REGISTERED NUMBER: |
Strategic Report, Report of the Directors and |
Financial Statements for the Year Ended 31 December 2022 |
for |
Monat Global UK Ltd |
REGISTERED NUMBER: |
Strategic Report, Report of the Directors and |
Financial Statements for the Year Ended 31 December 2022 |
for |
Monat Global UK Ltd |
Monat Global UK Ltd (Registered number: 11062833) |
Contents of the Financial Statements |
for the Year Ended 31 December 2022 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 5 |
Report of the Independent Auditors | 7 |
Statement of Profit or Loss | 10 |
Statement of Profit or Loss and Other Comprehensive Income | 11 |
Statement of Financial Position | 12 |
Statement of Changes in Equity | 14 |
Statement of Cash Flows | 15 |
Notes to the Statement of Cash Flows | 16 |
Notes to the Financial Statements | 17 |
Monat Global UK Ltd |
Company Information |
for the Year Ended 31 December 2022 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
1, The Green |
Richmond |
TW9 1PL |
Monat Global UK Ltd (Registered number: 11062833) |
Strategic Report |
for the Year Ended 31 December 2022 |
Introduction |
The directors present their strategic report with the financial statements of the year ended 31 December 2022. The comparatives relates to the year ended 31 December 2021. |
Principal activities |
The principal activity of the company is retail of haircare and skincare products. |
BUSINESS REVIEW |
Monat Global UK Ltd is a subsidiary of Alcora Corporation and was established as the company's first foray into the European market after successful recognition in the United States and expansion into Canada, providing premium hair-care and beauty products through the direct-selling channel. This report covers the financial year ended 31 December 2022. |
The aim for 2022 was to build on the achievements of 2021 and continue to establish Monat Global as a leader in naturally based, anti-ageing innovation. Revenue recognised for the year was £2,908,016 (2021: £7,242,199), and has drastically decreased on account as compared to previous year, on account of Covid restriction being uplift, and decrease in in distribution network. The company registered a pre-tax profit of £170,061 (2021: £39,589). |
Monat Global UK Ltd (Registered number: 11062833) |
Strategic Report |
for the Year Ended 31 December 2022 |
PRINCIPAL RISKS AND UNCERTAINTIES |
The principal risks and uncertainties facing the company are reviewed in detail by the directors and no material additional risk or uncertainty has been identified other than those detailed below. These risks are broadly accompanied with competitive, operational and financial risks. The directors risk management objectives consist of identifying and monitoring those risks which could have an adverse impact on the company assets, profitability or cash flows. |
The company is exposed to financial risks including credit risk, liquidity risk, and market risk, arising from the company's normal business activities. These risks and the company's approach to dealing with them are discussed below. |
Competitive risk |
The company operates in wholesale of haircare and skincare products. The markets remain competitive with price and margin fluctuation, which are dependent on relationships with key suppliers. Additionally, the uncertain surrounding the economy due to the direct result of the United Kingdom's exit remain prominent factors factoring affecting the sector. |
Operational risk |
The main operational risk relating to the company's operations in wholesale of haircare and skincare products are through relationships with the customers and quality of products to client specifications. The company's ability to provide products to its customers depends on maintaining relationships. The overall risk is mitigated by ensuring that the orders are delivered to client's specification and quality products to the company to enable operations to grow. |
Foreign exchange risks |
The company has certain balances due to and from customers, suppliers and related parties in other currencies, primarily in PNL & USD, and the company is therefore exposes to currency fluctuations. As a matter of policy, the company choose not to currently use financial derivatives or currency hedging to manage its exposure and the directors review exposures to risk and review currency fluctuations on an ongoing basis to ensure any adverse effect is limited. |
Credit risk |
The company's principal financial assets are bank balances, trade and other receivables. The company's credit risk is primarily attributable to its trade receivables and balances from the related parties. The company gives significant attention to credit risk and manages the risk though credit control procedures to ensure that credit risk is at an acceptable level for its future operations. |
Liquidity Risk |
