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BRAND MACHINE INTERNATIONAL LIMITED |
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Strategic Report, Report of the Director and |
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Financial Statements for the Year Ended 30 June 2022 |
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REGISTERED NUMBER:
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BRAND MACHINE INTERNATIONAL LIMITED |
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Strategic Report, Report of the Director and |
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Financial Statements for the Year Ended 30 June 2022 |
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BRAND MACHINE INTERNATIONAL LIMITED (REGISTERED NUMBER: 06873920) |
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Contents of the Financial Statements |
for the year ended 30 June 2022 |
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Page |
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Company Information | 1 |
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Strategic Report | 2 | to | 4 |
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Report of the Director | 5 | to | 6 |
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Report of the Independent Auditors | 7 | to | 8 |
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Income Statement | 9 |
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Other Comprehensive Income | 10 |
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Balance Sheet | 11 |
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Statement of Changes in Equity | 12 |
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Notes to the Financial Statements | 13 | to | 22 |
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BRAND MACHINE INTERNATIONAL LIMITED |
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Company Information |
for the year ended 30 June 2022 |
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Director: |
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Registered office: |
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Registered number: |
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Auditors: |
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5-6 Greenfield Crescent |
Edgbaston |
Birmingham |
West Midlands |
B15 3BE |
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Bank: |
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2 Churchill Place |
Canary Wharf |
London |
E14 5RB |
BRAND MACHINE INTERNATIONAL LIMITED (REGISTERED NUMBER: 06873920) |
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Strategic Report |
for the year ended 30 June 2022 |
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The director presents his strategic report for the year ended 30 June 2022. |
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Review of business |
We aim to present a balanced and comprehensive review of the strategic development and performance of our business during the year and its position at the year end. Our review is consistent with the size and non-complex nature of our business. |
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Brand Machine International Limited delivered sales slightly above the group's budgets and growth strategy in 2021/2022 and it continues to be a leading light in the international design, manufacturing and selling of globally recognised branded goods across Children's & Adult branded Apparel and accessories. |
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Although the overhang of supply chain pressure continued through this period, the company had managed its customers' expectations with great forward-looking communication, avoiding cancellations on its pre-sold order book. |
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The company's international business continued to grow outside of the UK & Ireland during this period, with the short to midterm outlook showing this incremental sales trend to continue for the foreseeable future. |
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The company took an immediate step back from its Russian based distribution, as the situation in the Ukraine unfolded early in 2022, and managed its exit well, and avoided over production due to quick actions at the timing of the unfolding events. |
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The EBIT profit levels held up well against a backdrop of increasing logistic and raw material costs, but we were able to make cost savings across other parts of the business through efficient working practices, speed to market, alongside great sourcing and long-term factory relationships. |
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Financial key performance indicators |
We consider that our key financial performance indicators are those that communicate the financial performance and strength of the company as a whole, these being turnover and profit margins. These financial statements report the first full year of trading operations since the transfer of assets from Flyers Group Plc, which was effected on 1 June 2021 under an intra-group asset purchase agreement. |
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Turnover for the year was £58.2m (12 months of trading) versus £5.6m (1 month of trading). The gross profit margin achieved was 37.4% (2021: 32.2%). The operating profit for the period was £12.7m (21.8%). |
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Profit after taxation was £10.3m which has been retained and added to reserves. Shareholder's funds therefore stood at £10.3m at the end of the year. |
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Principal risks and uncertainties |
We believe the manufacturing demand will start to slow down in Q4, this year, alongside reductions in the cost of shipping, which will assist a partial offsetting of some of the inflationary increases ahead. |
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Consumer price pressure will continue into 2023 as will the reduction in consumer purchasing, so in anticipation we have reduced our full year sales forecast by 11%, meaning a controlled growth of 19%, as a true reflection of feedback from our key trading accounts. |
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The pressure from a strong US dollar continues to be one to watch carefully and monitor in the coming months. |
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Our increased international USD business has allowed us to offset a reasonable portion of risk, but it remains one of the key factors for an importing business. |
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BRAND MACHINE INTERNATIONAL LIMITED (REGISTERED NUMBER: 06873920) |
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Strategic Report |
for the year ended 30 June 2022 |
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Development and performance |
The company's three E's still pay a pivotal part of its long-term strategy - ENTRY - ELEVATE - EXCEPTIONAL |
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Enter new markets with a great entry product strategy, manufacturing local for local and understanding cultural
differences. |
