Registration number:
Manufacturing Services Investment Limited
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Brebners
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Manufacturing Services Investment Limited
Contents
Company Information |
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Strategic Report |
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Directors' Report |
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Statement of Directors' Responsibilities |
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Independent Auditor's Report |
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Consolidated Income Statement |
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Consolidated Statement of Comprehensive Income |
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Consolidated Statement of Financial Position |
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Statement of Financial Position |
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Consolidated Statement of Changes in Equity |
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Statement of Changes in Equity |
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Consolidated Statement of Cash Flows |
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Notes to the Financial Statements |
Manufacturing Services Investment Limited
Company Information
Directors |
P R Williams R M Henry S R Hastings I C Homan R J Terrell L J Davis |
Registered office |
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Auditor |
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Manufacturing Services Investment Limited
Strategic Report for the Year Ended 31 March 2023
The directors present their strategic report for Manufacturing Services Investment Limited ('the company') and its subsidiaries (‘the group’) for the year ended 31 March 2023.
Principal activity
The principal activity of the group is that of an investment holding company. The principal activity of the group is that of the online retailing of technical sports clothing and equipment in water sports (trading as Wetsuit Outlet, WaterSports Outlet) and equestrian (trading as The Drillshed) through owned websites and marketplaces, as well as the direct selling and wholesaling of owned brands.
Fair review of the business
The group operates on a global basis, trading through 5 operating companies, in each of its core markets as follows:
• B2C Distribution Limited: Serving UK & ROW markets from Southend, UK.
• B2C Distribution International BV: Serving EU markets from Deventer, NL.
• B2C Distribution Inc: Serving US market from Los Angeles, USA.
• B2C Distribution Pty Ltd: Serving Australasia markets via a 3PL near Sydney, Aus.
• Optimum Time Limited: A specialist sports watch manufacturer & retailer.
The group is able to attract and retain customers through a competitive service and value proposition, offered via localised country websites that provide timely shipping of orders from our regional warehouses and ‘excellent’ rated [Trustpilot] multi-lingual customer service. This proposition is underpinned by the group’s proprietary software and systems.
Trading in the year
As detailed in the income statement, the group sales during the year were £24.5 million, a decline (-15%) over the prior year but remaining materially ahead (+48%) of pre-Covid levels.
The year-on-year downturn in sales can be attributed to trading patterns reverting to more normalised pre-pandemic levels, as well as the industry-wide issue of volume of excess stock which continues to impact upon performance across many of the group’s trading markets.
This excess in-market inventory led to high levels of discounting, notably in the significant UK market, and a resulting drop in gross profit margin at -3.9%. As a result, earnings before interest, tax, depreciation and amortisation (EBITDA) for the period fell to £(0.9) million as we invested in protecting the value and service proposition offered to our customer base. Despite the loss, we continue to generate cash from operating activities. Based on the data and insights available, this focus on customer resulted in gains in market share across core markets with progress being demonstrated through our growing loyalty programmes.
As the market remains volatile the group continues to manage inventory closely and holds cash at 31 March 2023 of £2.1 million. On a year-on-year basis this reduced cash position reflects the stepped movement of stock into the USA warehouse which opened in 2019 as well as the self-funded acquisition of Optimum Time in November 2021.
The group retains strong net assets of £6.1 million. With warehouses (fulfilment centres) distributed throughout the UK, The Netherlands and the USA ensuring competitive order fulfilment times and costs, group net assets are well positioned to deliver growth. These operations are part of the group’s strategic focus to grow in European and US markets which is being demonstrated by strong gains in its international trading mix.
Manufacturing Services Investment Limited
Strategic Report for the Year Ended 31 March 2023
Suppliers
The group has continued to worked closely and in partnership with its third party brands and suppliers to manage stock flow, supply chains and protect long-term relationships throughout a volatile period across the watersports and equestrian market.
Customers
We seek and gain regular feedback from new and returning customers on our service proposition and delivery, ensuring issues are addressed promptly and opportunities to continuously improve our service are actions. Elevation to Trust Pilot No.1 ranking watersports retailer in many of our core categories speaks to our customer focus.
