Mansion House Bedding Company Limited - Limited company accounts 20.1

REGISTERED NUMBER: 02575156 (England and Wales)

Strategic Report, Report of the Directors and

Audited Financial Statements for the Year Ended 31 March 2022

for

The Mansion House Bedding Company

Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Statement of Comprehensive Income

9

Balance Sheet

10

Statement of Changes in Equity

11

Notes to the Financial Statements

12

DIRECTORS:

Mr S D Eccles

Mr K Nunn

Mr C Payne

REGISTERED OFFICE:

6 Whittle Road

Hadleigh Road Industrial Estate

Ipswich

Suffolk

IP2 0UH

REGISTERED NUMBER:

02575156 (England and Wales)

AUDITORS:

Cunninghams Statutory Auditors

Number Sixty One

Alexandra Road

Lowestoft

Suffolk

NR32 1PL

The directors present their strategic report for the year ended 31 March 2022.

REVIEW OF BUSINESS

The principal activity of the company remains the sale of beds and mattresses, along with associated products to the contract, domestic and bespoke markets primarily within the United Kingdom as well as internationally.

The COVID-19 pandemic remained an ongoing presence. Measures such as social distancing, erection of hand sanitisers, and COVID tests were maintained for all employees. Any employee who either tested positive or came in contact with anyone who has tested positive for COVID-19 were made to self-isolate following the Government guidelines at the time.

Turnover increased substantially from the previous financial year across all sectors, as the company and the country as a whole began to emerge from the COVID-19 pandemic, and the company closes the year with a strong order book. Gross profit percentage remained strong throughout the year. Due to the reduction in overheads instigated in the previous financial year, net profit percentage was maintained.

The company continued to look at overheads as a whole and lots of other savings took place either by cancelling/ negotiating current contracts, and stripping out unnecessary expense. A full review of the financial processes of the company was made in the final quarter of the financial year, and further process changes to improve efficiency and profitability are planned for the next financial year.

The company continues to invest heavily into new automated machinery and is continuing to look at ways to bring in new machinery to help reduce costs and maximise productivity. Investment was also made on the factory property, by the removal of the old roof and replacement with a more thermally efficient roof. This new roof will reduce the company's heating overheads and also provides the factory with more natural light.

The company has experienced extremely high price increases in its raw materials with the biggest ones coming from timber, pocket paper, wire, cardboard and foam. Price increases have been put in place with customers to dampen the effect on our margins. These increases on raw materials are expected to continue into the new financial year alongside extra expense on gas and electricity. This is an area that the company is monitoring closely.

Monthly management accounts are produced for the directors which after reviewing we are able to provide immediate resolutions on trends in operations, logistics and resources.

PRINCIPAL RISKS AND UNCERTAINTIES

All risks are monitored on an on-going basis by the directors and improvements/ strategies are implemented as required to mitigate against such risks occurring and minimising their impact. The principle risks and uncertainties are set out below:

Credit Risk

The company has been able to minimise the risk of credit issues by insuring all of its debtors along with having strict credit terms with its customers which have been adhered to.

The businesses credit control department procedures are monitored regularly as the business developed both in the domestic and international markets and this can be seen as bad debts have remained low for yet another consecutive year despite another good year's turnover.

Cashflow Risk

The company operates a detailed cash flow forecast and is currently working on growing different sales avenues and areas to keep the cash being generated quickly enabling the business to keep on top of its outgoings and meet future projects, demands and ambitions.

Price Risk

The company is continually working and communicating hard with all its suppliers to reduce the amount of price increases to reduce the effect on the businesses margins as well as minimising any potential price increases for its customers.

KEY PERFORMANCE INDICATORS

The company's board of directors use a variety of measures to analyse the performance of the business including gross & net profit margins, current ratios, analysis against prior year accounts and labour cost percentages.

ENVIRONMENT & HEALTH AND SAFETY

The company is committed to supporting the environment and co-operates fully with relevant authorities to ensure that legal obligations are met. The company recycles the majority of its raw materials used in production via a third party and also employs a third party to make sure that we are up-to-date with all the health and safety regulations regarding the businesses workplace and employees.A new fire prevention system has been fitted throughout the factory and the office, alongside a new security system.

ON BEHALF OF THE BOARD:

Mr S D Eccles - Director

17 August 2022

The directors present their report with the financial statements of the company for the year ended 31 March 2022.

DIVIDENDS

No dividends will be distributed for the year ended 31 March 2022.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 April 2021 to the date of this report.

