REGISTERED NUMBER: |
Strategic Report, Report of the Director and |
Audited Financial Statements |
for the Period 1 January 2023 to 29 February 2024 |
for |
MARLETON CROSS LIMITED |
REGISTERED NUMBER: |
Strategic Report, Report of the Director and |
Audited Financial Statements |
for the Period 1 January 2023 to 29 February 2024 |
for |
MARLETON CROSS LIMITED |
MARLETON CROSS LIMITED (REGISTERED NUMBER: 01215692) |
Contents of the Financial Statements |
for the period 1 JANUARY 2023 TO 29 FEBRUARY 2024 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Director | 4 |
Report of the Independent Auditors | 6 |
Statement of Comprehensive Income | 10 |
Balance Sheet | 11 |
Statement of Changes in Equity | 12 |
Notes to the Financial Statements | 13 |
MARLETON CROSS LIMITED |
Company Information |
for the period 1 JANUARY 2023 TO 29 FEBRUARY 2024 |
DIRECTOR: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Accountants and Statutory Auditor |
The Pinnacle |
170 Midsummer Boulevard |
Milton Keynes |
MK9 1BP |
MARLETON CROSS LIMITED (REGISTERED NUMBER: 01215692) |
Strategic Report |
for the period 1 JANUARY 2023 TO 29 FEBRUARY 2024 |
The director presents his strategic report for the period 1 January 2023 to 29 February 2024. |
REVIEW OF BUSINESS |
The principal activity of the company during the period was the manufacture of shower trays. |
During the period under review the company was acquired by Brand K Ltd and became part of the Brand K Group which includes a number of companies associated with bathroom products. |
Some discoveries have been made which has necessitated a revision of prior years' figures, as described in Note 11 to the Financial Statements. |
The company made a loss of £(1,724,651) before exceptional items detailed in note 8 for the 14-month period (2022, 12-month period - £(2,578,417)). |
The result for the period reflects the fact that the company is operating in difficult trading conditions, along with the costs of integration. The director notes the improvement from the previous year, as restated, and is satisfied with the result for the period whilst looking to improve results in the future. |
PRINCIPAL RISKS AND UNCERTAINTIES |
Strategic, financial, commercial, operational, social, environmental, and ethical risks are all considered as part of the group's controls, which are designed to manage rather than eliminate the risk of failure to achieve business objectives. Therefore, they can only provide reasonable, not absolute assurance against material misstatement or loss. |
Although at present there are no immediate risks considered likely to have a significant impact on the short or long-term value of the company, the principal risks identified are as follows: |
o Liquidity Risks |
The company has net current liabilities of £2,356,555 (2022 - £4,904,469). Management has reviewed future cash flows and considers that the company has access to sufficient cash facilities to enable it to continue to meet its liabilities as they fall due. |
o Market Risks |
There is currently an uncertain current economic climate, with the cost of living crisis particularly impacting the housebuilding and home improvement industry, and the company has taken various measures to reduce its risk, such as the closure of a small division of the business, a review of its cost base and a change in management personnel. |
o Credit Risks |
The company's credit risk is primarily attributable to its trade debtors. The amounts presented in the balance sheet are net of allowances for doubtful debts, estimated by the management based on prior experience, the current economic environment or specific customer issues. |
o Competitive Risks |
The company operates in a competitive industry where price is important. Conditions which can suddenly affect the buying price present a risk, such as exchange rates, as the company sources a significant amount of its supplies from overseas. To manage this risk, the company closely monitors foreign exchange rates and reacts accordingly. |
The company has implemented policies that require appropriate credit checks on potential customers or review of existing customer credit history before a sale is made together with having in force a credit insurance policy. |
MARLETON CROSS LIMITED (REGISTERED NUMBER: 01215692) |
Strategic Report |
