Company registration number 02452908 (England and Wales)
SHAKESPEARE MONOFILAMENT UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
SHAKESPEARE MONOFILAMENT UK LIMITED
COMPANY INFORMATION
Directors
Mr K Baughman
Mr B Searfoss
Mr G Walsh
Mr M Rosebrock
Mr D Moody
(Appointed 18 March 2021)
Company number
02452908
Registered office
Enterprise Way
Venture Road
Fleetwood
FY7 8RY
Auditor
MHA Moore and Smalley
Richard House
9 Winckley Square
Preston
PR1 3HP
SHAKESPEARE MONOFILAMENT UK LIMITED
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5
Directors' responsibilities statement
6
Independent auditor's report
7 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
18
Notes to the financial statements
13 - 27
SHAKESPEARE MONOFILAMENT UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 1 -
The directors present the strategic report for the year ended 31 December 2021.
Review of the business
In
the
f
inancial year 2021
,
the company was still facing challenges brought about by the restrictions imposed by the Covid 19 pandemic, as well as facing new challenges brought about from supply chain and logistic disruptions, along with significant inflationary raw material cost price increases. Despite these challenges
,
the company was able to successfully navigate itself through these obstacles and deliver increased volume growth
,
resulting in increased turnover and gross margin. This was achieved through the dedication of its workforce as well as maintaining good dialogue with customers and suppliers to ensure that all expectations were met. The company ensured that
the impact of
increased costs w
ere
communicated with its customer base, so that
it
could negotiate an increase in sales prices.
The trading results for FY 2021, improved over FY 2020 with a
12
.3
% increase in sales and 20
.4
% increase in gross profit. The sales increase was driven by growth in
the
extrusion business
,
with volumes increasing by 43% over prior year and conductive fibers volumes increasing by 30%. This growth led to turnover increasing by £1,346k and gross margin increasing by £440k. This margin improvement was driven by improved cost absorption in
the
extrusion business due to more volume produced in the plant.
Freight costs increased by £70k over prior year
,
which is due to more volume being shipped to customers as well as an increase in logistics costs with freight companies.
Admin costs increased by £114k over prior year
,
primarily driven by foreign exchange losses due to the timing of when sales and purchase invoices were raised and then settlement of these invoices. In FY 2020 the company made a foreign exchange gain, therefore increasing the year over year FX difference.
The majority of the company’s sales are outside its functional currency of GBP. The company does not hedge its currency exposure Euro / GBP due to Barclays bank not allowing companies owned by USA private equity companies to enter into forward currency contracts and therefore the company traded at spot rates during the year. With regards to the USD exposure the company has a natural hedge, with significant USD purchases with its parent company
,
Shakespeare LLC and Asian vendors.
During FY 2021 the company installed a “Slub Detection System" which helps the company improve its diameter monitoring capability on its fine diameter product range and improve quality, in line with the demands of our customers. We also made an investment commitment for a new 86 position extrusion winder that will be installed In June 2022. This investment will help us improve the quality demands for our customers as well as increase production efficiencies.
Key performance indicators
The company’s key performance indicators are:
2021 2020
£’000 £’000
SHAKESPEARE MONOFILAMENT UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 2 -
Principal risks and uncertainties
Management meets on a monthly basis to evaluate the company’s risks. The principal risks and uncertainties facing the company are broadly grouped as competitive, legislative, and financial (treasury policies). The company consider the immediate risks affecting the company to be Supply chain disruptions, inflationary cost increases primarily energy and raw material price increases.
Covid 19 pandemic
The company still discuss the Covid 19 pandemic with a meeting held every 2 weeks with the JADEX parent company to discuss the risks that all the JADEX plants face, and to ensure that adequate safe measures are implemented. The UK government has now relaxed all COVID restrictions and the country is learning to live with COVID, with a high percentage of the UK population now being vaccinated.
Brexit
The company has managed to successfully put procedures in place that allows us to ship into the EU with minimal disruption. The only negative we have seen is an increase in documentation and lead times, but through dialogue with our EU customer base we have managed to communicate that lead times will take longer.
