Company registration number 14211686 (England and Wales)
M&A MATTING UK, LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
M&A MATTING UK, LTD
COMPANY INFORMATION
Directors
Mr. E D Hart
(Appointed 4 July 2022)
K Boster
(Appointed 4 July 2022)
Mr T Fowler
(Appointed 4 July 2022)
Company number
14211686
Registered office
Hilton Fold Lane
Middleton
Manchester
M24 2HZ
Auditor
Azets Audit Services
Ty Derw, Lime Tree Court
Cardiff Gate Business Park
Cardiff
United Kingdom
CF23 8AB
M&A MATTING UK, LTD
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 24
M&A MATTING UK, LTD
STRATEGIC REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the Period ended 31 December 2023.
The principal activities of M+A Matting UK Limited ("the Company") comprise of the manufacturing of matting products for the textile rental industry. The Company is member of the Mountville Mills group.
Review of the business
The Directors consider the results of the business to be in line with expectations.
During the period ended 31 December 2023 the Company has generated £26M turnover. The Company generated operating profit of £445K. After tax the Company delivered a loss of (£351K). As at 31 December 2023 the Company held net assets of £6.3M, including cash balances of £2.7M.
There have not been any significant changes in the principal activities in the year under review.
The 2023 performance represented our first period of operations. On December 26, 2022, M+A Matting UK purchased Milliken Industrials Limited’s mat business. During the year, the Company invested over £2M in capital improvements.
These investments support the Company's strategy to deliver profitable growth in our mat manufacturing business.
M&A MATTING UK, LTD
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 2 -
Principal risks and uncertainties
The Company is exposed to transactional and translation foreign currency risks. Through its trading activity, the company transacts in USD, EUR and GBP. The majority of the company's customers are invoiced in EUR therefore cashflows and profits are generated primarily in EUR. Significant supplier transactions tend to transact in EUR and GBP and there are also a small proportion of cash outflows in USD. As the Company has GBP functional currency, its foreign exchange risk lies primarily with its EUR exposure as at December 2023. The Company manages its transactional foreign currency risk by naturally hedging EUR exposure with equivalent purchases in raw materials transacted in EUR.
The Company has credit risk, which is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables. An allowance for impairment is made where there is.an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of cash flows.
The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.
The Company has no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers.
The Company has limited risk of product failure and the potential for liabilities and reputation damage, which is mitigated by regular production and supplier quality audits and ensuring operations are in accordance with the Quality Management System and applicable industry certificates.
Potential failure of the Company to retain key employees or attract capable people could lead to a lack of necessary expertise and continuity. The Company continues to focus on culture and making the Company a good place to work and investing in its employees through providing ongoing learning and development opportunities.
The Company must remain competitive in the market, including its pricing, purchasing and maintenance of strong relationships, in order to secure future sales and. profitability. External market and platform awareness is actively monitored by management alongside competitor activity. Additionally, the Company has created a customer-focused operational structure.
The Company has net assets and net current assets and is expected to continue to generate positive cash flows on its own account for the foreseeable future. It has a strong portfolio of geographically diverse customers and expects to grow steadily in the coming years with the fruits of current investments to be fully appreciated. The Company participates in the Group's centralised treasury arrangements and so may access the banking arrangements of its parent and fellow subsidiaries should further liquidity become necessary to finance its on-going operations and future development.
Building upon year-to-date performance, the Company has forecast through 12 months from the date of issue of the financial statements. The Company is forecast to be profitable and generate positive operating cashflow. Based on their assessment of the Company's financial position, the Company's Directors have a reasonable expectation that the Company has adequate resources to continue in existence undertaking the principal business activity outlined above for the foreseeable future.
The Company will look for further opportunities in what it perceives to be underdeveloped markets, as well as invest in new technology around the production process. The Company is constantly working with a wide range of partners to improve the products and services provided to customers and suppliers, and especially employees.
M&A MATTING UK, LTD
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 3 -
K Boster
Director
4 April 2024
M&A MATTING UK, LTD
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 4 -
The directors present their annual report and financial statements for the Period ended 31 December 2023.
Principal activities
The company started trading on the 26th of December 2022, principal activity is the manufacturing of woven or tufted carpet and rugs.
Results and dividends
The results for the Period are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the Period and up to the date of signature of the financial statements were as follows:
Mr. E D Hart
(Appointed 4 July 2022)
K Boster
(Appointed 4 July 2022)
Mr T Fowler
(Appointed 4 July 2022)
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
K Boster
Director
4 April 2024
M&A MATTING UK, LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 5 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with 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 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 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 transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
M&A MATTING UK, LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF M&A MATTING UK, LTD
- 6 -
Opinion
We have audited the financial statements of M&A Matting UK, Ltd (the 'company') for the Period ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and 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 company's affairs as at 31 December 2023 and of its loss for the Period 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.
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.
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 our 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.