for the period 1 JANUARY 2023 TO 29 FEBRUARY 2024 |
KEY PERFORMANCE INDICATORS |
The company's key performance indicators include turnover (including sales product mix), gross profit margin and EBITDA (being loss before tax, interest, depreciation, amortisation and exceptional items). |
The company's key financial and other performance indicators during the year were as follows: |
2024 (14m) | 2022 (12m) |
£'000 | £'000 |
Turnover (as per note 4) | 23,251 | 20,621 |
Gross profit margin | 18.1% | 9.5% |
EBITDA | (477) | (1,688) |
Turnover decreased (pro rata) by 3.3% which reflects the difficult UK market during the year in home improvements. The improvement in the gross profit percentage was welcomed by the director, who seeks to stabilise the company and improve the EBITDA figure in the future. |
ON BEHALF OF THE BOARD: |
MARLETON CROSS LIMITED (REGISTERED NUMBER: 01215692) |
Report of the Director |
for the period 1 JANUARY 2023 TO 29 FEBRUARY 2024 |
The director presents his report with the financial statements of the company for the period 1 January 2023 to 29 February 2024. |
DIVIDENDS |
No dividends will be distributed for the period ended 29 February 2024. |
DIRECTORS |
The directors who have held office during the period from 1 January 2023 to the date of this report are as follows: |
DISCLOSURE IN THE STRATEGIC REPORT |
The company has chosen, in accordance with section 414C(11) of the Companies Act 2006, and as noted in the Report of the Directors, to include certain matters in its Strategic Report that would otherwise be required to be disclosed in the Report of the Directors. |
STATEMENT OF DIRECTOR'S RESPONSIBILITIES |
The director is responsible for preparing the Strategic Report, the Report of the Director 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 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 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 enable him to ensure that the financial statements comply with the Companies Act 2006. He 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. |
MARLETON CROSS LIMITED (REGISTERED NUMBER: 01215692) |
Report of the Director |
for the period 1 JANUARY 2023 TO 29 FEBRUARY 2024 |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the director is 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 he 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. |
ON BEHALF OF THE BOARD: |
Report of the Independent Auditors to the Members of |
Marleton Cross Limited |
Opinion |
We have audited the financial statements of Marleton Cross Limited (the 'company') for the period ended 29 February 2024 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 29 February 2024 and of its profit for the period then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
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 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. |
Other information |
The director is responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Director, 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 Director 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 Director have been prepared in accordance with applicable legal requirements. |
Report of the Independent Auditors to the Members of |
Marleton Cross Limited |
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 Director. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept, 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 director |
As explained more fully in the Statement of Director's Responsibilities set out on page four, 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 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 has no realistic alternative but to do so. |
Report of the Independent Auditors to the Members of |
Marleton Cross Limited |
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: |
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud |
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates and considered the risks of acts by the company that were contrary to applicable laws and regulations, including fraud. These included, but were not limited to, the Companies Act 2006 and tax legislation. |
We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements and the financial report (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate entries including journals to overstate revenue or understate expenditure and management bias in accounting estimates. |