Corporate Social Responsibility
The group continues its work to minimise its direct environmental impact through significant recycling of 3rd party packaging materials alongside the use of recycled or plastic alternative materials for its own customer packaging.
As detailed further on the group's website, the introduction of large scale customer recycling program for wetsuits and an increasing number of more environmentally conscious products being offered to customer are part of the group giving its customer choices to reduce their own environmental impact.
Trading outlook
The group operates in a competitive market containing a number of diverse product-related income streams with many external factors impacting upon performance. We use market and customer feedback and data to support our decision making in order to mitigate these risks.
While 2023/24 is widely expected to remain challenging in both the water sports and equestrian markets, we believe the group has appropriate plans to retain a competitive market position and benefit as the post-pandemic market correction normalises.
Principal risks and uncertainties
The directors monitor on an ongoing basis, the turnover, profitability, cash stock position of the business and ensures appropriate systems and controls are in place to identify, quantify and mitigate any material risks or uncertainties that may or may not impact the group. These risks include:
• Economic and market risks: The group actively monitors the markets in which it operates and takes appropriate action to ensure that any risks identified are mitigated. The group continues to monitor the situation with regards geopolitical events and the global economic environment, regularly reviewing plans to mitigate adverse impact on its operations.
• Liquidity risk: The group produces regular forecasts to ensure that adequate liquid funds are available to the business at all times.
• International and foreign exchange risks: The group has appropriate systems in place to ensure compliance with international requirements and mitigation of foreign exchange risk.
• Interest rate risk: The group actively monitors interest rates and undertakes appropriate actions to ensure risks are identified and mitigated.
• Asset risk: The group has controls over the movement of stock as well as ensuring that the business has adequate insurance to cover any potential losses.
Manufacturing Services Investment Limited
Strategic Report for the Year Ended 31 March 2023
Impact of Russian forces entering Ukraine
On 24 February 2022 Russian Forces entered Ukraine, resulting in Western Nation reactions including announcements of sanctions against Russia and Russian interest worldwide and an economic ripple effect on the global economy. The directors have carried out an assessment of the potential impact of Russian Forces entering Ukraine on the business, including the impact of mitigation measures and uncertainties. The directors continue to monitor the situation and are hopeful that the impact upon the group and its operations will remain minimal.
There are no material matters that have not been disclosed elsewhere in this report that need to be reported at this time.
Approved by the
.........................................
Director
Manufacturing Services Investment Limited
Directors' Report for the Year Ended 31 March 2023
The directors present their report and the for the year ended 31 March 2023.
Directors of the group
The directors who held office during the year were as follows:
The following director was appointed after the year end:
Dividends
No interim dividends were paid during the year (2022: £Nil). No final dividend is proposed.
Information included in the Strategic Report
As permitted by Paragraph 1A of Schedule 7 to the Large and Medium-sized Companies and Group (Accounts and Reports) Regulations 2008 certain matters which are required to be disclosed in the Directors' Report have been omitted as they are included in the Strategic Report on page 2 to 4. These matters relate to future developments and principal risks and uncertainties.
Directors' liabilities
The directors benefit from a qualifying indemnity provision in the form permitted by Section 234 of the Companies Act 2006 in respect of certain third party actions against directors. No claim or notice of claim in respect of these indemnities has been received in the year. The qualifying indemnity provision was in force throughout the financial year and up to the date of approval of the Directors' Report.
Disclosure of information to the auditor
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.
Approved by the
.........................................
Director
Manufacturing Services Investment Limited
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities 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 group and the company and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
• |
select suitable accounting policies and apply them consistently; |
• |
make judgements 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; and |
• |
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 and in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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.
Manufacturing Services Investment Limited
Independent Auditor's Report to the Members of
Manufacturing Services Investment Limited
Opinion
We have audited the financial statements of Manufacturing Services Investment Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2023, which comprise the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Statement of Financial Position, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
• | give a true and fair view of the state of the group's and the company's affairs as at 31 March 2023 and of the group's loss for the year then ended; |
• | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
• | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Other information
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 auditor’s 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.
We have nothing to report in this regard.
Manufacturing Services Investment Limited
Independent Auditor's Report to the Members of
Manufacturing Services Investment Limited
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were 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.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• |
the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
• |
the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception
In the light of our 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 and the Directors' Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
• | the parent company financial statements are not in agreement with the accounting records and returns; or |
• | certain disclosures of directors' remuneration specified by law are not made; or |
• | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities [set out on page 6], 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 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.