Liquidity risk is the risk that insufficient working capital will be generated by the company's business activities and that in this event suitable sources of funding may not be available. The company ensures that sufficient cash is available to fund ongoing operations and has sufficient cash reserves for its operations. |
KEY PERFORMANCE INDICATORS |
The directors of the company use a variety of financial performance indicators, including turnover, total operating profit, profit after tax, shareholders fund and average employees. These are reviewed and assessed quarterly by the board and appropriate action taken to ensure growth targets are being achieved. |
The company's key financial and non-performance indicator for the year are as follows: |
2022 | 2021 |
£ | £ |
Turnover | 2,908,016 | 7,242,199 |
Total operating profit/(loss) | 170,061 | 39,589 |
Profit/(loss) after tax | 84,532 | 30,714 |
Shareholders Fund | (1,556,386) | (1,640,918) |
Average employees | 35 | 29 |
Monat Global UK Ltd (Registered number: 11062833) |
Strategic Report |
for the Year Ended 31 December 2022 |
FINANCIAL INSTRUMENTS |
The company has a normal level of exposure to price, credit, liquidity and cash flow risks arising from trading activities which are conducted in sterling and foreign currency for which company minimise exposure to exchange rate volatility through its internal management processes.The company does not enter into any formally designated hedging arrangements. |
ON BEHALF OF THE BOARD: |
Monat Global UK Ltd (Registered number: 11062833) |
Report of the Directors |
for the Year Ended 31 December 2022 |
The directors present their report with the financial statements of the company for the year ended 31 December 2022. The comparatives relates to the year ended 31 December 2021. |
PRINCIPAL ACTIVITY |
The principal activity of the company in the year under review was that of retail of haircare and skincare products. |
DIVIDENDS |
The directors do not recommend the payment of a dividend. The profit for the financial year of £84,532 will therefore be taken to reserves. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 January 2022 to the date of this report. |
Other changes in directors holding office are as follows: |
POLITICAL DONATIONS AND EXPENDITURE |
No donation was made during the year. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors 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 UK-adopted international accounting standards. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
Monat Global UK Ltd (Registered number: 11062833) |
Report of the Directors |
for the Year Ended 31 December 2022 |
AUDITORS |
The auditors, Feltons Chartered Accountants and Statutory Auditors, were appointed auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed has been approved by the Board. |
GOING CONCERN |
The directors have, at the time of approving the financial statements, a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. The directors have made this assessment for a period of at least one year from the date of approval of these financial statements. In particular, the directors have considered the Company's forecasts and projections, including the impact of Brexit and Covid-19, and have taken account of pressures on income. Accordingly, they continue to adopt the going concern basis in preparing the annual report and financial statements. |
ON BEHALF OF THE BOARD: |
Report of the Independent Auditors to the Members of |
Monat Global UK Ltd |
Opinion |
We have audited the financial statements of Monat Global UK Ltd (the 'company') for the year ended 31 December 2022 which comprise the Statement of Profit or Loss, the Statement of Profit or Loss and Other Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, the Statement of Cash Flows and Notes to the Statement of Cash Flows, 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 International Financial Reporting Standards (IFRSs) as adopted by the UK. |
In our opinion the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its profit for the year then ended; |
- | have been properly prepared in accordance with IFRSs as adopted by the UK; 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 UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors 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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
Report of the Independent Auditors to the Members of |
Monat Global UK Ltd |
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 Report of the Directors. |
Except for the matter described in the basis of qualified opinion section of our report, in the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. |
Arising solely from the limitations on the scope of our work relating to the inventory, referred to above: |
- we have not obtained all the information and explanations that we considered necessary for the purposes of our audit; and |
- we were unable to determine whether adequate accounting records had been kept. |
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: |