Audit procedures performed by the engagement team included: |
- | discussions with management, including considerations of known or suspected instances of non-compliance with laws and regulations and fraud; |
- | gaining an understanding of management's controls designed to prevent and detect irregularities; and |
- | identifying and testing journal entries. |
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations. |
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. |
Report of the Independent Auditors to the Members of |
Marleton Cross Limited |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in 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 |
Chartered Accountants and Statutory Auditor |
The Pinnacle |
170 Midsummer Boulevard |
Milton Keynes |
MK9 1BP |
MARLETON CROSS LIMITED (REGISTERED NUMBER: 01215692) |
Statement of Comprehensive |
Income |
for the period 1 JANUARY 2023 TO 29 FEBRUARY 2024 |
Period | Year Ended |
1.1.23 to 29.2.24 | 31.12.22 |
as restated |
Notes | £ | £ | £ | £ |
TURNOVER | 4 |
Cost of sales |
GROSS PROFIT |
Distribution costs |
Administrative expenses |
5,586,272 | 4,397,935 |
OPERATING LOSS | 7 | ( |
) | ( |
) |
Intercompany loan written off |
- Kartell | 8 |
115,994 | (2,439,359 | ) |
Interest receivable and similar income |
124,899 | (2,439,359 | ) |
Interest payable and similar expenses | 9 |
LOSS BEFORE TAXATION | ( |
) | ( |
) |
Tax on loss | 10 | ( |
) |
PROFIT/(LOSS) FOR THE FINANCIAL PERIOD | ( |
) |
OTHER COMPREHENSIVE INCOME |
Capital contribution |
Income tax relating to other comprehensive income |
OTHER COMPREHENSIVE INCOME FOR THE PERIOD, NET OF INCOME TAX |
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD |
( |
) |
MARLETON CROSS LIMITED (REGISTERED NUMBER: 01215692) |
Balance Sheet |
29 FEBRUARY 2024 |
2024 | 2022 |
as restated |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 12 |
Investments | 13 |
CURRENT ASSETS |
Stocks | 14 |
Debtors | 15 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 16 |
NET CURRENT LIABILITIES | ( |
) | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES | ( |
) | ( |
) |
CREDITORS |
Amounts falling due after more than one year |
17 |
NET LIABILITIES | ( |
) | ( |
) |
CAPITAL AND RESERVES |
Called up share capital | 21 |
Share premium | 22 |
Capital redemption reserve | 22 |
Retained earnings | 22 | ( |
) | (4,533,189 | ) |
SHAREHOLDERS' FUNDS | ( |
) | ( |
) |
The financial statements were approved by the director and authorised for issue on |
MARLETON CROSS LIMITED (REGISTERED NUMBER: 01215692) |
Statement of Changes in Equity |
for the period 1 JANUARY 2023 TO 29 FEBRUARY 2024 |
Called up | Capital |
share | Retained | Share | redemption | Total |
capital | earnings | premium | reserve | equity |
£ | £ | £ | £ | £ |
Balance at 1 January 2022 |
Prior year adjustment | - | ( |
) | - | - | ( |
) |
As restated | ( |
) |
Changes in equity |
Total comprehensive income | - | ( |
) | - | ( |
) |
Balance at 31 December 2022 | ( |
) | ( |
) |
Prior year adjustment | - | ( |
) | - | - | ( |
) |
As restated | ( |
) | ( |
) |
Changes in equity |
Total comprehensive income | - | - |
Balance at 29 February 2024 | ( |
) | ( |
) |
MARLETON CROSS LIMITED (REGISTERED NUMBER: 01215692) |
Notes to the Financial Statements |
for the period 1 JANUARY 2023 TO 29 FEBRUARY 2024 |
1. | STATUTORY INFORMATION |
Marleton Cross Limited is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Financial Reporting Standard 102 - reduced disclosure exemptions |
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": |
• | the requirements of Section 7 Statement of Cash Flows; |
• | the requirement of paragraph 3.17(d). |
Group financial statements |
The financial statements contain information about Marleton Cross Limited as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under Section 400 of the Companies Act 2006 from the requirements to prepare consolidated financial statements as it and its subsidiary undertaking are included by full consolidation in the consolidated financial statements of its parent, Brand K Holdings Limited, Thistledown Barn, Holcot Lane, Sywell, Northampton, NN6 0BG. |
This is both the smallest and largest group in which Marleton Cross Limited's accounts are consolidated. |
