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Registered number:
For the Year Ended
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MSS Products Holdings Limited
Company Information
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MSS Products Holdings Limited
Contents
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MSS Products Holdings Limited
Group Strategic Report
For the Year Ended 31 December 2024
The directors present the Group Strategic Report for the year ended 31 December 2024.
The Group's principal activities are the worldwide source and supply of electrical materials, engineered components and sub-assemblies. MSS Group gives original equipment manufacturers ('OEM's') a platform to low cost manufactured products providing best cost pricing with local quality and service. Customer relationships are key to success and MSS has long standing relationships with many customers.
The Electrical Industry has proved thoroughly robust and business performance in current market sectors, combined with new ''Green'' business, will facilitate ambitious growth targets. Principal risks and uncertainties The main risks facing the Group are currency and commodity fluctuations. As the majority of sales are metal-based, the Group's trading entities manage exposure to London Metal Exchange ('LME') pricing and exchange rates on a regular basis. Management of these risks is done in-house with a dedicated department who have expertise in this area. Derivative instruments such as forward contracts mitigate the risks from such exposures. Key performance indicators Management uses a range of performance measures to monitor and manage the business, including turnover, gross margin and EBITDA (as referred to below). The Group places significant emphasis on cash generation forecasts ensuring that the balance of customers, suppliers and stock levels help to maintain a positive cash flow over the working capital cycle. The Board considers Adjusted EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation, adjusted for exceptional and normalised items) to be its key metric. Adjusted EBITDA for the year was £8.105m (7.4% of Turnover). Normalisation adjustments are exceptional recruitment and interim staff costs incurred during the year.
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MSS Products Holdings Limited
Group Strategic Report (continued)
For the Year Ended 31 December 2024
Normalised adjustments were introduced in FY24 to provide a clearer view of the Group’s underlying performance. As this exercise was undertaken only in FY24, there are no comparative figures presented for FY23.
Developments and financial performance during the year As reported in the Consolidated Statement of Comprehensive Income, group turnover totalled £109m in the year ended 31 December 2024 (15 months ended 31 December 2023: £95.6m). The UK trading subsidiary's turnover has increased by 2% (28% when pro-rated) from £91,252,486 in the 15 months ended 31 December 2023 to £93,491,131 in the year ended 31 December 2024. The Company's increased turnover has been driven by favourable market conditions whilst the world continues to electrify, resulting in growth in all areas of the business. Although administration costs have risen, the gross margin has remained stable at 11% (2023: 10%); these margin gains have carried through to operating profit 7.4% (2023: 6.3%). The French subsidiary's turnover increased by £1.8m (39% pro-rated) to be £3.59m, whilst the US subsidiaries turnover increased from £319k to £12.47m. In addition, increased demand which has resulted from the world shortage of raw materials, and MSS's continued strategic climb up the value chain, has resulted in profit before tax totalling £7.6m (15 month period ended 31 December 2023: £5.5m) being achieved in the year. The Group has also continued to grow its subsidiary companies based in France and the United States. These companies have also benefitted from the buoyant marketplace and low cost sourcing. Financial position at the reporting date The balance sheet shows that the consolidated net assets at the reporting date totalled £19.53m (31 December 2023: £13.8m), as a result of profit achieved in the period.
For the financial year 2025, the MSS Products group is forecasting further growth in terms of turnover, due to a strong order book, new customers and the higher value-added content of products increasing throughout the year. A greater share of business will be components and assemblies, particularly for the renewable sector, which will increase net profit and margins throughout the year. MSS Product's pro-active approach has seen an increase in manpower and the addition of specialist expertise to be ready for the business growth.
The Directors continue to monitor the implications of global and local economic factors which may impact business activity, and remain confident in their strategy and the strength of the business. Existing risk management policies are deemed to be adequate.
