Registered number:
For the period ended
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Company Information
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Contents
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Strategic report
For the period ended 29 December 2019
The Directors present their strategic report together with the audited financial statements for the 61 week period ended 29 December 2019.
The Company's year end was extended from 28 October 2019 to 29 December 2019 thereby resulting in a 61 week period to 29 December 2019.
Crew Clothing is the go-to British smart casual lifestyle brand and its principal activity is to create high quality men's and women's clothing, shoes and accessories for sale through Crew's retail stores, website and wholesale accounts.
Business Review and Key Performance Indicators Turnover has increased by £21,648,000 (35%) to £82,830,000 (2018 - £61,182,000). The increase is partly due to the comparative period being for the 52 weeks ended 28 October 2018 and the current period being for the 61 week period ended 29 December 2019. However, the company continues to invest in its product range, E-Commerce platform and store portfolio which on a comparative 12 month period is 10% growth. Adjusted EBITDA is calculated as operating profit adjusted for depreciation, loss on disposal and amortisation of £1,922,000 (2018 - £1,839,000), management fee £NIL (2018 - £92,000), fair value movements £353,000 (2018 - £NIL), and exceptional and other costs of £53,000 (2018 - £89,000). Adjusted EBITDA (Earnings before interest, tax, depreciation and amortisation) has increased by 154% reflecting payback from prior period investments and growth in revenue across all channels. The income statement is set out and shows the profit for the year. The profit for the year after tax amounted to £8,799,000 (2018 - £2,787,000) reflecting payback from prior period investments. The Company monitors a range of key performance indicators (KPls) on a regular basis to manage the business, enable timely decision-making and to react quickly to a rapidly changing trading environment. Particular attention is paid to the weekly KPls and trading information with variances to budget and forecasts for individual product ranges and channels to market being reviewed. The two primary KPl's are turnover and adjusted EBITDA. The Directors are pleased to submit the annual accounts for the period ended on December 2019 and remain confident that the strategy being deployed will continue to show a positive trend for the future as consumers continue to adopt a varied shopping behaviour. Despite widespread difficulties across the UK retail sector, our performance is indicative of the resilience of a certain segment of UK consumers and their continued willingness to buy products which offer exceptional quality at reasonable price points. Although we are careful not to deviate too far from our core, we believe the Crew Clothing brand appeals to an increasingly broad core customer base and is capable of further expansion. In the face of significant discounting across the sector, we maintained a disciplined approach to promotions which benefitted our margins and working capital and further maintained the integrity and strength of the brand.
Page 1
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Strategic report (continued)
For the period ended 29 December 2019
Business Review and Key Performance Indicators (continued)
A high focus and attention has been given to improved optimisation of our store estate, cost controls across all areas of the business and re-establishing our online platform alongside additional channel launches to ensure a broader channel proposition is developed for our loyal customer base. Furthermore strategic partnerships with complementary lifestyle activities provides scope to broaden our Brand proposition to a relevant target consumer e.g LTA Tennis.
Crew Clothing is a well-established brand, with a loyal customer following. However we acknowledge and manage the following risks.
The company, as with all retailers, faces uncertainties in its trading environment.
A positive economic and favourable legislative environment is key to the overall success of the retail sector in the UK and as a consequence that of Crew Clothing. A significant challenge is attracting new and retaining existing customers in a very competitive and promotional retail environment. The management remain cognisant of the UK retail market, competitor activity and consumer behaviours in order to react and make the correct decisions required to satisfy customers and drive the business forward. The risk due to Brexit could impact the clearance of goods into the UK if more controls at the border are put in place. Management have considered the risk of Brexit however with the majority of goods bought outside the EU the risk is deemed low in this respect.
The existence of various financial instruments, primarily loans, cash, trade debtors and trade creditors, exposes the Company to a number of financial risks, which are described in more detail below.
The main risks arising from the Company's financial instruments are currency risk, liquidity risk and credit risk. The directors review and agree policies for managing each of these risks and they are summarised below. These policies have remained substantially unchanged from previous years. Currency risk The company is significantly reliant on production overseas and therefore is exposed to foreign exchange risk principally in US Dollars. Fluctuations in the exchange rates of the US Dollar is continually monitored and Crew Clothing may from time to time enter into forward currency contracts to hedge future inventory purchases. Liquidity risk The Company seeks to manage liquidity risk by regularly forecasting future cashflows and monitoring banking facilities to ensure sufficient funds are available to meet the Company's financial obligations for the foreseeable future. Short-term flexibility is achieved by way of a committed working capital facility.
