CLOGAU_GOLD_OF_WALES_LIMI - Accounts

We present our strategic report, together with the audited financial statements and auditor’s report, for the year ended 30 September 2020, but before we discuss the finer detail I need to say thank you. This year, more than any other, has made me appreciate just how special the team is here at Clogau. Your willingness and dedication throughout these challenging times has enabled us to survive, despite the overwhelming pressures. The path ahead is still uncertain, but I know that with this team, Clogau will continue to thrive. Thank you.

Turnover for the company showed an increase to £18,763,780 from £16,388,299 in the year prior. The 14.5% growth is attributable to online sales outperforming the negative impact of COVID-19 on our wholesale and own store network by more than double.

The profit for the year before taxation was £5,060,360 (2019: £2,856,266). The reasons for the variance are detailed under the Financial Key Performance Indictors heading below.

Wholesale:

Adjusted for the impact of COVID-19, this year, wholesale turnover was very similar to last year, with a small improvement in the Average Order Value. The partnership model remains integral to our success and we will continue to do all we can to support our independents.

Stores:

For the year, we fully expected to hit our store target with H1 tracking 7% ahead of budget, but lockdowns cost us an estimated £2.3m in lost high-street sales. We finished the year with an extra store and a 14% decline in turnover year on year.

Online:

Historically, our business strategy has been weighted entirely towards bricks and mortar because we value the in-store experience we can provide. Now it’s a hybrid. We want a multitude of high-street stores that complement a respectable online channel, but this isn’t a result of the pandemic. Prior to covid, online sales had grown 20% like for like. The appointment of key managerial personnel with e-commerce experience just as the pandemic hit contributed to this growth rate growing exponentially. We finished the year 115% up, which entirely compensated for lost high-street sales.

COVID-19 Pandemic Risk – the outbreak of COVID-19, since recognised as a global pandemic, poses a potential risk to both the operational capabilities and the financial success of the company. The current situation has created significant global uncertainty.

Global economies will be affected by government actions, and the ability of companies to operate effectively in the UK has been impacted by repeated lockdowns.

The scale and severity of the pandemic, and the measures required to fight it, are unprecedented. Hence, it’s not possible to predict the duration of the impact or the medium to long-term consequences of the outbreak.

However, we have considered the specific risks below when assessing the potential impact to the company of the COVID-19 pandemic:

• Ability to trade during a lockdown: During the first lockdown at the end of March 2020, the company was required to close all of its retail stores for three months, during which these stores were unable to trade.

The consumer shift to online shopping and the efforts of head office staff ensured we were able to maintain close to budgeted turnover.

Worst case scenario modelling also supports our capability to remain cash positive during any further lockdowns and restrictions.

• Consumer confidence: Economic growth and consumer confidence are likely to be impacted by the pandemic, and may therefore affect the financial performance of the company. However, we are satisfied that the risk arising from this can be mitigated, through strong engagement with both new and pre-existing customers. Recent trends support this as we continue to add more new customers than ever before whilst maintaining our repeat customer %.

• Financing needs and shareholder support: The company has been able to trade through the pandemic with its own funds coupled with the key business support measurers introduced by the government including the Coronavirus Job Retention Scheme, business rates relief and grants such as the Retail, Hospitality and Leisure Grant Fund.

We have not taken advantage of any government loan scheme or asked shareholders for help.

Based on current projections, taking note of cash flow forecast and projected profits, the company doesn’t see any requirement to borrow from shareholders, the government, or any other third party such as banks or other financing institutions.

We have sought to mitigate the risks to the company posed by the pandemic in the ways described above, and also through the following actions:

• We have prepared forecast projections and worst-case scenario modelling. The results of this modelling demonstrate that the company would have sufficient cash to continue trading during any additional lockdowns and restrictions over the next twelve months.

• The company will continue to make use of the government’s Coronavirus Job Retention Scheme, placing staff on furlough where required, and will continue to access grants were appropriate.

To summarise, The Board is satisfied that the combination of a strong balance sheet, net cash resources, and easy access to working capital facilities are more than adequate to meet any cash deficiencies which may reasonably be anticipated during this pandemic.

The main financial KPIs for the company are turnover growth and adjusted EBITDA.