- 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 directors' remuneration specified by law are not made |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page five, 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 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. |
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 a Report of the Auditors 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. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
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: |
- We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance. |
- We obtained an understanding of laws and regulations that could reasonably be expected to have a material effect on the financial statements through discussion with management and those charged with governance, including financial reporting and taxation legislation. We considered that extent of compliance with those laws and regulations as part of our procedures on the related financial statement items. |
Report of the Independent Auditors to the Members of |
Monat Global UK Ltd |
- We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations. We remained alert to any indications of non-compliance throughout the audit. |
- We addressed the risk of fraud through management override by reviewing the appropriateness of a sample of journal entries and other adjustments; assessing whether the judgements made in making key accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business that we come across throughout the audit. |
However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company. Our examination should not be relied upon to disclose all such material misstatements or frauds, errors or instances of non-compliance as may exist. |
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. |
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 Report of the Auditors. |
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 a Report of the Auditors 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 |
1, The Green |
Richmond |
TW9 1PL |
Monat Global UK Ltd (Registered number: 11062833) |
Statement of Profit or Loss |
for the Year Ended 31 December 2022 |
2022 | 2021 |
Notes | £ | £ |
CONTINUING OPERATIONS |
Revenue | 4 |
Cost of sales | ( |
) | ( |
) |
GROSS PROFIT |
Other operating income |
Distribution costs | ( |
) | ( |
) |
Administrative expenses | ( |
) | ( |
) |
OPERATING PROFIT |
Finance costs | 6 | (133 | ) | - |
PROFIT BEFORE INCOME TAX | 7 |
Income tax | 8 | ( |
) | ( |
) |
PROFIT FOR THE YEAR |
Monat Global UK Ltd (Registered number: 11062833) |
Statement of Profit or Loss and Other Comprehensive Income |
for the Year Ended 31 December 2022 |
2022 | 2021 |
£ | £ |
PROFIT FOR THE YEAR |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
Monat Global UK Ltd (Registered number: 11062833) |
Statement of Financial Position |
31 December 2022 |
2022 | 2021 |
Notes | £ | £ |
ASSETS |
NON-CURRENT ASSETS |
Owned |
Intangible assets | 9 |
Property, plant and equipment | 10 |
Right-of-use |
Deferred tax | 19 |
CURRENT ASSETS |
Inventories | 11 |
Trade and other receivables | 12 |
Cash and cash equivalents | 13 |
TOTAL ASSETS |
EQUITY |
SHAREHOLDERS' EQUITY |
Called up share capital | 14 |
Retained earnings | 15 | ( |
) | ( |
) |
TOTAL EQUITY | ( |
) | ( |
) |
LIABILITIES |
NON-CURRENT LIABILITIES |
Financial liabilities - borrowings |
Interest bearing loans and borrowings | 17 |
CURRENT LIABILITIES |
Trade and other payables | 16 |
Financial liabilities - borrowings |
Interest bearing loans and borrowings | 17 |
TOTAL LIABILITIES |
TOTAL EQUITY AND LIABILITIES |
The financial statements were approved by the Board of Directors and authorised for issue on |
Monat Global UK Ltd (Registered number: 11062833) |
Statement of Financial Position - continued |
31 December 2022 |
Monat Global UK Ltd (Registered number: 11062833) |
Statement of Changes in Equity |
for the Year Ended 31 December 2022 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 January 2021 | ( |
) | ( |
) |
Changes in equity |
Total comprehensive income | - |
Balance at 31 December 2021 | ( |
) | ( |
) |
Changes in equity |
Total comprehensive income | - |
Balance at 31 December 2022 | ( |
) | ( |
) |
Monat Global UK Ltd (Registered number: 11062833) |
Statement of Cash Flows |
for the Year Ended 31 December 2022 |
2022 | 2021 |
£ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | ( |
) |
Interest paid | ( |
) |
Net cash from operating activities | ( |
) |
Cash flows from investing activities |
Purchase of tangible fixed assets | ( |
) |
Net cash from investing activities | ( |
) |
Decrease in cash and cash equivalents | ( |
) | ( |
) |
Cash and cash equivalents at beginning of year |
2 |
1,173,488 |
Cash and cash equivalents at end of year | 2 |
Monat Global UK Ltd (Registered number: 11062833) |
Notes to the Statement of Cash Flows |
for the Year Ended 31 December 2022 |
1. | RECONCILIATION OF PROFIT BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS |
2022 | 2021 |