Page 2
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Strategic report (continued)
For the period ended 29 December 2019
Financial Risk Management (continued)
Credit risk The Company's principal financial assets are cash and trade debtors. Credit risk associated with trade debtors is managed by the Company monitoring the financial position of the counterparties involved. In order to manage credit risk arising from trade debtors, the directors set limits for customers based on a combination of payment history and size of account. Credit limits are reviewed on a regular basis in conjunction with debt ageing and collection history, and credit limits are adjusted on a regular basis. Credit risk also arises from cash and cash equivalents and deposits with banks and financial institutions. For banks and financial institutions, only independently rated parties with minimum "A" are accepted. COVID-19 In March 2020, the World Health Organization declared coronavirus (COVID-19) a pandemic disease. This highly contagious disease has caused widespread shutdowns of businesses and industries and has adversely affected financial markets globally, leading to a severe economic downturn. Until a vaccine, a significant curative treatment is developed for COVID-19, and/or the social distancing orders are reduced and the economy “reopens”, it is difficult for the company to predict the lasting duration or full magnitude of the adverse results of the COVID-19 pandemic and its effects on the company’s business or results of operations at this time However despite the environment outlined we are confident and encouraged by the resilience and early trading performance of our retail stores, continued online growth and our third party partnerships post lockdown all of which have performed ahead of our internal forecasts. As with all non essential retailers the closure of our store estate from 22 March 2020 and again for a 4 week period in November 2020, had an immediate and adverse impact to our income. This created a scenario and environment which nobody could have anticipated or had previously experienced, however through a highly competent and experienced Management team several actions were taken to address both the immediate and medium term issues which developed from this situation, including – • Utilisation of the Government CJRS scheme • Utilisation of the grant scheme for properties with an RV of £51K and below • For an initial period during lockdown all employees not furloughed mutually agreed a salary reduction • A mutual review and re-scheduling of all contracts and payment terms with third parties to address short term cash flow • A targeted restructure of our internal teams leading to redundancies within both stores and HO • Initial and ongoing discussions with our Landlords to support revised terms for both the closure period and new reality post lockdown • Inventory levels were reviewed including cancellations and rebalancing • Mothballed excess stock to hold until next year and in so doing to avoid excess markdowns this year
Page 3
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Strategic report (continued)
For the period ended 29 December 2019
The Company's business activities, together with the factors likely to affect its future development, performance and position are set out in the principal activities and business review on page 1.
The financial position of the Company has remained stable during the year, despite the challenging market conditions. The main financial risks arising from the activities of the Company are set out in this report on page 2, together with the Company's policies and processes for managing these risks. The Company has prepared forecasts which take into account possible changes in trading which have been reviewed by the directors. These forecasts show that the Company should be able to operate within the existing working capital facilities. The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. The directors therefore continue to adopt the going concern basis of accounting in preparing the annual financial statements for the Company.
This report was approved by the board
and signed on its behalf.
Page 4
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Directors' report
For the period ended 29 December 2019
The directors present their report and the financial statements for the 61 week period ended 29 December 2019.
The profit for the period, after taxation, amounted to £
8,799,000
(2018 -
£
2,787,000
)
.
The directors have not recommended a dividend (2018: £NIL).
The directors who served during the period were:
The directors are responsible for preparing the Strategic report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙
select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙
make judgments and accounting estimates that are reasonable and prudent;
∙
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to 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.
Page 5
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Directors' report (continued)
For the period ended 29 December 2019
Each of the persons who are
directors at the time when this Directors' report is approved has confirmed that:
At the time of signing the financial statements the directors are aware of the potential economic effects of the COVID-19 virus outbreak. The full impact of the pandemic on the UK economy is yet to be seen, but the company will continue to mitigate this risk by following the UK Government guidelines and adapting and developing its own internal strategy.
The company closed its stores from the middle of March until June 2020 in accordance with restrictions imposed by the UK Government. Similarly, stores have closed for a second period (of announced 4 week duration) and re-opened on 02 December 2020 in compliance with UK Government restrictions. During these periods of restriction, the company has utilised the support made available by the UK Government, including the Coronavirus Job Retention Scheme.