Mr S D Eccles

Mr K Nunn

Mr C Payne

Other changes in directors holding office are as follows:

Mr R C Graves - resigned 1 March 2022

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Cunninghams Statutory Auditors, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr S D Eccles - Director

17 August 2022

Opinion

We have audited the financial statements of The Mansion House Bedding Company Limited (the 'company') for the year ended 31 March 2022 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 March 2022 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.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' 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 Statement of Directors' Responsibilities set out on page four, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

- Enquiry of management around actual and potential litigation and claims;

- Enquiry of entity staff in compliance functions to identify any instances of non-compliance with laws and regulations;

- Reviewing minutes of meetings of those charged with governance;

- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.

- Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Benjamin Lynes (Senior Statutory Auditor)

for and on behalf of Cunninghams Statutory Auditors

Number Sixty One

Alexandra Road

Lowestoft

Suffolk

NR32 1PL

24 August 2022

TURNOVER

8,059,864

5,234,929

Cost of sales

4,314,340

2,965,423

GROSS PROFIT

3,745,524

2,269,506

Distribution costs

404,771

208,734

Administrative expenses

2,700,441

2,112,333

3,105,212

2,321,067

640,312

(51,561

)

Other operating income

59,498

531,166

OPERATING PROFIT

4

699,810

479,605

Interest payable and similar expenses

5

4,189

6,153

PROFIT BEFORE TAXATION

695,621

473,452

Tax on profit

6

101,298

97,556

PROFIT FOR THE FINANCIAL YEAR

594,323

375,896

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

594,323

375,896

FIXED ASSETS

Tangible assets

8

1,026,182

802,163

CURRENT ASSETS

Stocks

9

818,050

736,958

Debtors

10

1,231,771

860,805

Cash at bank and in hand

1,107,191

1,132,863

3,157,012

2,730,626

CREDITORS

Amounts falling due within one year

11

1,849,501

1,783,127

NET CURRENT ASSETS

1,307,511

947,499

TOTAL ASSETS LESS CURRENT LIABILITIES

2,333,693

1,749,662

CREDITORS

Amounts falling due after more than one year

12

(46,238

)

(73,093

)

PROVISIONS FOR LIABILITIES

16

(105,397

)

(88,834

)

NET ASSETS

2,182,058

1,587,735

CAPITAL AND RESERVES

Called up share capital

17

1,000

1,000

Retained earnings

18

2,181,058

1,586,735

SHAREHOLDERS' FUNDS

2,182,058

1,587,735

The financial statements were approved by the Board of Directors and authorised for issue on 17 August 2022 and were signed on its behalf by:

Mr S D Eccles - Director

Mr C Payne - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 April 2020

1,000

1,222,541

1,223,541

Changes in equity

Dividends

-

(11,702

)

(11,702

)

Total comprehensive income

-

375,896

375,896

Balance at 31 March 2021

1,000

1,586,735

1,587,735

Changes in equity

Total comprehensive income

-

594,323

594,323

Balance at 31 March 2022

1,000

2,181,058

2,182,058

1.	STATUTORY INFORMATION

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

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

BASIS OF PREPARING THE FINANCIAL STATEMENTS

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The financial statements are prepared in accordance with applicable United Kingdom Accounting Standards and United Kingdom Generally Accepted Accounting Practice, which has been applied consistently, except as otherwise stated.

FINANCIAL REPORTING STANDARD 102 - REDUCED DISCLOSURE EXEMPTIONS

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirement of paragraph 33.7.

The parent company of the group is Mansion House Bedding Group Limited and accounts are available from the public register at Companies House.

RELATED PARTY EXEMPTION

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

TURNOVER

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Revenue is recognised when the goods are delivered to the customer.

TANGIBLE FIXED ASSETS

Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Improvements to property

-

20% on cost and 10% on cost

Plant and machinery

-

25% on reducing balance, 20% on cost and 20% on reducing balance

Motor vehicles

-

33% on cost and 20% on cost

Computer equipment

-

33% on cost and 20% on cost

STOCKS

Stocks are stated at the lower of cost and net realisable value. The cost of finished goods and work in progress includes direct labour and an attributable proportion of appropriate production overheads based on normal levels of activity. Net realisable value is based on estimated selling price, less further costs expected to be incurred to completion and disposal. Provision is made for obsolete, slow-moving or defective items where appropriate.

TAXATION

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

Current or deferred taxation assets and liabilities are not discounted.