£ | £ |
Profit before income tax |
Depreciation charges |
Finance costs | 133 | - |
206,766 | 40,350 |
Decrease in inventories |
Decrease/(increase) in trade and other receivables | ( |
) |
(Decrease)/increase in trade and other payables | ( |
) |
Cash generated from operations | ( |
) |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts: |
Year ended 31 December 2022 |
31.12.22 | 1.1.22 |
£ | £ |
Cash and cash equivalents | 143,003 | 714,053 |
Year ended 31 December 2021 |
31.12.21 | 1.1.21 |
£ | £ |
Cash and cash equivalents | 714,053 | 1,173,488 |
Monat Global UK Ltd (Registered number: 11062833) |
Notes to the Financial Statements |
for the Year Ended 31 December 2022 |
1. | STATUTORY INFORMATION |
Monat Global UK Ltd is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | ACCOUNTING POLICIES |
BASIS OF PREPARATION |
The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as applied in accordance with the provisions of the Companies Act 2006. |
TURNOVER |
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 risk 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 cost incurred or to be incurred in respect of the transaction can be measured reliably. |
Rendering of services |
Revenue from contract to provide services is recognized in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied: |
-The amount of revenue can be measured reliably; |
- It is probable that their Company will receive the consideration due under the contract; |
- the stage of completion of the contract at the end of the reporting period can be measured reliably; and |
- the cost incurred and the costs to complete the contract can be measured reliably. |
CASH AND CASH EQUIVALENTS |
Cash represents cash in hand and deposits held on demand with financial institutions. Cash equivalents are short-term, highly-liquid investments with original maturities of three months or less (as at their date of acquisition). Cash equivalents are readily convertible to known amounts of cash and subject to an insignificant risk of change in that cash value. |
In the presentation of the Statement of Cash Flows, cash and cash equivalents also include bank overdrafts. Any such overdrafts are shown within borrowings under ‘current liabilities’ on the Statement of Financial Position. |
INTANGIBLE ASSETS |
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. |
Amortisation is provided on following basis: |
Software licenses - over 3 years |
Monat Global UK Ltd (Registered number: 11062833) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2022 |
2. | ACCOUNTING POLICIES - continued |
PROPERTY, PLANT AND EQUIPMENT |
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: |
Leasehold Improvements - over 17 months |
At each balance sheet date, the company reviews the carrying amounts of its property, plant and equipment to determine whether there is any indication that any items of property, plant and equipment have suffered an impairment loss. If any such indication exists, the recoverable amount of an asset is estimated in order to determine the extent of the impairment loss, if any. Where it is not possible to estimate the recoverable amount of the asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs. |
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. Impairment loss is recognised as an expense immediately. |
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income immediately. |
FINANCIAL INSTRUMENTS |
Financial assets and financial liabilities are recognised when the Company becomes party to the contractual provisions of the instruments. |
Financial assets are classified as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity financial assets and available-for-sale financial assets, as appropriate. The classification depends on the nature and purpose of the financial assets. The Company determines the classification of its financial assets at initial recognition. |
All purchases and sales of financial assets are recognised on the date on which the Company commits to purchase or sell the asset. Financial assets are derecognised only when the contractual rights to the cash flows from the financial asset expire or the Company transfers substantially all risks and rewards of ownership. |
Financial liabilities are classified as either financial liabilities at fair value through profit or loss (i.e. derivatives) or other liabilities, as appropriate. All loans and borrowings and trade and other payables are classified as other liabilities. |
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. |
Monat Global UK Ltd (Registered number: 11062833) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2022 |
2. | ACCOUNTING POLICIES - continued |
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. |
DEFERRED TAX |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date except that: |
- The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and |
- Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met. |