The auditors, Kreston Reeves LLP, will be proposed for reappointment in accordance with
section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
Page 6
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Independent auditors' report to the members of Crew Clothing Co. Limited
We have audited the financial statements of Crew Clothing Co. Limited (the 'Company') for the period ended 29 December 2019, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of changes in equity
and the related notes, 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:
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 Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
∙
the directors
' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
∙
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
The directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Auditors' report 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 there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
Page 7
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Independent auditors' report to the members of Crew Clothing Co. Limited (continued)
We have nothing to report in this regard.
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 period for which the financial statements are prepared is consistent with the financial statements; and
∙
the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or 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:
As explained more fully in the Directors' responsibilities statement on page 5, 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 Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
. This description forms part of our Auditors' report.
Page 8
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Independent auditors' report to the members of Crew Clothing Co. Limited (continued)
This report is made solely to the Company's members
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 Auditors' 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 for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
London
Page 9
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Statement of comprehensive income
For the period ended 29 December 2019
Page 10
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Registered number:
03265824
Balance sheet
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 13 to 27 form part of these financial statements.
Page 11
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Statement of changes in equity
For the period ended
29 December 2019
Statement of changes in equity
For the period ended
28 October 2018
Page 12
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Notes to the financial statements
For the period ended 29 December 2019
Crew Clothing Co. Limited is a private company limited by shares and is incorporated in England & Wales with the company number 03265824. The address of the registered office and principal place of business is 20 Lydden Road, London, SW18 4LR.
The principal activity is to create high quality men's and woman's clothing, shoes and accessories for sale through Crew's retail stores, website and wholesale accounts. The financial statements represents the 61 week period ending 29 December 2019, the prior period represents the 52 week period ending 28 October 2018.
2.
Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with 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 (see note 3).
The Company's financial statements are presented to the nearest thousand.
For accounting periods on or after 1 January 2019 the amendments to FRS 102, as set out in the triennial review published in December 2017, are mandatory to adopt. The adoption of these amendments has no material impact on the financial statements of the Company.
The following principal accounting policies have been applied:
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙
the requirements of Section 7 Statement of Cash Flows;
∙
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙
the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Broadgate 1960 Company Limited as at 29 December 2019 and these financial statements may be obtained from 20 Lydden Road, London, United Kingdom, SW18 4LR.
Page 13
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Notes to the financial statements
For the period ended 29 December 2019
2.
Accounting policies (continued)
The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future.
The Company has prepared forecasts which take into account possible changes in trading, particularly in relation to the Coronavirus Pandemic, which have been reviewed by the Directors. These forecasts show that the Company should be able to operate within the existing working capital facilities. While the impact of COVID-19 has been assessed by the Directors, so far as reasonably possible, due to its unprecedented impact on the wider economy, it is difficult to evaluate with any certainty the potential outcomes on the Company’s trade, its customers and suppliers. However, taking into consideration the UK Government’s response and the company's planning, the Directors have a reasonable expectation that the Company will continue in operational existence for the foreseeable future.
Functional and presentation currency
The Company's functional and presentational currency is pounds sterling.
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.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
Revenue is the total amount receivable by the Company, less credits and returns, in the ordinary course of business with customers for goods supplied, excluding VAT and trade discounts. Revenue is recognised when the risks and rewards of owning the goods have passed to the customer, which is generally on the point of sale. Online and wholesale sales are recognised on dispatch of goods to the customer.
Page 14
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Notes to the financial statements
For the period ended 29 December 2019
2.
Accounting policies (continued)
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Finance costs are charged to profit or loss 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.
All borrowing costs are recognised in profit or loss in the period in which they are incurred.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance sheet date, except that:
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.
Page 15
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Notes to the financial statements
For the period ended 29 December 2019
2.
Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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 profit or loss.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
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.
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
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.
Page 16
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Notes to the financial statements
For the period ended 29 December 2019
2.
Accounting policies (continued)
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 comprehensive income.
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.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.
Financial assets and liabilities are offset and the net amount reported in the Balance sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or income as appropriate. The company does not currently apply hedge accounting for interest rate and foreign exchange derivatives.
