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Registered number: 10471604









DE MONCHY UK LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 
DE MONCHY UK LIMITED
 
 
COMPANY INFORMATION


Director
G C Snel 




Registered number
10471604



Registered office
Hearts of Oak House
Pembroke Road

Sevenoaks

Kent

TN13 1XR




Trading Address
Barham Court
Teston

Maidstone

Kent

ME18 5BZ







 
DE MONCHY UK LIMITED
 

CONTENTS



Page
Strategic report
 
1 - 6
Director's report
 
7 - 8
Independent auditors' report
 
9 - 12
Statement of comprehensive income
 
13
Balance sheet
 
14
Statement of changes in equity
 
15
Statement of cash flows
 
16
Analysis of net debt
 
17
Notes to the financial statements
 
18 - 29


 
DE MONCHY UK LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
The objectives of De Monchy UK Limited (hereafter: "DMU") entail wholesale and trade of raw materials for industrial applications. Sales of products mainly take place in UK and Ireland.

Business review
 
The year 2023
Althrough market prices decreased throughout the year 2023, demand for our products was good. After the high working capital requirements we have seen in the past few years, the working capital further reduced in the course of 2023. Our credit lines have been more than sufficientr throughout the year. Liquidity risk is monitored closely. Also, focus on credit management has incresaed by ensuring timely actions in case of over due balances and we anticipated by balancing the level of stock carefully on a product-by-product basis throughout the year.

Research and developments & Information regarding the aspects of corporate social responsibility
Adding new product lines and technologies to our current product portfolio is part of our philosophy. There is a constant focus on obtaining market information and to gather data on what raw materials are needed to develop new generation products. During recent years the sustainability and renewable trend has been picked up more and more widely across the industry. As such, part of our sourcing is related to our goal to increase the percentage of sales coming from biobased, renewable or recyclable sourcing.

Strategy & Forecast 2024
The coming year will be challenging as a result of uncertainty in the market due to persisting geopolitical tensions. This requires a flexible and adaptive strategy with a strong focus on working closely together with our stakeholders. Our long-term cooperation with our suppliers, our strategy where different markets are handled in combination with a well-balanced geographical spread serving North-Western Europe shows added value while market developments are challenging. 
Via long-term partnerships with both our suppliers and our customers er are involved in research and development with a focus on new applications with a positive effect on sustainability.
Investments are expected to be done mainly in IT. The expected growth of activities will be financed via the credit facility at group level.

Principal risks and uncertainties
 
Substantial attention is applied to the Company's internal control and management of operational risks. Credit insurance of credit risks and adequate insurance of risks relating to liability, transport and storage is in place to mitigate risks in these areas. Furthermore, high demands are made to the commercial relationships in terms of reliability, continuity and reputation. Purchase and sale transactions in EUR and USD are hedged on individual transactions.
In addition, the dependency of specific suppliers and specific customers is limited due to the large spread in the supplier base, customer base as well the portfolio overall.
Please refer to the risk appetite table for all applicable risk categories at De Monchy UK Limited in the appendix which forms an integrated part with this strategic report.

Fraud and irregularities

Management of DMU is aware of the inherent risk of fraud that it faces, both internally and externally, in carrying out its business activities. Fraud and compliance are on top of the agenda of Management of DMU. These risks are amongst other mitigated by a Code of Business Conduct. Our financial processes are characterized by the presence of segregation of duties. Despite all internal control measures and compliance and risk awareness, a limited risk remains.
Transparent decision-making, the governance structure, an open culture in which we dare to call each other to account, periodic internal and external audits on compliance with control measures contribute to framework to prevent and detect override of controls.
Page 1

 
DE MONCHY UK LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Information security has priority from the perspectives of going concern, fruad and privacy and related reputation. During daily business operations, checks are carried out to determine whether work is being done in accordance with the agreements made in this regard, including the various information security protocols.
Management is of the opinion that, with all procedures and control measures taken in account, the risk assessment provides a complete overview of the risks the company faces and that adequate procedures are in place to mitigate these risks.