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
GOING CONCERN |
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus, the directors continue to adopt the going concern basis of accounting in preparing the financial statements. |
At 31 December 2022 the company's had net current liability of £2,152,675 (2021: £2,016,596 net liability) and net profit after tax of £84,532 (2021: £30,714 Profit), however the financial statements have been prepared on a going concern basis. |
TRADE AND OTHER DEBTORS |
Trade and other debtors that are receivable within one year and do not constitute a financing transaction are recorded at the undiscounted amount expected to be received, net of impairment. Those that are receivable after more than one year or that constitute a financing transaction are recorded initially at fair value less transaction costs and subsequently at amortised cost, net of impairment. |
TRADE AND OTHER CREDITORS |
Trade and other creditors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method unless the effect of discounting would be immaterial, in which case they are stated at cost. |
Monat Global UK Ltd (Registered number: 11062833) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2022 |
2. | ACCOUNTING POLICIES - continued |
INVENTORY |
Inventory is stated at the lower of cost and estimated selling price less costs to complete and sell. Costs is based on the cost of purchase on an average cost basis. |
When inventory is sold, the carrying amount of those inventory is recognised as an expense in the period in which the related revenue is recognised. The amount of any write -down of inventory to net realisable value and all losses of inventory is recognised as an expense in the period in which the written - down or loss occurs. The amount of any reversal of any write -down of inventory is recognised as are deduction in the amount of inventories recognised as an expense in the period in which the reversal occurs. |
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. |
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. |
SEGMENTAL INFORMATION |
The company operates in one reportable industry segment, namely in the United Kingdom therefore segmental information has not been provided. |
3. | CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
In the application of the company's accounting policies, which are described in note 2, management is required to make judgments, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. |
The estimates and underlying assumptions are reviewed on an on going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. |
The following are considered to be key areas of estimation & uncertainities: |
Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. Further details on taxes are disclosed in note 8. |
Monat Global UK Ltd (Registered number: 11062833) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2022 |
4. | REVENUE |
REVENUE ANALYSIS |
2022 | 2021 |
£ | £ |
Product Revenue | 2,863,471 | 7,088,924 |
Revenue from services | 44,545 | 153,275 |
2,908,016 | 7,242,199 |
The turnover and profit before taxation are attributable to the one principal activity of the company. |
An analysis of turnover by geographical market is given below: |
2022 | 2021 |
£ | £ |
United Kingdom | 2,890,048 | 6,747,013 |
Europe | 17,968 | 495,186 |
2,908,016 | 7,242,199 |
5. | EMPLOYEES AND DIRECTORS |
2022 | 2021 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
2022 | 2021 |
Employees |
2022 | 2021 |
£ | £ |
Directors' remuneration |
6. | NET FINANCE COSTS |
2022 | 2021 |
£ | £ |
Finance costs: |
Bank loan interest |
Monat Global UK Ltd (Registered number: 11062833) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2022 |
7. | PROFIT BEFORE INCOME TAX |
The profit before income tax is stated after charging/(crediting): |
2022 | 2021 |
£ | £ |
Cost of inventories recognised as expense |
Depreciation - owned assets |
Software amortisation |
Foreign exchange differences | ( |
) |
8. | INCOME TAX |
Analysis of tax expense |
2022 | 2021 |
£ | £ |
Deferred tax |
Total tax expense in statement of profit or loss |
FACTORS AFFECTING THE TAX EXPENSE |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
2022 | 2021 |
£ | £ |
Profit before income tax |
Profit multiplied by the standard rate of corporation tax in the UK of (2021 - |
Effects of: |
Depreciation in excess of Capital Allowance | (38,848 | ) | 145 |
Expenses not deductible for tax purpose | 50,743 | 1,208 |
Deferred Tax | 85,529 | 8,875 |
Losses utilized in the year | (44,207 | ) | (8,875 | ) |
Tax expense |
The company has carried forward tax losses of £1,744,592 |
Monat Global UK Ltd (Registered number: 11062833) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2022 |
9. | INTANGIBLE ASSETS |
Software |
£ |
COST |
At 1 January 2022 |
and 31 December 2022 |
AMORTISATION |
At 1 January 2022 |
and 31 December 2022 |
NET BOOK VALUE |
At 31 December 2022 |
At 31 December 2021 |
10. | PROPERTY, PLANT AND EQUIPMENT |