Manufacturing Services Investment Limited
Independent Auditor's Report to the Members of
Manufacturing Services Investment Limited
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Based on our understanding of the Group and the industry in which it operates, we determined that the principal risks of non-compliance with laws and regulations related to the reporting framework (FRS 102 and the Companies Act 2006) and UK corporate taxation laws. These risks were communicated to our audit team and we remained alert to any indications of non-compliance throughout our audit.
We understood how the Group is complying with relevant legislation by making enquiries of management. We also considered the results of our audit procedures and to what extent these corroborate this understanding and assessed the susceptibility of the company’s financial statements to material misstatement. This included consideration of how fraud might occur and evaluation of management’s incentives and opportunities for fraudulent manipulation of the financial statements.
We designed our audit procedures to identify any non-compliance with laws and regulations. Such procedures included, but were not limited to, inspection of any regulatory or legal correspondence; challenging assumptions and judgements made by management; identifying and testing journal entries with a focus on large or unusual transactions as determined based on our understanding of the business; and identifying and assessing the effectiveness of controls in place to prevent and detect fraud.
Owing to the inherent limitations of an audit, there remains a risk that a material misstatement may not have been detected, even though we have properly planned and performed our audit in accordance with auditing standards. We are not responsible for preventing non-compliance with laws and regulations and cannot be expected to detect all instances of non-compliance.
The primary responsibility for the detection and prevention of fraud rests with those responsible for governance and management. The further removed non-compliance with laws and regulations is from the events reflected in the financial statements, the less likely the auditor will become aware of it.
The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment, collusion, omission, misrepresentation or forgery.
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 auditor's report.
Manufacturing Services Investment Limited
Independent Auditor's Report to the Members of
Manufacturing Services Investment Limited
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in 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.
......................................
For and on behalf of
130 Shaftesbury Avenue
London
W1D 5AR
Manufacturing Services Investment Limited
Consolidated Income Statement for the Year Ended 31 March 2023
Note |
2023 |
2022 |
|
Turnover |
|
|
|
Cost of sales |
( |
( |
|
Gross profit |
|
|
|
Administrative expenses |
( |
( |
|
Operating (loss)/profit |
( |
|
|
Other interest receivable and similar income |
|
|
|
Interest payable and similar expenses |
( |
( |
|
(510,539) |
(507,351) |
||
(Loss)/profit before tax |
( |
|
|
Tax on (loss)/profit |
|
( |
|
(Loss)/profit for the financial year |
( |
|
|
Profit/(loss) attributable to: |
|||
Owners of the company |
( |
|
Manufacturing Services Investment Limited
Consolidated Statement of Comprehensive Income for the Year Ended 31 March 2023
2023 |
2022 |
|
(Loss)/profit for the year |
( |
|
Foreign currency translation gains |
|
|
Total comprehensive income for the year |
( |
|
Manufacturing Services Investment Limited
Consolidated Statement of Financial Position as at 31 March 2023
Note |
2023 |
2022 |
|
Fixed assets |
|||
Intangible assets |
|
|
|
Tangible assets |
|
|
|
|
|
||
Current assets |
|||
Stocks |
|
|
|
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Total assets less current liabilities |
|
|
|
Creditors: Amounts falling due after more than one year |
( |
( |
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
1,675 |
1,675 |
|
Share premium reserve |
14,371,024 |
14,371,024 |
|
Retained earnings |
(8,254,044) |
(5,380,347) |
|
Equity attributable to owners of the company |
6,118,655 |
8,992,352 |
|
Shareholders' funds |
6,118,655 |
8,992,352 |
Approved and authorised by the
.........................................
Director
Company registration number: 08869609
Manufacturing Services Investment Limited
Statement of Financial Position as at 31 March 2023
Note |
2023 |
2022 |
|
Fixed assets |
|||
Investments |
|
|
|
Current assets |
|||
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Total assets less current liabilities |
|
|
|
Creditors: Amounts falling due after more than one year |
( |
( |
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
1,675 |
1,675 |
|
Share premium reserve |
14,371,024 |
14,371,024 |
|
Retained earnings |
(3,012,954) |
(2,375,281) |
|
Shareholders' funds |
11,359,745 |
11,997,418 |
The company made a loss after tax for the financial year of £637,673 (2022 - loss of £465,977).
