MASTERWEAVER_LIMITED - Accounts

The directors present their annual report and financial statements for the year ended 31 March 2023.

The principal activity of the company continued to be that of carpet distributors.

The results for the year are set out on page 6.

No ordinary dividends were paid. 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:

In accordance with the company's articles, a resolution proposing that JW Hinks LLP be reappointed as auditor of the company will be put at the forthcoming Annual General Meeting.

Each director in office at the date of approval of this annual report confirms that:

•     so far as the director is aware, there is no relevant audit information of which the company's auditor is unaware, and

•     the director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditor is aware of that information.

This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.

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 International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom. 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, International Accounting Standard 1 requires that directors:

•     properly select and apply accounting policies;

•     present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

•     provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and

•     make an assessment of the company's ability to continue as a going concern.

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 Masterweaver Limited (the 'company') for the year ended 31 March 2023 which comprise the income statement, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards.

In our opinion the financial statements:

•     give a true and fair view of the state of the company's affairs as at 31 March 2023 and of its profit for the year then ended;

•     have been properly prepared in accordance with IFRSs as adopted by the European Union; and

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

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.

In forming our opinion of the financial statements, we have considered the adequacy of the disclosures made in note 19 to the financial statements concerning the company's ability to continue as a going concern.

These financial statements have been prepared on a going concern basis, the validity of which is dependent upon the continued support of the company's parent undertaking, Crossley Holdings (Proprietary) Limited, to ensure adequate facilities are available for the company to discharge its liabilities as they fall due. As with any company placing reliance on other group entities for financial support, the directors acknowledge that there can be no certainty that this support will continue indefinitely, although at the date of approval of these financial statements, the directors are in receipt of a letter from the company's parent undertaking indicating that support will be available for the foreseeable future.

Based on this undertaking, the directors believe that it remains appropriate to prepare the financial statements on a going concern basis. The financial statements do not include any adjustments which would result from the basis of preparation being appropriate.

The company has experienced a profit in the year of £81,429 and at the balance sheet date had net liabilities of £1,289,361. The amount due to the parent company at the balance sheet date was £1,829,729 and the parent company had indicated that the amount due to it will be deferred.

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.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

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

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

• the directors' report has 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 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:

• 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; or

• the directors were not entitled to take advantage of the small companies exemption from the requirement to prepare a strategic report.

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.

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.

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements and discussed the policies and procedures regarding compliance.

Specific areas considered were as follows:

• Enquiring with management and others to gain an understanding of the organisation itself including operations, financial reporting and known fraud or error.

• Evaluating and understanding the internal control system.

• Performing analytical procedures as expected or unexpected variances in account balances or classes of transactions appear.

• Testing documentation supporting account balances or classes of transactions.

• Observing the physical stock count.

• Confirming accounts receivable and other accounts with a third party.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected all irregularities including those leading to material misstatements in the financial statements or non-compliance with regulation, even though we have properly planned and performed our audit in accordance with auditing standards.

This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities is available on the Financial Reporting Council's website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's 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 income statement has been prepared on the basis that all operations are continuing operations.

Masterweaver Limited is a private company limited by shares incorporated in England and Wales. The registered office is 55 Baker Street, London, W1U 7EU.

The principal place of business is Stourport Road, Kidderminster, Worcestershire, DY11 7QL.

Masterweaver Limited is a company domiciled in the United Kingdom.

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, (except as otherwise stated).

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. The principal accounting policies adopted are set out below.

These financial statements have been prepared on a going concern basis, the validity of which is dependent upon the continued support of the company's parent undertaking, Crossley Holdings (Proprietary) Limited, to ensure adequate facilities are available for the company to discharge its liabilities as they fall due. As with any company placing reliance on other group entities for financial support, the directors acknowledge that there can be no certainty that this support will continue indefinitely, although at the date of approval of these financial statements, the directors are in receipt of a letter from the company's parent undertaking that support will be available for the foreseeable future.true

Based on this undertaking, the director believes that it remains appropriate to prepare the financial statements on a going concern basis. The financial statements do not include any adjustments which would result from the basis of preparation being inappropriate.

Turnover represents net invoiced sales of goods, excluding value added tax.

The company recognises revenue from the following major sources:

• Carpet sales

Property, plant and equipment 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 recognised in the income statement.

At each reporting end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Inventories are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slowing moving items.

Inventories that have not moved for 18 months are considered to have a value of £6.30 per square metre and a provision is applied accordingly.

Cash and cash equivalents 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.

Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.

At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.

Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.

Equity instruments issued by the company are recorded at the proceeds received, net of direct issue 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 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 inventories or non-current 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.

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to the income statement in the period to which they relate.

Government grants are recognised when there is reasonable assurance that the grant conditions will be met and the grants will be received.

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.

New and revised IFRSs applied with no material effect on the financial statements

The accounting policies adopted are consistent with those of the previous period’s financial period, except for the following amendments to IFRS effective for annual period beginning on or before April 1, 2022 which did not have a material effect on the financial statements:

- Applying IFRS 9 'Financial Instruments' with IFRS 4 'Insurance Contracts' (Amendments to IFRS 4)

- Covid-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16)

- Reference to the Conceptual Framework (Amendments to IFRS 3)

- Property, Plant and Equipment — Proceeds before Intended Use (Amendments to IAS 16)

- Onerous Contracts — Cost of Fulfilling a Contract(Amendments to IAS 37)

- Annual Improvements to IFRS Standards 2018–2020

New and revised standards and interpretations in issue but not yet effective

The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Company’s financial statements are disclosed below. The management anticipates that these standards and amendments will have no material effect on the financial statements. The Company intends to adopt these standards, if applicable, when they become effective.