Financial key performance indicators
 
Turnover & Result
Net turnover of De Monchy UK Limited decreased by 28.5% from £29,8 million in 2022 to £21.3 million in 2023. This decrease is mainly caused due to the decrease inmarket prices in 2023 which had a decreasing effect on net turnover. The relative margins increased compared to 2022 from 7.8% to 9.5% in 2023 mainly due to positive effects in the mix of the sold products and also stabilizing of market prices helped the percentual margin in the last months of 2023. Personnel costs increased from £0.8 million to 2022 to £0.9 million in 2023 due to an increase in personnel remuneration and extra temporary staffing. Other operating costs (£0.5 million) increased compared to last year £0.3 miilion due to higher professional services and bad debts.
As a result of the aforementioned developments, the net profit of this year was £0.5 million lower than previous year.
Solvency & Liquidity
The balance sheet at the end of the year 2023 showed a solvency ratio of 23% (2022: 15%). The liquidity (current assets divided by current liabilities) increased from 1,17 as per 31 December 2022 to 1,29 as per 
31 December 2023 due to a decrease of the net working capital.
Cash flow & Financing
Cash flow is positively influenced mainly by the positive operating result (£0.7 million), decreased inventories (£1,4 million), decreased trade receivables (£1,7 million). This positive impact is partly offset by higher current assets (£0.8 million) and lower current liabilities excluding bank loans and overdrafts (1.5 million).
Financing is arranged via a credit facility at group level. In 2023, there was no breach of agreements or covenants. Based on the forecasts, we expect that the group will continue to meet the convenant requirements in the foreseeable future and that the group wil generate sufficient cash flows to continue to meet its obligatiions.

Page 2

 
DE MONCHY UK LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Appendix
 
Risk appetite table De Monchy UK Limited
Risk Category
Category description
Risk appetite/probability-impact
Main risks
Strategic risks
Risk relating to prospective earnings and
Low
Large fluctuations in market prices;

capital arising from stategic changes in the 

Large fluctuations in currency (US$);

business environment and (adverse) strategic business decisions.

Deterioration of economic conditions.
Operational risks
Risk relating to current operational and financial
Low
Machinery or system failure;

performance and capital

Defective products;

arising from inadequate 

Supply chain failure;

or failed internal processes, people and

Loss of talent and valuable knowledge.

systems or external events.
Medium
Vulerability to cyber attacks;



Natural disasters.
Financial risks
Risk relating to financial loss due to the financial
Medium-High
Large fluctuations in currency (US$);

instruments of the

Credit Risk;

business (including

Liquidity Risk;

capital structure, insurance and financial structure) which may impair its ability to provide an adequate return.

Inadequate insurance coverage.
Compliance risks
Risk resulting from non-compliance with relevant laws and regulations (including tax compliance, health and safety), internal policies and procedures.
Low-Medium
Changes in rule of law Non-compliance with Company policies and laws and regulations.
Financial reporting risks
Risks and uncertainties relating to the reliability of internal and external 
Low-Medium
Degree of subjectivity regarding valuation issues;

financial reporting.

Risks regarding the set-up of the financial reporting system.

The sequence in which these risks and mitigating actions are presented in no way reflects any order of importance, chance or materiality.
Page 3

 
DE MONCHY UK LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Strategic Risks
Risks
Risk description
Mitigating action
Large fluctuations in market prices
Commodity prices volatility
Monitoring and actively managing goods/product positions and stock volumes;


Monitoring trends and market developments;


Monitoring that customers and/or suppliers respect their contractual obligations.
Large fluctuations in currency (US$)
EUR - US$ volatility
Monitoring currency hedging process (daily) and overall forward currency positions already hedged (monthly);


Monitoring macro-economic developments and bank reports on currency development expectations;


Monitoring and actively managing goods/product positions and stock volumes, as currency may have an effect on product demand in Euro-buying-markets.
Deterioration of economic conditions
Consumers and customers changing preference of choice of product and/or change financial 
Continue to deliver the high quality standard at market conform prices;

buying power.
Monitoring the balance between incoming goods, stock volumes and new sales contract (including forward sales contract with regular call-off structure);


Exploring new markets/products.