Approved and authorised by the
......................................... |
Company registration number: 08869609
Manufacturing Services Investment Limited
Consolidated Statement of Changes in Equity for the Year Ended 31 March 2023
Equity attributable to the parent company
Share capital |
Share premium |
Retained earnings |
Total |
Total equity |
|
At 1 April 2021 |
|
|
( |
|
|
Profit for the year |
- |
- |
|
|
|
Other comprehensive income |
- |
- |
|
|
|
Total comprehensive income |
- |
- |
|
|
|
At 31 March 2022 |
|
|
( |
|
|
Share capital |
Share premium |
Retained earnings |
Total |
Total equity |
|
At 1 April 2022 |
|
|
( |
|
|
Loss for the year |
- |
- |
( |
( |
( |
Other comprehensive income |
- |
- |
|
|
|
Total comprehensive income |
- |
- |
( |
( |
( |
At 31 March 2023 |
|
|
( |
|
|
Manufacturing Services Investment Limited
Statement of Changes in Equity for the Year Ended 31 March 2023
Share capital |
Share premium |
Retained earnings |
Total |
|
At 1 April 2021 |
|
|
( |
|
Loss for the year |
- |
- |
( |
( |
At 31 March 2022 |
|
|
( |
|
Share capital |
Share premium |
Retained earnings |
Total |
|
At 1 April 2022 |
|
|
( |
|
Loss for the year |
- |
- |
( |
( |
At 31 March 2023 |
|
|
( |
|
Manufacturing Services Investment Limited
Consolidated Statement of Cash Flows for the Year Ended 31 March 2023
Note |
2023 |
2022 |
|
Cash flows from operating activities |
|||
(Loss)/profit for the year |
( |
|
|
Adjustments to cash flows from non-cash items |
|||
Depreciation and amortisation |
|
|
|
Profit on disposal of tangible assets |
( |
- |
|
Finance income |
( |
( |
|
Finance costs |
|
|
|
Income tax expense |
( |
|
|
( |
|
||
Working capital adjustments |
|||
Decrease/(increase) in stocks |
|
( |
|
Increase in trade and other debtors |
( |
( |
|
Increase in trade and other creditors |
|
|
|
Cash generated from operations |
|
( |
|
Income taxes (paid)/received |
( |
|
|
Net cash flow from operating activities |
|
( |
|
Cash flows from investing activities |
|||
Interest received |
|
|
|
Acquisitions of tangible assets |
( |
( |
|
Proceeds from sale of tangible assets |
|
- |
|
Acquisition of intangible assets |
( |
( |
|
Cash acquired through acquisitions |
- |
|
|
Acquisition of subsidiaries |
- |
( |
|
Net cash flows from investing activities |
( |
( |
Manufacturing Services Investment Limited
Consolidated Statement of Cash Flows for the Year Ended 31 March 2023
Cash flows from financing activities |
||
Interest paid |
( |
( |
Increase in bank borrowings |
( |
- |
Repayment of loans |
( |
( |
Net cash flows from financing activities |
( |
( |
Net decrease in cash and cash equivalents |
( |
( |
Cash and cash equivalents at 1 April |
|
|
Effect of exchange rate fluctuations on cash held |
|
( |
Cash and cash equivalents at 31 March |
2,100,403 |
2,767,168 |
Manufacturing Services Investment Limited
Notes to the Financial Statements for the Year Ended 31 March 2023
General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
The principal activity of the company is that of an investment holding company. The principal activity of the group is that of the online retailing of technical sports clothing and equipment in water sports (trading as Wetsuit Outlet, WaterSports Outlet) and equestrian (trading as The Drillshed) through owned websites and marketplaces, as well as the direct selling and wholesaling of owned brands.
Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
Basis of preparation
These financial statements have been prepared using the historical cost convention except any items disclosed in the accounting policies as being shown at fair value and are presented in sterling, which is the functional currency of the entity.