Related party exemption |
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group, on the grounds that consolidated financial statements for the year ended 29th February 2024 of its ultimate parent company, Brand K Holdings Limited, are publicly available. |
Turnover |
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. |
Turnover is recognised on the despatch of an order to a customer. |
Tangible fixed assets |
Plant and machinery | - |
Fixtures and fittings | - |
Motor vehicles | - |
Fixed assets are initially stated at historical cost. |
MARLETON CROSS LIMITED (REGISTERED NUMBER: 01215692) |
Notes to the Financial Statements - continued |
for the period 1 JANUARY 2023 TO 29 FEBRUARY 2024 |
2. | ACCOUNTING POLICIES - continued |
Stocks and work in progress |
Stocks and work in progress are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. Cost includes all costs incurred in bringing each product to its present location and condition on a first in first out basis. Net realisable value is based on estimated selling price less any further costs expected to be incurred to completion and disposal. |
Financial instruments |
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. |
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. |
(i) Financial assets and liabilities |
All financial assets and liabilities are initially measured at transaction price (including transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. |
Debt instruments that are classified as payable or receivable within one year on initial recognition and which |
meet the above conditions are measured at the undiscounted amount of the cash or other consideration |
expected to be paid or received, net of impairment. |
Other debt instruments not meeting these conditions are measured at fair value through profit or loss. |
Financial assets are derecognised when and only when a) the contractual rights to the cash flows from the |
financial asset expire or are settled, b) the Company transfers to another party substantially all of the risks and |
rewards of ownership of the financial asset, or c) the Company, despite having retained some but not all of the significant risks and rewards of ownership, has transferred control of the asset to another party. |
Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled or expires. |
Taxation |
Taxation for the period comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, 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. |
MARLETON CROSS LIMITED (REGISTERED NUMBER: 01215692) |
Notes to the Financial Statements - continued |
for the period 1 JANUARY 2023 TO 29 FEBRUARY 2024 |
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 period 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. |
Research and development |
Expenditure on research and development is written off in the year in which it is incurred. |
Foreign currencies |
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
Hire purchase and leasing commitments |
Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter. |
The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability. |
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. |
Going concern |
The company has incurred a loss after taxation, excluding exceptional items, for the financial period of £945,360 and a loss after taxation in the previous year of £2,578,417. There is a Net Liabilities position of £165,311 at 29th February 2024. |
These financial statements have been prepared on a going concern basis, which the director believes to be appropriate. Some members of the group provide cross-company guarantees to secure group debts. The owner of the group, who is also Managing Director, has confirmed the group will continue to provide financial support for loss-making companies in the group. The director has reviewed the latest group forecasts for the following year and has a reasonable expectation that the company and the group have adequate resources to continue in operational existence for the foreseeable future. Therefore, they continue to adopt the going concern basis of accounting in preparing the annual financial statements. |
Finance costs |
Finance costs of debt are recognised in the Statement of Income and Retained Earnings over the term of such instruments at a constant rate on the carrying amount. |
