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REGISTERED NUMBER: 09392139 (England and Wales)














Financial Statements

for the Year Ended 31 December 2023

for

Merino Industries Ltd

Merino Industries Ltd (Registered number: 09392139)






Contents of the Financial Statements
for the Year Ended 31 December 2023




Page

Company Information 1

Balance Sheet 2

Notes to the Financial Statements 3


Merino Industries Ltd

Company Information
for the Year Ended 31 December 2023







DIRECTOR: M E Colley





SECRETARY: M E Colley





REGISTERED OFFICE: Milestone House
Millbrook
Guildford
GU1 3YA





REGISTERED NUMBER: 09392139 (England and Wales)





AUDITORS: Bristow Burrell
4 Riverview
Walnut Tree Close
Guildford
Surrey
GU1 4UX

Merino Industries Ltd (Registered number: 09392139)

Balance Sheet
31 December 2023

31.12.23 31.12.22
Notes £    £    £    £   
FIXED ASSETS
Investments 4 9,767,352 17,489,452

CURRENT ASSETS
Debtors 5 1,458,339 1,671,573
Cash at bank 54,984 101,527
1,513,323 1,773,100
CREDITORS
Amounts falling due within one
year

6

735,828

804,650
NET CURRENT ASSETS 777,495 968,450
TOTAL ASSETS LESS CURRENT
LIABILITIES

10,544,847

18,457,902

CREDITORS
Amounts falling due after more
than one year

7

6,431,992

7,287,992
NET ASSETS 4,112,855 11,169,910

CAPITAL AND RESERVES
Called up share capital 8 50,000 50,000
Revaluation reserve 9 4,662,690 11,412,790
Retained earnings 9 (599,835 ) (292,880 )
SHAREHOLDERS' FUNDS 4,112,855 11,169,910

The financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

In accordance with Section 444 of the Companies Act 2006, the Income Statement has not been delivered.

The financial statements were approved by the director and authorised for issue on 9 April 2024 and were signed by:





M E Colley - Director


Merino Industries Ltd (Registered number: 09392139)

Notes to the Financial Statements
for the Year Ended 31 December 2023

1. STATUTORY INFORMATION

Merino Industries Ltd is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2. ACCOUNTING POLICIES

Basis of preparing the financial statements
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

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

These financial statements contain information about Merino Industries Limited as an individual company and do not contain financial information as parent of a group. The company has taken exemption not to prepare consolidated financial statements on the basis that the subsidiaries are held exclusively with a view to subsequent resale.

Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements in conformity with generally accepted accounting practice requires management to make estimates and judgements that affect the reported assets and liabilities at the balance sheet date as well as the reported amounts of revenue and expenses during the reporting period.

Judgements
The classification of financial instruments as 'basic' or 'other' requires judgement as to whether all the applicable conditions for classification as basic are met. This includes consideration of the form of the instrument and its return.

There are currently £6,318,500 (2022: £7,074,500) of profit sharing loans included in creditors due in more than one year. The profit sharing loans from shareholders are deemed to meet the criteria of an asset backed security as defined in section 12 of FRS 102. The company has however recognised the loans under amortised cost on the basis that profit is considered to be a non-financial variable. In the absence of any specific guidance from the Financial Reporting Council on this matter, significant judgement has been used to arrive at this conclusion using our knowledge of the underlying investments and their operations. Under the amortised cost model, the loan has been recognised at its nominal value and not discounted on the basis that there is no fixed repayment date.

Key sources of estimation uncertainty
The company holds its investments in group companies at fair value. The valuation technique used by management depends on the nature of the investment. One valuation technique used by management utilises the profit multiples of listed companies operating in similar sectors and then applies the mean value of these to the EBIT (Earnings Before Interest and Taxation) or EBTA (Earnings Before Tax and Amortisation) of the group company. A liquidity discount is applied to the valuation in order to reflect the fact that there is lower marketability of the group companies than the listed comparatives. This discount also takes into account that the group companies are smaller, unlisted entities and have differing growth prospects to the comparable companies. The company also values group companies using an adjusted net asset basis or a discounted cash flow basis where these are more appropriate than a profit multiple.