Summary of disclosure exemptions
The company is a qualifying entity for the purposes of FRS 102 and has elected to take the exemption under paragraph 1.12(b) and not present the company statement of cash flows.
Basis of consolidation
The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 March 2023.
No Income Statement is presented for the company as permitted by section 408 of the Companies Act 2006. The company made a loss after tax for the financial year of £637,673 (2022 - loss of £465,977).
Manufacturing Services Investment Limited
Notes to the Financial Statements for the Year Ended 31 March 2023
A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the Income Statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.
The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.
Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.
Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.
Going concern
At 31 March 2023, the group had substantial net assets of £6,118,655 including cash and cash equivalents of £2,100,403, despite making a loss during the year.
The directors have considered the effect of the ongoing global economic uncertainty and, although there is no certainty as to when this will end, the directors' view is that the impact is manageable.
Current management forecasts predict the group to return to profitability and to consistently generate future economic benefits over the next 5 years through developments in business strategy of the group.
On the basis of the above, and after making enquiries, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future.
Manufacturing Services Investment Limited
Notes to the Financial Statements for the Year Ended 31 March 2023
Judgements and key sources of estimation uncertainty
In applying the Group's accounting policies, the directors are required to make judgements, estimates and assumptions in determining the carrying amounts of assets and liabilities. The directors' judgements, estimates and assumptions are based on the best and most reliable evidence available at the time. The decisions are made, and are based on historical experience and other factors that are considered to be applicable. Due to the inherent subjectivity involved in making such judgements, estimates and assumptions, the actual results and outcomes may differ.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised, if the revision affects only that year, or in the year of the revision and future years, if the revision affects both current and future years.
Critical judgements in applying the Company's accounting policies
The critical judgements that the directors have made in the process of applying the Group's accounting policies that have the most significant effect on the amounts recognised in the statutory financial statements are discussed below.
The directors do not consider themselves to have made any critical judgements in applying the Company's accounting policies.
Key sources of estimation uncertainty
(i) Stock valuation
The Directors have considered whether the net realisable value of inventory was lower than the carrying value. Slow-moving, excess and obsolete inventory are reviewed and provided for as necessary. The Directors, having reviewed the run off of inventory subsequent to the year end and the prices achieved have concluded that its net realisable value was not materially lower than the net carrying value at year end.
(ii) Determining useful economic lives of intangible fixed assets
The company amortises intangible fixed assets over their estimated useful lives. The estimation of the useful lives of assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied by management. The actual lives of these assets can vary depending on a variety of factors, including technological innovation and product life cycles.
Revenue recognition
Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company's activities. Turnover is shown net of Value Added Tax, other sales taxes, returns, volume rebates and discounts.
Turnover 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 delivery of the goods), when the amount of revenue can be reliably measured, and it is probable that future economic benefits will flow to the entity.
Manufacturing Services Investment Limited
Notes to the Financial Statements for the Year Ended 31 March 2023
Foreign currency transactions and balances
Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.
Tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.
Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the consolidated financial statements.
Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.
Tangible assets
Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
Asset class |
Depreciation method and rate |
Freehold buildings |
2-5% straight line |
Furniture, fittings and equipment |
3 years straight line |
Motor vehicles |
4 years straight line |
Business combinations
Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.
Manufacturing Services Investment Limited
Notes to the Financial Statements for the Year Ended 31 March 2023
Goodwill
Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date. Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.
Amortisation
Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:
Asset class |
Amortisation method and rate |
Website development |
5 years straight line |
Goodwill |
10 years straight line |
Investments
Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.
Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the weighted average cost principle.
The cost of finished goods and work in progress comprises direct materials and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are 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.
Borrowings
Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the income statement over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.
Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
Manufacturing Services Investment Limited
Notes to the Financial Statements for the Year Ended 31 March 2023
Leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.
Assets held under hire purchase contracts are capitalised at the lesser of fair value or present value of minimum lease payments in the statement of financial position. The present value of the minimum lease payments is calculated using the interest rate implicit in the lease. A corresponding liability is recognised at the same value in the statement of financial position. The asset is then depreciated over its useful life.