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MSS Products Holdings Limited
Group Strategic Report (continued)
For the Year Ended 31 December 2024
The Group’s principal objective is to establish and maintain its position as preferred partner to our customers and to increase the value of the Group by generating strong, sustainable and growing cash flows across industry and economic cycles. To achieve these objectives, the Group has the following key strategies:
• Consistently meeting and surpassing our customers' expectations in terms of quality and supply reliability. • Offering development opportunities to our employees through skills enhancement and a commitment to learning, fostering an empowered workforce. • Establishing world class operations with industry leading process management in all disciplines. • Contributing to the global energy transition as well as to a responsible and sustainable environment. • Making a positive contribution to our stakeholders and communities while achieving top tier financial performance. The directors believe these are critical long term factors for the success of the Group. The directors’ decision making has supported the implementation of the strategy which aims to operate and develop the business in a way that supports both the current and future needs. The directors strongly believe that sustainable business management and practices will contribute to the long term business success and will strengthen the Group’s leading position in the market. The directors ensure that the Group has sufficient resources to support its long term growth strategy and fund investment. The Group operates in an industry characterised by long term relationships between stakeholders and therefore engagement with stakeholders and maintaining a reputation for high standards of service and business conduct is vital. Engaging stakeholders and developing meaningful partnerships is essential for business. The Group engages in regular, open and proactive dialogue with all relevant stakeholders as this is needed to understand their perspectives, expectations, concerns and needs. In this way the Group is able to integrate stakeholders' considerations. Key decisions taken by directors during the period are as follows: • To continue to invest in recruitment and training and to boost capacity to support the Group’s continued growth and expansion. During the period under review, the Group approved and committed significant amounts on Capital Expenditure to expand its capacity in its two manufacturing bases and made a number of significant hires. Employee engagement The Group places considerable value on the involvement of its employees and has continued to keep them informed on matters affecting them as employees and on the various factors affecting performance of the Group. This is achieved through regular meetings with employees, both formal and informal, giving the opportunity for consultation on a wide range of matters affecting their current and future interests. Engagement with customers and suppliers Customers The Group's broad customer base spans industries, businesses and end users of our products. We work closely with our customers to understand their evolving needs so we can improve and adapt to meet them. The Group protects the interests of its customers through the careful selection of suppliers and other business partners, and through the standards set for its own actions. Suppliers We depend on the capability and performance of our suppliers to help deliver the products we need for our operations and our customers. The Group only works with suppliers who are prepared to eliminate problems or implement risk reduction measures.
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MSS Products Holdings Limited
Group Strategic Report (continued)
For the Year Ended 31 December 2024
Community, environment and members The Group engages with the community and has relationships with local charities to whom it regularly contributes. The Group monitors and seeks to reduce its impact on the environment. A review is planned for 2024 to plan net zero targets.
This report was approved by the board and signed on its behalf.
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MSS Products Holdings Limited
Directors' Report
For the Year Ended 31 December 2024
The directors present their report and the financial statements for the year ended 31 December 2024.
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £5,707,782 (2023 -£4,289,802).
No dividends were paid during the year (15 month period to 31 December 2023 - £nil). The directors do not recommend the payment of a final dividend.
The directors who served during the year were:
The Group invests in research and development with the purpose of creating innovative, efficient products for the power industry.
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MSS Products Holdings Limited
Directors' Report (continued)
For the Year Ended 31 December 2024
The Group's principal financial instruments comprise trade debtors, loans to and from group undertakings, trade creditors, an invoice discounting facility, and forward contracts. The Group has in place a risk management programme that seeks to limit the adverse effects of the risks associated with these financial instruments on the financial performance of the Group.
