ACCOUNTS - Final Accounts
ACCOUNTS - Final Accounts
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Registered number:
For the Year Ended
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Woodclay Limited
Company Information
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Woodclay Limited
Contents
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Woodclay Limited
Group Strategic Report
For the Year Ended 31 December 2020
The directors present their group strategic report for the year ended 31 December 2020.
We aim to present a balanced and comprehensive review of the development and performance of our company during the year and its position at the year-end. Our review is consistent with the size and nature of our business and is written in the context of the risks and uncertainties we face.
Overall, revenue has decreased from £23,906,821 to £20,209,220, as compared with the last year. Clearly, as a trade supplier to ‘non-essential retail’ COVID had a serious and instantaneous impact on sales in quarters 2 and 3 of 2020. The business quickly adapted to the new digital environment and sales from late quarter 3 onwards returned to higher than 2019 comparables. The whole annual result was, therefore, much better than might have been originally anticipated when the pandemic began. Overall operating profit has changed from £1,393,908 to £1,793,200. In light of the pandemic, this is an excellent result, helped in part by the Government furlough scheme but also by a strict review and control of costs, as well, regrettably some staff redundancies to better match the business levels. Profit before tax has changed from £1,393,245 to £1,791,413. After taxation and dividends £1,162,938 (2019: £597,398) has been added to reserves. Particulars of dividends paid are detailed in note 13 to the financial statements. The company continues to invest in new product development with a significant in-house design team, and also, invests constantly in improving our IT infrastructure, in particular to assist with Business: Business and Business: Consumer digital sales. Future Developments Management is continually reviewing the company’s business strategy and is developing and investing in the wider management team to face the more volatile market and global conditions.
As for many companies of our size, the business environments in which we operate continue to be challenging with inflationary pressures from the Far East, where approximately 95% of the products sold are sourced. We are, of course, subject to consumer spending patterns and consumers' overall disposable income together with the performance of the UK economy and the further uncertainty of how the pandemic might play out.
Whilst the GBP:US$ exchange rate has improved, the other currency impact of the RMB: US$ has caused some cost price rises. The company mitigates these risks by entering in to forward currency exchange contracts. The shipping crisis (both before and after the Suez blockage) has also impacted on both delays to shipping and cost increases, sometimes as high as 400%. We hope that this will settle down as 2021 moves in to 2022, but some permanent increase in freight costs seems likely & the business will adapt its costing & sales prices to protect margins. The high street market has undergone huge changes, accelerated by the pandemic, but the business is very diverse and new digital and export markets have replaced this vacuum.
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Woodclay Limited
Group Strategic Report (continued)
For the Year Ended 31 December 2020
Our key financial performance indicators are turnover, gross margin and operating profits. Turnover has decreased to £20.2 million from £23.9 million for the previous year largely due to the pandemic – but sales in Q4 rebounded to normal levels. Gross margins have remained steady at 39.1% (2019: 37.5%). Operating profits have been explained in the earlier section.
The company's principal financial instruments comprise bank balances, bank overdrafts, trade creditors and trade debtors. The main purpose of these instruments is to raise funds for and to finance the company's operations.
The company pays for its imported goods in foreign currency which it normally buys forward. The majority of goods are paid for in US$. The directors manage closely the company's exposure to currency movements. In respect of bank balances the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of an overdraft at a floating rate of interest. Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits. Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due. During 2020, the group took advantage of the Government’s Coronavirus Business Interruption Loan (CBIL) scheme to the value of £3m. In the event, this was not actually required due to better-than-expected trading conditions and has been repaid in full in quarter 2 of 2021.
This report was approved by the board and signed on its behalf.
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Woodclay Limited
Directors' Report
For the Year Ended 31 December 2020
The directors present their report and the financial statements for the year ended 31 December 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;
∙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 profit for the year, after taxation, amounted to £1,462,938 (2019: £1,197,398).
Dividends paid on equity capital amounted to £300,000 (2019: £600,000).
The directors who served during the year were:
This year, the company continued to develop the in-house IT system and website, to develop digital channels. We constantly review and develop our own website and also our bespoke digital “sales tool” for the various sales teams. Constant improvements to our CRM system also help to enhance our whole IT suite.
Financial risk management is considered to be of strategic importance and is therefore disclosed in the Strategic Report.
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Woodclay Limited
Directors' Report (continued)
For the Year Ended 31 December 2020
There have been no 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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Woodclay Limited
Independent Auditors' Report to the Members of Woodclay Limited
We have audited the financial statements of Woodclay Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2020, which comprise the Group Statement of Comprehensive Income, the Group and Company Balance Sheets, the Group Statement of Cash Flows, the Group 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).
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.
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's or the 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.
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Woodclay Limited
Independent Auditors' Report to the Members of Woodclay 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.
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Woodclay Limited
Independent Auditors' Report to the Members of Woodclay 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.
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 local management and parent company 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 and testing of the operating effectiveness 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. • Carrying out substantive testing to confirm the validity and accuracy of government grant claims under the Coronavirus Job Retention Scheme.
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Woodclay Limited
Independent Auditors' Report to the Members of Woodclay Limited (continued)
We have also considered the risk of fraud through management override of controls by:
• Testing the appropriateness of journal entries and other adjustments. We have used data analytics software to identify accounting transactions which may pose a heightened risk of material misstatement, whether due to fraud or error. • 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. 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
Lancashire Gate
21 Tiviot Dale
SK1 1TD
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Woodclay Limited
Consolidated Statement of Comprehensive Income
For the Year Ended 31 December 2020
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Woodclay Limited
Registered number: 01601417
Consolidated 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 34 form part of these financial statements.