Right of | Fixtures |
use | Leasehold | and | Computer |
Assets | Improvements | fittings | equipment | Totals |
£ | £ | £ | £ | £ |
COST |
At 1 January 2022 |
Additions |
At 31 December 2022 |
DEPRECIATION |
At 1 January 2022 |
Charge for year |
At 31 December 2022 |
NET BOOK VALUE |
At 31 December 2022 |
At 31 December 2021 |
11. | INVENTORIES |
2022 | 2021 |
£ | £ |
Stocks |
Monat Global UK Ltd (Registered number: 11062833) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2022 |
12. | TRADE AND OTHER RECEIVABLES |
2022 | 2021 |
£ | £ |
Current: |
Trade debtors |
Prepayments |
13. | CASH AND CASH EQUIVALENTS |
2022 | 2021 |
£ | £ |
Bank accounts |
14. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2022 | 2021 |
value: | £ | £ |
Ordinary | 1 | 100 | 100 |
15. | RESERVES |
Retained |
earnings |
£ |
At 1 January 2022 | ( |
) |
Profit for the year |
At 31 December 2022 | ( |
) |
16. | TRADE AND OTHER PAYABLES |
2022 | 2021 |
£ | £ |
Current: |
Trade creditors |
Amount due to group |
undertaking | 3,832,180 | 4,815,444 |
Social security and other tax |
Accruals and deferred income |
Value Added Tax Payable | 62,471 | 165,349 |
Monat Global UK Ltd (Registered number: 11062833) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2022 |
17. | FINANCIAL LIABILITIES - BORROWINGS |
2022 | 2021 |
£ | £ |
Current: |
Leases (see note 18) | 99,631 | - |
Non-current: |
Leases (see note 18) | 281,399 | - |
Terms and debt repayment schedule |
1 year or |
less | 1-2 years | 2-5 years | Totals |
£ | £ | £ | £ |
Leases | 99,631 | 97,290 | 184,109 | 381,030 |
18. | LEASING |
LEASE LIABILITIES |
2022 | 2021 |
Maturity Analysis | £ | £ |
Within one year | 99,631 | - |
In two to five years | 281,399 | - |
Total undiscounted liabilities | 381,030 | - |
19. | DEFERRED TAX |
2022 | 2021 |
£ | £ |
Balance at 1 January | (375,678 | ) | (384,553 | ) |
Movement in year | 85,528 | 8,875 |
Balance at 31 December | ( |
) | ( |
) |
20. | PENSION COMMITMENTS |
The company operates a defined contribution pension scheme . The assets of the scheme are held separately from those of the company in an independently administered fund. The pension costs charge represents contributions payable by the company to the fund and amounted to £49,294 (2021 - £23,655) |
Monat Global UK Ltd (Registered number: 11062833) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2022 |
21. | RELATED PARTY DISCLOSURES |
During the year, transactions made with Related parties & their closing balances are as follows : |
Particulars |
Receivables (Closing balance |
) |
Payables (Closing balance |
) |
Monat Global USA | -£3,763,104 |
Monat Global Poland | £909,796 |
Monat Global Canada | £0 |
Monat Global Ireland | -£36,750 |
Monat Spain | £48,204 |
Monat Lithuania | £76,821 |
Monat Global New Zealand | -£32,325 |
22. | ULTIMATE CONTROLLING PARTY |
Monat UK Global Limited is a wholly owned subsidiary of Alcora Corporation which is the ultimate parent company and is incorporated in the United States of America. |
Monat Global UK Ltd (Registered number: 11062833) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2022 |
23. | FINANCIAL INSTRUMENTS |
The company's principal financial liabilities comprise intercompany loans and trade and other payables. The main purpose of the company's loan is to finance the ongoing trade of the company whilst it continues to develop a presence within United Kingdom. The company has various financial assets such as trade and other receivables and cash that arise directly from its operation. |
The company is exposed to credit risk and liquidity risk. |
The Board of directors reviews and agreed policies for managing each of these risks which are summaries below: |
Credit risk |
Credit risk is the risk that a counterparty will not meet its obligation under a customer contract, leading to a financial loss. The company has no significant concentrations of credit risk. The company structures the level of credit risk it accepts by placing limits on its exposure to a single counterparty or groups of counterparties. |
Credit Risk is managed by requiring customers to pay at point of sale. Outstanding customer receivables are regularly monitored. |
Liquidity Risk |
The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of intercompany loans. The Company manages liquidity risk by maintaining adequate reserves and cash balances by continuously monitoring forecast and actual cash flows. |
The table below summarizes the maturity profile of the company’s financial assets and liabilities based on contractual undiscounted cashflow: |
The following table sets out the financial instruments as at the reporting date: |
2022 | 2021 |
£ | £ |
Financial Asset |
Trade receivables | 1,063,881 | 1,278,478 |
Total | 1,063,881 | 1,278,478 |
2022 | 2021 |
£ | £ |
Financial Liability |
Trade Payables | 182,130 | 286,347 |
Amount due to group undertaking | 3,832,180 | 4,815,444 |
Accrual and deferred income | 88,718 | 322,323 |
Total | 4,103,028 | 5,424,114 |