MARLETON CROSS LIMITED (REGISTERED NUMBER: 01215692) |
Notes to the Financial Statements - continued |
for the period 1 JANUARY 2023 TO 29 FEBRUARY 2024 |
2. | ACCOUNTING POLICIES - continued |
Confidential invoice discounting |
Amounts due in respect of invoice discounting are included within either cash at bank or within other loans, depending on if the balance is positive or negative. The company can use these facilities to draw down a percentage of the value of certain sales invoices. The management and collection of trade debtors remains with the company. |
Investments in subsidiaries |
Investments in subsidiaries are measured at cost less impairment. For investments in subsidiaries acquired cost is measured by reference to the nominal value of the shares issued plus fair value of other consideration. Any premium is ignored. |
MARLETON CROSS LIMITED (REGISTERED NUMBER: 01215692) |
Notes to the Financial Statements - continued |
for the period 1 JANUARY 2023 TO 29 FEBRUARY 2024 |
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, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. |
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised 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. |
Critical judgements in applying the Company's accounting policies |
The following are critical judgements, apart from those involving estimates (which are dealt with separately below), that the directors have made in the process of applying the Company's accounting policies and that have the most significant effect on the amount recognised in the financial statements. |
Impairment of assets |
The directors constantly review factors likely to impact the value or recoverability of assets held by the company. In conducting their review, they consider both internal and external sources of information as well as past experiences and market conditions. As far as the directors are aware there are no prevailing indications that assets held without impairment require one, or where an impairment has already been made that the amount of that impairment requires adjustment. |
Key sources of estimation uncertainty |
The key assumptions concerning the future, and other key sources of estimation uncertainty, that have a significant risk of causing material adjustment to the carrying amount of assets and liabilities within the next financial year are discussed below: |
Rebate accruals |
The company estimates the accrual required for volume rebates to be paid after the year end. |
Depreciation |
The company estimates the residual value and useful economic life of fixed assets. |
Prior year adjustment |
As described in Note 11, a prior year adjustment has been made to correct transactions processed in prior years. Full financial information has been unavailable and therefore the following judgements and estimates have been made. A judgement was made that journal entries of a certain nature represented revaluations of fixed assets and a credit to the profit and loss account. Estimates were made of the annual cost value of production moulds produced in house which have been recognised as fixed assets. |
Property dilapidations |
Under certain operating leases for land and buildings, the company is obligated to make repairs of dilapidations to the leased property upon the expiry of the lease. The company provides for the best estimate of the future unrecoverable costs of its obligations under these leases. |
MARLETON CROSS LIMITED (REGISTERED NUMBER: 01215692) |
Notes to the Financial Statements - continued |
for the period 1 JANUARY 2023 TO 29 FEBRUARY 2024 |
4. | TURNOVER |
The turnover and loss before taxation are attributable to the one principal activity of the company. |
An analysis of turnover by geographical market is given below: |
Period |
1.1.23 |
to | Year Ended |
29.2.24 | 31.12.22 |
as restated |
£ | £ |
United Kingdom |
Europe |
Rest of the World | - | 14,114 |
5. | EMPLOYEES AND DIRECTORS |
Period |
1.1.23 |
to | Year Ended |
29.2.24 | 31.12.22 |
as restated |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the period was as follows: |
Period |
1.1.23 |
to | Year Ended |
29.2.24 | 31.12.22 |
as restated |
Production | 145 | 153 |
Administration | 7 | 9 |
Sales | 2 | 5 |
MARLETON CROSS LIMITED (REGISTERED NUMBER: 01215692) |