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Woodclay Limited
Registered number: 01601417
Company Balance Sheet
As at
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.
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 34 form part of these financial statements.
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Woodclay Limited
Consolidated Statement of Changes in Equity
For the Year Ended 31 December 2020
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Woodclay Limited
Company Statement of Changes in Equity
For the Year Ended 31 December 2020
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Woodclay Limited
Consolidated Statement of Cash Flows
For the Year Ended 31 December 2020
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Woodclay Limited
Consolidated Analysis of Net Debt
For the Year Ended 31 December 2020
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Woodclay Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
Woodclay Limited is a private company limited by members capital and is incorporated in England & Wales, company number 01601417. The address of the company's registered office is Broadgate, Broadway Business Park, Chadderton, Oldham, OL9 9XE.
The nature of the company's operation and its principal activity is that of a holding company. The nature of the group's operations and its principal activity is that of an importer and distributor of giftware and associated 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 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.
As permitted by FRS 102, the company has not presented its own Statement of cash flows in these financial statements as the cash flows for the company are included in the Consolidated statement of cash flows presented within the financial statements.
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 Balance Sheet, 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. In accordance with the transitional exemption available in FRS 102, the group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 01 October 2014.
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Woodclay Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
2.Accounting policies (continued)
The Group and 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. Stocks purchased in foreign currency are translated using a forward rate, based on the contracts available at the time of purchase. Where material, 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 the Statement of Comprehensive Income except when deferred in other comprehensive income as qualifying cash flow hedges. At 31 December 2020 and 31 December 2019 the group has determined that the fair value of its forward contracts, net of its firm commitments, are immaterial. Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in the Consolidated Statement of Comprehensive Income within 'other operating income'.
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Woodclay Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
2.Accounting policies (continued)
Government grants relating to tangible fixed assets are treated as deferred income and released to the profit and loss account over the expected useful lives of the assets concerned. Other grants are credited to the profit and loss account as the related expenditure is incurred.
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Woodclay Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
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 and reducing balance 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.
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Woodclay Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
2.Accounting policies (continued)
At each balance sheet 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.
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Woodclay Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
2.Accounting policies (continued)
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Where material, derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or income as appropriate. Where material, the company applies hedge accounting for interest rate and foreign exchange derivatives, with the gains or losses on both the hedged item and the hedging instrument being recognised in profit or loss.
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Woodclay Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
a) Derivatives The Group has entered into forward currency contracts to manage its exposure to foreign exchange cash flow risk on its overseas purchases. These derivatives are measured at fair value at each balance sheet date, and where material, these are recognised in the financial statements. The Group also attributes a fair value to its firm commitments relating to stock purchases. The fair value is measured as the mark to market value, being the difference between the change in value of the hedged item and the change in value of the hedging instrument. To the extent the hedge is effective, movements in fair value are recognised in comprehensive income and presented within a fair value hedging reserve. Any ineffective portions of those movements are also recognised in profit or loss for the period. As at 31 December 2020, the fair value of such derivatives net of firm commitments is immaterial. b) Recoverable value of trade debtors The Group has recognised trade debtors with a carrying value of £3,398,722 (2019:£3,671,889). The recoverability of trade debtors is regularly reviewed in the light of the available economic information specific to each debtor and specific provisions are recognised for balances considered to be at risk or irrecoverable. c) Stock valuation The Group exercises judgement in estimating the obsolescence of stock and making impairments to reflect the difference between cost and estimated net realisable value. The Group has recognised stock with a net realisable value of £7,166,324 (2019:£7,907,209).
The whole of the turnover is attributable to the group's principal activity as described in note 1.
Analysis of turnover by country of destination:
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Woodclay Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
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Woodclay Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
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Woodclay Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
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Woodclay Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
12.Taxation (continued)
There are no factors that may affect future tax charges.
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Woodclay Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
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Woodclay Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
14.Tangible fixed assets (continued)
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Woodclay Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
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Woodclay Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
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Woodclay Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
Other loans relate to a government Coronavirus Business Interruption Loan. This loan is secured by a legal charge over all assets of the group. Interest is charged on the loan at 1.9% above the Bank of England base rate. The loan was repaid in full in July 2021.
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Woodclay Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
22.Deferred taxation (continued)
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Woodclay Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
Share premium
The share premium account represents the excess over nominal value paid for shares in the company. Capital redemption reserve The capital redemption reserve represents the nominal value of shares repurchased by the company. Profit and loss account The profit and loss account includes all current and prior period retained profits and losses.
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 £144,433 (2019: £172,124). Contributions totalling £Nil (2019: £857) were payable to the fund at the balance sheet date and are included in creditors.
In addition two directors are members of a self administered pension scheme which involves no minimum contractual benefit commitments, during the period no employer contributions were made to the directors' scheme (2019: £Nil).
26.Other financial commitments
The company is a member of the Widdop Bingham & Co Limited VAT scheme under section 43 of the Value Added Tax Act 1994, and in consequence may be held responsible for the liabilities of other members, which totalled £312,115 at 31 December 2020 (2019: £242,277).
At 31 December 2020, the company was committed to purchasing foreign currency under contracts agreeing a set forward rate. Such commitments amounted to £3,206,932 (2019: £4,777,234).
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Woodclay Limited
Notes to the Financial Statements
For the Year Ended 31 December 2020
There is no overall controlling party of Woodclay Limited.
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