Company Registration No. 02452908 (England and Wales)
SHAKESPEARE MONOFILAMENT UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
SHAKESPEARE MONOFILAMENT UK LIMITED
COMPANY INFORMATION
Directors
Mr K Baughman
Mr B Searfoss
(Appointed 1 January 2020)
Mr G Walsh
(Appointed 1 January 2020)
Mr M Rosebrock
(Appointed 1 January 2020)
Mr D Moody
(Appointed 19 March 2021)
Company number
02452908
Registered office
Enterprise Way
Venture Road
Fleetwood
FY7 8RY
Auditor
MHA Moore and Smalley
Richard House
9 Winckley Square
Preston
PR1 3HP
SHAKESPEARE MONOFILAMENT UK LIMITED
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5
Directors' responsibilities statement
6
Independent auditor's report
7 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 27
SHAKESPEARE MONOFILAMENT UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
- 1 -
The directors present the strategic report for the year ended 31 December 2020.
Review of the business
Financial
y
ear 2020 was the year
in which
the
Covid
19
p
andemic
brought along many unforeseen challenges that the company faced for the first time. On the 23 March 2020 the UK government issued national lockdown restrictions and the work from home policy w
h
ere possible, and also ensuring that employees who could not work from home could work in a safe environment. As a result of the
Covid
19 pandemic the
p
arent company set up a
Covid
19 safety committee, which would meet on a daily, then weekly basis to ensure that safe practices were put in place, across all Jadex sites. As a result of this the company managed to work effectively through this period, all be it for a 3 week period when the company furloughed all its production employees due to the business going through a quiet period.
With regards to the trading results FY 2020 was a very good year with gross profit increasing by £269k and a 5% gross margin improvement over prior year. This margin improvement was primarily driven by product mix and the fact that the Asian conductive fibre sales are now being accounted for by our
p
arent company which eliminates the intercompany transfer prices.
Admin and freight costs were similar to prior year, all be it a slight increase in freight of £30k due to the company’s sales increasing for customers in the USA which costs more to service.
The company received £33k from HMRC from the “furlough scheme” as a result of furloughing production employees for a 3 week period. This income is reflected within “Other Income” within the accounts.
The majority of the company’s sales are outside its function
al
currency
of
GBP
.
The company has previously entered into forward currency contracts for the EUR / GBP to mitigate this foreign exchange risk, but during FY 2020, no contracts were entered into and the company traded at spot rates. The exchange rate was closely monitored but due to no significant movement in these rates and also the fact that
Brexit
was on the horizon, local management decided not to enter into any FX contracts. With regards to the USD the company does not enter into FX contracts as the company
h
as a natural hedge, with significant USD purchases with its parent company Shakespeare LLC and Asian vendors.
During FY 2020 the company made investments in its production equipment and
h
as committed to a “Slub Detection System" to be received in April 2021. This system will help improve its diameter monitoring capability on its fine diameter product range and improve quality demands of our customers.
Key performance indicators
The company’s key performance indicators are:
2020
2019
£’000
£’000
Turnover 10,928 12,337
EBITDA (excluding 2019 loan waiver) 1,043 830
EBITDA % 9.5% 6.7%
SHAKESPEARE MONOFILAMENT UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 2 -
Principal risks and uncertainties
Management meet on a monthly basis to evaluate the company’s risks. The principal risks and uncertainties facing the company are broadly grouped as competitive, legislative and financial (treasury policies). The company consider the immediate risks affecting the company to be the Covid 19 pandemic and Brexit.
Covid 19 pandemic
As a result of the
Covid
19 pandemic our
p
arent company set up a
Covid
committee in April 2020 for all its
Jadex
facilities both in the USA and UK. These meetings initially met daily, then weekly
,
provid
ing
guidance on all the safe measures that the
m
anufacturing plants and offices
required
to ensure that minimal disruption would be caused. These strict safety measures included social distancing, work
ing
from home were possible, hand sanitization dispensers, wearing of face masks, temperature checks for employees, and many other safety measures. As a result of this, the
c
ompany managed to work effectively during the pandemic with minimum disruption to production and shipping out of goods to customers. These safety measures are still in place now and as the UK government
Covid
19 vaccine program roll out gains momentum, with all the high risk individuals being vaccinated
,
the UK
is
in a good place with regards to getting the country back to our normal working lives.