Management anticipates that the adoption of the above standards in future years will have no material impact on the financial statements of the Company in the period of initial application.

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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.

An analysis of the company's revenue is as follows:

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 1 (2022 - 1).

The charge for the year can be reconciled to the profit per the income statement as follows:

No liability to UK corporation tax arose for the year ended 31 March 2022 nor for the year ended 31 March 2021.

The directors consider the carrying value of inventories to be an approximation of their fair value. Inventories are stated net of a provision of £293,398 (2022: £293,398).

At 31 March 2023 trade debtors and amounts due from group undertakings included euro denominated balances of €252,069 (2022: €273,774) and €nil (2022: €nil) respectively. All other receivables were sterling denominated.

Some of the unimpaired trade receivables are past due as at the reporting date. The age of the trade receivables past due but not impaired is as follows:

The directors consider the carrying value of trade and other receivables to be an approximation of their fair value.

Credit risk

The company's principal financial assets are bank balances and cash, and trade and other receivables. There is no concentration of credit risk.

At 31 March 2023 trade payables and amounts owed to group undertakings included euro denominated balances of €765,111 (2022: €660,036) and €nil (2022: €nil) respectively. Also, within trade payables, a balance of $nil (2022: $nil) remained on US dollar denominated balances. All other payables were sterling denominated.

The directors consider that the carrying amount of trade payables approximates to their fair value.

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.

FINANCIAL INSTRUMENTS

The company's approach to the management of capital and market risks is set out in note 1 to the financial statements.

Categories of financial instruments

Financial assets

Loans and receivables (including cash and cash equivalents) amounting to £759,583 (2022: £536,465).

Financial liabilities

Trade payables amounting to £2,587,305 (2022: £2,460,846).

Risk Management

Financial Risk Management

Financial risks include market risk (principally foreign currency risk), credit risk, liquidity risk and interest risk. The company seeks to minimise the effect of these risks by developing and applying policies and procedures which are regularly reviewed for appropriateness and effectiveness.

The company's principal financial instruments comprise cash held in current accounts, trade receivables, trade payables and other payables that arise directly from its operations.

Foreign currency risk

Although the company operates in overseas markets, all material sales and purchases are undertaken in sterling. Any foreign exchange exposure from trading with overseas group members is reflected at group level.

Credit risk

Credit risk refers to that risk that a customer or counterparty to a financial instrument fails to meet its contractual obligations, resulting in financial loss to the company, and arises principally from the company's receivables from customers and bank current accounts. Major customers that wish to trade on credit terms are subject to credit verification procedures and receivable balances are monitored on an ongoing basis. The credit risk on bank current account balances is limited because the counterparties are banks with high credit ratings assigned by international credit-rating agencies.

At 31 March 2023 and 31 March 2022 there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet.

Liquidity risk

Liquidity risk is the risk that the company does not have sufficient cash to meet its financial obligations as they fall due.

At the reporting date the company had net cash funds of £420,509 (2022: £135,211).

Interest risk

The company is exposed to interest rate risk on floating rate deposits and bank overdrafts but this risk is deemed to be immaterial to the company as liquidity is managed on a group basis.

During the financial year, Masterweaver Limited purchased stock and other expenses from its parent company, Crossley Holdings (Proprietary) Limited, amounting to £Nil (2022: £Nil). Sales and recharges to Crossley Holdings (Proprietary) Limited from Masterweaver Limited amounted to £14,585 (2022: £Nil).

At the year end, a balance of £4,503 (2022: £4,503) was owed to the company by Mr S Radisa, a director of the company.

The net amount owing to its parent company at the balance sheet date was £1,829,729 (2022: £1,844,314).

All transactions were made under usual commercial terms.

The company is a wholly owned subsidiary of Crossley Holdings (Proprietary) Limited, a company incorporated in South Africa,

The ultimate parent company is the Industrial Development Corporation of South Africa Limited, a company incorporated in South Africa.

The registered office is 2096 Prince Mcwayizeni Drive, Reunion, Durban, South Africa, 4110. The group accounts can also be attained from this address.

These financial statements have been prepared on a going concern basis, the validity of which is dependent upon the continued support of the company's parent undertaking, Crossley Holdings (Proprietary) Limited, to ensure adequate facilities are available for the company to discharge its liabilities as they fall due. As with any company placing reliance on other group entities for financial support, the directors acknowledge that there can be no certainty that this support will continue indefinitely, although at the date of approval of these financial statements, the directors are in receipt of a letter from the company's parent undertaking indicating that support will be available for the foreseeable future.

Based on this undertaking, the directors believe that it remains appropriate to prepare the financial statements on a going concern basis. The financial statements do not include any adjustments which would result from the basis of preparation being appropriate.

The company has experienced a profit in the year of £81,429 and at the balance sheet date had net liabilities of £1,289,361. The amount due to the parent company at the balance sheet date was £1,829,729 and the parent company had indicated that the amount due to it will be deferred.