- | Elevate existing markets, continue to disrupt the norm, with great marketing and surprise partnerships. |
- | Employ exceptional people to create exceptional product and experiences for the consumer. |
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We continue to invest in the Senior Leadership Team (SLT), bringing to the business the best-in-class leaders, from Design to logistic at home and overseas. |
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The business continues to expand its product categories within each brand and is successfully moving swiftly into new areas of the business, incrementally creating additional future long term growth. |
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The brand profile continues to be concentrated in the company's core business of fashion and sports apparel, with an eye on further acquisitions to add to the group's owned branded offer. Adults apparel, although relevantly new in the last three years, continues to incrementally grow and provide an expanding retailer customer list. We continue to meet and partner with the best commercially minded brands in the world to add to our already unchallengeable stable of brands. |
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The company is continuing its commitment with its manufacturing, branded and retail partners to address environmental issues. We have appointed an ESG officer with a substantial background in Environmental, Social and Governance to the SLT, who will help us through the changing landscape for a fast-paced entrepreneurial large multi-channel international business. |
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We have a high percentage of young people in our business and, with the help of their input, we see this accelerating at quite a pace in the coming year to become a leading light in the process of industry change in sustainable manufacturing. We are pleased to say that many of our manufacturing partners have installed some great long-term initiatives at several points of the manufacturing process. |
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Our supply base continues to evolve and new vendors been audited to allow us to get ahead of our growth and new product needs. We continue to update and check that all compliance and international requirements are adhered to by our manufacturing partners and we are pleased to say they remains on the leading lists of manufactures in the industry. |
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The company's business strategy has evolved over the years, and no more so than recently. Covid-19 has shown how volatile the market can turn and to be able to adapt quickly is to survive. We continue to drive our multi-channel strategy, and now have four consumer facing digital businesses covering Kids, Sport, Premium and Luxury and soon adding a premium Tailoring online presence through one of our acquisitions in 2022. |
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Alongside our direct to retail distribution and .com presence, this year has seen the first ever US Polo Assn store open in the UK, with substantial press, and success, which will continue our consumer engagement and direct to consumer strategy. |
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We continue to create the best teams of diverse talent in our people within each pillar of the business, rewarding them based on group performance, with above market salaries and bonuses. |
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The group paid out in 2021/2022 the largest bonus payments in its history to say thank you for helping the business through the ever-changing rollercoaster of changing market pressures. |
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We continue to search in a difficult employment market for people who will change the momentum of each of the pillars, while still retaining a steady and strategic focus on the existing teams through training and listening to ideas small or large. |
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We opened our new one stop creative studio and showrooms in Camden London, bringing together the creative and product teams under one purpose-built space, increasing interaction and the sharing of ideas post Covid-19. |
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The company's logistics continues to be a long-term strategic plan of change in line with growth. |
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BRAND MACHINE INTERNATIONAL LIMITED (REGISTERED NUMBER: 06873920) |
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Strategic Report |
for the year ended 30 June 2022 |
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Future developments |
The delayed opening of our new Polish distribution centre in 2022, was unfortunate, but with the Ukraine situation we rightly decided to step away short term to allow the market to stabilise. We are now back on track for Q1 2023, to open in partnership with one of the world's largest logistics partners. |
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With the incremental growth from international retailers over the past twelve months looking to continue an upward trend, this will cement our commitment to supporting growth in Europe with our key retail partners. |
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We continue to invest in new IT solutions, and data is key for the future planning of the business which we anticipate will become the major investment in future years as we extend our interest internationally. |
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The SLT, along with the owners are exceptionally positive with the continuing investment in the employees of the BMIL, and believe they continue to be the backbone of the business supporting the company's growth. We as a business will continue to reward and share the success of the business with the employees through social events and financial reward to thank them for the hard work they do. |
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On behalf of the board: |
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BRAND MACHINE INTERNATIONAL LIMITED (REGISTERED NUMBER: 06873920) |
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Report of the Director |
for the year ended 30 June 2022 |
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The director presents his report with the financial statements of the company for the year ended 30 June 2022. |
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Principal activity |
The principal activity of the company continued to be that of the wholesale of branded clothing. |
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Dividends |
No dividends will be distributed for the year ended 30 June 2022. |
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Director |
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Qualifying third party indemnity provisions |
During the year and up to the date of the report, the company maintained liability insurance and third-party indemnification provisions for its directors, under which the company has agreed to indemnify the directors to the extent permitted by law in respect of all liabilities to third parties arising out of, or in connection with, the execution of their powers, duties and responsibilities as directors of the company. |