Brexit
Although a free trade agreement was finalised between the UK and the EU on 24 December 2020 it still created shipping issues for goods that were dispatched from 1
January 2021. The issues
we
encountered were increased customs documentation / checks and backlogs at ports resulted in some logistical issues. Although the company had prepared the best it could, we still faced challenges in understanding the implications of this new trade deal with regards to UK origin and
p
referential origin of goods that caused us and our customers problems. We were quickly able to understand these issues and were able to resolve these problems for both us and our customers. However we cannot move away from the fact that
Brexit h
as caused logistic issues for all UK / EU companies but it is something that we will all need to find a workable solution to.
Competitive risks
The company faces competitive risks from other manufacturing businesses within Europe. Turnover is maintained and furthered through the regular technical meetings held with customers and financial criteria established with customers.
Legislative risks
In the UK, manufactured products must be in line with European Union standards. These standards are subject to continuous revision and any new directive may have a material impact on the ability of the company to manufacture and supply products at a profit. The company considers that its current quality and level of equipment at its site demonstrates its ability to keep up with technological changes and protects it against this risk.
Financial risks
The company’s financial risks and treasury policies are discussed further below.
SHAKESPEARE MONOFILAMENT UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 3 -
Financial risk management
The company’s financial instruments comprise cash and liquid resources, balances with group undertakings and various items such as trade debtors, trade creditors, etc., that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the company’s operations.
The main risks arising from the company’s financial instruments are foreign currency risk, interest rate risk, cash flow risk, credit risk, price risk and liquidity risk. The board reviews and agrees policies for managing these risks.
Foreign currency risk
The company has no operations outside of the United Kingdom but it buys and sells goods and services denominated in currencies other than sterling. As a result, the value of the company’s non-sterling revenues, purchases, financial assets and liabilities and cash flows can be affected significantly by movements in exchange rates in general and in the US Dollar and Euro rates in particular. The company’s transactional currency exposure arises from sales or purchases in currencies other than its functional currency. The company previously entered into forward contracts with its previous owner Newell Brands Treasury where it protected its sales over a 12-18 month period at pre-determined rates. Going forward the company will deal directly with Barclays bank as and when it deems it to be the right time to hedge.
Interest rate cash flow risk
The company does not have any external debt. The company finances its operations through a mixture of retained profits and balances with group undertakings.
Credit risk
The company does not enter into transactions on deferred terms. In agreeing annual budgets, the company sets targets for debtors’ days and doubtful debt expense against which performance is monitored.
Price risk
The company does come under pressure from its customers at times to reduce prices, and although the company does its best to keep these customers, in certain cases the company cannot meet the price the customer is looking for.
Liquidity risk
The company mitigates liquidity risk by managing cash generation by its operations, applying cash collection targets and setting authorisation limits for investment. The company’s funding strategy is not to rely on external finance, but to rely on group funding if and when required.
Future developments
FY 2021
h
as started off well, with a strong order
book
due to increased demand from our existing customer base, as well as new projects coming to fruition. As a result of this increased demand the company
h
as increased its production headcount to cope. From 1 January 2021 the company faced the challenges that
Brexit
brought
,
all be it that a free trade agreement between the UK and the EU did materiali
s
e, there w
ere
still logistical and increased customs declaration requirements that the company had to navigate through. All these challenges were met resulting in the company now being able to effectively ship into the EU region with minimum disruption.
The plans and forecast for FY 2021 indicate the sales and operating profit will be greater than FY 2020.
SHAKESPEARE MONOFILAMENT UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 4 -
Mr G Walsh
Director
4 August 2021
SHAKESPEARE MONOFILAMENT UK LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
- 5 -
The directors present their annual report and financial statements for the year ended 31 December 2020.
Principal activities
The principal activity of the company continued to be the manufacturer of monofilaments and the importing of goods made in the USA, for sale in Europe and Asia. The company also sells marine and land based antennas.