Competitive risks
The company faces competitive risks from other manufacturing businesses within Europe. Turnover is maintained and furthered through the regular technical meetings held with customers and financial criteria established with customers.
Legislative risks
In the UK, manufactured products must be in line with European Union standards. These standards are subject to continuous revision and any new directive may have a material impact on the ability of the company to manufacture and supply products at a profit. The company considers that its current quality and level of equipment at its site demonstrates its ability to keep up with technological changes and protects it against this risk.
Financial risks
The company’s financial risks and treasury policies are discussed further below.
SHAKESPEARE MONOFILAMENT UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 3 -
Financial risk management
The company’s financial instruments comprise cash and liquid resources, balances with group undertakings and various items such as trade debtors, trade creditors, etc, that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the company’s operations.
The main risks arising from the company’s financial instruments are foreign currency risk, interest rate risk, cash flow risk, credit risk, price risk and liquidity risk. The board reviews and agrees policies for managing these risks.
Foreign currency risk
The company has no operations outside of the United Kingdom, but it buys and sells goods and services denominated in currencies other than sterling. As a result, the value of the company’s non-sterling revenues, purchases, financial assets and liabilities and cash flows can be affected significantly by movements in exchange rates in general and in particular the Euro and US Dollar. The company’s transactional currency exposure arises from sales or purchases in currencies other than its functional currency. The company does not carry out any hedging and trades at spot rate with Barclays bank, as it cannot enter into forward currency contracts due to being owned by a USA private equity company.
Interest rate cash flow risk
The company does not have any external debt. The company finances its operations through a mixture of retained profits and balances with group undertakings.
Credit risk
The company does not enter into transactions on deferred terms. In agreeing annual budgets, the company sets targets for debtors’ days and doubtful debt expense against which performance is monitored.
Price risk
The company does come under pressure from its customers at times to reduce prices, and although the company does its best to keep these customers, in certain cases the company cannot meet the price the customer is looking for.
Liquidity risk
The company mitigates liquidity risk by managing cash generation by its operations, applying cash collection targets, and setting authorisation limits for investment. The company’s funding strategy is not to rely on external finance, but to rely on group funding when required.
Future developments
FY 2022 has started off well, with a very strong order book due to increased demand from our existing customer base, as well as new customers making enquiries due to the competition having lead times in excess of 12 months, therefore forcing them to look at alternative suppliers. Our current extrusion order bo
ok
is approx
imately
6 to 8 months out, which allows us to plan effectively for raw material purchases.
The plans and forecast for FY 2022 indicate the sales will be similar with FY 2021, but the company may see margin pressures due to continued increases in raw materials and energy prices. The commercial team will look to pass on these cost increases, by maintaining regular dialogue with its customers, although in certain cases this may not be possible.
The company will install a new extrusion winder in June 2022, that will help improve production efficiencies.
SHAKESPEARE MONOFILAMENT UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 4 -
Mr G Walsh
Director
12 July 2022
SHAKESPEARE MONOFILAMENT UK LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 5 -
The directors present their annual report and financial statements for the year ended 31 December 2021.
Principal activities
The principal activity of the company continued to be the manufacturer of monofilaments and the importing of goods made in the USA, for sale in Europe and Asia. The company also sells marine and land based antennas.
Results and dividends
The results for the year are set out on page 10.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
No preference dividends were paid.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr K Baughman
Mr C Villa
(Resigned 18 March 2021)
Mr B Searfoss
Mr G Walsh
Mr M Rosebrock
Mr D Moody
(Appointed 18 March 2021)
Auditor
The auditor, MHA Moore and Smalley, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s
auditor
is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s
auditor
is aware of that information.
Information referred to in the Strategic Report
The company has chosen in accordance with Companies Act 2006, s. 414C
(11) to set out in the company's
S
trategic
R
eport information required by Large and Medium-sized Companies and Groups (Accounts and
Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of
future developments.