The main risk arising from the Group's financial instruments are cash flow risk, credit risk, liquidity risk and exchange rate risk. The directors review and agree policies for managing each of these risks and these policies have not significantly changed from previous years. Credit risk is managed by running credit checks on new customers and by monitoring payments against the contractual arrangements. The Group has no significant concentration of credit risk, with exposure spread over a number of customers. With regards to liquidity risk, the objective is to ensure continuity of funding and cash levels sufficient to meet the ongoing needs of the business. The policy is to smooth the cash requirements of the business and to arrange funding ahead of requirements, should it be needed. The Group recognises that managing cash flow risk is crucial to maintaining financial stability and ensuring the smooth operation of our business. Our cash flow risk policy aims to safeguard the company against potential liquidity shortages and ensure that we have sufficient cash to meet our obligations as they fall due. We maintain detailed cash flow forecasts to anticipate our cash needs. These forecasts are regularly updated to reflect changes in business operations, market conditions, and other external factors. Efficient credit control processes are in place to manage receivables and ensure timely collections from customers. This helps maintain a steady cash inflow. We closely monitor our expenditure, maintaining a healthy cash balance and avoiding unnecessary financial strain.
Customers
The Group's broad customer base spans all areas of Electrical and Renewable industries, businesses and end users of our products. We work closely with customers to understand their evolving needs so we can improve and adapt to them. The Company protects the interests of its customers through the careful selection of suppliers and other business partners, and through the standards set for its own actions. Suppliers We depend on the capability and performance of our suppliers to help deliver the products we need for our operations and our customers. The Group only works with suppliers who are prepared to eliminate problems or implement risk reduction measures. Employees The Group places considerable value on the involvement of its employees and has continued to keep them informed on matters affecting them as employees, and on the various factors affecting performance of the Group. This is achieved through formal and informal meetings. Employee representatives are consulted regularly on a wide range of matters affecting their current and future interest through regular meetings. Applications for employment by disabled persons are always fully considered, bearing in mind the abilities of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment with the Group continues and that appropriate training is arranged. It is the policy of the Group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
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MSS Products Holdings Limited
Directors' Report (continued)
For the Year Ended 31 December 2024
The Group has taken measures to improve energy efficiency and reduce energy consumption through various projects including:
∙Implementation of 5 additional electric charging points at our Head Office for our growing fleet of hybrid and electric vehicles;
∙The business has started the process of initiating switchover to electric/hybrid vehicles, with a commitment to 100% electric/hybrid usage by September 2025;
∙Installation of energy efficient lighting; and
∙Upgrade to more energy efficient solar panels.
The intensity ratio of tonnes CO2e per £m sales revenue for the UK companies is 1.63 (Year to 31 December 2023: 2.24).
Subsequent to the year-end, the entire share capital of the company was acquired by Chambertin Capital Limited (company number 05617608). The ultimate controlling party continues to be Stellex Capital Holdings II Luxembourg SARL.
The auditors, Hurst Accountants Limited, will not be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
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MSS Products Holdings Limited
Directors' Report (continued)
For the Year Ended 31 December 2024
This report was approved by the board and signed on its behalf.
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MSS Products Holdings Limited
Independent Auditors' Report to the Members of MSS Products Holdings Limited
We have audited the financial statements of MSS Products Holdings Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2024, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, 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).
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 Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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 Group's or the parent 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.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. 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. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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MSS Products Holdings Limited
Independent Auditors' Report to the Members of MSS Products Holdings Limited (continued)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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MSS Products Holdings Limited
Independent Auditors' Report to the Members of MSS Products Holdings Limited (continued)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
The engagement partner's assessment of the appropriateness of the collective competence and capabilities of the engagement team included consideration of the engagement team’s:
∙Understanding of, and practical experience with audit engagements of a similar nature and complexity through appropriate training and participation;
∙Knowledge of the industry in which the entity operates;
∙Understanding of the legal and regulatory requirements specific to the entity.
Identifying and assessing potential risks related to irregularities
In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
∙The nature of the industry and sector in which the group operates; the control environment and business performance including key drivers for directors' remuneration, bonus levels and performance targets.