Results and dividends
The results for the year are set out on page 10.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
No preference dividends were paid.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr K Baughman
Mr C Villa
(Resigned 19 March 2021)
Mr B Searfoss
(Appointed 1 January 2020)
Mr G Walsh
(Appointed 1 January 2020)
Mr M Rosebrock
(Appointed 1 January 2020)
Mr D Moody
(Appointed 19 March 2021)
Auditor
The auditor, MHA Moore and Smalley, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Information referred to in the Strategic Report
The company has chosen in accordance with Companies Act 2006, s. 414C
(11) to set out in the company's
S
trategic
R
eport information required by Large and Medium-sized Companies and Groups (Accounts and
Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of
future developments.
On behalf of the board
Mr G Walsh
Director
4 August 2021
SHAKESPEARE MONOFILAMENT UK LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2020
- 6 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
SHAKESPEARE MONOFILAMENT UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SHAKESPEARE MONOFILAMENT UK LIMITED
- 7 -
Opinion
We have audited the financial statements of Shakespeare Monofilament UK Limited (the 'company') for the year ended 31 December 2020 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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 company's affairs as at 31 December 2020 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the financial statements
section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
SHAKESPEARE MONOFILAMENT UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SHAKESPEARE MONOFILAMENT UK LIMITED
- 8 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors' r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
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 directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company
'
s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The
specific procedures for this engagement and the extent
to which our procedures are capable of detecting irregularities, including fraud, is detailed below
.
SHAKESPEARE MONOFILAMENT UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SHAKESPEARE MONOFILAMENT UK LIMITED
- 9 -
Because of the field in which the client operates, we identified the following areas as those most likely to have a material impact on the financial statements: Health and Safety
,
employment law and compliance with the UK Companies Act.
Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognize the non-compliance.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Paul Locker (Senior Statutory Auditor)
For and on behalf of MHA Moore and Smalley
Chartered Accountants
Statutory Auditor
Richard House
9 Winckley Square
Preston
PR1 3HP
4 August 2021
SHAKESPEARE MONOFILAMENT UK LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
- 10 -
2020
2019
Notes
£
£
Turnover
3
10,928,393
12,336,573
Cost of sales
(8,763,950)
(10,441,245)
Gross profit
2,164,443
1,895,328
Distribution costs
(384,914)
(355,232)
Administrative expenses
(837,462)
(842,716)
Other operating income
32,702
17,415
Operating profit before intercompany loan waiver
5
974,769
714,795
Intercompany loan waiver
4
(10,664,147)
Operating profit/(loss)
974,769
(9,949,352)
Interest receivable and similar income
8
15,180
78,772
Profit/(loss) before taxation
989,949
(9,870,580)
Tax on profit/(loss)
9
(181,934)
(168,922)
Profit/(loss) for the financial year
808,015
(10,039,502)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
SHAKESPEARE MONOFILAMENT UK LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2020
31 December 2020
- 11 -
2020
2019
Notes
£
£
£
£
Fixed assets
Tangible assets
10
1,236,618
1,196,009
Current assets
Stocks
11
2,033,220
2,871,147
Debtors falling due after more than one year
12
1,282,339
94,537
Debtors falling due within one year
12
2,349,169
1,827,534
Cash at bank and in hand
1,668,320
1,621,640
7,333,048
6,414,858
Creditors: amounts falling due within one year
13
(1,172,027)
(1,021,243)
Net current assets
6,161,021
5,393,615
Total assets less current liabilities
7,397,639
6,589,624
Capital and reserves
Called up share capital
16
1,255,141
1,255,141
Profit and loss reserves
6,142,498
5,334,483
Total equity
7,397,639
6,589,624
The financial statements were approved by the board of directors and authorised for issue on 4 August 2021 and are signed on its behalf by:
Mr G Walsh
Director
Company Registration No. 02452908
SHAKESPEARE MONOFILAMENT UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
- 12 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2019
1,255,141
15,373,985
16,629,126
Year ended 31 December 2019:
Loss and total comprehensive income for the year
-
(10,039,502)
(10,039,502)
Balance at 31 December 2019
1,255,141
5,334,483
6,589,624
Year ended 31 December 2020:
Profit and total comprehensive income for the year
-
808,015
808,015
Balance at 31 December 2020
1,255,141
6,142,498
7,397,639