M&A MATTING UK, LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF M&A MATTING UK, LTD
- 7 -
Matters on which we are required to report by exception
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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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 directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's 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 an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
M&A MATTING UK, LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF M&A MATTING UK, LTD
- 8 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Craig Yearsley FCCA
Senior Statutory Auditor
For and on behalf of Azets Audit Services
4 April 2024
Chartered Accountants
Statutory Auditor
Ty Derw, Lime Tree Court
Cardiff Gate Business Park
Cardiff
United Kingdom
CF23 8AB
M&A MATTING UK, LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 9 -
Period
ended
31 December
2023
Notes
£
Turnover
3
26,040,654
Cost of sales
(21,132,983)
Gross profit
4,907,671
Administrative expenses
(3,932,964)
Exceptional item
4
(529,666)
Operating profit
5
445,041
Interest receivable and similar income
8
2,006
Interest payable and similar expenses
9
(570,323)
Loss before taxation
(123,276)
Tax on loss
10
(228,207)
Loss for the financial Period
(351,483)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
M&A MATTING UK, LTD
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
Notes
£
£
Fixed assets
Tangible assets
11
1,796,799
Current assets
Stocks
12
3,794,161
Debtors
13
4,718,833
Cash at bank and in hand
2,665,857
11,178,851
Creditors: amounts falling due within one year
14
(4,932,991)
Net current assets
6,245,860
Total assets less current liabilities
8,042,659
Creditors: amounts falling due after more than one year
15
(6,599,420)
Provisions for liabilities
Deferred tax liability
17
228,207
(228,207)
Net assets
1,215,032
Capital and reserves
Called up share capital
19
1,000
Share premium account
1,565,515
Profit and loss reserves
(351,483)
Total equity
1,215,032
The financial statements were approved by the board of directors and authorised for issue on 4 April 2024 and are signed on its behalf by:
K Boster
Director
Company Registration No. 14211686
M&A MATTING UK, LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 11 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 4 July 2022
-
Period ended 31 December 2023:
Loss and total comprehensive income for the period
-
-
(351,483)
(351,483)
Issue of share capital
19
1,000
1,565,515
-
1,566,515
Balance at 31 December 2023
1,000
1,565,515
(351,483)
1,215,032
M&A MATTING UK, LTD
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 12 -
2023
Notes
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
25
2,426,650
Interest paid
(570,323)
Net cash inflow/(outflow) from operating activities
1,856,327
Investing activities
Purchase of business
(7,599,171)
Purchase of tangible fixed assets
(728,781)
Interest received
2,006
Net cash used in investing activities
(8,325,946)
Financing activities
Proceeds from issue of shares
1,566,515
Proceeds from borrowings
7,568,961
Net cash generated from/(used in) financing activities
9,135,476
Net increase in cash and cash equivalents
2,665,857
Cash and cash equivalents at beginning of Period
Cash and cash equivalents at end of Period
2,665,857
M&A MATTING UK, LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 13 -
1
Accounting policies
Company information
M&A Matting UK, Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Hilton Fold Lane, Middleton, Manchester, M24 2HZ.
1.1
Reporting period
The company was incorporated on the 4th July 2022 and the year end was extended to 31st December to become co terminous with the remainder of the group.
1.2
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention.
1.3
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
While the company has generated a loss for the year of (£351,483) this was on the basis of the first year of trade, along with considerable one off aquisition costs. The company has net assets at the year end of £1,215,032 and a net current assets position of £6,245,659. The company is expecting to make a profit for 2024 and the directors are confident that they can meet their liabilites as they fall due.
1.4
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and equipment
5-7 years straight line
Fixtures and fittings
3-5 years straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
M&A MATTING UK, LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally 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.
M&A MATTING UK, LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
M&A MATTING UK, LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Other financial liabilities
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 finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
M&A MATTING UK, LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover and other revenue
2023
£
Turnover analysed by class of business
Sales of goods
26,040,654
2023
£
Turnover analysed by geographical market
United Kingdom
8,722,763
Europe and the rest of the world
17,317,891
26,040,654
2023
£
Other revenue
Interest income
2,006
M&A MATTING UK, LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 18 -
4
Exceptional item
2023
£
Expenditure
Exceptional costs
529,666
Exceptional items are in relation to non-recurring expenses which were incurred as a result of the acqusition, of the trade and assets in the period.
5
Operating profit
2023
Operating profit for the period is stated after charging/(crediting):
£
Exchange gains
(380,538)
Fees payable to the company's auditor for the audit of the company's financial statements
25,000
Depreciation of owned tangible fixed assets
253,000
Operating lease charges
834,991
6
Employees
The average monthly number of persons (including directors) employed by the company during the Period was:
2023
Number
Adminstration
27
Production
124
Total
151
Their aggregate remuneration comprised:
2023
£
Wages and salaries
5,301,764
Social security costs
420,046
Pension costs
197,246
5,919,056
7
Directors' remuneration
The directors of the company are paid through other group companies.