Operational Risks
Risk
Risk description
Mitigating action
Machinery or systems failure
Risk of failure of machinery or IT failure.
Service contract for IT services, structural maintenance program for all machinery, Internal service department on stand-by (PIT team).
Defective products
Risk of product not matching internal and external quality demands
Continuous focus on improving quality (involving suppliers actively), combined with a clear shared understanding and documentation of the current quality demands;


Continuous internal quality checks by staff before, during and after production.
Supply chain failure
Inadequate supply of goods by our suppliers (quality, quantity, 
Improving agreements with our suppliers;

documentation)
Monitoring purchase contracts to ensure timely and accurate shipment;


Ensuring as board as possible network of alternative suppliers.
Page 4

 
DE MONCHY UK LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Volatility of commodity prices
Unexpected fluctuations in commodity prices
Continuously monitoring relevant markets and developments;


Monitoring purchase contracts to ensure timely and accurate shipment;


Ensuring as broad as possible network of suppliers for commodity goods.
Loss of talent and valuable knowledge
Risk of losing talented people and knowledge
Documenting operational procedures as much as possible;


Sharing knowledge between employees and documenting it.
Vulnerability to cyber attacks
Unavailability of IT systems resulting in operational standstill
Continuously ensuring proper level of cyber security measures.

Financial Risks
Risk
Risk description
Mitigating action
Large fluctuations in currency (US$)
Risk of fluctuations in foreign currencies (e.g. EUR/USD)
Monitoring exchange rates intensively and continuously translating the possible effects to the commodity (demand/supply);


Accurate and complete hedging of contracted sales orders.
Liquidity risk
Failing to adjust on fluctuations of account receivable, payable 
Constant monitoring of financial flows;

and stock.
Constant monitoring of stocks and keeping stock levels as low as possible.
Credit risk
Non-paying customers
Use of credit insurance coverage as a basis and weekly active monitoring of all outstanding invoices on possible late payments.
Inadequate insurance coverage
Size and scope of insurance policy is inadequate to meet nature or size of damage claims
Periodical review of possible exposures and associated insurance coverage.

Compliance Risks
Risk
Risk description
Mitigating action
Non-compliance with Company policies and laws and regulations
Changes in regulatory requirements, practices and procedures such as health and safety, trade, transport and customs.
Monitoring and adapting to relevant (changes in) rules and regulations and maintaining an internal compliance system.
Page 5

 
DE MONCHY UK LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Financial Reporting Risks
Risk
Risk description
Mitigating action
Degree of subjectivity regarding valuation issues 
Risks of incorrect presentation of balance values due to the subjective opinion such as provision debtors and stock.
Monthly reporting including analysis of the figures and the deviations in relation to budget and the same periods of the actual's of last year.
Risks regarding the set-up of the financial reporting system
Not being able to adequately monitor the financial development of the Company.
Monitoring the sub administrations with the general ledger such as stock position, debtors and creditors.


This report was approved by the board on 12 July 2024 and signed on its behalf.



G C Snel
Director

Page 6

 
DE MONCHY UK LIMITED
 
 
 
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

The director presents his report and the financial statements for the year ended 31 December 2023.

Director's responsibilities statement

The director is responsible for preparing the Strategic report, the Director's report and the financial statements in accordance with applicable law and regulations.
 
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the director must not approve the financial statements unless he is 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 director is required to:


select suitable accounting policies for the Company's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The director is responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable him to ensure that the financial statements comply with the Companies Act 2006He is 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.

Results and dividends

The profit for the year, after taxation, amounted to £344,464 (2022 - £812,633).

No dividends are planned to be paid.

Director

The director who served during the year was:

G C Snel 

Disclosure of information to auditors

The director at the time when this Director's report is approved has confirmed that:
 
so far as he is aware, there is no relevant audit information of which the Company's auditors are unaware, and

he has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Page 7

 
DE MONCHY UK LIMITED
 
 
 
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Auditors

The auditorsCreasey Son & Wickendenwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 12 July 2024 and signed on its behalf.
 





G C Snel
Director

Page 8

 
DE MONCHY UK LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DE MONCHY UK LIMITED
 

Opinion


We have audited the financial statements of De Monchy UK Limited (the 'Company') for the year ended 31 December 2023, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of cash flows, the Statement of changes in equity and the related notes, including a summary of significant accounting policiesThe 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 profit 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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


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 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 director with respect to going concern are described in the relevant sections of this report.


Page 9

 
DE MONCHY UK LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DE MONCHY UK LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The director is responsible for the other information contained within the Annual ReportOur 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.


Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


the information given in the Strategic report and the Director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic report and the Director's report have been prepared in accordance with applicable legal requirements.