SHAKESPEARE MONOFILAMENT UK LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2020
- 13 -
2020
2019
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
22
268,589
1,122,570
Income taxes paid
(128,000)
(221,082)
Net cash inflow from operating activities
140,589
901,488
Investing activities
Purchase of tangible fixed assets
(109,089)
(62,527)
Interest received
15,180
78,772
Net cash (used in)/generated from investing activities
(93,909)
16,245
Financing activities
Repayment of bank loans
(38,768)
Net cash used in financing activities
(38,768)
Net increase in cash and cash equivalents
46,680
878,965
Cash and cash equivalents at beginning of year
1,621,640
742,675
Cash and cash equivalents at end of year
1,668,320
1,621,640
SHAKESPEARE MONOFILAMENT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
- 14 -
1
Accounting policies
Company information
Shakespeare Monofilament UK Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Enterprise Way, Venture Road, Fleetwood, FY7 8RY.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
As with most businesses, at the date of approval of the financial statements, the company has been affected by the impact of the Covid-19 pandemic which has impacted upon normal operations. However management tooks steps to manage the operational risks posed by the pandemic, such that the company was able to continue to trade profitability throughout 2020. The board are continuing to monitor developments and all emerging risks regarding the impact of the pandemic, but are anticipating that business should not be significantly impacted by the pandemic in the twelve month period following approval of the accounts, based on management's experience to date.
true
The directors have prepared cashflow forecasts which demonstrate that the company appears to have sufficient cash resources to be able to meet its liabilities as they fall due for the twelve month period following approval of the accounts. Therefore the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer
,
the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity
.
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following
straight line
bases:
Freehold land and buildings
50 years
Plant and machinery
5 to 35 years
Office equipment
3 to 5 years
Freehold land is not depreciated.
SHAKESPEARE MONOFILAMENT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 15 -
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.5
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price.
Raw materials are valued at standard cost. Finished goods are valued using the standard cost of raw materials consumed, plus a standard cost of labour and a standard overhead absorption. Standard costs are set at the beginning of each financial year. The purchase price variance (difference between standard and actual cost) is reviewed and is written off to the profit and loss account if immaterial.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
SHAKESPEARE MONOFILAMENT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 16 -
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
The company does not have any non-basic financial assets.
Impairment of financial assets
Financial assets
are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
SHAKESPEARE MONOFILAMENT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 17 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans
and
loans from
fellow group companies are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities. Trade creditors are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
The company does not have any non-basic financial liabilities.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
SHAKESPEARE MONOFILAMENT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
1
Accounting policies
(Continued)
- 18 -
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
1.14
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
SHAKESPEARE MONOFILAMENT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 19 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant
effect on amounts recognised in the financial statements.
Impairment of stock
At the end of each reporting period, management undertake an assessment of stock, based upon their knowledge of the market and the movement of each stock item. Where necessary, an impairment is recognised in the profit and loss account. The actual net realisable value may differ from the estimated level of recovery.
Warranty provision
At the end of each reporting period, management undertake an assessment of the warranty provision, based upon their knowledge of known manufacturing issues. Where necessary, a provision is recognised in the profit and loss account.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are
as follows.
Overhead and labour absorption rate
At the end of each reporting period, management undertake an assessment of the overhead and labour absorption rate reviewing the actual rate against the rate set in the stock management system. Where necessary, an adjustment is made to the rate used.
