Mobus Fabrics Holdings Limited Group accounts (Group and Company)

Mobus Fabrics Holdings Limited Group accounts (Group and Company)

MOBUS FABRICS HOLDINGS LIMITED - Company Information

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COMPANY REGISTRATION NUMBER: 11114986
MOBUS FABRICS HOLDINGS LIMITED
FINANCIAL STATEMENTS
30 September 2022
MOBUS FABRICS HOLDINGS LIMITED
FINANCIAL STATEMENTS
YEAR ENDED 30 SEPTEMBER 2022
Contents
Pages
Officers and professional advisers 1
Strategic report 2 to 3
Directors' report 4 to 5
Independent auditor's report to the members 6 to 9
Consolidated statement of comprehensive income 10
Consolidated statement of financial position 11
Company statement of financial position 12
Consolidated statement of changes in equity 13
Company statement of changes in equity 14
Consolidated statement of cash flows 15
Notes to the financial statements 16 to 27
MOBUS FABRICS HOLDINGS LIMITED
OFFICERS AND PROFESSIONAL ADVISERS
The board of directors
Mr M S Presley
Mr G D R McConnell
Mr L Paxman
Mr D R Barnes
Registered office
Russell Way
Off Bradford Road
Brighouse
West Yorkshire
England
HD6 4LX
Auditor
Wheawill & Sudworth Limited
Chartered Accountants & statutory auditor
35 Westgate
Huddersfield
HD1 1PA
Bankers
HSBC Bank plc
33 Park Row
Leeds
LS1 1LD
MOBUS FABRICS HOLDINGS LIMITED
STRATEGIC REPORT
YEAR ENDED 30 SEPTEMBER 2022
The principal activity of the group continued to be the design, manufacture and sale of fabrics for the upholstery market . Results, performance and developments during the year We are pleased to report another profitable year of operations. Turnover has decreased 8.15% to £22m which is a return to pre-covid levels. The reduction in turnover towards the end of the financial year was anticipated due to a decline in market confidence following the rise in inflation and energy costs. Gross profit was maintained due to lower stock losses and improved efficiencies in the supply chain, most of which have materialised from the long term investment in our UK operations. Principal risks and uncertainties The Directors consider that the key risks and principal uncertainties faced by the group are: Raw material price volatility Exchange rate variances Supply chain disruption These risks are managed through monitoring of the appropriate markets, the use of forward contracts and currency hedges, maintaining close supplier relationships and multiple sourcing of key resources. Financial instruments Due to the nature of the financial instruments used by the group there is no material exposure to price risk. The group's approach to managing other risk applicable to the financial instruments concerned are shown below. In respect of bank balances the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of short term invoice finance and trade loan facilities. Trade debtors are managed in respect of credit and cash flow by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits. Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due. Key performance indicators Key performance indicators monitored by management include order in-take, gross margin, stock volumes and cash collection. Outlook The market is extremely challenging with the cost of living crisis, high energy costs and food inflation at record levels - leading to a severe lack of consumer confidence in the home sector. Mobus remains confident that we are on the right path to support our partners following further investments in our supply chain and new finishing technology. The acquisition of a leading UK FR finisher enabled us to bring all our finishing within the Group and ensure we remain as market leaders well into the future. We have invested in 10 new collections which offer greater variety in terms of style, appearance and price points. Additionally we have added a range of 100% recycled polyester fabrics, to build on the success of the GreenFR® finish - the market leading FR finish. Mobus continues to work with all customers, offering weekly order reports, order book transparency and stock management support to ensure deliveries arrive on time. Our internal laboratory, inspections and Quality Assurance teams ensure fabrics are consistently of the highest quality to avoid production issues and reduce waste. As a group Mobus has invested in our China stock to reduce minimum orders, speed up developments and reduce waste within the supply chain. Mobus USA has also launched more recently after 18 months work in the market development, fabric testing and IT so we can offer the best levels of service and quality. Mobus is on track with all its long term sustainability directives to not only improve what we do, but to also support all our customers and suppliers in making the right choices.
