Asiatic Carpets Holdings Limited - Limited company accounts 23.2

REGISTERED NUMBER: 04710645 (England and Wales)

Group Strategic Report,

Report of the Directors and

Consolidated Financial Statements

for the Year Ended 31 March 2023

for

ASIATIC CARPETS HOLDINGS LIMITED

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

5

Report of the Independent Auditors

7

Consolidated Income Statement

11

Consolidated Other Comprehensive Income

12

Consolidated Balance Sheet

13

Company Balance Sheet

14

Consolidated Statement of Changes in Equity

15

Company Statement of Changes in Equity

16

Consolidated Cash Flow Statement

17

Notes to the Consolidated Cash Flow Statement

18

Notes to the Consolidated Financial Statements

20

DIRECTORS:

Mr F S Kelaty

Ms S Kelaty

SECRETARY:

Mr F S Kelaty

REGISTERED OFFICE:

42 Lytton Road

Barnet

Hertfordshire

EN5 5BY

REGISTERED NUMBER:

04710645 (England and Wales)

AUDITORS:

JLA (UK) Ltd

42 Lytton Road

Barnet

Hertfordshire

EN5 5BY

The directors present their strategic report of the company and the group for the year ended 31 March 2023.

REVIEW OF BUSINESS

The group has performed well against a backdrop of challenging business conditions and market uncertainty. Despite a decrease in turnover, the group has increased its gross profit margin and has ended the year with healthy profit and cashflow position.

The company's directors believe that, following a review management and processes the company is better placed to adapt to meet changes in the economic environment and utilise resources efficiently which will enable the company to continue to trade profitably.

FINANCIAL REVIEW

Turnover

The company's turnover has seen a significant decrease from the previous year. This has been associated with the prior year being an exceptional year in terms of trading and the this year's turnover is more in line with the normal trading pattern of the group.

The company's directors aim to maintain their management policies and are looking into further opportunities to take advantage of the economy and market conditions.

Gross Profit Margin

Gross profit during the year as a percentage of sales was 49% (2022: 39%)

Profit after taxation

The profit for the year after taxation was £2,327,500 (2022: £3,015,815)

Dividend

Dividend paid during the year amounted to £1,599,784 (2022: £310,511)

Cash at bank

The balance in hand at 31 March 2022 was £1,638,713 (2022: £531.170)

Shareholders' Funds

As at 31 March 2022 these stood at £28,225,632 (2021: £27,497,916)

PRINCIPAL RISKS AND UNCERTAINTIES

The group is exposed to a variety of risks. These could range from the wider effects of the general economy and external competition to those more specific to the group, such as its own financial strength and size. The group's directors regularly review these risks and their potential impact on the group.

The group's directors monitor the group's performance carefully through the use of regular financial information and management reports.

Key risks and the group's response to these risks are shown below.

1- Financial Risk Management

The group's financial instruments comprise of cash at bank, loan and overdraft facility at the group's disposal. The main purpose of these financial instruments is to raise adequate finance for the group's operations, together with management of working capital.

The main risk arising from the group's financial instruments is liquidity risk. As can be seen from the cash flow notes in the annexed financial statements, the group currently does not suffer from a liquidity problem. It alleviates this risk by agreeing credit terms with its customers and suppliers.

2- Foreign Currency Risk

The group is exposed to foreign currency fluctuation as the group has overseas suppliers and customers which account for majority of the group's purchases and sales.

The group minimises this risk by agreeing appropriate pricing.

3- Customer concentration risk

As with any business of its size, the group relies on a relatively small number of customers for a large percentage of its turnover. The loss of a key customer can have a detrimental impact on earnings.

The group is focused on customer retention by supplying top rate products and service as well as obtaining new customers thus broadening the number of key customers.

4- Competitive pressure risk

The group operates in a highly competitive market environment and performance may suffer if there is a loss of competitiveness vis-a- vis its customers.

The group reviews the competitiveness of its services with its clients and customers in the market.

5-Credit risk

Default by customers on receivables could negatively affect the earnings.

Credit is assessed and monitored by the group and where risk is judged to be high, more stringent credit terms are implemented.

6- Loss of supply of critical products.

Loss of supply of critical products from key suppliers could affect the group's ability to provide the products to its customers.

Where possible, the group attempts to dual source all key products from multiple suppliers. The group also endeavours to maintain supply contracts with all key suppliers.

ON BEHALF OF THE BOARD:

Mr F S Kelaty - Director

22 December 2023

The directors present their report with the financial statements of the company and the group for the year ended 31 March 2023.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review continued to be that of holding company.

The principal activity of the Group in the year under review continued to be that of carpet dealers and property investors.