3
Turnover and other revenue
2020
2019
£
£
Turnover analysed by class of business
Attributable to principal activities
10,928,393
12,336,573
2020
2019
£
£
Other significant revenue
Interest income
15,180
78,772
Grants received
32,382
SHAKESPEARE MONOFILAMENT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
3
Turnover and other revenue
(Continued)
- 20 -
2020
2019
£
£
Turnover analysed by geographical market
United Kingdom
2,209,984
2,026,918
Europe
5,125,720
4,642,027
Asia
2,845,139
4,981,036
Rest of the world
747,550
686,592
10,928,393
12,336,573
4
Exceptional costs/(income)
2020
2019
£
£
Intercompany loan waiver
10,664,147
On 1 May 2019 the company waived the intercompany loan balance of £10,664,147 due from Alltrista Plastics UK Limited, a fellow group subsidiary. This has been presented as an exceptional debit within the profit and loss account.
5
Operating profit/(loss)
2020
2019
Operating profit/(loss) for the year is stated after charging/(crediting):
£
£
Exchange gains
(85,251)
(70,086)
Government grants
(32,382)
Fees payable to the company's auditor for the audit of the company's financial statements
16,275
15,500
Depreciation of owned tangible fixed assets
68,480
115,424
Operating lease charges
41,781
40,830
6
Employees
The average monthly number of persons (excluding directors) employed by the company during the year was:
2020
2019
Number
Number
Manufacturing
21
18
Office and management
11
10
Total
32
28
SHAKESPEARE MONOFILAMENT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
6
Employees
(Continued)
- 21 -
Their aggregate remuneration comprised:
2020
2019
£
£
Wages and salaries
1,332,594
1,216,494
Social security costs
142,226
131,607
Pension costs
116,772
116,240
1,591,592
1,464,341
7
Directors' remuneration
2020
2019
£
£
Remuneration for qualifying services
108,472
Company pension contributions to defined contribution schemes
5,841
114,313
Included within remuneration for qualifying services is an element attributable to services provided by the overseas directors.
8
Interest receivable and similar income
2020
2019
£
£
Interest income
Interest receivable from group companies
15,180
78,772
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
15,180
78,772
9
Taxation
2020
2019
£
£
Current tax
UK corporation tax on profits for the current period
127,162
Group tax relief
164,917
Total current tax
164,917
127,162
SHAKESPEARE MONOFILAMENT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
9
Taxation
2020
2019
£
£
(Continued)
- 22 -
Deferred tax
Origination and reversal of timing differences
28,139
29,637
Changes in tax rates
(11,122)
(3,120)
Adjustment in respect of prior periods
15,243
Total deferred tax
17,017
41,760
Total tax charge
181,934
168,922
The actual charge for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
2020
2019
£
£
Profit/(loss) before taxation
989,949
(9,870,580)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 19.00% (2019: 19.00%)
188,090
(1,875,410)
Tax effect of expenses that are not deductible in determining taxable profit
4,966
6,021
Adjustments in respect of prior years
15,243
Effect of change in corporation tax rate
(11,122)
(3,120)
Intercompany loan waiver
2,026,188
Taxation charge for the year
181,934
168,922
During the period the Chancellor stated his intention to maintain the main rate of corporation tax at 19%. This change to previously announced policy was substantively enacted on 17 March 2020 and therefore deferred tax has been provided for at this rate at the balance sheet date.
Subsequent to the balance sheet date, the Chancellor confirmed an increase in the main corporation tax rate from 19% to 25% with effect from 1 April 2023.