M&A MATTING UK, LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 19 -
8
Interest receivable and similar income
2023
£
Interest income
Interest on bank deposits
2,006
2023
Investment income includes the following:
£
Interest on financial assets not measured at fair value through profit or loss
2,006
9
Interest payable and similar expenses
2023
£
Interest on financial liabilities measured at amortised cost:
Interest payable to group undertakings
557,076
Other interest on financial liabilities
13,247
570,323
10
Taxation
2023
£
Deferred tax
Origination and reversal of timing differences
228,207
The actual charge for the Period can be reconciled to the expected credit for the Period based on the profit or loss and the standard rate of tax as follows:
2023
£
Loss before taxation
(123,276)
Expected tax credit based on the standard rate of corporation tax in the UK of 22.00%
(27,121)
Tax effect of expenses that are not deductible in determining taxable profit
2,876
Unutilised tax losses carried forward
233,675
Effect of change in corporation tax rate
27,184
Permanent capital allowances in excess of depreciation
(8,407)
Taxation charge for the period
228,207
M&A MATTING UK, LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 20 -
11
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Total
£
£
£
Cost
At 4 July 2022
Additions
1,882,275
167,524
2,049,799
At 31 December 2023
1,882,275
167,524
2,049,799
Depreciation and impairment
At 4 July 2022
Depreciation charged in the Period
212,849
40,151
253,000
At 31 December 2023
212,849
40,151
253,000
Carrying amount
At 31 December 2023
1,669,426
127,373
1,796,799
12
Stocks
2023
£
Finished goods and goods for resale
3,794,161
13
Debtors
2023
Amounts falling due within one year:
£
Trade debtors
1,632,838
Amounts owed by group undertakings
2,690,685
Other debtors
208,421
Prepayments and accrued income
186,889
4,718,833
14
Creditors: amounts falling due within one year
2023
Notes
£
Other borrowings
16
594,234
Trade creditors
980,835
Amounts owed to group undertakings
2,164,198
Taxation and social security
36,404
Other creditors
194,343
Accruals and deferred income
962,977
4,932,991
M&A MATTING UK, LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 21 -
15
Creditors: amounts falling due after more than one year
2023
Notes
£
Other borrowings
16
6,599,420
16
Loans and overdrafts
2023
£
Loans from group undertakings
7,193,654
Payable within one year
594,234
Payable after one year
6,599,420
There are no fixed charges for the loan term loans
The balance above is made up of two loans from Mountville Mills International LLC.
The first loan is for a total of $8.46m. The repayments are quarterly instalments of $332,223 commencing on the 1st Janaury 2024.
The second loan is for a total of $700k. The repayments are quarterly instalments of $32,893 commencing on 1st January 2024
Interest is charged at 8% per annum on both loans.
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
2023
Balances:
£
Accelerated capital allowances
262,026
Tax losses
(22,246)
Short term timing differences
(11,573)
228,207
M&A MATTING UK, LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
17
Deferred taxation
(Continued)
- 22 -
2023
Movements in the Period:
£
Liability at 4 July 2022
-
Charge to profit or loss
228,207
Liability at 31 December 2023
228,207
18
Retirement benefit schemes
2023
Defined contribution schemes
£
Charge to profit or loss in respect of defined contribution schemes
197,246
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
19
Share capital
2023
2023
Ordinary share capital
Number
£
Issued and fully paid
Ordinary shares of £1 each
1,000
1,000
20
Acquisition
On 26 December 2022 the company acquired the business of Milliken Industrials Limited.
Fair Value
£
Property, plant and equipment
1,321,018
Inventories
3,771,575
Trade and other receivables
3,000,448
Trade and other payables
(493,870)
Total identifiable net assets
7,599,171
Goodwill
-
Total consideration
7,599,171
Satisfied by:
£
Cash
7,599,171
M&A MATTING UK, LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
20
Acquisition
(Continued)
- 23 -
Contribution by the acquired business for the reporting period since acquisition:
£
Turnover
100
Profit after tax
100
There was no goodwill arising on the acquisition of the business.
21
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
£
Within one year
808,654
Between two and five years
2,257,280
3,065,934
22
Events after the reporting date
On 15 March 2024, the company acquired the trade and assets of Millennium Mats Limited for total consideration of $7.1m.
23
Related party transactions
The company has taken advantage of the exemption conferred by section 1AC.35 of FRS 102 not to disclose transactions with other owned subsidiaries within the group as consolidated accounts including the subsidiary undertakings, are publicly available.
24
Ultimate controlling party
The ultimate parent undertaking is Mountville Mills International LLC, a private company incorporated in USA, whose address is 1729 South Davis Road, LaGrange, GA 3024, United States.
M&A MATTING UK, LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 24 -
25
Cash generated from/(absorbed by) operations
2023
£
Loss for the Period after tax
(351,483)
Adjustments for:
Taxation charged
228,207
Finance costs
570,323
Investment income
(2,006)
Depreciation and impairment of tangible fixed assets
253,000
Foreign exchange gains on cash equivalents
(375,307)
Movements in working capital:
Increase in stocks
(22,586)
Increase in debtors
(1,718,385)
Increase in creditors
3,844,887
Cash generated from/(absorbed by) operations
2,426,650
26
Analysis of changes in net debt
4 July 2022
Cash flows
Exchange rate movements
31 December 2023
£
£
£
£
Cash at bank and in hand
-
2,290,550
375,307
2,665,857
Borrowings excluding overdrafts
-
(7,568,961)
375,307
(7,193,654)
-
(5,278,411)
750,614
(4,527,797)
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