The minimum lease payments are apportioned between the finance charge recognised in the income statement and the reduction of the outstanding liability using the effective interest method. The finance charge in each period is allocated so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
Turnover |
The analysis of the group's Turnover for the year from continuing operations is as follows:
2023 |
2022 |
|
Sale of goods |
|
|
The analysis of the group's Turnover for the year by destination is as follows:
2023 |
2022 |
|
United Kingdom |
|
|
Europe |
|
|
Rest of World |
|
|
|
|
Manufacturing Services Investment Limited
Notes to the Financial Statements for the Year Ended 31 March 2023
Other gains and losses |
The analysis of the group's other gains and losses for the year is as follows:
2023 |
2022 |
|
Gain on disposal of Tangible assets |
|
- |
Operating (loss)/profit |
Arrived at after charging/(crediting)
2023 |
2022 |
|
Depreciation expense |
|
|
Amortisation expense |
|
|
Foreign exchange (gains)/losses |
( |
|
Operating lease expense - property |
|
|
Profit on disposal of property, plant and equipment |
( |
- |
Other interest receivable and similar income |
2023 |
2022 |
|
Interest income on bank deposits |
|
|
Interest payable and similar expenses |
2023 |
2022 |
|
Interest on bank overdrafts and borrowings |
|
|
Loan stock interest |
|
|
|
|
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
2023 |
2022 |
|
Wages and salaries |
|
|
Social security costs |
|
|
Pension costs, defined contribution scheme |
|
|
Other employee expense |
|
|
|
|
Manufacturing Services Investment Limited
Notes to the Financial Statements for the Year Ended 31 March 2023
The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:
2023 |
2022 |
|
Administration and support |
|
|
Other departments |
|
|
|
|
Directors' remuneration |
The directors' remuneration for the year was as follows:
2023 |
2022 |
|
Remuneration |
|
|
Contributions paid to money purchase schemes |
|
|
685,023 |
642,703 |
In respect of the highest paid director:
2023 |
2022 |
|
Remuneration |
|
|
Company contributions to money purchase pension schemes |
- |
|
During the year retirement benefits were accruing to 2 directors (2022: 2) in respect of defined contribution pension schemes.
Auditor's remuneration |
2023 |
2022 |
|
Audit of these financial statements |
13,500 |
9,350 |
Audit of the financial statements of subsidiaries of the company pursuant to legislation |
19,000 |
21,000 |
|
|
|
Other fees to auditors |
||
Taxation compliance services |
|
|
Other services |
|
|
|
|
Manufacturing Services Investment Limited
Notes to the Financial Statements for the Year Ended 31 March 2023
Taxation |
Tax charged/(credited) in the consolidated income statement
2023 |
2022 |
|
Current taxation |
||
UK corporation tax |
( |
|
UK corporation tax adjustment to prior periods |
( |
( |
(78,267) |
75,995 |
|
Deferred taxation |
||
Arising from origination and reversal of timing differences |
( |
|
Tax (receipt)/expense in the income statement |
( |
|
The tax on profit before tax for the year is higher than the standard rate of corporation tax in the UK (2022 - lower than the standard rate of corporation tax in the UK) of
The differences are reconciled below:
2023 |
2022 |
|
(Loss)/profit before tax |
( |
|
Corporation tax at standard rate |
( |
|
Effect of revenues exempt from taxation |
( |
- |
Effect of expense not deductible in determining taxable profit (tax loss) |
|
|
Effect of tax losses |
|
- |
Deferred tax debit/(credit) |
( |
|
Deferred tax credit from unrecognised temporary difference from a prior period |
- |
( |
Decrease in UK and foreign current tax from adjustment for prior periods |
( |
( |
Tax (decrease)/increase from effect of capital allowances and depreciation |
( |
|
Tax effect of movement in provisions |
|
- |
Tax decrease from effect of adjustment in research and development tax credit |
( |
- |
Other tax effects for reconciliation between accounting profit and tax expense (income) |
- |
|
Total tax (credit)/charge |
( |
|
Manufacturing Services Investment Limited
Notes to the Financial Statements for the Year Ended 31 March 2023
Deferred tax
Group
Deferred tax assets and liabilities
2023 |
Asset |
Liability |
Tax losses carried forward |
|
- |
Accelerated capital allowances |
( |
- |
Provisions |
|
- |
|
- |
2022 |
Asset |
Liability |
Tax losses carried forward |
|
- |
Accelerated capital allowances |
( |
- |
Short term timings differences |
|
- |
|
- |
Company
Deferred tax assets and liabilities
2022 |
Asset |
Liability |
Tax losses carried forward |
|
- |
|
- |
The rate of UK corporation tax is currently 19%. In its 2021 Spring budget, the UK government announced that from 1 April 2023 the corporation tax rate will increase to 25%. This was substantively enacted for UK GAAP purposes on 24 May 2021.