Notes to the Financial Statements - continued |
for the period 1 JANUARY 2023 TO 29 FEBRUARY 2024 |
6. | DIRECTORS' EMOLUMENTS |
Period |
1.1.23 |
to | Year Ended |
29.2.24 | 31.12.22 |
as restated |
£ | £ |
Directors' remuneration |
Directors' pension contributions to money purchase schemes |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes |
7. | OPERATING LOSS |
The operating loss is stated after charging: |
Period |
1.1.23 |
to | Year Ended |
29.2.24 | 31.12.22 |
as restated |
£ | £ |
Other operating leases |
Depreciation - owned assets |
Depreciation - assets on hire purchase contracts |
Loss on disposal of fixed assets |
Auditors' remuneration |
8. | EXCEPTIONAL ITEMS |
Period |
1.1.23 |
to | Year Ended |
29.2.24 | 31.12.22 |
as restated |
£ | £ |
Intercompany loan written off |
- Kartell |
During the period ended 29 February 2024, the company recognised exceptional income totalling £1,496,284. This income relates to the writing off of an intercompany loan owed to another group company. |
The total impact of exceptional items on the income statement is as follows: |
- Exceptional income: £1.5 million |
- Net impact: £(1.5M) credit to profit before tax |
MARLETON CROSS LIMITED (REGISTERED NUMBER: 01215692) |
Notes to the Financial Statements - continued |
for the period 1 JANUARY 2023 TO 29 FEBRUARY 2024 |
9. | INTEREST PAYABLE AND SIMILAR EXPENSES |
Period |
1.1.23 |
to | Year Ended |
29.2.24 | 31.12.22 |
as restated |
£ | £ |
Invoice discounting interest |
Other Interest |
Hire purchase interest |
10. | TAXATION |
Analysis of the tax credit |
The tax credit on the loss for the period was as follows: |
Period |
1.1.23 |
to | Year Ended |
29.2.24 | 31.12.22 |
as restated |
£ | £ |
Current tax: |
UK corporation tax | ( |
) |
Tax on loss | ( |
) |
MARLETON CROSS LIMITED (REGISTERED NUMBER: 01215692) |
Notes to the Financial Statements - continued |
for the period 1 JANUARY 2023 TO 29 FEBRUARY 2024 |
10. | TAXATION - continued |
Reconciliation of total tax credit included in profit and loss |
The tax assessed for the period is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
Period |
1.1.23 |
to | Year Ended |
29.2.24 | 31.12.22 |
as restated |
£ | £ |
Loss before tax | ( |
) | ( |
) |
Loss multiplied by the standard rate of corporation tax in the UK of |
( |
) |
( |
) |
Effects of: |
Expenses not deductible for tax purposes |
Capital allowances in excess of depreciation | - | ( |
) |
Utilisation of tax losses |
Adjustments to tax charge in respect of previous periods |
Research and development relief for prior years | (510,209 | ) | - |
Deferred taxation credit not provided for | 174,257 | (370,910 | ) |
Effect of change in rate of deferred tax being 25% | (24,761 | ) | - |
Intercompany waiver not taxable | (366,440 | ) | - |
Total tax credit | (779,291 | ) | - |
Tax effects relating to effects of other comprehensive income |
1.1.23 to 29.2.24 |
Gross | Tax | Net |
£ | £ | £ |
Capital contribution | - | 1,525,283 |
MARLETON CROSS LIMITED (REGISTERED NUMBER: 01215692) |
Notes to the Financial Statements - continued |
for the period 1 JANUARY 2023 TO 29 FEBRUARY 2024 |
11. | PRIOR YEAR ADJUSTMENT |
During the year, the company was purchased as part of a group, and upon review of the previous years' financial statements, a number of material errors were identified which have been amended retrospectively in accordance with the provisions of FRS 102 within these financial statements. The effect on prior period comparatives is as follows: |
Changes to the balance sheet |
At 31 December 2022 |
Notes | As previously reported | Adjustment | As restated |
£ | £ | £ |
Fixed assets |
Tangible assets | 4,5 | 4,356,320 | (1,666,708 | ) | 2,689,612 |
Current assets |
Stocks | 3 | 4,199,847 | (3,182,164 | ) | 1,017,683 |
Debtors | 1 | 4,961,121 | (381,320 | ) | 4,579,801 |
Creditors due within one year | 2,6 | (10,069,058 | ) | (433,517 | ) | (10,502,575 | ) |
Net assets | 3,422,192 | (5,663,709 | ) | (2,241,517 | ) |
Capital and reserves |
Retained earnings | 1,2,3,4,5,6 | 1,130,520 | (5,663,709 | ) | (4,533,189 | ) |
Total equity | 3,422,192 | (5,663,709 | ) | (2,241,517 | ) |
Changes to the profit and loss account |
For the period to 31 December 2022 |
Notes | As previously reported | Adjustment | As restated |
£ | £ | £ |
