Mori Lee Europe Limited - Limited company accounts 22.3

REGISTERED NUMBER: 03726927 (England and Wales)

Strategic Report, Report of the Director and

Audited Financial Statements

for the Year Ended 31 December 2022

for

Mori Lee Europe Limited

Page

Company Information

1

Strategic Report

2

Report of the Director

3

Report of the Independent Auditors

5

Statement of Income and Retained Earnings

8

Balance Sheet

9

Cash Flow Statement

10

Notes to the Cash Flow Statement

11

Notes to the Financial Statements

12

DIRECTOR:

Ms T Eagle

SECRETARY:

G P Connell

REGISTERED OFFICE:

Unit 5 Northgate Terrace

Northgate Road

Newark

Nottinghamshire

NG24 2EU

REGISTERED NUMBER:

03726927 (England and Wales)

SENIOR STATUTORY AUDITOR:

Robert J Buckby, FCCA

AUDITORS:

D. K. Rumsby & Co Limited, Statutory Auditors

3 Colwick Quays

Colwick

Nottingham

Nottinghamshire

NG4 2JY

BANKERS:

HSBC Plc

Stonebow Branch

221 High Street

Lincoln

LN1 1TS

The director presents her strategic report for the year ended 31 December 2022.

REVIEW OF BUSINESS

The activity of the business continued to be that of marketing and wholesale distribution of bridal and occasion wear garments.

The director closely monitors the following Key Performance Indicators:

Amounts owed by Group Undertakings, being €6.8m (2021 - €6.6m) at the balance sheet date.

Administration expenses of €4.0m (2021 - €3.7m).

Shareholders funds, bring €5.4m (2021 - €5.5m) at the balance sheet date.

PRINCIPAL RISKS AND UNCERTAINTIES

The business operates in several major European markets, whilst slowly recovering from the long-term effects of the Covid-19 pandemic, the new cost of living crisis threatens to negatively affect demand.

Key risks for the business are;

European wide cost of living crisis and the potential change in customer demands.

Inflation impacting costs and negatively effecting the future profitability.

Currency fluctuations, minimalised by forward buying currencies to manage the risk level.

ON BEHALF OF THE BOARD:

Ms T Eagle - Director

4 April 2023

The director presents her report with the financial statements of the company for the year ended 31 December 2022.

DIVIDENDS

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

FUTURE DEVELOPMENTS

The continued development and expansion into European markets, whilst improving processes from production to customer service.

DIRECTOR

The director whom held office during the period from 1 January 2022 to the balance sheet date is follows:

M Udell - resigned prior to the date of this report.

DIRECTOR APPOINTMENT SINCE YEAR END

Ms T Eagle was appointed prior to this report.

DIRECTOR'S RESPONSIBILITIES STATEMENT

The director is responsible for preparing the Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless she is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is required to:

-	select suitable accounting policies and then apply them consistently;

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

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

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

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

ON BEHALF OF THE BOARD:

Ms T Eagle - Director

4 April 2023

Opinion

We have audited the financial statements of Mori Lee Europe Limited (the 'company') for the year ended 31 December 2022 which comprise the Statement of Income and Retained Earnings, Balance Sheet, Cash Flow Statement and Notes to the Cash Flow Statement, 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 December 2022 and of its loss 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 director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

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

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

Other information

The director is responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Director, but does not include the financial statements and our Report of the Auditors thereon.

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

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

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

Matters on which we are required to report by exception

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

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

-

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

-

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

-

certain disclosures of the director's remuneration specified by law are not made; or

-

we have not received all the information and explanations we require for our audit.

Responsibilities of director

As explained more fully in the Director's Responsibilities Statement set out on page three, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

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:

Discussions were held with senior management to obtain an understanding of the legal and regulatory framework applicable to the company and how it is complying with that framework. These discussions helped us obtain an understanding of the company's policies and procedures on compliance with laws and regulations. To support our understanding, we also reviewed any documentation regarding any instances of non-compliance together with the minutes of meetings held by those charged with governance.

After obtaining such information, we designed our audit work so that appropriate tests could be devised to enable our work to cover the risk of management override of controls, including the testing of journal entries and other adjustments for appropriateness, as well as evaluating the business rationale of significant transactions outside the normal course of business and the review of accounting estimates for bias.

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.

Robert J Buckby, FCCA (Senior Statutory Auditor)

for and on behalf of D. K. Rumsby & Co Limited, Statutory Auditors

3 Colwick Quays

Colwick

Nottingham

Nottinghamshire

NG4 2JY

12 April 2023

TURNOVER

4

23,000

1,053,459

Cost of sales

(50,089

)

(726,828

)

GROSS (LOSS)/PROFIT

(27,089

)

326,631

Administrative expenses

(4,004,080

)

(3,651,488

)

(4,031,169

)

(3,324,857

)

Other operating income

3,783,052

3,144,699

OPERATING LOSS

6

(248,117

)

(180,158

)

Income from shares in group undertakings

-

579,900

Interest receivable and similar income

8

35,909

31,630

(LOSS)/PROFIT BEFORE TAXATION

(212,208

)

431,372

Tax on (loss)/profit

9

(5,121

)