On behalf of the board
Mr G Walsh
Director
12 July 2022
SHAKESPEARE MONOFILAMENT UK LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 6 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
SHAKESPEARE MONOFILAMENT UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SHAKESPEARE MONOFILAMENT UK LIMITED
- 7 -
Opinion
We have audited the financial statements of Shakespeare Monofilament UK Limited (the 'company') for the year ended 31 December 2021 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including 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 31 December 2021 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
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
Auditor's
responsibilities for the audit of the
financial statements
section of our report. We are independent of the
company
in accordance with the ethical requirements that are relevant to our audit of the
financial statements
in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's 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.
SHAKESPEARE MONOFILAMENT UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SHAKESPEARE MONOFILAMENT UK LIMITED
- 8 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors'
r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report or the directors'
r
eport
. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of
remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of
financial statements
that are free from material misstatement, whether due to fraud or error. In preparing the
financial statements
, the
directors are
responsible for assessing the company
'
s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have
no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor's
report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
ISAs (UK)
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements
.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The
specific procedures for this engagement and the extent
to which our procedures are capable of detecting irregularities, including fraud, is detailed below
.
-
Enquiries with management
, including directors
,
about any known or suspected instances of non-compliance with laws and regulations and fraud
;
-
Challenging assumptions and judgements made by management in their significant accounting estimates, in particular in relation to
stock
provisions
and absorption rates;
-
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness
; and
-
Reviewing
management minutes.
Because of the field in which the client operates, we identified the following areas as those most likely to have a material impact on the financial statements: Health and Safety
,
employment law and compliance with the UK Companies Act.
SHAKESPEARE MONOFILAMENT UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SHAKESPEARE MONOFILAMENT UK LIMITED
- 9 -
Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognize the non-compliance.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's 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 auditor's 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.
Paul Locker (Senior Statutory Auditor)
For and on behalf of MHA Moore and Smalley
Chartered Accountants
Statutory Auditor
Richard House
9 Winckley Square
Preston
PR1 3HP
12 July 2022
SHAKESPEARE MONOFILAMENT UK LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
- 10 -
2021
2020
Notes
£
£
Turnover
3
12,274,672
10,928,393
Cost of sales
(9,659,847)
(8,763,950)
Gross profit
2,614,825
2,164,443
Distribution costs
(465,588)
(384,914)
Administrative expenses
(973,296)
(837,462)
Other operating income
3,392
32,702
Operating profit
4
1,179,333
974,769
Interest receivable and similar income
7
41,444
15,180
Profit before taxation
1,220,777
989,949
Tax on profit
8
(218,568)
(181,934)
Profit for the financial year
1,002,209
808,015
The profit and loss account has been prepared on the basis that all operations are continuing operations.
SHAKESPEARE MONOFILAMENT UK LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2021
31 December 2021
- 11 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
9
1,399,792
1,236,618
Current assets
Stocks
10
2,498,270
2,033,220
Debtors falling due after more than one year
11
70,682
1,282,339
Debtors falling due within one year
11
3,446,553
2,349,169
Cash at bank and in hand
2,138,363
1,668,320
8,153,868
7,333,048
Creditors: amounts falling due within one year
12
(1,153,812)
(1,172,027)
Net current assets
7,000,056
6,161,021
Net assets
8,399,848
7,397,639
Capital and reserves
Called up share capital
15
1,255,141
1,255,141
Profit and loss reserves
7,144,707
6,142,498
Total equity
8,399,848
7,397,639
The financial statements were approved by the board of directors and authorised for issue on 12 July 2022 and are signed on its behalf by:
Mr G Walsh
Director
Company Registration No. 02452908
SHAKESPEARE MONOFILAMENT UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
- 12 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2020
1,255,141
5,334,483
6,589,624
Year ended 31 December 2020:
Profit and total comprehensive income for the year
-
808,015
808,015
Balance at 31 December 2020
1,255,141
6,142,498
7,397,639
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
1,002,209
1,002,209
Balance at 31 December 2021
1,255,141
7,144,707
8,399,848
SHAKESPEARE MONOFILAMENT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 13 -
1
Accounting policies
Company information
Shakespeare Monofilament UK Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
Enterprise Way, Venture Road, Fleetwood, FY7 8RY.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
As with most businesses, at the date of approval of the financial statements, the company has been affected on multiple fronts by the global economic pressures that have been a constraint on the company. These challenges include the Ukraine
true
and
Russia conflict,
s
upply chain disruptions caused by COVID lockdowns in China and
,
significant raw material prices, increased freight and electric costs. All
of
these factors have a negative impact on the business, but the company is still performing well and managing these issues in an effective manner, with strong financial results reported as at the end of June 2022.