Cost of sales | 3,4,5 | (16,168,699 | ) | (1,471,960 | ) | (17,640,659 | ) |
Gross profit | 4,451,844 | (1,471,960 | ) | 2,979,884 |
Taxation | 1 | 370,910 | (370,910 | ) | - |
Profit/(loss) for the financial period | (735,548 | ) | (1,842,870 | ) | (2,578,418 | ) |
Reconciliation of changes in equity |
31 December | 1 January |
2022 | 2022 |
Notes | £ | £ |
Equity as previously reported | 3,422,192 | 4,157,740 |
Adjustments to prior year |
Deferred tax asset | 1 | (381,320 | ) | (10,410 | ) |
Provisions | 2 | (380,000 | ) | (380,000 | ) |
Reduction in stock value | 3 | (3,182,164 | ) | (2,230,832 | ) |
Introduction of fixed assets | 4 | 396,511 | 338,068 |
Removal of fixed assets | 5 | (2,063,219 | ) | (1,484,148 | ) |
VAT | 6 | (53,517 | ) | (53,517 | ) |
Equity as adjusted | (2,241,517 | ) | 336,900 |
MARLETON CROSS LIMITED (REGISTERED NUMBER: 01215692) |
Notes to the Financial Statements - continued |
for the period 1 JANUARY 2023 TO 29 FEBRUARY 2024 |
Reconciliation of changes in profit/(loss) for the previous financial period |
2022 |
Notes | £ |
Loss previously reported | (735,548 | ) |
Adjustments to prior year |
Deferred tax asset | 1 | (370,910 | ) |
Provisions | 2 | - |
Reducing stock value | 3 | (951,332 | ) |
Introducing fixed assets | 4 | 58,443 |
Removal of fixed assets | 5 | (579,071 | ) |
VAT | 6 | - |
Lossasadjusted | (2,578,418 | ) |
Notes to reconciliation |
1. Deferred tax asset |
Correction to remove deferred tax asset which should not have been provided for. |
2. Provisions |
Correction to include provisions for dilapidation costs on lease contracts. |
3. Reducing stock value |
Correction to remove incorrectly included items of stock and correcting valuations. |
4. Introducing fixed assets |
Correction to include assets previously included as stock, and the subsequent depreciation of the assets. |
5. Removal of fixed assets |
Correction to remove incorrectly capitalised assets, and their depreciation. |
6. VAT |
Correction to remove incorrectly claimed VAT on invoices. |
MARLETON CROSS LIMITED (REGISTERED NUMBER: 01215692) |
Notes to the Financial Statements - continued |
for the period 1 JANUARY 2023 TO 29 FEBRUARY 2024 |
12. | TANGIBLE FIXED ASSETS |
Fixtures |
Plant and | and | Motor |
machinery | fittings | vehicles | Totals |
£ | £ | £ | £ |
COST |
At 1 January 2023 |
Additions |
Disposals | ( |
) | ( |
) | ( |
) | ( |
) |
At 29 February 2024 |
DEPRECIATION |
At 1 January 2023 |
Charge for period |
Eliminated on disposal | ( |
) | ( |
) | ( |
) | ( |
) |
At 29 February 2024 |
NET BOOK VALUE |
At 29 February 2024 |
At 31 December 2022 |
The net book value of tangible fixed assets includes £NIL (2022 - £ 66,543 ) in respect of assets held under hire purchase contracts. |
13. | FIXED ASSET INVESTMENTS |
The company's investments at the Balance Sheet date in the share capital of companies include the following: |
Registered office: 155 Wellingborough Road, Rushden, Northamptonshire, United Kingdom, NN10 9TB |
Nature of business: |
% |
Class of shares: | holding |
2024 | 2022 |
£ | £ |
Aggregate capital and reserves |
Registered office: 155 Wellingborough Road, Rushden, Northamptonshire, NN10 9TB |
Nature of business: |
% |
Class of shares: | holding |
2024 | 2022 |
£ | £ |
Aggregate capital and reserves |
MARLETON CROSS LIMITED (REGISTERED NUMBER: 01215692) |
Notes to the Financial Statements - continued |
for the period 1 JANUARY 2023 TO 29 FEBRUARY 2024 |
14. | STOCKS |
2024 | 2022 |
as restated |
£ | £ |
Raw materials |
Finished goods |
15. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2024 | 2022 |
as restated |
£ | £ |
Trade debtors |
Amounts owed by group undertakings |
Other debtors |
Tax |
Prepayments |
Included within trade debtors is £3,148,456 which forms part of a confidential invoice discounting facility. |
16. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2024 | 2022 |
as restated |
£ | £ |
Bank loans and overdrafts (see note 18) |
Other loans (see note 18) |
Hire purchase contracts (see note 19) |
Trade creditors |
Amounts owed to group undertakings |
Social security and other taxes |
VAT | 262,249 | 122,608 |
Other creditors |
Directors' current accounts | - | 748,848 |
Accrued expenses |
17. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
2024 | 2022 |
as restated |
£ | £ |
Hire purchase contracts (see note 19) |