45,982

(LOSS)/PROFIT FOR THE FINANCIAL YEAR

(217,329

)

477,354

Retained earnings at beginning of year

5,524,225

5,796,871

Dividends

10

-

(750,000

)

RETAINED EARNINGS AT END OF YEAR

5,306,896

5,524,225

FIXED ASSETS

Tangible assets

11

10,241

23,517

Investments

12

3,007

3,007

13,248

26,524

CURRENT ASSETS

Debtors

13

7,506,419

7,557,098

Cash at bank and in hand

41,314

4,089

7,547,733

7,561,187

CREDITORS

Amounts falling due within one year

14

(2,252,585

)

(2,061,986

)

NET CURRENT ASSETS

5,295,148

5,499,201

TOTAL ASSETS LESS CURRENT LIABILITIES

5,308,396

5,525,725

CAPITAL AND RESERVES

Called up share capital

16

1,500

1,500

Retained earnings

17

5,306,896

5,524,225

SHAREHOLDERS' FUNDS

5,308,396

5,525,725

The financial statements were approved by the director and authorised for issue on 4 April 2023 and were signed by:

Ms T Eagle - Director

Cash flows from operating activities

Cash generated from operations

1

795,723

5,244,761

Tax paid

-

(636

)

Net cash from operating activities

795,723

5,244,125

Cash flows from investing activities

Purchase of fixed asset investments

-

(3,003

)

Interest received

35,909

31,630

Dividends received

-

579,900

Net cash from investing activities

35,909

608,527

Cash flows from financing activities

Movement in intercompany loans

(794,407

)

(6,041,998

)

Equity dividends paid

-

(750,000

)

Net cash from financing activities

(794,407

)

(6,791,998

)

Increase/(decrease) in cash and cash equivalents

37,225

(939,346

)

Cash and cash equivalents at beginning of year

2

4,089

943,435

Cash and cash equivalents at end of year

2

41,314

4,089

1.	RECONCILIATION OF (LOSS)/PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

31.12.22

31.12.21

€

€

(Loss)/profit before taxation

(212,208

)

431,372

Depreciation charges

13,277

16,085

Finance income

(35,909

)

(611,530

)

(234,840

)

(164,073

)

Decrease in stocks

-

980,929

Decrease in trade and other debtors

240,497

4,237,298

Increase in trade and other creditors

790,066

190,607

Cash generated from operations

795,723

5,244,761

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2022

31.12.22

1.1.22

€

€

Cash and cash equivalents

41,314

4,089

Year ended 31 December 2021

31.12.21

1.1.21

€

€

Cash and cash equivalents

4,089

943,435

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.1.22

Cash flow

At 31.12.22

€

€

€

Net cash

Cash at bank and in hand

4,089

37,225

41,314

4,089

37,225

41,314

Total

4,089

37,225

41,314

1.	STATUTORY INFORMATION

Mori Lee Europe 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 Euro (€).

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.

Preparation of consolidated financial statements

The financial statements contain information about Mori Lee Europe Limited as an individual company and do not contain consolidated financial information as the parent of a group. The company has prepared group financial statements which have been filed with the Registrar of Companies.

Turnover

Turnover represents the invoiced value of sales made to customers after deduction of discounts and value added tax. Turnover is recognised when the risks and rewards of the underlying products have been substantially transferred to the customer and when it can be reliably be measured. With the sale of goods, this occurs when the goods are despatched.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Short leasehold

-

10% on cost

Plant and machinery

-

25% on cost and 10% on cost

Fixtures and fittings

-

25% on cost

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Taxation

Taxation for the year comprises current 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.

Taxation assets and liabilities are not discounted.

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

Deferred tax

Deferred tax has not been recognised in the financial statements due to the immaterial nature of the amounts involved.

Foreign currencies

Assets and liabilities in foreign currencies are translated into Euros at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into Euros at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

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.

Debtors and creditors receivable or payable within one year

Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account in other administrative expenses.

Impairment

Assets not measured at fair value are reviewed for any indication that the asset may be impaired at each balance sheet date. If such indication exists, the recoverable amount of the asset, or the asset's cash generating unit, is estimated and compared to the carrying amount. Where the carrying amount exceeds its recoverable amount, an impairment loss is recognised in profit or loss unless the asset is carried at a revalued amount where the impairment loss is a revaluation decrease.

3.	CRITICAL ACCOUNTING 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 consider to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The directors do not consider there to be any estimates and assumptions which may have a significant risk of causing a material adjustment to the carrying amount of assets or liabilities.

4.

