, the balance sheet, the statement of cash flows, the statement of changes in equity and the related notes, including a summary of 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).
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 Auditors' 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 United Kingdom, including the Financial Reporting Council'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.
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 auditors' 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.
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Cleland McIver Limited
Independent Auditors' Report to the Members of Cleland McIver Limited (continued)
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.
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.
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Cleland McIver Limited
Independent Auditors' Report to the Members of Cleland McIver Limited (continued)
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 auditors' 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:
Identifying and assessing potential risks related to irregularities In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following: • The nature of the industry and sector in which the company operates; the control environment and business performance including key drivers for directors' remuneration, bonus levels and performance targets. • The outcome of enquiries of management, including whether management was aware of any instances of non-compliance with laws and regulations, and whether management had knowledge of any actual, suspected, or alleged fraud. • Supporting documentation relating to the Company's policies and procedures for: - Identifying, evaluating, and complying with laws and regulations - Detecting and responding to the risks of fraud • The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations. • The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. • The legal and regulatory framework in which the Company operates, particularly those laws and regulations which have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or which had a fundamental effect on the operations of the Company, including General Data Protection requirements, and Anti-bribery and Corruption. Audit response to risks identified Our procedures to respond to the risks identified included the following: • Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the provisions of those relevant laws and regulations which have a direct effect on the financial statements. • Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud. • Evaluation of management’s controls designed to prevent and detect irregularities. • Enquiring of management about any actual and potential litigation and claims. • Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of material misstatement due to fraud. We have also considered the risk of fraud through management override of controls by: • Testing the appropriateness of journal entries and other adjustments; • Challenging assumptions made by management in their significant accounting estimates, and assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and • Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
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Cleland McIver Limited
Independent Auditors' Report to the Members of Cleland McIver Limited (continued)
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of them. 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.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors' 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 auditors' 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.
for and on behalf of
Chartered Accountants
Statutory Auditors
3 Stockport Exchange
Cheshire
SK1 3GG
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Cleland McIver Limited
Statement of Comprehensive Income
For the year ended 30 September 2024
Page 11
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Cleland McIver Limited
Registered number: 01689093
Balance Sheet
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 16 to 37 form part of these financial statements.
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Cleland McIver Limited
Statement of Changes in Equity
For the year ended 30 September 2024
Page 13
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Cleland McIver Limited
Statement of Cash Flows
For the year ended 30 September 2024
Page 14
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Cleland McIver Limited
Analysis of Net Debt
For the year ended 30 September 2024
Page 15
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Cleland McIver Limited
Notes to the Financial Statements
For the year ended 30 September 2024
The company is a private company limited by shares, registered in England and Wales, registered number 01689093. The address of the registered office and principal place of business is Hollingworth Mill, Smithy Bridge Road, Littleborough, OL15 8QF.
The principal activity of the company during the year was as a distributor of home textile products.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The Company is exempt from the requirement to prepare consolidated financial statements as all of its subsidiaries are dormant, and are deemed immaterial.
The Company has net current liabilities of £1,262,983 (2023: assets of £7,868,696).
The company net current liability position is a result of accounting for the financial instruments which is a non-cash/non-trading item and therefore excluding this the company has a net current asset position. Detailed forecasts which cover the foreseeable future have been prepared. The forecasts prepared show that the Company will operate within its available facilities now agreed with the bank. Astute cash flow management will ensure that the Company remains a strong and viable business. As a result of the above, the Directors have prepared the accounts on a going concern basis.
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Cleland McIver Limited
Notes to the Financial Statements
For the year ended 30 September 2024
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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Cleland McIver Limited
Notes to the Financial Statements
For the year ended 30 September 2024
2.Accounting policies (continued)
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Cleland McIver Limited
Notes to the Financial Statements
For the year ended 30 September 2024
2.Accounting policies (continued)
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Cleland McIver Limited
Notes to the Financial Statements
For the year ended 30 September 2024
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Freehold land is not depreciated.
Assets subject to a finance lease have been depreciated over the length of the finance lease.
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Cleland McIver Limited
Notes to the Financial Statements
For the year ended 30 September 2024
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
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Cleland McIver Limited
Notes to the Financial Statements
For the year ended 30 September 2024
2.Accounting policies (continued)
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the Company's balance sheet when the Company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
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Cleland McIver Limited
Notes to the Financial Statements
For the year ended 30 September 2024
2.Accounting policies (continued)
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Other financial instruments
With the exception of forward foreign exchange contracts, the Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares. Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received.
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Cleland McIver Limited
Notes to the Financial Statements
For the year ended 30 September 2024
2.Accounting policies (continued)
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.
Provision for obsolete and slow moving stocks The Company reviews its stock to assess loss on account of obsolescence on a regular basis. In determining whether provision for obsolescence should be recorded in the profit and loss, the company makes judgements as to whether there is any observable data indicating that there is any future saleability of the product and the estimated net realisable value for such product. Accordingly, provision for impairment is made where the net realisable value is less than the cost based on best estimates by management. The provision for obsolescence of stock is based on the ageing and historical sales pattern. The value of stock held at the year end totalled £13,552,034 (2023: £15,509,780), which included impairments of £861,205 (2023: £823,513).
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Cleland McIver Limited
Notes to the Financial Statements
For the year ended 30 September 2024
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Cleland McIver Limited
Notes to the Financial Statements
For the year ended 30 September 2024
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Cleland McIver Limited
Notes to the Financial Statements
For the year ended 30 September 2024
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Cleland McIver Limited
Notes to the Financial Statements
For the year ended 30 September 2024
10.Taxation (continued)
There are no factors that may affect future tax charges.
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Cleland McIver Limited
Notes to the Financial Statements
For the year ended 30 September 2024
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Cleland McIver Limited
Notes to the Financial Statements
For the year ended 30 September 2024
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Cleland McIver Limited
Notes to the Financial Statements
For the year ended 30 September 2024
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Cleland McIver Limited
Notes to the Financial Statements
For the year ended 30 September 2024
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Cleland McIver Limited
Notes to the Financial Statements
For the year ended 30 September 2024
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Cleland McIver Limited
Notes to the Financial Statements
For the year ended 30 September 2024
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Cleland McIver Limited
Notes to the Financial Statements
For the year ended 30 September 2024
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Cleland McIver Limited
Notes to the Financial Statements
For the year ended 30 September 2024
Revaluation reserve
Fair value reserve The fair value reserve includes all gains and losses made on forward contracts net of deferred tax.
Profit and loss account
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £291,575 (2023: £190,692) . Contributions totalling £27,860 (2023: £24,978) were payable to the fund at the balance sheet date and are included in creditors.
29.Other financial commitments
The bank have provided a guarantee in favour of H M Revenue & Customs limited to £800,000 (2023: £800,000).
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Cleland McIver Limited
Notes to the Financial Statements
For the year ended 30 September 2024
The company is under the control of Mr J J R McIver by virtue of his majority shareholding in the company.
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