| UNIVERSAL TEXTILES UK LTD |
| Strategic Report |
|
| The directors present their strategic report for the year ended 31 August 2023. |
|
| REVIEW OF BUSINESS |
|
| GENERAL REVIEW |
|
| The company has performed well against a backdrop of challenging business conditions and market uncertainty, particularly in it's business with European countries and rest of the world. The company's benefited from the weakness in sterling during the period which helped its competitiveness. |
|
| The Company continues to have a strong balance sheet and good cash flow and continues to invest in its IT and staff. |
|
|
| Turnover increased by 18% to £26,257,968 in the current year. |
|
| Gross Profit Margin |
| Gross profit during the year as a percentage of sales was 18% (2022: 19%) which reflects the trading environment. |
|
| Profit after taxation |
| The profit for the year after taxation was £1,031,825 (2022: £797,128). |
|
| Dividend |
| Dividend paid during the year amounted to £500,000 (2022: £2,000,000) |
|
| Cash at bank |
| The balance in hand at 31 August 2023 was £1,023,518 (2022: £1,351,467) |
|
| Shareholders' Funds |
| As at 31 August 2023 these stood at £1,490,172 (2022: £958,347) |
|
| Environment and sustainability |
| The directors understand that, as well as their legal responsibility to protect the environment, there is an overriding moral responsibility for the Company to have minimal negative impact on the environment. Our aspiration is to leave a sustainable and lasting positive impact on the surrounding area. |
|
| Universal Textiles UK Ltd utilises an online reporting tool to measure its waste volumes, energy usage and carbon footprint. Using these measurements, Universal Textiles is then able to establish targets at Company level and subsequently identify realistic measures to reduce the environmental impact of the business's operations. |
|
| Universal Textiles UK Ltd is committed to the reduction of Greenhouse Gas (GHG) emissions related to operations across the business. To successfully deliver on this commitment, we have chosen to expand our scope of reporting. |
|
| Universal Textiles UK Ltd is implementing changes across the business to reduce our carbon footprint, for example, we have reduced electrical usage and equipment; we promote a cycle to work scheme and provide facilities for secure and safe storage of bikes and equipment. |
|
| UNIVERSAL TEXTILES UK LTD |
| PRINCIPAL RISKS AND UNCERTAINTIES |
|
| The Directors fully recognise and accept that the company operates in a risk environment both operationally and commercially. Management of risk is therefore integral to all of our activities. |
|
| The key risks to the business are volume, pricing and currency. The business monitors, manages and mitigates these risks. The risks are reviewed and debated by the board on a regular basis and updated together with planned activities to improve our risk control. |
|
| Financial Risk Management |
| The main risk arising from the company's financial instruments is liquidity risk. As can be seen from the cash flow notes in the annexed financial statements, the company currently does not suffer from a liquidity problem. |
|
|
| Strategic Report |
|
| Foreign Currency Risk |
| The company is exposed to foreign currency fluctuation as some of the company's purchases and sales are in euros. The company minimises this risk by agreeing appropriate pricing. |
|
| Competitive pressure risk |
| The company operates in a highly competitive market environment and performance may suffer if there is a loss of competitiveness vis-a vis its competitors. The company reviews the competitiveness of its services with its clients and customers in the market place. |
|
| Overall strategy |
| The overall strategy for the business is to continue to grow to both provide opportunities for progression to its employees and great value for its shareholders. |
|
| The plan is to increase the number of suppliers the company acts for and the number of marketplaces whilst continuing to deliver the best in class IT processes. These strategic thrusts will help deliver further growth in turnover, profitability and balance sheet in the coming year despite increasing external pressures for retail businesses. |
|
| Financial Instruments |