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

DEFERRED TAX

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

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

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

HIRE PURCHASE AND LEASING COMMITMENTS

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

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

PENSION COSTS AND OTHER POST-RETIREMENT BENEFITS

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

INVOICE DISCOUNTING

Where debts are invoice discounted the separate presentation treatment has been adopted. In accordance with this treatment the gross amount of the debts is included within trade debtors with the advances received from invoice discounting being shown as a liability.

3.	EMPLOYEES AND DIRECTORS

31.3.22

31.3.21

£

£

Wages and salaries

2,621,796

2,075,625

Social security costs

278,992

205,863

Other pension costs

142,463

64,689

3,043,251

2,346,177

The average number of employees during the year was as follows:

31.3.22

31.3.21

Administration

11

11

Sales

9

9

Manufacture

66

73

86

93

31.3.22

31.3.21

£

£

Directors' remuneration

631,292

316,753

Directors' pension contributions to money purchase schemes

81,878

20,390

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

3

4

Information regarding the highest paid director is as follows:

31.3.22

31.3.21

£

£

Emoluments etc

313,345

131,975

Pension contributions to money purchase schemes

10,000

10,000

4.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

31.3.22

31.3.21

£

£

Other operating leases

1

1

Depreciation - owned assets

151,280

157,506

Depreciation - assets on hire purchase contracts

60,522

56,309

Profit on disposal of fixed assets

(39,900

)

(11,923

)

Auditors' remuneration

15,700

15,250

5.

INTEREST PAYABLE AND SIMILAR EXPENSES

31.3.22

31.3.21

£

£

Bank loan interest

354

938

Hire purchase

3,835

5,215

4,189

6,153

6.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

31.3.22

31.3.21

£

£

Current tax:

UK corporation tax

84,735

122,408

Deferred tax:

Timing differences

16,563

(24,852

)

Tax on profit

101,298

97,556

RECONCILIATION OF TOTAL TAX CHARGE INCLUDED IN PROFIT AND LOSS

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

31.3.22

31.3.21

£

£

Profit before tax

695,621

473,452

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2021 - 19%)

132,168

89,956

Effects of:

Expenses not deductible for tax purposes

692

1,128

Capital allowances in excess of depreciation

(3,436

)

-

Depreciation in excess of capital allowances

-

4,476

Movement in accrued pension contributions

(1,996

)

1,996

Enhanced expenditure

(26,130

)

-

Total tax charge

101,298

97,556

7.

DIVIDENDS

31.3.22

31.3.21

£

£

Ordinary shares of £1 each

Interim

-

11,702

8.	TANGIBLE FIXED ASSETS

Improvements

to

Plant and

Motor

Computer

property

machinery

vehicles

equipment

Totals

£

£

£

£

£

COST

At 1 April 2021

714,432

1,348,852

645,784

38,176

2,747,244

Additions

219,000

75,866

130,768

16,887

442,521

Disposals

-

-

(153,400

)

-

(153,400

)

At 31 March 2022

933,432

1,424,718

623,152

55,063

3,036,365

DEPRECIATION

At 1 April 2021

463,584

902,879

544,833

33,785

1,945,081

Charge for year

48,975

96,457

61,744

4,626

211,802

Eliminated on disposal

-

-

(146,700

)

-

(146,700

)

At 31 March 2022

512,559

999,336

459,877

38,411

2,010,183

NET BOOK VALUE

At 31 March 2022

420,873

425,382

163,275

16,652

1,026,182

At 31 March 2021

250,848

445,973

100,951

4,391

802,163

Included within improvements to property is assets in the course of construction of £219,000 (2021: Nil).

Fixed assets, included in the above, which are held under hire purchase contracts are as follows:

Plant and

Motor

machinery

vehicles

Totals

£

£

£

COST

At 1 April 2021

85,000

101,001

186,001

Additions

-

102,755

102,755

At 31 March 2022

85,000

203,756

288,756

DEPRECIATION

At 1 April 2021

23,800

45,450

69,250

Charge for year

12,240

48,282

60,522

At 31 March 2022

36,040

93,732

129,772

NET BOOK VALUE

At 31 March 2022

48,960

110,024

158,984

At 31 March 2021

61,200

55,551

116,751

9.

STOCKS

31.3.22

31.3.21

£

£

Consumables

13,205

3,664

Raw materials

674,153

659,032

Finished goods

130,692

74,262

818,050

736,958