ACCOUNTS - Final Accounts
ACCOUNTS - Final Accounts
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(FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
FOR THE YEAR ENDED 31 MARCH 2020
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
COMPANY INFORMATION
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
CONTENTS
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2020
The Directors present the Strategic Report for the year ended 31 March 2020.
The principal activity of the Group during the year continued to be the design and manufacture of woven or tufted carpets and rugs.
The Directors are satisfied with the financial performance of the business in the 2019/20 Financial Year against a backdrop of continued uncertainty related to Brexit and, in the latter part of the year, the COVID-19 pandemic.
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
The Directors constantly monitor risks and uncertainties facing the Group with particular reference to the exposure on exchange rates, liquidity, stocks, interest rates and credit risks. They are confident that there are suitable policies in place and there are no material risks and uncertainties which have not been considered.
The Group uses various financial instruments which include, cash and various items, such as trade debtors and trade creditors that arise directly from its operations. The main purpose of these financial instruments is to maintain finance for the Group’s operations. The existence of these financial instruments exposes the Group to a number of financial risks, which are described in more detail below. The main risks arising from the Group’s financial instruments are, liquidity risk, interest rate risk and credit risk. The Directors review and agree policies for managing each of these risks and they are summarised below. Liquidity Risk The Company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. Short term flexibility is achieved by utilising related Group funds. Interest Rate Risk The Group finances its operations through a mixture of retained profits and related Group funds. The Group’s exposure to interest rate fluctuations on its borrowings is controlled by actively minimising its working capital requirement. Credit Risk The Group’s principal financial assets are stock and trade debtors. The principal credit risk arises therefore from its trade debtors. In order to manage credit risk, the directors set limits for its customers based on a combination of payment history and third party credit references. Credit limits are reviewed by the credit controller on a regular basis in conjunction with debt aging and collection history and a Credit Insurance policy is in place. The Coronavirus Pandemic (COVID-19) The business has performed well in 2020 despite significant disruption as a result of the COVID-19 pandemic, however the Board recognises that there will continue to be a risk to operations and that the wider economic situation remains uncertain. As a result the Board continues to monitor performance on an ongoing basis. Management information and cash forecasts are reviewed on a regular basis reflecting differing levels of downturn and strategies developed accordingly to enable the business to protect its cash reserves in order to continue to meet its financial obligations. The Directors also recognise the importance of the welfare of our employees during this time and continue to ensure that COVID secure working practices are in place and adhered to throughout the business. We have also ensured that communication channels are in place throughout the business and are able to respond to any concerns our employees may have. Where possible the business has utilised support from the U.K. Government, such as the Coronavirus Job Retention Scheme, which has allowed flexibility in the workforce whilst protecting jobs for the future. Brexit With the completion of a trade deal between the U.K. Government and the E.U. following the end of the Brexit transition period we do not foresee any material disruption to the business.
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
This report was approved by the board on 17 February 2021 and signed on its behalf.
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2020
The Directors present their report and the financial statements for the year ended 31 March 2020.
The Directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the Directors are required to:
∙select suitable accounting policies for the Group'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; and
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the year, after taxation, amounted to £230,391 (2019: profit £24,574).
Dividends of £24,463 were paid in respect of the year ended 31 March 2020 (2019: £70,802).
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
The Directors have prepared budgets and cash flow forecasts to for a period of at least 12 months following the anticipated date of approval of the financial statements.
In response to the ongoing COVID-19 crisis, the Directors continue to review detailed management Information, including updated cash flow and profitability forecasts for a number of scenarios and have developed strategies accordingly. Key to this is management of cash resources and management of stock levels appropriate to different levels of turnover and the business has invested in skills and technology to ensure that we can respond to fluctuating demand levels as efficiently as possible. The underlying demand for our products remains strong and this has been demonstrated by very strong performance as we move out of lockdown situations. This demonstrates a degree of resilience in the marketplace and a continued strengthening in demand for our wool-based product portfolio. We continue to invest in product development and have an ongoing program of introducing unique, high quality product into the marketplace. Due to ongoing disruption in the marketplace as a result of the Coronavirus epidemic we anticipate turnover to be substantially reduced in the year 2020-21, however strong cash management and overhead control, alongside utilisation of government assistance, namely the Coronavirus Job Retention Scheme, mean that the Directors are confident that the headroom within the forecast is sufficient to enable the company to operate and meet its liabilities as they fall due for at least the next 12 months. The Directors therefore consider it is appropriate for the going concern basis to be used as the basis of the preparation of the financial statements. The financial statements do not reflect the adjustments that would be necessary should the ability of the company to trade be jeopardised due to a material issue with the availability of its work force, the level of demand for its products or its ability to supply product to its customers.
The Directors who served during the year were:
Throughout the COVID-19 crisis the business has continued to operate an active and creative product development programme and the strategy of the business continues to be to produce unique, high quality wool-rich carpet. A continued focus on wool as our primary raw material is an acknowledgement that wool allows the business to produce a wide range of styles and add uniqueness to our product portfolio, whilst also promoting our belief that wool is the best performing and most environmentally sustainable fibre. Following this strategy ensures that our product retains a high value in a marketplace where price pressure can be high in some product group areas.
Furthermore, our exceptional investment in operational restructuring and in the improvements to our manufacturing hardware during the 2019-20 financial year has ensured that the business is well placed to build on profitability despite the current uncertainties in the marketplace.
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
Each of the persons who are Directors at the time when this Directors' Report is approved has confirmed that:
There have been no significant events, other than the ongoing Coronavirus pandemic, affecting the Group since the year end.