Adjusted EBITDA for the year ended 30 September 2020 amounted to £4,694,922 compared to the prior year of £3,234,806. Adjusted EBITDA % was 25% and 20% respectively. The natural transition to more direct to consumer sales generated an additional £1m in EBTIDA and a net saving of £460k was delivered by reducing admin expenses. Adjusted EBITDA is EBITDA which has been adjusted for exceptional non-recurring items in the year.

The main non-financial KPI for the group is number of stores. Stores open at the end of the financial year amounted to ten (2019: nine).

At the time of signing these financial statements, our outlook for growth and profitability continues to be very favourable, even after taking account of the effect of the pandemic on the business.

Today, all but one of our stores reopened. Prior to the pandemic, the store we closed, Westfield London, was already financially challenged and the pandemic only added to its difficulties. As restrictions persisted, it became clear to us that long-term we could not profitably sustain this store and it closed in March 2021.

Despite gloomy headlines about the high street, there are plenty of grounds for optimism, and we are very much bucking the trend. Shortly after 30 September 2020 we opened three new stores and we will continue to open more because we are absolutely confident this is what our customers want and need.

We’ve always been conscious to minimise our environmental impact, striving to build a sustainable business model that works for the greater good. Since 1986, we’ve been planting trees to offset our carbon footprint, the first of many green initiatives. More recently, in 2013 we constructed our own hydroelectric turbine to provide clean energy, after adding solar panels in 2008. Adapting to the shift to online shopping, we’ve changed all of our postal packaging boxes to a design made from reclaimed card, which in turn is fully recyclable. And our efforts to protect the environment are only set to intensify. Next year, we’ll be showcasing some innovative sustainable jewellery box ideas and sponsoring an exciting expedition led by intrepid Welsh explorer Richard Parks. All of which informs our new marketing theme - sustainability.

Post balance sheet event

In January 2021, Clogau Holdings Ltd redeemed all Preference A Shares for cash to WS Roberts and issued new Preference B Shares. There has been no change in control of Clogau Gold of Wales Limited. WS Roberts continues to have control of Clogau Holdings Ltd and thereby retains ultimate control of Clogau Gold of Wales Ltd.

On behalf of the board

The directors present their annual report and financial statements for the year ended 30 September 2020.

The principal activity of the company continued to be that of design, wholesale and retail of jewellery and associated products.

The results for the year are set out on page 8.

Ordinary dividends were paid amounting to £3,576,929. The directors do not recommend payment of a final dividend.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Details of future developments can be found in the Strategic Report on page 2 and form part of this report by cross referencing.

Champion Accountants LLP were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

•     select suitable accounting policies and then apply them consistently;

•     make judgements and accounting estimates that are reasonable and prudent;

•     prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

We have audited the financial statements of Clogau Gold of Wales Limited (the 'company') for the year ended 30 September 2020 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, 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 FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

•     give a true and fair view of the state of the company's affairs as at 30 September 2020 and of its profit for the year then ended;

•     have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

•     have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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 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.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information. 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

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 and the directors' report.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

•     adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

•     the financial statements are not in agreement with the accounting records and returns; or

•     certain disclosures of directors' remuneration specified by law are not made; or

•     we have not received all the information and explanations we require for our audit.

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

Clogau Gold of Wales Limited is a private company limited by shares incorporated in England and Wales. The registered office is Number 5 Kinmel Park, Abergele Road, Bodelwyddan, Rhyl, Denbighshire, LL18 5TX.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

The financial statements of the company are consolidated in the financial statements of Clogau Holdings Limited. These consolidated financial statements are available from its registered office, 5 Kinmel Park, Abergele Road, Bodelwyddan, Rhyl, Denbighshire, LL18 5TX.

At the time of approving the financial statements, thetrue directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the company will continue to adopt the going concern basis of accounting in preparing the financial statements.

The directors have considered the on-going situation with regards to COVID-19 as part of their going concern assessment. The view of the directors is that, whilst they acknowledge the significant disruption that the pandemic has brought and will continue to bring over the coming weeks and months, they believe that the company is well placed to negotiate the unique set of conditions currently facing the UK economy, which gives the directors comfort in being able to meet the company's liabilities for the coming 12 months.