∙The outcome of enquiries of management, including whether management was aware of any instances of non-compliance with laws and regulations, and whether management had knowledge of any actual, suspected, or alleged fraud.
∙Supporting documentation relating to the Group and parent company's policies and procedures for:
°Identifying, evaluating, and complying with laws and regulations
°Detecting and responding to the risks of fraud
∙The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.
∙The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
∙The legal and regulatory framework in which the Group and parent company operate, particularly those laws and regulations which have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or which had a fundamental effect on the operations of the Company, including General Data Protection requirements and Anti-bribery and Corruption.
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MSS Products Holdings Limited
Independent Auditors' Report to the Members of MSS Products Holdings Limited (continued)
Audit response to risks identified Our procedures to respond to the risks identified included the following:
∙Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the provisions of those relevant laws and regulations which have a direct effect on the financial statements.
∙Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud.
∙Evaluation of the operating effectiveness of management’s controls designed to prevent and detect irregularities.
∙Enquiring of management about any actual and potential litigation and claims.
∙Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of material misstatement due to fraud.
We have also considered the risk of fraud through management override of controls by:
∙Testing the appropriateness of journal entries and other adjustments. We have used data analytics software to identify accounting transactions which may pose a heightened risk of material misstatement, whether due to fraud or error.
∙Challenging assumptions made by management in their significant accounting estimates, and assessing whether the judgements made in making 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.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of them. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
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MSS Products Holdings Limited
Independent Auditors' Report to the Members of MSS Products Holdings Limited (continued)
for and on behalf of
Chartered Accountants & Statutory Auditors
3 Stockport Exchange
SK1 3GG
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MSS Products Holdings Limited
Consolidated Statement of Comprehensive Income
For the Year Ended 31 December 2024
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MSS Products Holdings Limited
Registered number: 10975186
Consolidated Balance Sheet
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 21 to 43 form part of these financial statements.
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MSS Products Holdings Limited
Registered number: 10975186
Company Balance Sheet
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 21 to 43 form part of these financial statements.
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MSS Products Holdings Limited
Consolidated Statement of Changes in Equity
For the Year Ended 31 December 2024
Consolidated Statement of Changes in Equity
For the Period Ended 31 December 2023
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MSS Products Holdings Limited
Company Statement of Changes in Equity
For the Year Ended 31 December 2024
Company Statement of Changes in Equity
For the Period Ended 31 December 2023
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MSS Products Holdings Limited
Consolidated Statement of Cash Flows
For the Year Ended 31 December 2024
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MSS Products Holdings Limited
Consolidated Statement of Cash Flows (continued)
For the Year Ended 31 December 2024
Consolidated Analysis of Net Debt
For the Year Ended 31 December 2024
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MSS Products Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
MSS Products Holdings Limited is a limited company incorporated in England and Wales. The address of the registered office and principal place of business is Bankfield Road, Tyldesley, Manchester, M29 8QH.
The Group's principal activities are the worldwide source and supply of electrical materials, engineered components and sub-assemblies.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
Parent Company disclosure exemptions
In preparing the separate financial statements of the parent Company, advantage has been taken of the following disclosure exemptions available in FRS 102:
∙No Statement of Cash Flows has been presented for the parent Company;
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
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MSS Products Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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MSS Products Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
2.Accounting policies (continued)
When the outcome of longer-term projects can be estimated reliably, contract revenue and contract costs are recognised as revenue and expenses respectively by reference to the stage of completion at the end of the reporting period. Reliable estimation of the outcome of longer-term projects requires reliable assessment of the stage of completion, future costs and collectability of billings, to be made by management. When the outcome of a long-term project cannot be reliably measured, costs are expensed as incurred, and revenue is recognised only to the extent that it is probable that costs will be recoverable. When it is probable that the total contract costs will exceed total contract revenue on a longer-term project, the expected loss shall be recognised as an expense immediately, with a corresponding provision for an onerous contract. Royalties Royalties are recognised on an accruals basis in accordance with the substance of the relevant agreement.