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 Director's 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 director's 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 Director's responsibilities statement set out on page 7, the director is 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 director determines 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 director is 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 director either intends to liquidate the Company or to cease operations, or have no realistic alternative but to do so.


Page 10

 
DE MONCHY UK LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DE MONCHY UK LIMITED (CONTINUED)


Auditors' 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 Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.


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:

Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain sufficient appropriate audit evidence regarding compliance with laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements, to perform audit procedures to help identify instances of non-compliance with other laws and regulations that may have a material effect on the financial statements, and to respond appropriately to identified or suspected noncompliance with laws and regulations identified during the audit.

In relation to fruad, the objectives of our audit are to identify and assess the risk of material misstatement of the financial statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fruad through designing and implementing appropriate responses and to respond appropriately to fruad or suspected fruad identified during the audit.

However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulation and for the prevention and detection of fruad. In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the company audit team:

obtain an understanding of the nature of the industry and sector, including the legal and regulatory framework that the compnay operates in and how the company is complying with the legal and regulatory framework;
inquired of management, and those charged with governance, about their identification and assessment of the risks of irregularities, including any known, suspected or alleged instances of fruad; and
discussed matters about non-compliance with laws and regulations and how fraud might occur including assessing how and where the financial statements may be susceptible to fraud.

As a result of these procedures, we consider the most significant laws and regulations that have a direct impact on the financial statements are FRS 102, the Companies Act 2006 and tax compliance regulations. We performed audit procedures to detect non-compliances which may have a material impact on the financial statements which included reviewing financial statement disclosures and completion of re;l checklists, inspecting correspondence with national and local tax authoritieswhere relevant, evaluating any tax advice received.

The most significant laws and regulations that have an indirect impact on the financial statements are those in relation to health and safety. We performed audit procedures to inquire of management and those charged with governance whether the company is compliant with these laws and regulations, reviewed minutes of relevant meetings and completed searches for any reportable incidents in the public domain.
Page 11

 
DE MONCHY UK LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DE MONCHY UK LIMITED (CONTINUED)


The company audit engagement team identified the risk of management override of controls as the area where financial statements were most susceptible to material misstatement due to fruad. Audit procedures performed included but were not limited to testing journal entries and other adjustments and evaluating the business rationale in respect of any significant or unuual transactions and any transactions entered into outside of the normal course of business.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.


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 2006Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.







M K Lunt FCA (Senior statutory auditor)
  
for and on behalf of
Creasey Son & Wickenden
 
Chartered Accountants
Statutory auditor
  
Hearts of Oak House
4 Pembroke Road
Sevenoaks
Kent
TN13 1XR

12 July 2024
Page 12

 
DE MONCHY UK LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

  

Turnover
 3 
21,420,738
29,818,068

Cost of sales
  
(19,394,342)
(27,605,726)

Gross profit
  
2,026,396
2,212,342

Administrative expenses
  
(1,278,086)
(954,437)

Operating profit
  
748,310
1,257,905

Interest receivable and similar income
 6 
298
39

Interest payable and similar expenses
 7 
(297,459)
(256,714)

Profit before tax
  
451,149
1,001,230

Tax on profit
 8 
(106,685)
(188,597)

Profit for the financial year
  
344,464
812,633

Other comprehensive income for the year
  

Unrealised gains on foreign currency forward contracts
  
10,623
(20,363)

Total comprehensive income for the year
  
355,087
792,270

There were no recognised gains and losses for 2023 or 2022 other than those included in the statement of comprehensive income.

The notes on pages 18 to 29 form part of these financial statements.

Page 13

 
DE MONCHY UK LIMITED
REGISTERED NUMBER: 10471604

BALANCE SHEET
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 9 
-
2,577

Tangible assets
 10 
83,139
73,206

  
83,139
75,783

Current assets
  

Stocks
  
4,310,830
5,700,586

Debtors: amounts falling due within one year
 11 
3,746,551
4,436,053

Cash at bank and in hand
 12 
423,859
1,264,148

  
8,481,240
11,400,787

Creditors: amounts falling due within one year
 13 
(6,620,303)
(9,887,581)

Net current assets
  
 
 
1,860,937
 
 
1,513,206

  

Net assets
  
1,944,076
1,588,989


Capital and reserves
  

Called up share capital 
  
1,000
1,000

Revaluation reserve
 14 
7,562
(3,061)

Profit and loss account
 14 
1,935,514
1,591,050

  
1,944,076
1,588,989


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 12 July 2024.