This report was approved by the board of directors on 8 June 2023 and signed on behalf of the board by:
Mr G D R McConnell
Mr D R Barnes
Director
Director
MOBUS FABRICS HOLDINGS LIMITED
DIRECTORS' REPORT
YEAR ENDED 30 SEPTEMBER 2022
The directors present their report and the financial statements of the group for the year ended 30 September 2022 .
Directors
The directors who served the company during the year were as follows:
Mr M S Presley
Mr G D R McConnell
Mr L Paxman
Mr D R Barnes
Dividends
Particulars of recommended dividends are detailed in note 13 to the financial statements.
Future developments
Details of future developments are included within the strategic report.
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, directors' 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 group and the company and the profit or loss of the group for that period.
In preparing these financial statements, the directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgments 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.
Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the group and the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the group and the company's auditor is aware of that information.
This report was approved by the board of directors on 8 June 2023 and signed on behalf of the board by:
Mr G D R McConnell
Mr D R Barnes
Director
Director
MOBUS FABRICS HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MOBUS FABRICS HOLDINGS LIMITED
YEAR ENDED 30 SEPTEMBER 2022
Opinion
We have audited the financial statements of Mobus Fabrics Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 September 2022 which comprise the consolidated statement of comprehensive income, consolidated statement of financial position, company statement of financial position, consolidated statement of changes in equity, company statement of changes in equity, consolidated statement of cash flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 group's and of the parent company's affairs as at 30 September 2022 and of the group's profit for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - 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 auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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 group's or the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
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. 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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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 directors' report 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 group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or - the parent company 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 directors' responsibilities statement, 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 group's and the parent 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 group or the parent 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 extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: We gained an understanding of the legal and regulatory framework applicable to the Company, considered the risk of acts by the Directors which were contrary to applicable laws and regulations, including fraud. We made enquiries of the Directors to obtain further understanding of risks of non-compliance. We focused on laws and regulations that could give rise to a material misstatement in the financial statements. Our tests included, but were not limited to: - agreement of the financial statement disclosures to underlying supporting documentation; - enquiries of management regarding known or suspected instances of non-compliance with laws and regulations; - review of minutes of the Directors' Board meetings throughout the year; and - obtaining an understanding of the control environment in place to prevent and detect irregularities. Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group's internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group's or the parent company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group or the parent company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. - Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. 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 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.
David Butterworth
(Senior Statutory Auditor)
For and on behalf of
Wheawill & Sudworth Limited
Chartered Accountants & statutory auditor
35 Westgate
Huddersfield
HD1 1PA
8 June 2023
MOBUS FABRICS HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
YEAR ENDED 30 SEPTEMBER 2022
2022
2021
Note
£
£
Turnover
4
22,043,221
24,003,935
Cost of sales
17,973,346
19,623,404
-------------
-------------
Gross profit
4,069,875
4,380,531
Administrative expenses
2,477,964
2,796,848
Other operating income
5
8,000
8,000
------------
------------
Operating profit
6
1,599,911
1,591,683
Share of profit/(loss) of associates
16
2,470
( 53,834)
Other interest receivable and similar income
10
1,634
–
Interest payable and similar expenses
11
314,511
294,193
------------
------------
Profit before taxation
1,289,504
1,243,656
Tax on profit
12
308,918
295,539
------------
------------
Profit for the financial year and total comprehensive income
980,586
948,117
------------
------------
All the activities of the group are from continuing operations.