DIVIDENDS

The total distribution of dividends for the year ended 31 March 2023 will be £nil.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 April 2022 to the date of this report.

Mr F S Kelaty

Ms S Kelaty

CHARITABLE DONATIONS

During the year the company made charitable donations totalling £158,360 (2021: £101,393).

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors 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 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 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, JLA (UK) Ltd, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr F S Kelaty - Director

22 December 2023

Opinion

We have audited the financial statements of Asiatic Carpets Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2023 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, 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 Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 March 2023 and of the group's 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 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 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

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 and 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.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors 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 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.

Opinions on other matters prescribed by the Companies Act 2006

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

-	the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

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 Report of the Directors.

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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company 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.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page five, 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 necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Auditors' responsibilities for the audit of the financial statements

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 a Report of the Auditors 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

The engagement partner and engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and affect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment, environmental and health and safety legislation; we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management.

The identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining on how fraud might occur, by:

- Making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of

actual, suspected and alleged fraud;

- And considering the measures in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override controls, we:

- Performed analytical procedures to identify any unusual or unexpected relationships;

- Tested journal entries to identify unusual transactions

- Assessed whether judgements and assumptions made in determining the accounting estimates that were

indicative of potential bias.

- Performed substantive testing on management expenses and transactions

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

- Agreeing financial statement disclosures to underlying supporting documentation;

- Enquiring of management as to actual and potential litigation and claims

- And reviewing available correspondence with HMRC and the company's legal advisors.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance.

Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or 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 Report of the Auditors.

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 a Report of the Auditors 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.

Jeffrey Lermer, FCA (Senior Statutory Auditor)

for and on behalf of JLA (UK) Ltd

42 Lytton Road

Barnet

Hertfordshire

EN5 5BY

22 December 2023

TURNOVER

4

17,720,456

24,391,465

Cost of sales

9,038,857

14,863,016

GROSS PROFIT

8,681,599

9,528,449

Distribution costs

(2,747

)

18,569

Administrative expenses

7,002,166

7,714,054

6,999,419

7,732,623

1,682,180

1,795,826

Other operating income

1,010,376

1,667,601

OPERATING PROFIT

6

2,692,556

3,463,427

Interest receivable and similar income

293,099

280,440

2,985,655

3,743,867

Interest payable and similar expenses

7

85,636

94,108

PROFIT BEFORE TAXATION

2,900,019

3,649,759

Tax on profit

8

572,519

633,944

PROFIT FOR THE FINANCIAL YEAR

2,327,500

3,015,815

Profit attributable to:

Owners of the parent

2,327,500

3,015,815

PROFIT FOR THE YEAR

2,327,500

3,015,815

OTHER COMPREHENSIVE INCOME

Fair value reserves

-

6,966,131

Income tax relating to other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

-

6,966,131

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

2,327,500

9,981,946

Total comprehensive income attributable to:

Owners of the parent

2,327,500

9,981,946

FIXED ASSETS

Tangible assets

11

6,585,349

6,694,692

Investments

12

Interest in associate

746

746

Other investments

650,000

650,000

Investment property

13

10,610,640

10,610,640

17,846,735

17,956,078

CURRENT ASSETS

Stocks

14

1,762,919

2,063,927

Debtors

15

13,411,734

12,945,216

Cash at bank and in hand

1,638,713

531,170

16,813,366

15,540,313

CREDITORS

Amounts falling due within one year

16

2,557,088

1,641,005

NET CURRENT ASSETS

14,256,278

13,899,308

TOTAL ASSETS LESS CURRENT LIABILITIES

32,103,013

31,855,386

CREDITORS

Amounts falling due after more than one year

17

(1,645,030

)

(2,125,119

)

PROVISIONS FOR LIABILITIES

20

(2,232,351

)

(2,232,351

)

NET ASSETS

28,225,632

27,497,916

CAPITAL AND RESERVES

Called up share capital

21

1,000,100

1,000,100

Revaluation reserve

22

3,036,660

3,036,660

Fair value reserve

22

6,966,131

6,966,131

Retained earnings

22

17,222,736

16,495,020

SHAREHOLDERS' FUNDS

28,225,627

27,497,911

NON-CONTROLLING INTERESTS

23

5

5

TOTAL EQUITY

28,225,632

27,497,916

The financial statements were approved by the Board of Directors and authorised for issue on 22 December 2023 and were signed on its behalf by:

Mr F S Kelaty - Director

FIXED ASSETS

Tangible assets

11

6,537,021

6,602,021

Investments

12

1,000,946

1,000,946

Investment property

13

560,640

560,640

8,098,607

8,163,607

CURRENT ASSETS

Debtors

15

5,238,523

5,248,523

Cash at bank

10,396

14,668

5,248,919

5,263,191

CREDITORS

Amounts falling due within one year

16

74,876

74,875

NET CURRENT ASSETS

5,174,043

5,188,316

TOTAL ASSETS LESS CURRENT LIABILITIES

13,272,650

13,351,923

CREDITORS

Amounts falling due after more than one year

17

1,214,820

1,282,205

NET ASSETS

12,057,830

12,069,718

CAPITAL AND RESERVES

Called up share capital

21

1,000,100

1,000,100

Revaluation reserve

22

3,036,660

3,036,660

Retained earnings

22

8,021,070

8,032,958

SHAREHOLDERS' FUNDS

12,057,830

12,069,718

Company's (loss)/profit for the financial year

(11,888

)

12,293

The financial statements were approved by the Board of Directors and authorised for issue on 22 December 2023 and were signed on its behalf by:

Mr F S Kelaty - Director

Called up

share

Retained

Revaluati

capital

earnings

reserve

£

£

£

Balance at 1 April 2021

1,000,100

13,789,716

3,036,660

Changes in equity

Dividends

-

(310,511

)

-

Total comprehensive income

-

3,015,815

-

Balance at 31 March 2022

1,000,100

16,495,020

3,036,660

Changes in equity

Dividends

-

(1,599,784

)

-

Total comprehensive income

-

2,327,500

-

Balance at 31 March 2023

1,000,100

17,222,736

3,036,660

Fair

value

Non-controlling

Total

reserve

Total

interests

equity

£

£

£

£

Balance at 1 April 2021

-

17,826,476

5

17,826,481

Changes in equity

Dividends

-

(310,511

)

-

(310,511

)

Total comprehensive income

6,966,131

9,981,946

-

9,981,946

Balance at 31 March 2022

6,966,131

27,497,911

5

27,497,916

Changes in equity

Dividends

-

(1,599,784

)

-

(1,599,784

)

Total comprehensive income

-

2,327,500

-

2,327,500

Balance at 31 March 2023

6,966,131

28,225,627

5

28,225,632

Called up

share

Retained

Revaluation

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 April 2021

1,000,100

8,020,665

3,036,660

12,057,425

Changes in equity

Total comprehensive income

-

12,293

-

12,293

Balance at 31 March 2022

1,000,100

8,032,958

3,036,660

12,069,718

Changes in equity

Total comprehensive income

-

(11,888

)

-

(11,888

)

Balance at 31 March 2023

1,000,100

8,021,070

3,036,660

12,057,830

Cash flows from operating activities

Cash generated from operations

1

3,311,345

(2,782,912

)

Interest paid

(85,636

)

(94,108

)

Tax paid

275,452

(1,085,169

)

Net cash from operating activities

3,501,161

(3,962,189

)

Cash flows from investing activities

Purchase of tangible fixed assets

-

(96,620

)

Sale of tangible fixed assets

27,119

(18,569

)

Interest received

293,099

280,440

Net cash from investing activities

320,218

165,251

Cash flows from financing activities

New loans in year

-

400,000

Loan repayments in year

(772,131

)

(511,406

)

Government grants

-

(24,539

)

Dividends paid to minority interests

(1,599,784

)

(310,511

)

Net cash from financing activities

(2,371,915

)

(446,456

)

Increase/(decrease) in cash and cash equivalents

1,449,464

(4,243,394

)

Cash and cash equivalents at beginning of year

2

(179,682

)

4,063,712

Cash and cash equivalents at end of year

2

1,269,782

(179,682

)

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

31.3.23

31.3.22

£

£

Profit before taxation

2,900,019

3,649,759

Depreciation charges

84,971

95,341

(Profit)/loss on disposal of fixed assets

(2,747

)

18,569

Increase in inter-company balances

311,504

(4,242,854

)

Government grants

-

(24,539

)

Finance costs

85,636

94,108

Finance income

(293,099

)

(280,440

)

3,086,284

(690,056

)

Decrease/(increase) in stocks

301,008

(47,404

)

Decrease in trade and other debtors

41,104

1,893,430

Decrease in trade and other creditors

(117,051

)

(3,938,882

)

Cash generated from operations

3,311,345

(2,782,912

)

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 March 2023

31.3.23

1.4.22

£

£

Cash and cash equivalents

1,638,713

531,170

Bank overdrafts

(368,931

)

(710,852

)

1,269,782

(179,682

)

Year ended 31 March 2022

31.3.22

1.4.21

£

£

Cash and cash equivalents

531,170

4,364,404

Bank overdrafts

(710,852

)

(300,692

)

(179,682

)

4,063,712