Temporary differences at the statement of financial position date have been measured using the enacted deferred tax rate of 25% (2022: 25%) and reflected in these financial statements.
Manufacturing Services Investment Limited
Notes to the Financial Statements for the Year Ended 31 March 2023
Intangible assets |
Group
Goodwill |
Website Development |
Total |
|
Cost or valuation |
|||
At 1 April 2022 |
|
|
|
Additions acquired separately |
- |
|
|
At 31 March 2023 |
|
|
|
Amortisation |
|||
At 1 April 2022 |
|
|
|
Amortisation charge |
|
|
|
At 31 March 2023 |
|
|
|
Carrying amount |
|||
At 31 March 2023 |
|
|
|
At 31 March 2022 |
|
|
|
Manufacturing Services Investment Limited
Notes to the Financial Statements for the Year Ended 31 March 2023
Tangible assets |
Group
Freehold land and buildings |
Furniture, fittings and equipment |
Motor vehicles |
Total |
|
Cost or valuation |
||||
At 1 April 2022 |
|
|
|
|
Additions |
- |
|
- |
|
Disposals |
- |
- |
( |
( |
At 31 March 2023 |
|
|
|
|
Depreciation |
||||
At 1 April 2022 |
|
|
|
|
Charge for the year |
|
|
|
|
Eliminated on disposal |
- |
- |
( |
( |
At 31 March 2023 |
|
|
|
|
Carrying amount |
||||
At 31 March 2023 |
|
|
|
|
At 31 March 2022 |
|
|
|
|
Investments |
Company
2023 |
2022 |
|
Investments in subsidiaries |
|
|
Subsidiaries |
£ |
Cost or valuation |
|
At 1 April 2022 and 31 March 2023 |
|
Carrying amount |
|
At 31 March 2023 |
|
At 31 March 2022 |
|
Manufacturing Services Investment Limited
Notes to the Financial Statements for the Year Ended 31 March 2023
Details of undertakings
Details of the investments in which the group holds 20% or more of the nominal value of any class of share capital are as follows:
Undertaking |
Registered office |
Proportion of voting rights and shares held |
||
2023 |
2022 |
|||
|
Cumberland House, 24-28 Baxter Avenue, Southend-on-Sea, Essex, SS2 6HZ |
|
|
|
|
Harderwijkerstraat 17, 7418 BA, Deventer |
|
|
|
Netherlands |
||||
|
511 Avenue of the Americas #4036 New York, NY 10011 |
|
|
|
United States |
||||
|
Cumberland House, 24-28 Baxter Avenue, Southend-on-Sea, Essex, SS2 6HZ |
|
|
|
|
Suite 302, Level 3, 83 Mount Street, North Sydney, NSW 2059 |
|
|
|
Australia |
||||
|
The Gunnery Drill Shed, Chapel Road, Shoeburyness, Southend-on-Sea, SS3 9SL |
|
|
|
|
Cumberland House, 24-28 Baxter Avenue, Southend-on-Sea, Essex, SS2 6HZ |
|
|
|
*These entities are held indirectly.
Manufacturing Services Investment Limited
Notes to the Financial Statements for the Year Ended 31 March 2023
B2C (Holdings) Limited
The principal activity of B2C (Holdings) Limited is that of an investment holding company.
B2C Distribution International B.V.
The principal activity of B2C Distribution International B.V. is that of online sale of water sports technical clothing and accessories.
B2C Distribution Inc.
The principal activity of B2C Distribution Inc. is that of online sale of water sports technical clothing and accessories.
B2C Distribution Limited
The principal activity of B2C Distribution Limited is that of online sale of water sports technical clothing and accessories.