| The risks to the company, as identified by the directors, are deemed to be loss of supply of critical products and inability for creditors to complete work within the target deadline imposed by the market place. Both these risks are stringently managed by close relationships with all stakeholders. Credit and performance checks are performed on all current suppliers, new suppliers and customers with automated alerts when credit rating changes. Internal reviews of all complaints and balances are also performed monthly. |
|
|
| This report was approved by the board on 23 May 2024 and signed on its behalf. |
|
|
|
| Mr R Karia |
| Director |
|
|
| 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 |
| 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 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 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. |
|
| 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 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. |
|
| Matters on which we are required to report by exception |
| UNIVERSAL TEXTILES UK LTD |
| Statement of Cash Flows |
| for the year ended 31 August 2023 |
|
| Notes |
|
2023 |
|
2022 |
| £ |
£ |
| Operating activities |
| Profit for the financial year |
1,031,825 |
|
797,128 |
|
| Adjustments for: |
| Loss on sale of fixed assets |
- |
|
39,528 |
| Interest receivable |
(3,667) |
|
(329) |
| Interest payable |
7,306 |
|
14,721 |
| Tax on profit on ordinary activities |
234,009 |
|
203,913 |
| Depreciation |
57,922 |
|
43,864 |
| (Increase)/decrease in stocks |
(125,421) |
|
190,435 |
| Increase in debtors |
(628,154) |
|
(170,576) |
| Decrease in creditors |
(200,764) |
|
(660,826) |
|
|
|
373,056 |
|
457,858 |
|
| Interest received |
3,667 |
|
329 |
| Interest paid |
|
|
(585) |
|
(10,301) |
| Interest element of finance lease payments |
(6,721) |
|
(4,420) |
| Corporation tax paid |
(156,839) |
|
(190,540) |
|
| Cash generated by operating activities |
212,578 |
|
252,926 |
|
|
|
|
|
|
| Investing activities |
| Payments to acquire tangible fixed assets |
(40,527) |
|
(102,916) |
| Payments to acquire investments |
- |
|
(1,033) |
| Proceeds from sale of tangible fixed assets |
- |
|
856,512 |
|
| Cash (used in)/generated by investing activities |
(40,527) |
|
752,563 |
|
|
|
|
|
|
| Financing activities |
| Equity dividends paid |
(500,000) |
|
(2,000,000) |
| Proceeds from the issue of shares |
- |
|
21 |
| Repayment of loans |
- |
|
(555,879) |
|
| Cash used in financing activities |
(500,000) |
|
(2,555,858) |
|
|
|
|
|
|
| Net cash used |
| Cash generated by operating activities |
212,578 |
|
252,926 |
| Cash (used in)/generated by investing activities |
(40,527) |
|
752,563 |
| Cash used in financing activities |
(500,000) |
|
(2,555,858) |
|
| Net cash used |
(327,949) |
|
(1,550,369) |
|
| Cash and cash equivalents at 1 September |
1,351,467 |
|
2,901,836 |
| Cash and cash equivalents at 31 August |
1,023,518 |
|
1,351,467 |
|
|
|
|
|
|
| Cash and cash equivalents comprise: |
| Cash at bank |
1,023,518 |
|
1,351,467 |
|
|
|
|
|
|
|
|
|
Investment property |
|
Investment property is initially recognised at cost and then subsequently measured at fair value. Changes in value are recognised in profit or loss. |
|
|
Investments |
|
Investments in subsidiaries, associates and joint ventures are measured at cost less any accumulated impairment losses. Listed investments are measured at fair value. Unlisted investments are measured at fair value unless the value cannot be measured reliably, in which case they are measured at cost less any accumulated impairment losses. Changes in fair value are included in the profit and loss account. |
|
|
Stocks |
|
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first in first out method. The carrying amount of stock sold is recognised as an expense in the period in which the related revenue is recognised. |
|
|
Debtors |
|
Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts. |
|
|
Creditors |
|
Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. |
|
|
Taxation |
|
A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted. |
|
|
Provisions |
|
Provisions (ie liabilities of uncertain timing or amount) are recognised when there is an obligation at the reporting date as a result of a past event, it is probable that economic benefit will be transferred to settle the obligation and the amount of the obligation can be estimated reliably. |
|
|
Foreign currency translation |
|
Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction.