In financial year 2022
,
the company is looking at an investment in Solar panels to reduce its energy cost increases that the company will incur. This will be reviewed by the directors and a financial evaluation undertaken.
The directors have reviewed the financial performance and prepared cashflow forecasts which demonstrate that the company
has
sufficient cash resources to be able to meet its liabilities as they fall due for the twelve-month period following approval of the accounts. Therefore, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer
,
the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity
.
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
SHAKESPEARE MONOFILAMENT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 14 -
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following
straight line
bases:
Freehold land and buildings
50 years
Plant and machinery
5 to 35 years
Office equipment
3 to 5 years
Freehold land is not depreciated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.5
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the
company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price.
Raw materials are valued at standard cost. Finished goods are valued using the standard cost of raw materials consumed, plus a standard cost of labour and a standard overhead absorption. Standard costs are set at the beginning of each financial year. The purchase price variance (difference between standard and actual cost) is reviewed and is written off to the profit and loss account if immaterial.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
SHAKESPEARE MONOFILAMENT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 15 -
1.7
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include
debtors
and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method 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.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
The company does not have any non-basic financial assets.
Impairment of financial assets
Financial assets
are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
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.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of 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 company after deducting all of its liabilities.
SHAKESPEARE MONOFILAMENT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 16 -
Basic financial liabilities
Basic financial liabilities, including
creditors
, bank loans
and
loans from
fellow group companies are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities.
Trade creditors
are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
The company does not have any non-basic financial liabilities.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the
profit and loss account
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the
profit and loss account
, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
SHAKESPEARE MONOFILAMENT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 17 -
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or
fixed assets
.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
1.14
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
1.15
Foreign exchange
Transactions in currencies other than
pounds sterling
are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
SHAKESPEARE MONOFILAMENT UK LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 18 -
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
23
501,622
268,589
Income taxes refunded/(paid)
189,753
(128,000)
Net cash inflow from operating activities
691,375
140,589
Investing activities
Purchase of tangible fixed assets
(280,276)
(109,089)
Proceeds on disposal of tangible fixed assets
17,500
Interest received
41,444
15,180
Net cash used in investing activities
(221,332)
(93,909)
Net increase in cash and cash equivalents
470,043
46,680
Cash and cash equivalents at beginning of year
1,668,320
1,621,640
Cash and cash equivalents at end of year
2,138,363
1,668,320
SHAKESPEARE MONOFILAMENT UK LIMITED
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 19 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount 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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant
effect on amounts recognised in the financial statements.
Impairment of stock
At the end of each reporting period, management undertake an assessment of stock, based upon their knowledge of the market and the movement of each stock item. Where necessary, an impairment is recognised in the profit and loss account. The actual net realisable value may differ from the estimated level of recovery.
Warranty provision
At the end of each reporting period, management undertake an assessment of the warranty provision, based upon their knowledge of known manufacturing issues. Where necessary, a provision is recognised in the profit and loss account.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are
as follows.
Overhead and labour absorption rate
At the end of each reporting period, management undertake an assessment of the overhead and labour absorption rate reviewing the actual rate against the rate set in the stock management system. Where necessary, an adjustment is made to the rate used.