The company's balance sheet includes fixed asset investments, comprising investments in subsidiaries, loans to subsidiaries and investments in associates. At each balance sheet date, the investments and loans are assessed for signs of impairment. If indicators of impairment exist and there are doubts over recovery, the investment would be provided against to a sufficient extent that the impaired balance is deemed to be recoverable based on the information available.

Merino Industries Ltd (Registered number: 09392139)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

2. ACCOUNTING POLICIES - continued

Turnover
Turnover comprises revenue earned by the company in respect of monitoring services provided to the group companies.

As this revenue arises from the provision of services, it is recognised by reference to the stage of completion, with amounts being deferred or accrued as appropriate depending on the work performed at the year end.

Interest income is recognised in the Income Statement using the effective interest method.

Investments in subsidiaries
Investments held as fixed assets are shown at market value at the balance sheet date. Revaluation gains and losses are recognised in the Income Statement.

The company adopts a policy of revaluing its investments annually with the exception of investments entered into during the year. Such investments are not revalued until they have been held for a full 12 month period.

Financial instruments
The company enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares. The company also has other financial instruments as defined by section 11 and 12 of FRS 102. The arrangements that fall within this category are profit sharing loans with shareholders.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence on impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Income Statement.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.


For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the company would receive for the asset if it were to be sold at the balance sheet date.

Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.


Merino Industries Ltd (Registered number: 09392139)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

2. ACCOUNTING POLICIES - continued
Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

3. EMPLOYEES AND DIRECTORS

The average number of employees during the year was 3 (2022 - 3 ) .

4. FIXED ASSET INVESTMENTS

31.12.23 31.12.22
£    £   
Shares in group undertakings 4,500,092 11,250,192
Loans to group undertakings 5,267,260 6,239,260
9,767,352 17,489,452

Additional information is as follows:
Shares in
group
undertakings
£   
COST OR VALUATION
At 1 January 2023 11,250,192
Revaluations (6,750,100 )
At 31 December 2023 4,500,092
NET BOOK VALUE
At 31 December 2023 4,500,092
At 31 December 2022 11,250,192

Merino Industries Ltd (Registered number: 09392139)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

4. FIXED ASSET INVESTMENTS - continued

Cost or valuation at 31 December 2023 is represented by:

Shares in
group
undertakings
£   
Valuation in 2019 913,399
Valuation in 2020 2,561,460
Valuation in 2021 9,244,181
Valuation in 2022 (1,522,500 )
Valuation in 2023 (6,750,100 )
Cost 53,652
4,500,092

If fixed asset investments had not been revalued they would have been included at the following historical cost:

31.12.23 31.12.22
£    £   
Cost 53,652 53,652

Fixed asset investments were valued on an open market basis on 31 December 2023 by the director .

The company's investments at the Balance Sheet date in the share capital of companies include the following:

One for Fun International Limited
Registered office: Unit 7 Tobar Ipswich Road, Brome, Eye, England, IP23 8AW
Nature of business: Holding company
%
Class of shares: holding
Ordinary 79.00

Corriedale Limited
Registered office: Unit A Pauls Cycles, Yaxham Road, Dereham, Norfolk, England, NR19 1HB
Nature of business: Holding company
%
Class of shares: holding
A Ordinary 90.00

Independent Plant Hire Group Limited
Registered office: 10 Bond Avenue Bletchley, Milton Keynes, Buckinghamshire, United Kingdom, MK1 1SW
Nature of business: Holding company
%
Class of shares: holding
A Ordinary 78.00

Performance Doors and Joinery Limited
Registered office: Milestone House, Millbrook, Guildford, Surrey, England, GU1 3YA
Nature of business: Holding company
%
Class of shares: holding
Ordinary 100.00

Merino Industries Ltd (Registered number: 09392139)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

4. FIXED ASSET INVESTMENTS - continued

Duroc Limited
Registered office: Milestone House, Millbrook, Guildford, Surrey, United Kingdom, GU1 3YA
Nature of business: Holding company
%
Class of shares: holding
Ordinary 82.00

Longden Doors Holdings Limited
Registered office: Unit 5 Whinbank Park Whinbank Road, Aycliffe Business Park, Newton Aycliffe, England, DL5 6AY
Nature of business: Holding company
%
Class of shares: holding
Ordinary 92.00
Loans to
group
undertakings
£   
At 1 January 2023 6,239,260
New in year 599,153
Repayment in year (1,356,192 )
Loan written off (214,961 )
At 31 December 2023 5,267,260

5. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
31.12.23 31.12.22
£    £   
Amounts owed by participating interests 1,440,000 1,655,440
Other debtors 18,339 16,133
1,458,339 1,671,573

6. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
31.12.23 31.12.22
£    £   
Trade creditors (1 ) (1 )
Amounts owed to participating interests 712,445 712,000
Taxation and social security 11,401 76,373
Other creditors 11,983 16,278
735,828 804,650

7. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
31.12.23 31.12.22
£    £   
Other creditors 6,431,992 7,287,992

Loans made to the company of £6,431,992 (2022: £7,287,992) by its shareholders do not attract any interest or require any security. £113,492 (2022: £213,492) of this loan has no repayment date but will be repayable if the underlying investment which it was used to fund is sold. The remaining £6,318,500 (2022: £7,074,500) is structured as a profit sharing loan. See note 11 for further details.

Merino Industries Ltd (Registered number: 09392139)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

8. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 31.12.23 31.12.22
value: £    £   
50,000 Ordinary £1 50,000 50,000

9. RESERVES
Retained Revaluation
earnings reserve Totals
£    £    £   

At 1 January 2023 (292,880 ) 11,412,790 11,119,910
Deficit for the year (7,057,055 ) (7,057,055 )
Revaluation transfers 6,750,100 (6,750,100 ) -
At 31 December 2023 (599,835 ) 4,662,690 4,062,855

The movements on the revaluation reserve in the year relate to the revaluation of fixed asset investments, as shown in note 4. There is no tax effect of these revaluations because the assets concerned are covered by the substantial shareholding exemption for tax.

10. DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006

The Report of the Auditors was unqualified.

Bruce Sleap (Senior Statutory Auditor)
for and on behalf of Bristow Burrell

11. OTHER FINANCIAL COMMITMENTS

The company has provided a guarantee of 20% up to a maximum of £90,000 (2022 £150,000) in relation to a loan taken out by one of its associated undertakings.

Merino Industries Ltd (Registered number: 09392139)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

12. RELATED PARTY DISCLOSURES

During the year the company charged monitoring fees to subsidiary undertakings of £221,000 (2022: £221,000). At the balance sheet date £120,300 (2022: £61,800) was outstanding in respect of this.

During the year the company charged no monitoring fees to associated undertakings (2022: £Nil). At the balance sheet date £Nil (2022: £Nil) was outstanding in respect of this.

During the year the company charged monitoring fees to companies which have a common director and shareholder of £81,000 (2022: £80,000). At the balance sheet date £90,000 (2022: £61,000) was outstanding in respect of this.

The company provides revolving credit facilities to indirect subsidiaries and related parties. During the year, interest of £615,350 (2022: £633,676) was charged in respect of the loan interest. Interest is charged between 8% and 10% per annum depending on subsidiary and related party. At the balance sheet date £1,229,700 (2022: £1,532,640) was outstanding in respect of this. During the year £544,920 (2022: £Nil) of accrued interest was considered irrecoverable and has been treated as a bad debt.

The director charged the business £146,204 (2022: £160,000) during the period for management services. At the balance sheet date £572,445 (2022: £517,000) was outstanding in respect of this.

Merino Management Limited which is a company owned and managed by the director has loaned to the company £140,000 (2022: £195,000) in the year. The loan has no interest attached and is provided for the purpose of making necessary investments in group companies.

The director has provided a loan facility made available to the company of £955,000. At the period end the amount drawn down and therefore repayable was £113,492 (2022: £213,492). The loan has no interest attached and is provided for the purpose of making necessary investments in group companies. No repayment date is set in the agreement but will be repayable if the underlying investment which it was used to fund, is sold.

A shareholder of the company has provided a loan facility available to the Company of £8,995,000. At the balance sheet date £6,318,500 (2022: £7,074,500) was drawn down and therefore repayable. The loan has no interest rate or payment date attached but is structured as a profit sharing loan.

Of the loans disclosed in note 4, £Nil (2022: £Nil) relates to a loan provided to a company which has a common director, the remainder relates to subsidiaries.

13. ULTIMATE CONTROLLING PARTY

The ultimate controlling party is M E Colley.