SHAKESPEARE MONOFILAMENT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 23 -
10
Tangible fixed assets
Freehold land and buildings
Plant and machinery
Office equipment
Total
£
£
£
£
Cost
At 1 January 2020
1,537,960
3,684,704
31,857
5,254,521
Additions
107,412
1,677
109,089
At 31 December 2020
1,537,960
3,792,116
33,534
5,363,610
Depreciation and impairment
At 1 January 2020
649,791
3,383,403
25,318
4,058,512
Depreciation charged in the year
28,586
37,964
1,930
68,480
At 31 December 2020
678,377
3,421,367
27,248
4,126,992
Carrying amount
At 31 December 2020
859,583
370,749
6,286
1,236,618
At 31 December 2019
888,169
301,301
6,539
1,196,009
11
Stocks
2020
2019
£
£
Raw materials and consumables
796,871
847,403
Finished goods and goods for resale
1,236,349
2,023,744
2,033,220
2,871,147
12
Debtors
2020
2019
Amounts falling due within one year:
£
£
Trade debtors
2,127,873
1,714,410
Corporation tax recoverable
92,838
Amounts owed by group undertakings
15,180
Other debtors
67,365
79,796
Prepayments and accrued income
45,913
33,328
2,349,169
1,827,534
SHAKESPEARE MONOFILAMENT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
12
Debtors
(Continued)
- 24 -
2020
2019
Amounts falling due after more than one year:
£
£
Amounts owed by group undertakings
1,204,819
Deferred tax asset (note 14)
77,520
94,537
1,282,339
94,537
Total debtors
3,631,508
1,922,071
13
Creditors: amounts falling due within one year
2020
2019
£
£
Trade creditors
239,816
203,416
Amounts owed to group undertakings
565,407
321,220
Corporation tax
35,162
Other taxation and social security
37,661
36,920
Accruals and deferred income
329,143
424,525
1,172,027
1,021,243
14
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Assets
Assets
2020
2019
Balances:
£
£
Fixed asset timing differences
5,827
22,319
Intangible asset timing differences
83,079
84,953
Other timing differences
(11,386)
(12,735)
77,520
94,537
SHAKESPEARE MONOFILAMENT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
14
Deferred taxation
(Continued)
- 25 -
2020
Movements in the year:
£
Asset at 1 January 2020
(94,537)
Charge to profit or loss
17,017
Asset at 31 December 2020
(77,520)
As at the signing date of these financial statements, the company has not finalised its capital expenditure programme for the coming year and so an assessment as to the likely movement of timing differences cannot be made.
15
Retirement benefit schemes
2020
2019
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
116,772
116,240
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
16
Share capital
2020
2019
£
£
Ordinary share capital
Issued and fully paid
200 Ordinary shares of £1 each
200
200
Preference share capital
Issued and fully paid
1,254,941 Redeemable preference shares of £1 each
1,254,941
1,254,941
Total equity share capital
1,255,141
1,255,141
The redeemable preference shares do not carry any rights to attend or vote at any general meetings or other meetings of the shareholders.
The company may redeem the preference shares at any time after 1 January 2001, with at least three months’ notice given in writing to the holders.
The preference shares do not carry the right to a fixed, mandatory dividend.
SHAKESPEARE MONOFILAMENT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 26 -
17
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2020
2019
£
£
Within one year
21,149
42,008
Between two and five years
18,295
24,903
39,444
66,911
18
Capital commitments
Amounts contracted for but not provided in the financial statements:
2020
2019
£
£
Acquisition of tangible fixed assets
89,077
-
19
Related party transactions
The company has taken advantage of the exemption permitted under Section 33.1A from disclosing transactions with the parent and fellow subsidiary companies within the same wholly owned group.
20
Ultimate controlling party
The ultimate parent undertaking is One Rock Capital Partners, a private equity company incorporated in the USA.
The smallest group for which group accounts are prepared is that headed by Jadex Inc. and the largest group for which group accounts are prepared is that headed by
Zinc-Polymer Holdings, LLC
. The head office of Jadex Inc. and
Zinc-Polymer Holdings, LLC
is 1303 South Batesville Road, Greer, South Carolina, 29650, United States. The group accounts are publicly available and may be obtained upon request from this address.
21
Analysis of changes in net funds
1 January 2020
Cash flows
31 December 2020
£
£
£
Cash at bank and in hand
1,621,640
46,680
1,668,320
SHAKESPEARE MONOFILAMENT UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
- 27 -
22
Cash generated from operations
2020
2019
£
£
Profit/(loss) for the year after tax
808,015
(10,039,502)
Adjustments for:
Taxation charged
181,934
168,922
Investment income
(15,180)
(78,772)
Depreciation and impairment of tangible fixed assets
68,480
115,424
Intercompany loan waiver
-
10,664,147
Movements in working capital:
Decrease/(increase) in stocks
837,927
(910,109)
(Increase)/decrease in debtors
(1,633,616)
1,915,375
Increase/(decrease) in creditors
21,029
(712,915)
Cash generated from operations
268,589
1,122,570
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