3
Turnover and other revenue
2021
2020
£
£
Turnover analysed by class of business
Attributable to principal activities
12,274,672
10,928,393
SHAKESPEARE MONOFILAMENT UK LIMITED
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
3
Turnover and other revenue
(Continued)
- 20 -
2021
2020
£
£
Turnover analysed by geographical market
United Kingdom
2,013,231
2,209,984
Europe
5,957,263
5,125,720
Asia
3,387,183
2,845,139
Rest of the world
916,995
747,550
12,274,672
10,928,393
2021
2020
£
£
Other revenue
Interest income
41,444
15,180
Grants received
32,382
4
Operating profit
2021
2020
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
127,633
(85,251)
Government grants
(32,382)
Fees payable to the company's auditor for the audit of the company's financial statements
17,500
16,275
Depreciation of owned tangible fixed assets
78,102
68,480
Loss on disposal of tangible fixed assets
21,500
Operating lease charges
29,131
41,781
5
Employees
The average monthly number of persons (excluding directors) employed by the company during the year was:
2021
2020
Number
Number
Manufacturing
22
21
Office and management
11
11
Total
33
32
SHAKESPEARE MONOFILAMENT UK LIMITED
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
5
Employees
(Continued)
- 21 -
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
1,442,754
1,332,594
Social security costs
159,740
142,226
Pension costs
125,200
116,772
1,727,694
1,591,592
6
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
116,330
108,472
Company pension contributions to defined contribution schemes
6,529
5,841
122,859
114,313
Included within remuneration for qualifying services is an element attributable to services provided by the overseas directors.
7
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
552
Interest receivable from group companies
40,892
15,180
Total income
41,444
15,180
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
41,444
15,180
8
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
211,731
Group tax relief
164,917
Total current tax
211,731
164,917
SHAKESPEARE MONOFILAMENT UK LIMITED
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
8
Taxation
2021
2020
£
£
(Continued)
- 22 -
Deferred tax
Origination and reversal of timing differences
6,837
28,139
Changes in tax rates
(11,122)
Total deferred tax
6,837
17,017
Total tax charge
218,568
181,934
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
£
£
Profit before taxation
1,220,777
989,949
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
231,948
188,090
Tax effect of expenses that are not deductible in determining taxable profit
4,833
4,966
Effect of change in corporation tax rate
(1,248)
(11,122)
Change in deferred tax rates
(16,965)
Taxation charge for the year
218,568
181,934
The deferred tax balance was calculated through applying a corporation tax rate of
25
% (20
20
: 1
9
%) by
reference to future taxation rates which are substantively enacted at the balance sheet date, the
expectation as to when the various timing differences may unwind and with due regard
to prudence.
SHAKESPEARE MONOFILAMENT UK LIMITED
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 23 -
9
Tangible fixed assets
Freehold land and buildings
Plant and machinery
Office equipment
Total
£
£
£
£
Cost
At 1 January 2021
1,537,960
3,792,116
33,534
5,363,610
Additions
280,276
280,276
Disposals
(572,127)
(572,127)
At 31 December 2021
1,537,960
3,500,265
33,534
5,071,759
Depreciation and impairment
At 1 January 2021
678,377
3,421,367
27,248
4,126,992
Depreciation charged in the year
28,586
47,983
1,533
78,102
Eliminated in respect of disposals
(533,127)
(533,127)
At 31 December 2021
706,963
2,936,223
28,781
3,671,967
Carrying amount
At 31 December 2021
830,997
564,042
4,753
1,399,792
At 31 December 2020
859,583
370,749
6,286
1,236,618
10
Stocks
2021
2020
£
£
Raw materials and consumables
822,067
796,871
Finished goods and goods for resale
1,676,203
1,236,349
2,498,270
2,033,220
11
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
1,977,945
2,127,873
Corporation tax recoverable
92,838
Amounts owed by group undertakings
1,215,174
15,180
Other debtors
129,336
67,365
Prepayments and accrued income
124,098
45,913
3,446,553
2,349,169
SHAKESPEARE MONOFILAMENT UK LIMITED
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
11
Debtors
(Continued)
- 24 -
2021
2020
Amounts falling due after more than one year:
£
£
Amounts owed by group undertakings
1,204,819
Deferred tax asset (note 13)
70,682
77,520
70,682
1,282,339
Total debtors
3,517,235
3,631,508
12
Creditors: amounts falling due within one year
2021
2020
£
£
Trade creditors
308,460
239,816
Amounts owed to group undertakings
419,198
565,407
Corporation tax
143,728
Other taxation and social security
45,014
37,661
Accruals and deferred income
237,412
329,143
1,153,812
1,172,027
Barclays Bank PLC hold a guarantee dated 15 May 2021 in favour of HMRC for £300,000.