MOBUS FABRICS HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 September 2022
2022
2021
Note
£
£
Fixed assets
Intangible assets
14
1,482,087
1,729,101
Tangible assets
15
554,045
588,546
Investments:
16
Investments in associates
154,367
151,897
------------
------------
2,190,499
2,469,544
Current assets
Stocks
17
7,172,469
8,581,260
Debtors
18
4,508,251
5,005,647
Cash at bank and in hand
552,512
457,347
-------------
-------------
12,233,232
14,044,254
Creditors: amounts falling due within one year
19
8,431,059
11,071,529
-------------
-------------
Net current assets
3,802,173
2,972,725
------------
------------
Total assets less current liabilities
5,992,672
5,442,269
Creditors: amounts falling due after more than one year
20
3,603,333
3,911,333
Provisions
Taxation including deferred tax
21
74,117
76,104
------------
------------
Net assets
2,315,222
1,454,832
------------
------------
Capital and reserves
Called up share capital
26
100
100
Profit and loss account
2,315,122
1,454,732
------------
------------
Shareholders funds
2,315,222
1,454,832
------------
------------
These financial statements were approved by the board of directors and authorised for issue on 8 June 2023 , and are signed on behalf of the board by:
Mr G D R McConnell
Mr D R Barnes
Director
Director
Company registration number: 11114986
MOBUS FABRICS HOLDINGS LIMITED
COMPANY STATEMENT OF FINANCIAL POSITION
30 September 2022
2022
2021
Note
£
£
Fixed assets
Investments
16
10,065,464
10,065,364
Current assets
Debtors
18
100
100
Creditors: amounts falling due within one year
19
6,512,131
6,212,031
------------
------------
Net current liabilities
6,512,031
6,211,931
-------------
-------------
Total assets less current liabilities
3,553,433
3,853,433
Creditors: amounts falling due after more than one year
20
3,553,333
3,853,333
------------
------------
Net assets
100
100
------------
------------
Capital and reserves
Called up share capital
26
100
100
------------
------------
Shareholders funds
100
100
------------
------------
The profit for the financial year of the parent company was £ 120,196 (2021: £ 200,744 ).
These financial statements were approved by the board of directors and authorised for issue on 8 June 2023 , and are signed on behalf of the board by:
Mr G D R McConnell
Mr D R Barnes
Director
Director
Company registration number: 11114986
MOBUS FABRICS HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
YEAR ENDED 30 SEPTEMBER 2022
Called up share capital
Profit and loss account
Total
£
£
£
At 1 October 2020
100
707,359
707,459
Profit for the year
948,117
948,117
------------
------------
------------
Total comprehensive income for the year
–
948,117
948,117
Dividends paid and payable
13
–
( 200,744)
( 200,744)
------------
------------
------------
Total investments by and distributions to owners
–
( 200,744)
( 200,744)
At 30 September 2021
100
1,454,732
1,454,832
Profit for the year
980,586
980,586
------------
------------
------------
Total comprehensive income for the year
–
980,586
980,586
Dividends paid and payable
13
–
( 120,196)
( 120,196)
------------
------------
------------
Total investments by and distributions to owners
–
( 120,196)
( 120,196)
------------
------------
------------
At 30 September 2022
100
2,315,122
2,315,222
------------
------------
------------
MOBUS FABRICS HOLDINGS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
YEAR ENDED 30 SEPTEMBER 2022
Called up share capital
Profit and loss account
Total
£
£
£
At 1 October 2020
100
–
100
Profit for the year
200,744
200,744
------------
------------
------------
Total comprehensive income for the year
–
200,744
200,744
Dividends paid and payable
13
–
( 200,744)
( 200,744)
------------
------------
------------
Total investments by and distributions to owners
–
( 200,744)
( 200,744)
At 30 September 2021
100
–
100
Profit for the year
120,196
120,196
------------
------------
------------
Total comprehensive income for the year
–
120,196
120,196
Dividends paid and payable
13
–
( 120,196)
( 120,196)
------------
------------
------------
Total investments by and distributions to owners
–
( 120,196)
( 120,196)
------------
------------
------------
At 30 September 2022
100
–
100
------------
------------
------------
MOBUS FABRICS HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED 30 SEPTEMBER 2022
2022
2021
£
£
Cash flows from operating activities
Profit for the financial year
980,586
948,117
Adjustments for:
Depreciation of tangible assets
105,980
120,449
Amortisation of intangible assets
247,014
247,014
Government grant income
( 8,000)
( 8,000)
Share of profit of associates
( 2,470)
53,834
Other interest receivable and similar income
( 1,634)
–
Interest payable and similar expenses
314,511
294,193
Gains on disposal of tangible assets
( 3,435)
–
Tax on profit
308,918
295,539
Changes in:
Stocks
1,408,791
( 2,152,148)
Trade and other debtors
497,396
( 50,581)
Trade and other creditors
( 600,325)
1,331,959
------------
------------
Cash generated from operations
3,247,332
1,080,376
Interest paid
( 314,511)
( 294,193)
Interest received
1,634
–
Tax paid
( 127,705)
( 402,427)
------------
------------
Net cash from operating activities
2,806,750
383,756
------------
------------
Cash flows from investing activities
Purchase of tangible assets
( 73,653)
( 104,009)
Proceeds from sale of tangible assets
5,609
–
------------
------------
Net cash used in investing activities
( 68,044)
( 104,009)
------------
------------
Cash flows from financing activities
Proceeds from borrowings