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Financial risk management objectives and policies |
The company's activities expose it to a number of financial risks. |
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The company took steps to ensure that when purchasing finished goods it has limited its reliance on any one supplier by expanding the supplier base and territories. |
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Credit risk |
Credit risk is the risk that one party to a financial instrument will cause a financial loss for that other party by failing to discharge an obligation. Credit risk attributable to trade receivables was minimised by setting credit limits based on credit ratings assigned by credit agencies. |
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Liquidity risk |
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The company mitigated liquidity risk by managing cash generation through its operation and by applying cash collection targets. |
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Cash flow risk |
Cash flow risk is the risk of exposure to variability in cash flows that are attributable to a particular risk associated with a recognised asset or liability such as future interest payments on a variable rate debt. The company's exposure to cash flow risk was mitigated via the of invoice financing. |
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Foreign exchange risk |
The company mitigated foreign exchange risk by monitoring all its foreign currency denominated transactions and as much as possible limiting them in entering into transactions having a volatile foreign currency. |
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Company's policy for payment of creditors |
The company's policy concerning the payments of trade creditors was to: |
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- | Settle the terms of payment with suppliers when agreeing the term of each transaction; |
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ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contract;
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- | pay in accordance with the company's contractual and other legal obligations. |
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Disclosure in the strategic report |
Certain items of disclosure required by the Companies Act 2006 have been included within the Strategic Report. |
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BRAND MACHINE INTERNATIONAL LIMITED (REGISTERED NUMBER: 06873920) |
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Report of the Director |
for the year ended 30 June 2022 |
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Director's responsibilities statement |
The director is responsible for preparing the Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations. |
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Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is required to: |
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- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
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state whether applicable accounting standards have been followed, subject to any material departures disclosed and
explained in the financial statements; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
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The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
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Statement as to disclosure of information to auditors |
So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
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Auditors |
The auditors, Haines Watts Birmingham LLP, are deemed to be re-appointed under section 487(2) of the Companies Act 2006. |
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On behalf of the board: |
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Report of the Independent Auditors to the Members of |
Brand Machine international Limited |
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Opinion |
We have audited the financial statements of Brand Machine international Limited (the 'company') for the year ended 30 June 2022 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
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In our opinion the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 30 June 2022 and of its profit for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
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Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
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Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
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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. |
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Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report. |
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Other information |
The director is responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Director, but does not include the financial statements and our Report of the Auditors thereon. |
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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. |
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In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
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Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements. |
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Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Director. |
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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 director's remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Report of the Independent Auditors to the Members of |
Brand Machine international Limited |
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Responsibilities of director |
As explained more fully in the Director's Responsibilities Statement set out on page six, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
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In preparing the financial statements, the director is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so. |
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Auditors' responsibilities for the audit of the financial statements |
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
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We obtained an understanding of the legal and regulatory framework applicable to both the company itself and the industry in which it operates. We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our sector experience and through discussion with the directors and other management. The most significant were identified as the Companies Act 2006, UK GAAP (FRS102) and relevant tax legislation. |
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We considered the extent of compliance with those laws and regulations as part of our procedures on the related financial statements. Our audit procedures included, but were not limited to: |