13
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Assets
Assets
2021
2020
Balances:
£
£
Fixed asset timing differences
(11,779)
5,827
Intangible asset timing differences
93,697
83,079
Other timing differences
(11,236)
(11,386)
70,682
77,520
SHAKESPEARE MONOFILAMENT UK LIMITED
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
13
Deferred taxation
(Continued)
- 25 -
2021
Movements in the year:
£
Asset at 1 January 2021
(77,520)
Charge to profit or loss
6,838
Asset at 31 December 2021
(70,682)
As at the signing date of these financial statements, the company has not finalised its capital expenditure programme for the coming year and so an assessment as to the likely movement of timing differences cannot be made.
14
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
125,200
116,772
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
15
Share capital
2021
2020
£
£
Ordinary share capital
Issued and fully paid
200 Ordinary shares of £1 each
200
200
Preference share capital
Issued and fully paid
1,254,941 Redeemable preference shares of £1 each
1,254,941
1,254,941
Total equity share capital
1,255,141
1,255,141
The redeemable preference shares do not carry any rights to attend or vote at any general meetings or other meetings of the shareholders.
The company may redeem the preference shares at any time after 1 January 2001, with at least three months’ notice given in writing to the holders.
The preference shares do not carry the right to a fixed, mandatory dividend.
16
Financial commitments, guarantees and contingent liabilities
Amounts contracted for but not provided in the financial statements:
SHAKESPEARE MONOFILAMENT UK LIMITED
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 26 -
17
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2021
2020
£
£
Within one year
21,377
21,149
Between two and five years
42,983
18,295
64,360
39,444
18
Capital commitments
Amounts contracted for but not provided in the financial statements:
2021
2020
£
£
Acquisition of tangible fixed assets
115,020
89,077
19
Events after the reporting date
On 2 July 2022, the amount due in one year from group of £1,215,174 was extended an additional 12 months and as such, will not be collected within the year.
20
Related party transactions
The company has taken advantage of the exemption permitted under Section 33.1A from disclosing transactions with the parent and fellow subsidiary companies within the same wholly owned group.
21
Ultimate controlling party
The ultimate parent undertaking is One Rock Capital Partners, a private equity company incorporated in the USA.
The smallest group for which group accounts are prepared is that headed by Jadex Inc. and the largest group for which group accounts are prepared is that headed by
Zinc-Polymer Holdings, LLC
. The head office of Jadex Inc. and
Zinc-Polymer Holdings, LLC
is 1303 South Batesville Road, Greer, South Carolina, 29650, United States. The group accounts are publicly available and may be obtained upon request from this address.
22
Analysis of changes in net funds
1 January 2021
Cash flows
31 December 2021
£
£
£
Cash at bank and in hand
1,668,320
470,043
2,138,363
SHAKESPEARE MONOFILAMENT UK LIMITED
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 27 -
23
Cash generated from operations
2021
2020
£
£
Profit for the year after tax
1,002,209
808,015
Adjustments for:
Taxation charged
218,568
181,934
Investment income
(41,444)
(15,180)
Loss on disposal of tangible fixed assets
21,500
Depreciation and impairment of tangible fixed assets
78,102
68,480
Intercompany loan waiver
-
10,664,147
Movements in working capital:
(Increase)/decrease in stocks
(465,050)
837,927
Decrease/(increase) in debtors
14,597
(12,297,763)
(Decrease)/increase in creditors
(326,860)
185,946
Cash generated from operations
501,622
433,506
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