712,923
981,120
Repayments of borrowings
( 3,244,268)
–
Government grant income
8,000
8,000
Dividends paid
( 120,196)
( 200,744)
Repayment of loan notes
–
( 500,000)
Share buy back
–
(666,667)
------------
------------
Net cash used in financing activities
( 2,643,541)
( 378,291)
------------
------------
Net increase/(decrease) in cash and cash equivalents
95,165
( 98,544)
Cash and cash equivalents at beginning of year
457,347
555,891
------------
------------
Cash and cash equivalents at end of year
552,512
457,347
------------
------------
MOBUS FABRICS HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 SEPTEMBER 2022
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is Russell Way, Off Bradford Road, Brighouse, West Yorkshire, HD6 4LX, England.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis. The financial statements are prepared in sterling, which is the functional currency of the entity and rounded to the nearest pound.
Disclosure exemptions
The parent company satisfies the criteria of being a qualifying entity as defined in FRS 102. As such, advantage has been taken of the following reduced disclosures available under FRS 102:
(a) Disclosures in respect of each class of share capital have not been presented.
(b) No cash flow statement has been presented for the company.
(c) Disclosures in respect of financial instruments have not been presented.
(d) No disclosure has been given for the aggregate remuneration of key management personnel.
Consolidation
The financial statements consolidate the financial statements of Mobus Fabric Holdings Limited and all of its subsidiary undertakings .
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts and Value Added Tax. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably. Revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that it is probable the expenses recognised will be recovered.
Taxation
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Foreign currencies
Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to the profit and loss account.
Goodwill
Goodwill arises on business acquisitions and represents the excess of the cost of the acquisition over the company's interest in the net amount of the identifiable assets, liabilities and contingent liabilities of the acquired business. Goodwill is measured at cost less accumulated impairment losses.
Amortisation
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:
Goodwill
-
Over 10 years
If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Long leasehold property
-
Over the life of the lease
Plant and machinery
-
20% reducing balance
Fixtures and fittings
-
20% reducing balance
Motor vehicles
-
25% reducing balance
Investments
Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.
Listed investments are measured at fair value with changes in fair value being recognised in profit or loss.
Investments in associates
Investments in associates are accounted for using the equity method of accounting, whereby the investment is initially recognised at the transaction price and subsequently adjusted to reflect the group's share of the profit or loss, other comprehensive income and equity of the associate.
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets. For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
Government grants
Government grants are recognised at the fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and the grants will be received. Government grants are recognised using the accrual model and the performance model. Under the accrual model, government grants relating to revenue are recognised on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs are recognised in income in the period in which it becomes receivable. Grants relating to assets are recognised in income on a systematic basis over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income and not deducted from the carrying amount of the asset. Under the performance model, where the grant does not impose specified future performance-related conditions on the recipient, it is recognised in income when the grant proceeds are received or receivable. Where the grant does impose specified future performance-related conditions on the recipient, it is recognised in income only when the performance-related conditions have been met. Where grants received are prior to satisfying the revenue recognition criteria, they are recognised as a liability.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
Financial instruments
A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument. Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Debt instruments are subsequently measured at amortised cost. Where investments in non-convertible preference shares and non-puttable ordinary shares or preference shares are publicly traded or their fair value can otherwise be measured reliably, the investment is subsequently measured at fair value with changes in fair value recognised in profit or loss. All other such investments are subsequently measured at cost less impairment. Other financial instruments, including derivatives, are initially recognised at fair value, unless payment for an asset is deferred beyond normal business terms or financed at a rate of interest that is not a market rate, in which case the asset is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Other financial instruments are subsequently measured at fair value, with any changes recognised in profit or loss, with the exception of hedging instruments in a designated hedging relationship.
Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately. For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets are either assessed individually or grouped on the basis of similar credit risk characteristics. Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
4. Turnover
Turnover arises from:
2022
2021
£
£
UK
18,268,427
19,721,847
Europe
1,827,869
2,441,329
Asia
1,763,206
1,568,500
USA
183,719
272,259
-------------
-------------
22,043,221
24,003,935
-------------
-------------
The whole of the turnover is attributable to the principal activity of the group.
5. Other operating income
2022
2021
£
£
Government grant income
8,000
8,000
------------
------------
6. Operating profit
Operating profit or loss is stated after charging/crediting:
2022
2021
£
£
Amortisation of intangible assets
247,014
247,014
Depreciation of tangible assets
105,980
120,449
Gains on disposal of tangible assets
( 3,435)
–
Impairment of trade debtors
–
5,403
Foreign exchange differences
( 414,970)
( 49,388)
------------
------------
7. Auditor's remuneration
2022
2021
£
£
Fees payable for the audit of the financial statements
16,000
29,500
------------
------------
8. Staff costs
The average number of persons employed by the group during the year, including the directors, amounted to:
2022
2021
No.
No.
Distribution staff
24
19
Administrative staff
14
11
Management staff
4
4
------------
------------
42
34
------------
------------
The aggregate payroll costs incurred during the year, relating to the above, were:
2022
2021
£
£
Wages and salaries
1,092,465
1,022,510
Social security costs
104,543
80,775
Other pension costs
177,461
152,328
------------
------------
1,374,469
1,255,613
------------
------------
9. Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
2022
2021
£
£
Remuneration
128,863
162,860
Company contributions to defined contribution pension plans
103,652
95,626
Compensation for loss of office
–
30,000
------------
------------
232,515
288,486
------------
------------
The number of directors who accrued benefits under company pension plans was as follows:
2022
2021
No.
No.
Defined contribution plans
4
4
------------
------------
10. Other interest receivable and similar income
2022
2021
£
£
Other interest receivable and similar income
1,634
–
------------
------------
11. Interest payable and similar expenses
2022
2021
£
£
Interest on banks loans and overdrafts
50,479
47,837
Dividends paid on shares classed as debt
30,645
19,338
Interest payable on loan notes
174,672
165,671
Other interest payable and similar charges
58,715
61,347
------------
------------
314,511
294,193
------------
------------
12. Tax on profit
Major components of tax income
2022
2021
£
£
Current tax:
UK current tax income
296,989
269,844
Adjustments in respect of prior periods
13,916
–
------------
------------
Total current tax
310,905
269,844
------------
------------
Deferred tax:
Origination and reversal of timing differences
( 1,987)
25,695
------------
------------
Tax on profit
308,918
295,539
------------
------------
Reconciliation of tax expense
The tax assessed on the profit on ordinary activities for the year is higher than (2021: higher than) the standard rate of corporation tax in the UK of 19 % (2021: 19 %).
2022
2021
£
£
Profit on ordinary activities before taxation
1,289,504
1,243,656
------------
------------
Profit on ordinary activities by rate of tax
245,005
236,295
Adjustment to tax charge in respect of prior periods
13,916
–
Effect of expenses not deductible for tax purposes
52,643
48,970
Effect of capital allowances and depreciation
( 657)
1,566
Effect of revenue exempt from tax
( 1,989)
8,708
------------
------------
Tax on profit
308,918
295,539
------------
------------
13. Dividends
Equity dividends
2022
2021
£
£
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year )
120,196
200,744
------------
------------
Dividends on shares classed as debt
2022
2021
£
£
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year )
30,645
19,338
------------
------------
14. Intangible assets
Group
Goodwill
£
Cost
At 1 October 2021 and 30 September 2022
2,470,143
------------
Amortisation
At 1 October 2021
741,042
Charge for the year
247,014
------------
At 30 September 2022
988,056
------------
Carrying amount
At 30 September 2022
1,482,087
------------
At 30 September 2021
1,729,101
------------
The company has no intangible assets.