The auditors, Bishop Fleming LLP, 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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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
We have audited the financial statements of Hoobrook Holdings Limited (formerly Brockway Carpets (Holdings) Limited) (the 'Parent Company') and its subsidiaries (the 'Group') for the year ended 31 March 2020, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Company Statements of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated Analysis of Net Debt, the Consolidated and Company 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).
In our opinion the financial statements:
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 Group 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.
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
∙the Directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
∙the Directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Group's or the Parent Company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED) (CONTINUED)
The Directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Auditors' Report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group 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 Group 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 Group and the Parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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:
As explained more fully in the Directors' Responsibilities Statement set out on page 4, 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 Group's and the Parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) 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 Group financial statements.
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
1-3 College Yard
WR1 2LB
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2020
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
REGISTERED NUMBER:02897594
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2020
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 34 form part of these financial statements.
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
REGISTERED NUMBER:02897594
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2020
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 34 form part of these financial statements.
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2020
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2020
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2020
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 MARCH 2020
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
Hoobrook Holdings Limited (formerly Brockway Carpets (Holdings) Limited is a private company limited by shares incorporated in the UK and registered in England and Wales. The registered office is Hoobrook, Kidderminster, Worcestershire, DY10 1XW.
The principal activity of the Group during the year was the design and manufacture of woven or tufted carpets and rugs. The principal activity of the Company was that of a holding company. On 26 May 2020 the Company changed its name from Brockway Carpets (Holdings) Limited to Hoobrook Holdings Limited.
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.
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The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
Parent Company disclosure exemptions
In preparing the separate financial statements of the Parent Company, advantage has been taken of the following disclosure exemptions available to qualifying entities:
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
2.ACCOUNTING POLICIES (continued)
The Directors have prepared budgets and cash flow forecasts to for a period of at least 12 months following the anticipated date of approval of the financial statements.
In response to the ongoing COVID-19 crisis, the Directors continue to review detailed management Information, including updated cash flow and profitability forecasts for a number of scenarios and have developed strategies accordingly. Key to this is management of cash resources and management of stock levels appropriate to different levels of turnover and the business has invested in skills and technology to ensure that we can respond to fluctuating demand levels as efficiently as possible. The underlying demand for our products remains strong and this has been demonstrated by very strong performance as we move out of lockdown situations. This demonstrates a degree of resilience in the marketplace and a continued strengthening in demand for our wool-based product portfolio. We continue to invest in product development and have an ongoing program of introducing unique, high quality product into the marketplace. Due to ongoing disruption in the marketplace as a result of the Coronavirus epidemic we anticipate turnover to be substantially reduced in the year 2020-21, however strong cash management and overhead control, alongside utilisation of government assistance, namely the Coronavirus Job Retention Scheme, mean that the Directors are confident that the headroom within the forecast is sufficient to enable the company to operate and meet its liabilities as they fall due for at least the next 12 months. The Directors therefore consider it is appropriate for the going concern basis to be used as the basis of the preparation of the financial statements. The financial statements do not reflect the adjustments that would be necessary should the ability of the company to trade be jeopardised due to a material issue with the availability of its work force, the level of demand for its products or its ability to supply product to its customers.
Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
2.ACCOUNTING POLICIES (continued)
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.
The Group has taken advantage of the optional exemption available on transition to FRS 102 which allows lease incentives on leases entered into before the date of transition to the standard 1 April 2014 to continue to be charged over the period to the first market rent review rather than the term of the lease.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
DEFINED CONTRIBUTION PENSION PLAN
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds.
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
2.ACCOUNTING POLICIES (continued)
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Statement of Financial Position date, except that:
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.
GOODWILL
OTHER INTANGIBLE ASSETS
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
2.ACCOUNTING POLICIES (continued)
Land is not depreciated. Depreciation on other assets 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.
Investments in subsidiaries are measured at cost less accumulated impairment.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first outbasis. Work in progress and finished goods include labour and attributable overheads.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
2.ACCOUNTING POLICIES (continued)
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the Statement of Financial Position date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.
The Group 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 and loans to related parties.
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. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated Statement of Comprehensive Income.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position when there is an 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.
Equity dividends are recognised when they become legally payable, or are received. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
In the application of the Group's accounting policies, which are described in note 2, the directors are required to make judgements, estimates and assumptions about the carrying amounts 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 of the revision and future periods if the revision affects both current and future periods. The following are the critical judgements and key sources of estimation uncertainty that the directors have made in the process of applying the Company's accounting policies and that have the most significant effect on the amounts recognised in the financial statements. Income taxes The Group is subject to the income tax laws of the United Kingdom. These laws are complex and subject to different interpretations by taxpayers and tax authorities. When establishing income tax provisions, the directors make a number of judgements and interpretations about the application and interaction of these laws. Changes in these tax laws or in their interpretation could affect the Group's effective tax rate and the results of operations in a given period. Accordingly, potentially significant tax benefits will not be recognised until there is sufficient certainty that they will be accepted by HMRC.
The whole of the turnover is attributable to the principal activity of the Group, as detailed in note 1.
All turnover was generated in the UK in both this year and the comparative period.
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
Page 24
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
Page 25
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
9.TAXATION (CONTINUED)
Page 26
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
Page 27
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
Page 28
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
Page 29
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
Page 30
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
Page 31
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
Page 32
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
Capital redemption reserve
Profit and loss account
Page 33
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HOOBROOK HOLDINGS LIMITED (FORMERLY BROCKWAY CARPETS (HOLDINGS) LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
The Group 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 Group to the fund and amounted to £89,580 (2018: £94,685). Contributions totalling £
The ultimate controlling party is C P G Annable by virtue of his shareholding.
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