At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss. |
|
|
Leased assets |
|
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. The rights of use and obligations under finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction in the outstanding liability using the effective interest rate method. The finance charge is allocated to each period during the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability. Leased assets are depreciated in accordance with the company's policy for tangible fixed assets. If there is no reasonable certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the lower of the lease term and its useful life. Operating lease payments are recognised as an expense on a straight line basis over the lease term. |
|
|
Pensions |
|
Contributions to defined contribution plans are expensed in the period to which they relate. |
|
|
| 2 |
Analysis of turnover |
2023 |
|
2022 |
| £ |
£ |
|
|
Sale of goods |
26,257,968 |
|
21,536,806 |
|
|
|
|
|
|
|
|
|
|
By geographical market: |
|
|
UK |
26,257,968 |
|
21,536,806 |
|
|
|
|
|
|
|
|
|
|
| 3 |
Operating profit |
2023 |
|
2022 |
| £ |
£ |
|
This is stated after charging: |
|
|
Depreciation of owned fixed assets |
57,922 |
|
43,864 |
|
Auditors' remuneration for audit services |
7,000 |
|
7,000 |
|
Carrying amount of stock sold |
10,752,228 |
|
8,627,879 |
|
|
|
|
|
|
|
|
|
|
| 4 |
Directors' emoluments |
2023 |
|
2022 |
| £ |
£ |
|
|
Emoluments |
90,390 |
|
81,583 |
|
|
|
|
|
|
|
|
|
|
| 5 |
Staff costs |
2023 |
|
2022 |
| £ |
£ |
|
|
Wages and salaries |
1,874,318 |
|
1,715,282 |
|
Social security costs |
141,793 |
|
125,252 |
|
Other pension costs |
30,166 |
|
27,535 |
|
|
|
|
|
|
2,046,277 |
|
1,868,069 |
|
|
|
|
|
|
|
|
|
|
|
Average number of employees during the year |
Number |
Number |
|
|
Administration |
61 |
|
82 |
|
Sales |
79 |
|
87 |
|
|
|
|
|
|
140 |
|
169 |
|
|
|
|
|
|
|
|
|
|
| 6 |
Interest payable |
2023 |
|
2022 |
| £ |
£ |
|
|
Bank loans and overdrafts |
585 |
|
10,301 |
|
Finance charges payable under finance leases and hire purchase contracts |
|
6,721 |
|
4,420 |
|
|
|
|
|
|
7,306 |
|
14,721 |
|
|
|
|
|
|
|
|
|
|
| 7 |
Taxation |
2023 |
|
2022 |
| £ |
£ |
|
Analysis of charge in period |
|
Current tax: |
|
UK corporation tax on profits of the period |
262,447 |
|
187,274 |
|
Adjustments in respect of previous periods |
(27,831) |
|
- |
|
|
|
|
|
|
234,616 |
|
187,274 |
|
|
|
|
|
|
|
|
|
|
Deferred tax: |
|
Origination and reversal of timing differences |
(607) |
|
16,639 |
|
|
|
|
|
|
|
|
|
|
|
Tax on profit on ordinary activities |
234,009 |
|
203,913 |
|
|
|
|
|
|
|
|
|
|
|
Factors affecting tax charge for period |
|
The differences between the tax assessed for the period and the standard rate of corporation tax are explained as follows: |
|
|
|
|
|
|
|
2023 |
|
2022 |
| £ |
£ |
|
Profit on ordinary activities before tax |
1,265,834 |
|
1,001,041 |
|
|
|
|
|
|
|
|
|
|
Standard rate of corporation tax in the UK |
19% |
|
19% |
|
| £ |
£ |
|
Profit on ordinary activities multiplied by the standard rate of corporation tax |
|
240,508 |
|
190,198 |
|
|
Effects of: |
|
Expenses not deductible for tax purposes |
21,939 |
|
(2,924) |
|
Adjustments to tax charge in respect of previous periods |
(27,831) |
|
- |
|
|
Current tax charge for period |
234,616 |
|
187,274 |
|
|
|
|
|
|
|
|
|
|
|
Factors that may affect future tax charges |
|
|
|
| 8 |
Tangible fixed assets |
|
|
Land and buildings |
|
Plant and machinery |
|
Fixtures, fittings, tools and equipment |
|
Total |
|
|
At cost |
|
At cost |
|
At cost |
| £ |
£ |
£ |
£ |
|
Cost or valuation |
|
At 1 September 2022 |
196,340 |
|
199,790 |
|
105,181 |
|
501,311 |
|
Additions |
35,880 |
|
- |
|
4,647 |
|
40,527 |
|
At 31 August 2023 |
232,220 |
|
199,790 |
|
109,828 |