15. Tangible assets
Group
Long leasehold property
Plant and machinery
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 October 2021
333,729
312,742
( 149,009)
65,447
562,909
Additions
–
42,806
30,847
–
73,653
Disposals
–
( 5,035)
–
( 18,495)
( 23,530)
------------
------------
------------
------------
------------
At 30 September 2022
333,729
350,513
( 118,162)
46,952
613,032
------------
------------
------------
------------
------------
Depreciation
At 1 October 2021
4,650
99,642
( 195,376)
65,447
( 25,637)
Charge for the year
39,605
50,932
15,443
–
105,980
Disposals
–
( 2,861)
–
( 18,495)
( 21,356)
------------
------------
------------
------------
------------
At 30 September 2022
44,255
147,713
( 179,933)
46,952
58,987
------------
------------
------------
------------
------------
Carrying amount
At 30 September 2022
289,474
202,800
61,771
–
554,045
------------
------------
------------
------------
------------
At 30 September 2021
329,079
213,100
46,367
–
588,546
------------
------------
------------
------------
------------
The company has no tangible assets.
16. Investments
Group
Interests in associates
£
Share of net assets/cost
At 1 October 2021
151,897
Share of profit or loss
2,470
------------
At 30 September 2022
154,367
------------
Impairment
At 1 October 2021 and 30 September 2022
–
------------
Carrying amount
At 30 September 2022
154,367
------------
At 30 September 2021
151,897
------------
Company
Shares in group undertakings
£
Cost
At 1 October 2021
10,065,364
Additions
100
-------------
At 30 September 2022
10,065,464
-------------
Impairment
At 1 October 2021 and 30 September 2022
–
-------------
Carrying amount
At 30 September 2022
10,065,464
-------------
At 30 September 2021
10,065,364
-------------
Subsidiaries, associates and other investments
Details of the investments in which the group and the parent company have an interest of 20% or more are as follows:
Registered office
Class of share
Percentage of shares held
Subsidiary undertakings
Mobus Fabrics Limited
Russell Way
Ordinary
100
Off Bradford Road
Brighouse
West Yorkshire
HD6 4LX
Shaoxing Mobus Fabrics Co Limited
Zhuyuantongcun
Ordinary
100
Yangxunqiao Town
Keqiao District
Shaoxing City
Zhejiang Province
China
Clarkson Coatings Limited
Russell Way
Ordinary
100
Off Bradford Road
Brighouse
West Yorkshire
HD6 4LX
Hangzhou Mobus Fabrics Co Limited
Room No 803, Floor 8 Building 13
Ordinary
100
linpimgdadao 633
Linping town
Yuhang Hangzhou
Zhejiang
China
Furniture Industry Testing Technology Limited
35 Westgate
Ordinary
100
Huddersfield
West Yorkshire
HD1 1PA
Other significant holdings
Shaoxing Sian Flame Retardant Technology Co Limited
Zhuyuantongcun
Ordinary
31
xangzun Qiao Town
Keqiao District
Shaoxing City
Zhejiang Province
China
17. Stocks
Group
Company
2022
2021
2022
2021
£
£
£
£
Finished goods and goods for resale
7,172,469
8,581,260
–
–
------------
------------
------------
------------
18. Debtors
Group
Company
2022
2021
2022
2021
£
£
£
£
Trade debtors
3,553,578
4,766,166
–
–
Prepayments and accrued income
112,392
137,851
–
–
Other debtors
842,281
101,630
100
100
------------
------------
------------
------------
4,508,251
5,005,647
100
100
------------
------------
------------
------------
19. Creditors: amounts falling due within one year
Group
Company
2022
2021
2022
2021
£
£
£
£
Bank loans and overdrafts
1,370,014
657,091
–
–
Trade creditors
2,400,900
3,348,197
–
–
Amounts owed to group undertakings
–
–
5,289,809
4,545,365
Accruals and deferred income
1,868,450
1,542,815
–
–
Corporation tax
296,989
113,789
–
–
Social security and other taxes
719,660
789,563
–
–
Director loan accounts
326,743
354,267
–
–
Loan notes
1,000,000
1,000,000
1,000,000
1,000,000
Invoice finance facility
222,322
3,166,590
222,322
666,666
Other creditors
225,981
99,217
–
–
------------
-------------
------------
------------
8,431,059
11,071,529
6,512,131
6,212,031
------------
-------------
------------
------------
The invoice finance facility is secured by a fixed and floating charge over the group's assets .