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MSS Products Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
2.Accounting policies (continued)
Page 24
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MSS Products Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
2.Accounting policies (continued)
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
Negative goodwill on acquisitions - 2 years Negative goodwill When the fair value of the consideration for an acquired undertaking is lower than the fair value of its separable net assets, the difference is treated as negative goodwill and is capitalised. Negative goodwill up to the fair value of non-monetary assets acquired is amortised through the profit and loss account in the period in which these assets are recovered, while negative goodwill in excess of the fair value of non-monetary assets acquired is recognised in the profit and loss account in the periods expected to be benefited.
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:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Page 25
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MSS Products Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the Group's Balance Sheet when the Group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
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MSS Products Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
2.Accounting policies (continued)
Basic financial assets
Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.
Impairment of financial assets
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other creditors, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Page 27
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MSS Products Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
2.Accounting policies (continued)
Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.
The judgements, estimates and assumptions that have the most significant effect on the carrying value of assets and liabilities of the Group as at 31 December 2024 are discussed below: Provision for slow-moving and obsolete stocks In determining whether provision for slow-moving and obsolete stock should be recorded in profit or loss, the Group makes judgements as to whether there is any observable data indicating that there is any future saleability of the product and the estimated net realisable value for such product, including the potential scrap value. Accordingly, provision for impairment is made where the net realisable value is less than the cost, based on estimates by management. The provision for slow-moving and obsolete stock is based on ageing and historical sales patterns, and the estimated realisable value. At the year-end, stock held by the Group totalled £25,965,520 (2023: £17,060,602). Investments in subsidiaries (Company) Management assesses at each reporting date whether there is an indication that investments in each subsidiary are impaired. If any such indication exists, management shall estimate the recoverable amount of the asset and any impairment loss shall be recognised immediately in profit or loss. At the year end, investments in subsidiaries held by the Company totalled £3,344,860 (2023: £3,344,860).
Page 28
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MSS Products Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
Analysis of turnover by country of destination:
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MSS Products Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
Page 30
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MSS Products Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
Page 31
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MSS Products Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
Page 32
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MSS Products Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
Page 33
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MSS Products Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
12.Taxation (continued)
There were no factors that may affect future tax charges.
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MSS Products Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
Page 35
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MSS Products Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
Page 36
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MSS Products Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
Page 37
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MSS Products Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
Page 38
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MSS Products Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
Page 39
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MSS Products Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
Page 40
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MSS Products Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
Page 41
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MSS Products Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
Capital redemption reserve
The capital redemption reserve is a non-distributable reserve into which amounts are transferred following the redemption or purchase of a company's own shares. This cannot be distributed as a dividend. Merger reserve A merger reserve arose on a business combination that was accounted for as a merger in accordance with UK GAAP. Profit and loss account The profit & loss account represents the accumulated undistributed reserves of the Company.
A group undertaking is party to a guarantee dated 6 September 2022 in favour of HM Revenue & Customs for £30,000, and is party to guarantees dated 21 April 2023 and 27 November 2023 in favour of certain suppliers for amounts totalling £135,938.
The Company and its UK trading subsidiary, MSS Products Limited, are party to an agreement guaranteeing the liabilities of companies in the group headed by Bamboo Topco Limited totalling £78,048,000.
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £63,035 (15 month period to 31 December 2023: £71,330). Contributions totalling £9,715 (31 December 2023: £nil) were payable to the fund at the balance sheet date and are included in creditors.
Page 42
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MSS Products Holdings Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
At the start of the period the amount owed by a Director was £615. £615 was repaid during the year leaving a balance of £nil remaining at year end. The maximum amount outstanding during the year was £615.
No interest was charged and the loan was repayable on demand.
The ultimate controlling party is Stellex Capital Holdings II Luxembourg SARL, a company incorporated in Luxembourg.
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