MARLETON CROSS LIMITED (REGISTERED NUMBER: 01215692) |
Notes to the Financial Statements - continued |
for the period 1 JANUARY 2023 TO 29 FEBRUARY 2024 |
18. | LOANS |
An analysis of the maturity of loans is given below: |
2024 | 2022 |
as restated |
£ | £ |
Amounts falling due within one year or on demand: |
Bank loans |
Invoice discounting | 2,558,818 | 3,814,683 |
The invoicing discounting facility is secured in favour of Shawbrook Bank Limited by a first charge of book debts. |
19. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Hire purchase contracts |
2024 | 2022 |
as restated |
£ | £ |
Net obligations repayable: |
Within one year |
Between one and five years |
Non-cancellable operating | leases |
2024 | 2022 |
as restated |
£ | £ |
Within one year |
Between one and five years |
MARLETON CROSS LIMITED (REGISTERED NUMBER: 01215692) |
Notes to the Financial Statements - continued |
for the period 1 JANUARY 2023 TO 29 FEBRUARY 2024 |
20. | SECURED DEBTS |
The following secured debts are included within creditors: |
2024 | 2022 |
as restated |
£ | £ |
Hire purchase contracts | - | 51,756 |
Invoice financing creditor | 2,558,818 | 3,814,683 |
The Company has the following securities at the balance sheet date: |
Shawbrook Bank Limited holds a fixed and floating charge over the assets of the Company in respect of the Brand K Group facility of up to £32.9m. The group facilities include invoice discounting over receivables of up to £29.5m, in aggregate with the inventory facility, which is up to £5m, a cashflow facility of up to £3.41m. The cashflow facility is repayable in 36 monthly instalments. The advance rate for the invoice discounting facility is 85%. There is a group cross company guarantee in place as security for the charge. The bank also holds a right of group set-off. |
Post year end, the group entered a new facility agreement up to £41.6m. It includes invoice discounting over receivables of up to £35m, in aggregate with the inventory facility up to £5m, and a cashflow facility of up to £6.6m. |
The total balances secured at the year end across the group are as follows: confidential invoice discounting facility: £13.1m, inventory facility: £2.6m and cashflow facility: £2.6m. |
The balance due on the Company's confidential invoice discount facility at the balance sheet date was £2,558,818. No other facility was used by the Company during the year. |
21. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2024 | 2022 |
value: | as restated |
£ | £ |
Ordinary | 0.05 | 41,160 | 32,321 |
NIL | Preferred Ordinary | 0.05 | - | 8,839 |
41,160 | 41,160 |
During the period 176,787 Preferred Ordinary Shares of £0.05 were converted to Ordinary Shares of £0.05. |
MARLETON CROSS LIMITED (REGISTERED NUMBER: 01215692) |
Notes to the Financial Statements - continued |
for the period 1 JANUARY 2023 TO 29 FEBRUARY 2024 |
22. | RESERVES |
Capital |
Retained | Share | redemption |
earnings | premium | reserve | Totals |
£ | £ | £ | £ |
At 1 January 2023 | ( |
) | (439,808 | ) |
Prior year adjustment | ( |
) | ( |
) |
( |
) | (2,282,677 | ) |
Profit for the period |
Capital Contribution |
At 29 February 2024 | ( |
) | (206,471 | ) |
23. | RELATED PARTY DISCLOSURES |
The Company has taken advantage of the exemptions available under FRS102 section 33.1A not to report transactions with wholly owned group members. |
During the period a loan of £748,848 was repaid to a director who held office until March 2023. |
Property rental costs of £40,000 were charged to the company during the period by a previous director to March 2023. |
24. | ULTIMATE CONTROLLING PARTY |
The immediate parent company of the entity is Brand K Limited which owns 100% of the ordinary share capital of the company and is 100% owned itself by Brand K Holdings Limited. These companies are incorporated in the United Kingdom and registered in England and Wales. Their registered offices are the same as for the company. |
At 29 February 2024 the ultimate parent company was Brand K Holdings Limited. The registered office of the ultimate parent company is Thistledown Barn, Holcot Lane, Sywell, Northampton, NN6 0BG. The group accounts of Brand K Holdings Limited can be obtained from Companies House. |
At 29 February 2024, Brand K Holdings Limited was under the control of Alex Norford. |