20. Creditors: amounts falling due after more than one year
Group
Company
2022
2021
2022
2021
£
£
£
£
Accruals and deferred income
50,000
58,000
–
–
Shares classed as financial liabilities
733,333
733,333
733,333
733,333
Loan notes
2,820,000
3,120,000
2,820,000
3,120,000
------------
------------
------------
------------
3,603,333
3,911,333
3,553,333
3,853,333
------------
------------
------------
------------
The loan notes are unsecured and repayable by annual instalments; with interest payable at 3.5% above the published base rate of Barclays Bank Plc.
21. Provisions
Group
Deferred tax (note 22)
£
At 1 October 2021
76,104
Additions
( 1,987)
------------
At 30 September 2022
74,117
------------
The company does not have any provisions.
22. Deferred tax
The deferred tax included in the statement of financial position is as follows:
Group
Company
2022
2021
2022
2021
£
£
£
£
Included in provisions (note 21)
74,117
76,104
–
–
------------
------------
------------
------------
The deferred tax account consists of the tax effect of timing differences in respect of:
Group
Company
2022
2021
2022
2021
£
£
£
£
Accelerated capital allowances
88,617
94,056
–
–
Deferred income
( 14,500)
( 16,500)
–
–
Provisions
–
( 1,452)
–
–
------------
------------
------------
------------
74,117
76,104
–
–
------------
------------
------------
------------
23. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution pension plans was £ 177,461 (2021: £ 152,328 ).
24. Government grants
The amounts recognised in the financial statements for government grants are as follows:
Group
Company
2022
2021
2022
2021
£
£
£
£
Recognised in other operating income:
Government grants recognised directly in income
8,000
8,000
–
–
------------
------------
------------
------------
25. Financial instruments
The carrying amount for each category of financial instrument is as follows:
Financial liabilities measured at fair value through profit or loss
Group
Company
2022
2021
2022
2021
£
£
£
£
Financial liabilities measured at fair value through profit or loss
733,333
733,333
733,333
733,333
------------
------------
------------
------------
26. Called up share capital
Issued, called up and fully paid
2022
2021
No.
£
No.
£
Amounts presented in equity:
Ordinary shares of £ 1 each
100
100
100
100
------------
------------
------------
------------
Amounts presented in liabilities:
Preference shares of £ 1 each
733,333
733,333
733,333
733,333
------------
------------
------------
------------
27. Analysis of changes in net debt
At 1 Oct 2021
Cash flows
At 30 Sep 2022
£
£
£
Cash at bank and in hand
457,347
95,165
552,512
Debt due within one year
(1,011,358)
(685,399)
(1,696,757)
------------
------------
------------
( 554,011)
( 590,234)
( 1,144,245)
------------
------------
------------
MOBUS FABRICS HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
YEAR ENDED 30 SEPTEMBER 2022
28. Capital commitments
Capital expenditure contracted for but not provided for in the financial statements is as follows:
Group
Company
2022
2021
2022
2021
£
£
£
£
Intangible assets
–
112,993
–
–
------------
------------
------------
------------
29. Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
Group
Company
2022
2021
2022
2021
£
£
£
£
Not later than 1 year
214,075
228,347
–
–
Later than 1 year and not later than 5 years
1,360,000
1,360,221
–
–
Later than 5 years
906,667
1,246,666
–
–
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2,480,742
2,835,234
–
–
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Total lease payments recognised as an expense in the profit and loss was £378,140 (2021 - £409,002).
30. Contingencies
The company is party to an unlimited multilateral bank guarantee with one of its trading subsidiaries. The group has indemnified its bank in relation to an import VAT and duty guarantee provided by the bank in favour of H M Revenue & Customs.
31. Related party transactions
Group
At the year end the group had loans totalling £326,743 (2021: £354,266) owing to key management personnel. These loans are unsecured, repayable upon demand and currently interest is being paid at base rate plus 2%. During the year the group paid rent totalling £nil (2021: £18,637) to related parties.
32. Controlling party
No one party has equity control of the company .