TURNOVER

The turnover and loss (2021 - profit) before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

31.12.22

31.12.21

€

€

United Kingdom

23,000

142,717

Rest of the world

-

910,742

23,000

1,053,459

5.	EMPLOYEES AND DIRECTORS

31.12.22

31.12.21

€

€

Wages and salaries

316,429

322,733

Social security costs

130,090

113,944

Other pension costs

1,957

1,864

448,476

438,541

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

31.12.22

31.12.21

Accounts

2

2

Customer Services

4

5

Sales

1

1

7

8

31.12.22

31.12.21

€

€

Director's remuneration

-

-

6.	OPERATING LOSS

The operating loss is stated after charging:

31.12.22

31.12.21

€

€

Depreciation - owned assets

13,276

16,085

Foreign exchange differences

39,500

23,511

7.	AUDITORS' REMUNERATION

31.12.22

31.12.21

€

€

Fees payable to the company's auditors for the audit of the company's financial statements

15,739

9,465

The company has entered into a liability limitation agreement with the company's auditor which was approved on 28 February 2023. The principle terms of the agreement are the aggregate liability to the company or any third party, of whatever nature, whether in contract, tort or otherwise, for any losses whatsoever and howsoever caused by or arising from the engagement shall not exceed £750,000 including interest.

8.

INTEREST RECEIVABLE AND SIMILAR INCOME

31.12.22

31.12.21

€

€

Deposit account interest

35,909

31,630

9.

TAXATION

Analysis of the tax charge/(credit)

The tax charge/(credit) on the loss for the year was as follows:

31.12.22

31.12.21

€

€

Current tax:

UK corporation tax

(312,321

)

-

Deferred tax

317,442

(45,982

)

Tax on (loss)/profit

5,121

(45,982

)

UK corporation tax has been charged at 19% (2021 - 19%).

Reconciliation of total tax charge/(credit) included in profit and loss

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

31.12.22

31.12.21

€

€

(Loss)/profit before tax

(212,208

)

431,372

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

(40,320

)

81,961

Effects of:

Expenses not deductible for tax purposes

2,523

12

Income not taxable for tax purposes

-

(92,480

)

Depreciation in excess of capital allowances

(622

)

-

Foreign tax

43,540

(35,475

)

Total tax charge/(credit)

5,121

(45,982

)

10.

DIVIDENDS

31.12.22

31.12.21

€

€

Ordinary shares of €1 each

Interim

-

750,000

11.	TANGIBLE FIXED ASSETS

Fixtures

Short

Plant and

and

leasehold

machinery

fittings

Totals

€

€

€

€

COST

At 1 January 2022

and 31 December 2022

40,240

94,302

45,007

179,549

DEPRECIATION

At 1 January 2022

35,082

80,765

40,185

156,032

Charge for year

2,853

7,793

2,630

13,276

At 31 December 2022

37,935

88,558

42,815

169,308

NET BOOK VALUE

At 31 December 2022

2,305

5,744

2,192

10,241

At 31 December 2021

5,158

13,537

4,822

23,517

12.	FIXED ASSET INVESTMENTS

Shares in

group

undertakings

€

COST

At 1 January 2022

and 31 December 2022

3,007

NET BOOK VALUE

At 31 December 2022

3,007

At 31 December 2021

3,007

The company's investments at the balance sheet date are compromised of the following.

100% holding in the Ordinary share capital of Ronald Joyce International Limited. The Registered Office of Ronald Joyce International Limited is Unit 5, Northgate Terrace, Northgate Road, Newark, Nottinghamshire, NG24 2EU.

100% holding in the Ordinary share capital of Mori Lee Ireland Limited. The Registered Office of Mori Lee Ireland Limited is 25-28 North Wall Quay, Dublin 1, Dublin, D01H104, Ireland.

100% holding in the Ordinary share capital of Veni Infantino Limited. The Registered Office of Veni Infantino Limited is Unit 5, Northgate Terrace, Northgate Road, Newark, Nottinghamshire, NG24 2EU.

100% holding in the Ordinary share capital of Mori Lee España SL. The Registered Office of Mori Lee España SL is Calle Villalar 7, groundfloor left side, in Madrid, C.P. 28001, Spain.

13.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.22

31.12.21

€

€

Trade debtors

-

176,541

Amounts owed by group undertakings

6,806,584

6,612,187

Other debtors

-

459

Corporation tax recoverable

313,499

636

VAT

6,109

-

Deferred tax asset

43,614

361,056

Prepayments and accrued income

336,613

406,219

7,506,419

7,557,098

14.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.22

31.12.21

€

€

Trade creditors

774,821

425,784

Amounts owed to group undertakings

-

600,010

Other taxation and social security

3,127

1,924

VAT

-

55,556

Other creditors

353,932

28,291

Accruals and deferred income

1,120,705

950,421

2,252,585

2,061,986

15.	LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:

31.12.22

31.12.21

€

€

Within one year

48,000

39,000

Between one and five years

132,000

180,000

180,000

219,000

16.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

31.12.22

31.12.21

value:

€

€

1,000

Ordinary

£1

1,500

1,500

17.

RESERVES

Retained

earnings

€

At 1 January 2022

5,524,225

Deficit for the year

(217,329

)

At 31 December 2022

5,306,896

18.	ULTIMATE PARENT COMPANY

Mori Lee LLC (incorporated in the United States of America ) is regarded by the director as being the company's ultimate parent company.

The largest and smallest group of undertakings for which group accounts have been prepared is that headed by Mori Lee LLC. Mori Lee LLC is based in Little Falls Drive, . Delaware. Copies of the group accounts can be obtained from Mori Lee LLC at 251 Little Falls Drive, Wilmington, New Castle, DE 19808, USA.