|
541,838 |
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
At 1 September 2022 |
161,869 |
|
104,451 |
|
75,219 |
|
341,539 |
|
Charge for the year |
25,966 |
|
20,819 |
|
11,137 |
|
57,922 |
|
At 31 August 2023 |
187,835 |
|
125,270 |
|
86,356 |
|
399,461 |
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
At 31 August 2023 |
44,385 |
|
74,520 |
|
23,472 |
|
142,377 |
|
At 31 August 2022 |
34,471 |
|
95,339 |
|
29,962 |
|
159,772 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
2022 |
| £ |
£ |
|
Carrying amount of land and buildings on cost basis |
232,220 |
|
196,340 |
|
|
|
|
|
|
|
|
|
|
|
The property was valued by the directors at the year end and do not believe that there is any material difference between the cost and the valuation amount and not aware of any material change since the date of valuation. |
|
| 9 |
Investments |
| Investments in |
| subsidiary |
| undertakings |
| £ |
|
Cost |
|
At 1 September 2022 |
1,033 |
|
|
At 31 August 2023 |
1,033 |
|
|
The investment in subsidiary undertaking relates to the investment in Offshore UT In Private Limited, a company incorporated in India. |
|
|
|
The Company has taken advantage of the exemption under section 405 of Companies Act 2006, not to prepare Consolidated Accounts. |
|
|
|
| 10 |
Stocks |
2023 |
|
2022 |
| £ |
£ |
|
|
Finished goods and goods for resale |
876,174 |
|
750,753 |
|
|
|
|
|
|
|
|
|
|
| 11 |
Debtors |
2023 |
|
2022 |
| £ |
£ |
|
|
Trade debtors |
1,825,110 |
|
1,351,664 |
|
Other debtors |
299,004 |
|
227,531 |
|
Prepayments and accrued income |
265,171 |
|
181,936 |
|
|
|
|
|
|
2,389,285 |
|
1,761,131 |
|
|
|
|
|
|
|
|
|
|
| 12 |
Creditors: amounts falling due within one year |
2023 |
|
2022 |
| £ |
£ |
|
|
Trade creditors |
1,364,133 |
|
1,176,600 |
|
Corporation tax |
381,201 |
|
303,424 |
|
Other taxes and social security costs |
109,531 |
|
55,183 |
|
Other creditors |
9,044 |
|
6,702 |
|
Accruals and deferred income |
458,496 |
|
403,483 |
|
|
|
|
|
|
2,322,405 |
|
1,945,392 |
|
|
|
|
|
|
|
|
|
|
| 13 |
Creditors: amounts falling due after one year |
2023 |
|
2022 |
| £ |
£ |
|
|
Other creditors |
600,000 |
|
1,100,000 |
|
|
|
|
|
|
|
|
|
|
| 14 |
Deferred taxation |
2023 |
|
2022 |
| £ |
£ |
|
|
Accelerated capital allowances |
19,810 |
|
20,417 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
2022 |
| £ |
£ |
|
|
At 1 September |
20,417 |
|
3,778 |
|
(Credited)/charged to the profit and loss account |
(607) |
|
16,639 |
|
|
At 31 August |
19,810 |
|
20,417 |
|
|
|
|
|
|
|
|
|
|
|
| 15 |
Share capital |
Nominal |
|
2023 |
|
2023 |
|
2022 |
| value |
Number |
£ |
£ |
|
Allotted, called up and fully paid: |
|
Ordinary shares |
£0.001 each |
|
220,995 |
|
221 |
|
221 |
|
|
|
|
|
|
|
|
|
|
| 16 |
Profit and loss account |
2023 |
|
2022 |
| £ |
£ |
|
|
At 1 September |
958,126 |
|
2,160,998 |
|
Profit for the financial year |
1,031,825 |
|
797,128 |
|
Dividends |
(500,000) |
|
(2,000,000) |
|
|
At 31 August |
1,489,951 |
|
958,126 |
|
|
|
|
|
|
|
|
|
|
| 17 |
Dividends |
2023 |
|
2022 |
| £ |
£ |
|
|
Dividends on ordinary shares (note 16) |
500,000 |
|
2,000,000 |
|
|
|
|
|
|
|
|
|
|
|
| 18 |
Controlling party |
|
|
Mr R Karia and Mr M Karia are the controlling party by virtue of their beneficial ownership of the majority of the issued ordinary issued share capital in the company. |
|
|
| 19 |
Presentation currency |
|
|
The financial statements are presented in Sterling. |
|
|
| 20 |
Legal form of entity and country of incorporation |
|
|
UNIVERSAL TEXTILES UK LTD is a private company limited by shares and incorporated in England. |
|
|
| 21 |
Principal place of business |
|
|
The address of the company's principal place of business and registered office is: |
|
|
50 Oswin Road |
|
Leicester |
|
LE3 1HR |