Page 17
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Notes to the financial statements
For the period ended 29 December 2019
The preparation of the financial statements requires the Directors to make judgements, estimates and assumptions that can affect the amounts reported for assets and liabilities, and the results for the period. The nature of estimation is such though that actual outcomes could differ significantly from those estimates.
In preparing these financial statements, the Directors have made the following judgements: Tangible fixed assets The Company has recognised tangible fixed assets with a carrying value of £3,161,000 at the reporting date (see note 10). These assets are stated at their cost less provision for depreciation and impairment. The Company's accounting policy sets out the approach to calculating depreciation for assets and for subsequent additions. The Company determines at acquisition reliable estimates for the useful life of the asset and its residual value. These estimates are based upon such factors as the expected use of the acquired assets and market conditions. At subsequent reporting dates the Directors consider whether there are any factors such as technological advances or changes in market conditions that indicate a need to reconsider the estimates used. Where there are indicators that the carrying value of tangible assets may be impaired the Company undertakes tests to determine the recoverable value of assets. Recoverable value assessments include consideration of issues such as future market conditions, the remaining life of the asset and disposal values. Lease commitments The Company has entered into a range of lease commitments in respect of property, plant and equipment. The classification of these leases as either financial or operating leases requires Directors to consider whether the terms and conditions of each leases are such that the Company has acquired the risks and rewards associated with the ownership of the underlying assets. The following are the Company's key sources of estimation uncertainty: Stock provisioning The Company sells clothing and is subject to changing consumer demands. As a result it is necessary to consider the recoverability of the costs of stocks and the associated provisioning required. When calculating the stock provision, management considers the nature and condition of the stock, as well as applying assumptions around the anticipated saleability of the finished goods. See note 11. Taxation Provision has been made in the financial statements for deferred tax amounting to £510,000 at the reporting date (see note 17). This provision is based upon estimates of availability of future taxable profits, the timing of the reversal of timing differences upon which the provision is based and the tax rates that will be in force at that time together with an assessment of the impact of future tax planning strategies.
Page 18
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Notes to the financial statements
For the period ended 29 December 2019
The turnover and profit before tax are attributable to the one principal activity of the company.
Analysis of turnover by country of destination:
Page 19
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Notes to the financial statements
For the period ended 29 December 2019
Page 20
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Notes to the financial statements
For the period ended 29 December 2019
On 11 March 2020, during the 2020 budget announced by the Chancellor, it was reported that the corporation tax rate from 1 April 2020 would remain at 19% rather than being reduced to 17% as was previously planned. This will effect the tax calculations in future years as the 2020 budget was substantially enacted on 17 March 2020.
Page 21
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Notes to the financial statements
For the period ended 29 December 2019
Page 22
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Notes to the financial statements
For the period ended 29 December 2019
Page 23
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Notes to the financial statements
For the period ended 29 December 2019
Page 24
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Notes to the financial statements
For the period ended 29 December 2019
Page 25
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Notes to the financial statements
For the period ended 29 December 2019
Profit and loss account
The Company operates a defined contributions pension scheme. The assets of the scheme are held
separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £312,000 (2018: £172,000). Contributions totalling £49,000 (2018: £92,000) were payable to the fund at the balance sheet date and are included in creditors.
Page 26
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crew Clothing Co. Limited
Notes to the financial statements
For the period ended 29 December 2019
The Company closed its stores from the middle of March until June 2020 in accordance with restrictions imposed by the UK Government. Similarly, stores have closed for a second period (of announced 4 week duration) and re-opened on 02 December 2020 in compliance with UK Government restrictions. During these periods of restriction, the Company has utilised the support made available by the UK Government, including the Coronavirus Job Retention Scheme. b) On 2 April 2020, a dividend of £17,200,000 was declared.
The Company's immediate parent company is Crew Clothing Holdings Limited.
The Company is included in the group financial statements of Broadgate 1960 Company Limited, which may be obtained from its registered office 20 Lydden Road, London, United Kingdom, SW18 4LR. During the year there was a change in the ultimate parent company from Three Wishes Limited to New Wishes 2020 Limited. New Wishes 2020 Limited is incorporated in Gibraltar. The ultimate controlling party of the group is Menoshi Shina who is also a director of the company.
Page 27
|