G C Snel
Director

The notes on pages 18 to 29 form part of these financial statements.

Page 14

 
DE MONCHY UK LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023


Called up share capital
Foreign Exchange translation reserve
Profit and loss account
Total equity

£
£
£
£


At 1 January 2022
1,000
17,302
778,417
796,719



Profit for the year
-
-
812,633
812,633

Currency forward contracts entered into but not matured
-
(20,363)
-
(20,363)



At 1 January 2023
1,000
(3,061)
1,591,050
1,588,989



Profit for the year
-
-
344,464
344,464

Currency forward contracts entered into but not matured
-
10,623
-
10,623


At 31 December 2023
1,000
7,562
1,935,514
1,944,076


The notes on pages 18 to 29 form part of these financial statements.

Page 15

 
DE MONCHY UK LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
£
£

Cash flows from operating activities

Profit for the financial year
344,464
812,633

Adjustments for:

Amortisation of intangible assets
2,577
1,476

Depreciation of tangible assets
22,100
18,483

Loss on disposal of tangible assets
(12,675)
(21,372)

Interest paid
297,458
256,714

Interest received
(298)
(39)

Taxation charge
106,685
188,597

Decrease in stocks
1,389,756
244,954

Decrease in debtors
689,502
449,587

(Decrease)/increase in creditors
(1,315,353)
1,995,437

Corporation tax (paid)
(236,566)
(188,857)

Foreign exchange
10,823
(12,805)

Net cash generated from operating activities

1,298,473
3,744,808


Cash flows from investing activities

Purchase of tangible fixed assets
(34,785)
(74,859)

Sale of tangible fixed assets
15,427
25,679

Interest received
298
39

Net cash from investing activities

(19,060)
(49,141)

Cash flows from financing activities

Interest paid
(297,458)
(256,714)

Net cash used in financing activities
(297,458)
(256,714)

Net increase in cash and cash equivalents
981,955
3,438,953

Cash and cash equivalents at beginning of year
(3,693,473)
(7,132,426)

Cash and cash equivalents at the end of year
(2,711,518)
(3,693,473)


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
423,859
1,264,148

Bank overdrafts
(3,135,377)
(4,957,621)

(2,711,518)
(3,693,473)


The notes on pages 18 to 29 form part of these financial statements.

Page 16

 
DE MONCHY UK LIMITED
 

ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023




At 1 January 2023
Cash flows
At 31 December 2023
£

£

£

Cash at bank and in hand

1,264,148

(840,289)

423,859

Bank overdrafts

(4,957,621)

1,822,244

(3,135,377)


(3,693,473)
981,955
(2,711,518)

The notes on pages 18 to 29 form part of these financial statements.

Page 17

 
DE MONCHY UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

De Monchy UK Limited is incorporated in England and Wales and is a private company limited by shares.  Its registered office is at Hearts of Oak House, Pembroke Road, Sevenoaks, Kent TN13 1XR and its trading address is Barham Court, Teston, Maidstone, Kent, ME18 5BZ.  The company's principal activity is the distribution of industrial chemicals.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies.

These financial statements are prepared and presented in pound Sterling. Values are rounded to the nearest £1. They present information for this company alone.

The following principal accounting policies have been applied:

 
2.2

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

Page 18

 
DE MONCHY UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.3

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Company has transferred the significant risks and rewards of ownership to the buyer;
the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

 
2.4

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.5

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.6

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.

 
2.7

Taxation

Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Page 19

 
DE MONCHY UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.8

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 The estimated useful lives range as follows:

Goodwill
-
3
years

 
2.9

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Motor vehicles
-
25%
Computer equipment
-
20%

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.10

Revaluation of tangible fixed assets

Individual freehold and leasehold properties are carried at current year value at fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the balance sheet date.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.

Revaluation gains and losses are recognised in other comprehensive income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit or loss.

Page 20

 
DE MONCHY UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.11

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.12

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.13

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

 
2.14

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.15

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.

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.

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless
Page 21

 
DE MONCHY UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.15
Financial instruments (continued)

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.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Page 22

 
DE MONCHY UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.15
Financial instruments (continued)

Other financial instruments

Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.

Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.

Derecognition of financial instruments

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.


3.


Turnover

An analysis of turnover by class of business is as follows:


2023
2022
£
£

Chemical sales
21,420,738
29,818,068


Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
19,420,427
26,180,278

Rest of Europe
1,990,647
3,548,182

Rest of the world
9,664
89,608

21,420,738
29,818,068


Page 23

 
DE MONCHY UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors:


2023
2022
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
15,000
14,000


5.


Employees

2023
2022
£
£

Wages and salaries
390,549
407,542

Social security costs
46,005
47,105

Cost of defined contribution scheme
18,266
7,346

454,820
461,993


The average monthly number of employees, including directors, during the year was 7 (2022 - 7).


6.


Interest receivable

2023
2022
£
£


Other interest receivable
298
39


7.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
260,505
165,341

Other loan interest payable
36,954
91,373

297,459
256,714

Page 24

 
DE MONCHY UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

8.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
106,685
188,597


Total current tax
106,685
188,597

Deferred tax

Total deferred tax
-
-


Taxation on profit on ordinary activities
106,685
188,597

Factors affecting tax charge for the year

The tax assessed for the year is lower than (2022 - lower than) the standard rate of corporation tax in the UK of 25% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
451,150
1,001,230


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2022 - 19%)
112,788
190,234

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
-
90

Capital allowances for year in excess of depreciation
609
(1,727)

Change in tax rates
(6,712)
-

Total tax charge for the year
106,685
188,597


Factors that may affect future tax charges

There were no factors that may affect future tax charges.

Page 25

 
DE MONCHY UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

9.


Intangible assets




Computer software
Goodwill
Total

£
£
£



Cost


At 1 January 2023
4,422
40,000
44,422



At 31 December 2023

4,422
40,000
44,422



Amortisation


At 1 January 2023
1,845
40,000
41,845


Charge for the year on owned assets
2,577
-
2,577



At 31 December 2023

4,422
40,000
44,422



Net book value



At 31 December 2023
-
-
-



At 31 December 2022
2,577
-
2,577



Page 26

 
DE MONCHY UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

10.


Tangible fixed assets





Motor vehicles
Office equipment
Total

£
£
£



Cost or valuation


At 1 January 2023
102,382
4,256
106,638


Additions
34,785
-
34,785


Disposals
(27,524)
-
(27,524)



At 31 December 2023

109,643
4,256
113,899



Depreciation


At 1 January 2023
29,860
3,572
33,432


Charge for the year on owned assets
21,706
394
22,100


Disposals
(24,772)
-
(24,772)



At 31 December 2023

26,794
3,966
30,760



Net book value



At 31 December 2023
82,849
290
83,139



At 31 December 2022
72,522
684
73,206


11.


Debtors

2023
2022
£
£


Trade debtors
2,794,637
4,417,005

Other debtors
15,120
7,560

Prepayments and accrued income
936,794
11,488

3,746,551
4,436,053


Page 27

 
DE MONCHY UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

12.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
423,859
1,264,148

Less: bank overdrafts
(3,135,377)
(4,957,621)

(2,711,518)
(3,693,473)



13.


Creditors: Amounts falling due within one year

2023
2022
£
£

Bank overdrafts
3,135,377
4,957,621

Trade creditors
1,242,034
1,770,904

Corporation tax
58,646
188,330

Other taxation and social security
140,926
203,462

Accruals and deferred income
2,043,320
2,767,264

6,620,303
9,887,581



14.


Reserves

Revaluation reserve

Includes movement on all forward foreign currency contracts which have been entered into by the year end but not completed and have been classed as cash-flow hedges. 

Profit and loss account

Includes all current and prior period retained profits and losses.


15.


Pension commitments

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company  in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £18,266 (2022: £7,346). Contributions totalling £16,894 (2022: £15,000)  were payable to the fund at the balance sheet date and are included in creditors.

Page 28

 
DE MONCHY UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

16.


Controlling party

The immediate parent of this company is MCG BV, a company incorporated in The Netherlands. Its address is Beursplein 37, Kamer 1464, 3011 AARotterdam,  Netherlands.
The ultimate controlling party remained as D.L van Wassenaer throughout the year.

 
Page 29