Turnover represents the invoiced value of goods and services supplied by the company, net of value added tax and trade discounts. Turnover from the sale of goods is recognised at the point of dispatch and supply of services is recognised over the period it is performed.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

Stocks are valued at the lower of cost and net realisable value. Cost is calculated using the FIFO (first-in, first-out) method. Cost includes materials and other costs directly associated with bringing it to its present condition and location. Net realisable value is based on estimated selling price, less further costs expected to be incurred to completion and disposal. Provision is made for obsolete, slow-moving or defective items where appropriate.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Investment properties are measured at fair value by an external valuer every five years with any change recognised in the profit and loss account. As at March 2019, the directors obtained a valuation of the property from an independent land and estate agents. This valuation was carried out by a local estate and land agent with good knowledge and experience of the local market.

Stock is reviewed on an ongoing basis and a specific provision is calculated in relation to individual stock items to provide against exposure to foreign exchange variations and gold prices. As at the year end the directors have no material concerns over the recoverability of the company’s stock, this is because the company has many distribution channels to sell stock and can ultimately recover the metal value from stock after exhausting each option.

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2019 - 2).

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

The directors of the company have not revalued the investments property and it remains at the value of £322,264 (2019 - £322,264). The valuation given in March 2019 by Walter Lloyd Jones & Co Limited, Dolgellau was deemed to be the value as at 30 September 2020.

The investments above relate to Clogau St David's Gold Mines Limited and the provision for diminution in value is an historic one, carried forward. Clogau St David's Gold Mines Limited became dormant in the year ended 30 September 1998 and has remained dormant since.

Details of the company's subsidiaries at 30 September 2020 are as follows:

Registered office addresses (all UK unless otherwise indicated):

There is no material difference between the balance sheet value of stocks and it's replacement cost.

Included in creditors is £355,989 due to HSBC Invoicing Finance (UK) Limited (2019: £505,221), which is secured by a fixed charge over purchased debt. Interest is charged at 3.15% over the base rate as at 30 September 2020.

The onerous lease provision represents future rental payments due for the remainder of the lease. The lease was surrendered post year end at a net cost of £265,343, the provision has therefore been reversed to reflect the actual amount due. A store dilapidation provision has been set up to take account of any future costs associated with the closure of stores if and when it is reasonably probable a lease is not renewed.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

On 13 January 2020, the shareholders approved the reclassification of the entire share capital of the company, A, B and C ordinary shares as ordinary shares.

The company has one class of shares, which carry the right to receive notice of and vote at general meetings, right to participate in dividends, capital rights upon winding up and are not redeemable.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Included in operating lease commitments are land and building leases totalling £4,221,682 (2019 - £3,816,646).

The above balances have been included in debtors falling due within one year. The balances were repayable on demand and did not attract interest.

The amount due from LK Jewellery Limited is included in other debtors. LK Jewellery Limited is a company in which Mr W S Roberts and Mr B S Roberts are both directors and shareholders.

The parent company is Clogau Holdings Limited who own 100% of the shares in Clogau Gold of Wales Limited.

The largest and smallest group in which the results of the company are consolidated is that headed by the ultimate parent company Clogau Holdings Limited. Registered address for Clogau Holdings Limited is 5 Kinmel Park, Abergele Road, Bodelwyddan, Rhyl, Denbighshire, LL18 5TX. The consolidated financial statements of the group are available to the public and may be obtained from Companies House.

By virtue of his beneficial shareholding in Clogau Holdings Limited, Mr W S Roberts is the ultimate controlling party of Clogau Gold of Wales Limited.

COVID-19

The outbreak of COVID-19, since recognised as a global pandemic, poses a potential risk to both the operational capabilities and the financial success of the company. The current situation has created significant global uncertainty.

Global economies will be affected by government actions, and the ability of companies to operate effectively in the UK has been impacted by repeated lockdowns.

The scale and severity of the pandemic, and the measures required to fight it, are unprecedented. Hence, it’s not possible to predict the duration of the impact or the medium to long-term consequences of the outbreak.

The directors have considered the position as at the balance sheet date, and based on the events and conditions present, COVID-19 has been identified as a non-adjusting post balance sheet event.

Further detail as to the director’s considerations with respect to the risks posed to the group can be found in the Principal Risks & Uncertainties section of the Strategic Report. The directors have also considered the potential impact of COVID-19 on their assessment of the Going Concern basis of preparation. More detail can be found in Note 1 of these financial statements.

Share Reorganisation

In January 2021, Clogau Holdings Ltd redeemed all Preference A Shares for cash to WS Roberts and issued new Preference B Shares. There has been no change in control of Clogau Gold of Wales Limited. WS Roberts continues to have control of Clogau Holdings Ltd and thereby retains ultimate control of Clogau Gold of Wales Ltd.