B2C Distribution PTY Ltd
The principal activity of B2C Distribution PTY Ltd is that of online sale of water sports technical clothing and accessories.
Optimum Time Limited
The principal activity of Optimum Time Limited is that of wholesalers of watches and jewellery.
Manufacturing Services EBT Limited
The principal activity of Manufacturing Services EBT Limited was previously that of an investment holding company. The company is now dormant.
All subsidiaries are included in the consolidation.
Stocks |
Group |
Company |
|||
2023 |
2022 |
2023 |
2022 |
|
Finished goods and goods for resale |
|
|
- |
- |
Stocks are stated after a provision for impairment of £345,950 (2022: £227,296).
Manufacturing Services Investment Limited
Notes to the Financial Statements for the Year Ended 31 March 2023
Debtors |
Group |
Company |
||||
Note |
2023 |
2022 |
2023 |
2022 |
|
Trade debtors |
|
- |
- |
- |
|
Amounts owed by group undertakings |
- |
- |
|
|
|
Other debtors |
|
|
- |
- |
|
Prepayments |
|
|
|
|
|
Deferred tax assets |
|
|
- |
|
|
Corporation tax asset |
|
- |
- |
- |
|
|
|
|
|
Amounts owed by group undertakings are unsecured, interest free and repayable on demand.
Cash and cash equivalents |
Group |
Company |
|||
2023 |
2022 |
2023 |
2022 |
|
Cash at bank |
|
|
|
|
Creditors |
Group |
Company |
||||
Note |
2023 |
2022 |
2023 |
2022 |
|
Due within one year |
|||||
Loans and borrowings |
|
|
- |
- |
|
Trade creditors |
|
|
- |
- |
|
Social security and other taxes |
|
|
|
|
|
Other payables |
|
|
|
|
|
Accruals |
|
|
|
|
|
Corporation tax liability |
- |
100,106 |
- |
- |
|
|
|
|
|
||
Due after one year |
|||||
Loans and borrowings |
|
|
|
|
Manufacturing Services Investment Limited
Notes to the Financial Statements for the Year Ended 31 March 2023
Pension and other schemes |
Defined contribution pension scheme
The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £
Share capital |
Allotted, called up and fully paid shares
2023 |
2022 |
|||
No. |
£ |
No. |
£ |
|
|
|
500 |
|
500 |
|
|
911 |
|
911 |
|
|
264 |
|
264 |
|
|
|
|
Each class of share ranks pari passu for voting purposes. There is no restriction on the repayment of capital or the distribution of dividends.
Manufacturing Services Investment Limited
Notes to the Financial Statements for the Year Ended 31 March 2023
Loans and borrowings |
Group |
Company |
|||
2023 |
2022 |
2023 |
2022 |
|
Non-current loans and borrowings |
||||
Bank loans |
|
|
- |
- |
Loan notes |
|
|
|
|
Accrued interest on loan notes |
|
- |
|
- |
|
|
|
|
The loan notes are unsecured and due for repayment in 2025. Interest is accrued at 10% per annum.
Group |
Company |
|||
2023 |
2022 |
2023 |
2022 |
|
Current loans and borrowings |
||||
Bank loans |
|
|
- |
- |
Included in the loans and borrowings are the following amounts due after more than five years:
2023 |
2022 |
|
Amounts repayable by instalments due in greater than 5 years |
|
|
- |
- |
The bank loan is secured by a fixed charge over the freehold property shown in note 13.
Interest is payable at 3.17% above base rate.
Manufacturing Services Investment Limited
Notes to the Financial Statements for the Year Ended 31 March 2023
Commitments, Guarantees and obligations |
Group
Operating leases
The total of future minimum lease payments is as follows:
2023 |
2022 |
|
Not later than one year |
|
|
Later than one year and not later than five years |
|
|
|
|
The amount of non-cancellable operating lease payments recognised as an expense during the year was £
Analysis of changes in net debt |
Group
At 1 April 2022 |
Financing cash flows |
At 31 March 2023 |
|
Cash and cash equivalents |
|||
Cash |
2,767,168 |
(666,765) |
2,100,403 |
Borrowings |
|||
Long term borrowings |
(5,218,946) |
20,276 |
(5,198,670) |
|
|||
( |
( |
( |