Registered number:
05373866
EAST LONDON TEXTILES LIMITED
FINANCIAL STATEMENTS
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE YEAR ENDED 31 MARCH 2020
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EAST LONDON TEXTILES LIMITED
REGISTERED NUMBER:
05373866
BALANCE SHEET
AS AT
31 MARCH 2020
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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EAST LONDON TEXTILES LIMITED
REGISTERED NUMBER:
05373866
BALANCE SHEET
(CONTINUED)
AS AT
31 MARCH 2020
The
financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The company has opted not to file the statement of income and retained earnings in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
25 November 2020
.
The notes on pages 3 to 14 form part of these financial statements.
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EAST LONDON TEXTILES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
East London Textiles Limited ("the Company") is a private company limited by shares and incorporated in England and Wales. The address of the registered office is Unit G4, Galman's End Farm Manor Road, Abridge, Romford, England, RM4 1NA.
The Company's principal activity during the year continued to be that of the export of second hand clothing.
2.
Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of
Financial Reporting Standard 102, the Financial Reporting Standard applicable in
the UK and the Republic of Ireland and the Companies Act 2006
.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the company's accounting policies.
The following principal accounting policies have been applied:
The directors have considered the impact of COVID-19 on the ability of the Company to continue as
a Going Concern. In making their assessment the directors have prepared and critically reviewed the
Company's cash flow forecast for the next 12 months and ensured that this forecast is modelled on a
suitably cautious basis bearing in mind the unpredictable nature of the pandemic and its possible
impact on the Company and the wider economy. As well as considering cash flow, the directors have
also taken into account the immediate and future impact on Profit and Loss and Balance Sheet of
COVID-19. Based on these forecasts the directors have been able to conclude that it is still appropriate to prepare the financial statements on a Going Concern basis.
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EAST LONDON TEXTILES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
2.
Accounting policies (continued)
Revenue is measured at the fair value of the consideration received or receivable and represents the amount receivable for goods supplied or services rendered, net of returns, discounts and rebates allowed by the Company and value added taxes.
The Company recognises revenue when: (a) the significant risks and rewards of ownership have been transferred to the buyer; (b) the Company retains no continuing involvement or control over the goods; (c) the amount of revenue can be measured reliably; (d) it is probable that future economic benefits will flow to the entity and (e) when the specific criteria relating to each of the Company’s sales channels have been met, as described below:
The Company exports second hand clothing and provides these goods to both domestic and international customers.
Revenue is recognised when the Company has despatched the clothing to the customer. The risks and rewards of the product are considered to have been transferred to either the customer or to a third party when the products have been despatched from the Company's warehouse.
All sales are normally made with credit terms, unless settled immediately in cash. The element of financing is deemed immaterial and disregarded in the measurement of revenue.
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Foreign currency translation
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Functional and presentation currency
The company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
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Operating leases: the company as lessee
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Rentals paid under operating leases are charged to the statement of income and retained earnings on a straight line basis over the lease term.
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EAST LONDON TEXTILES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
2.
Accounting policies (continued)
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Leased assets: the company as lessee
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Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the statement of income and retained earnings so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.
Interest income is recognised in the statement of income and retained earnings using the effective interest method.
Finance costs are charged to the statement of income and retained earnings over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an Annual General Meeting.
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EAST LONDON TEXTILES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
2.
Accounting policies (continued)
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in the statement of income and retained earnings, except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.
The Company provides a range of benefits to employees, including paid holiday arrangements and a
defined contribution pension plan.
(i) Short term benefits
Short term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the period in which the service is received.
(ii) Termination benefits
The Company is committed, by legislation and/or contractual obligations, to make payments to employees when the company terminates their employment. Such payments are termination benefits. Because termination benefits do not provide the Company with future economic benefits, the Company recognises these as an expense in the statement of income and retained earnings immediately. The Company will only recognise termination benefits as a liability and an expense when the company is demonstrably committed to terminate the employment of an employee or group of employees before the normal retirement date.
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EAST LONDON TEXTILES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
2.
Accounting policies (continued)
Exceptional items are transactions that fall within the ordinary activities of the company but are presented separately due to their size or incidence.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a reducing balance and straight line basis.
Depreciation is provided on the following annual basis:
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Leasehold property improvements
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the statement of income and retained earnings.
Investments in unlisted company shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the statement of income and retained earnings for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted average basis.
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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EAST LONDON TEXTILES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
2.
Accounting policies (continued)
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the statement of income and retained earnings.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
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The average monthly number of employees, including directors, during the year was
2
(2019 -
2
)
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EAST LONDON TEXTILES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
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Transfers between classes
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Charge for the year on owned assets
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Charge for the year on financed assets
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EAST LONDON TEXTILES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
4.
Tangible fixed assets (continued)
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The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
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Raw materials and consumables
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Stock recognised in cost of sales during the year as an expenses was £5,960,476 (
2019 - £5,673,544
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EAST LONDON TEXTILES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
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Amounts owed by group undertakings
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Prepayments and accrued income
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Obligations under finance lease and hire purchase contracts
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Accruals and deferred income
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Creditors: Amounts falling due after more than one year
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Net obligations under finance leases and hire purchase contracts
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Net obligations under finance leases and hire purchase contracts and bank loans are secured.
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EAST LONDON TEXTILES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
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Analysis of the maturity of loans is given below:
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Amounts falling due within one year
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Amounts falling due 1-2 years
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Amounts falling due 2-5 years
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Hire purchase and finance leases
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Minimum lease payments under hire purchase fall due as follows:
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EAST LONDON TEXTILES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
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Charged to profit or loss
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The provision for deferred taxation is made up as follows:
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Accelerated capital allowances
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Commitments under operating leases
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At 31 March 2020 the company had future minimum lease payments under non-cancellable operating leases as follows:
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Later than 1 year and not later than 5 years
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EAST LONDON TEXTILES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
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Related party transactions
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Included within other creditors at the year end are amounts totalling £21,247
(2019 - £10,679)
owed to the directors.
During the year dividends of £282,353
(2019 - £160,912)
were declared to the company's parent undertaking. At the year end amounts of £nil
(2019 - £82,353)
were owed to this company.
Included within other creditors at the year end are amounts totalling £2,311
(2019 - £2,311)
owed to companies with common director.
Included within other debtors at the year end are amounts totalling £100,000
(2019 - £100,000)
owed by companies with common director.
Included within creditors is an amount of £69,880
(2019 - £36,481)
due to fellow subsidiaries. During the year sales of £59,310
(2019 - £38,433)
and purchases of £2,317,116
(2019 - £1,873,299)
were made to/from this company.
Included within debtors are amounts of £276,712
(2019 - £188,204)
due from fellow subsidiaries. During the year sales of £78,888
(2019 - £203,083)
were made to these companies. Purchases of £52,044
(2019 - £nil)
were made from these companies. Amounts of £100,000 owed by fellow subsidiaries were written off during the year.
The directors have personally guaranteed certain creditors of the company.
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Post balance sheet events
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Like all UK businesses, the Company has been affected by the COVID-19 pandemic, which began to affect the UK in early 2020, and therefore slightly before the Company’s financial year end. In accordance with Section 32 of FRS 102 the directors do not consider there to have been any ‘adjusting events’ as a result of the COVID-19 pandemic.
The ultimate parent company is New Sequent Limited.
The auditor's report on the financial statements for the year ended 31 March 2020 was unqualified.
The audit report was signed on
26 November 2020
by
Simon Liggins
(senior statutory auditor) on behalf of
Barnes Roffe LLP
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