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making enquires of directors and management as to where they consider there to be a susceptibility to
fraud and whether they have any knowledge or suspicion of fraud; |
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obtaining an understanding of the internal controls established to mitigate risks related to fraud or
non-compliance with laws and regulations; |
- | assessing the design effectiveness of the controls in place to prevent and detect fraud; |
- | assessing the risk of management override including identifying and testing journal entries; |
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challenging the assumptions and judgements made by management in its significant accounting
estimates. |
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Whilst our audit did not identify any significant matters relating to the detection of irregularities including fraud, and despite the audit being planned and conducted in accordance with ISAs (UK), there remains an unavoidable risk that material misstatements in the financial statements may not be detected owing to inherent limitations of the audit, and that by their very nature, any such instances of fraud or irregularity would likely involve collusion, forgery, intentional misrepresentations, or the override of internal controls. |
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A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
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Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
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for and on behalf of
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5-6 Greenfield Crescent |
Edgbaston |
Birmingham |
West Midlands |
B15 3BE |
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BRAND MACHINE INTERNATIONAL LIMITED (REGISTERED NUMBER: 06873920) |
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Income Statement |
for the year ended 30 June 2022 |
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Period |
1/2/20 |
Year ended | to |
30/6/22 | 30/6/21 |
Notes | £ | £ |
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Turnover | 3 |
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Cost of sales |
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Gross profit |
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Distribution costs | ( |
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Administrative expenses | ( |
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12,638,588 | (4,900 | ) |
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Other operating income |
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Operating profit | 5 |
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Interest payable and similar expenses | 6 | ( |
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Profit before taxation |
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Tax on profit | 7 | ( |
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Profit/(loss) for the financial year |
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BRAND MACHINE INTERNATIONAL LIMITED (REGISTERED NUMBER: 06873920) |
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Other Comprehensive Income |
for the year ended 30 June 2022 |
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Period |
1/2/20 |
Year ended | to |
30/6/22 | 30/6/21 |
Notes | £ | £ |
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Profit/(loss) for the year |
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Other comprehensive income | - | - |
Total comprehensive income for the year |
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BRAND MACHINE INTERNATIONAL LIMITED (REGISTERED NUMBER: 06873920) |
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Balance Sheet |
30 June 2022 |
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2022 | 2021 |
Notes | £ | £ | £ | £ |
Fixed assets |
Intangible assets | 8 |
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Tangible assets | 9 |
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Investments | 10 |
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Current assets |
Stocks | 11 |
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Debtors | 12 |
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Cash at bank |
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Creditors |
Amounts falling due within one year | 13 |
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Net current assets |
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Total assets less current liabilities |
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Creditors |
Amounts falling due after more than one
year |
14 |
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Net assets/(liabilities) |
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Capital and reserves |
Called up share capital | 17 |
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Retained earnings | 18 |
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Shareholders' funds |
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The financial statements were approved by the director and authorised for issue on
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BRAND MACHINE INTERNATIONAL LIMITED (REGISTERED NUMBER: 06873920) |
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Statement of Changes in Equity |
for the year ended 30 June 2022 |
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Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
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Changes in equity |
Issue of share capital |
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Total comprehensive income | - | ( |
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Balance at 30 June 2021 |
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Changes in equity |
Total comprehensive income | - |
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Balance at 30 June 2022 |
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BRAND MACHINE INTERNATIONAL LIMITED (REGISTERED NUMBER: 06873920) |
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Notes to the Financial Statements |
for the year ended 30 June 2022 |
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1. | Statutory information |
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Brand Machine International Limited is a private company, limited by shares, registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page. |
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The presentation currency of the financial statements is the Pound Sterling (£). |
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2. | Accounting policies |
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Basis of preparing the financial statements |
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Preparation of consolidated financial statements |
The financial statements contain information about Brand Machine International Limited as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under Section 400 of the Companies Act 2006 from the requirements to prepare consolidated financial statements as it and its subsidiary undertakings are included by full consolidation in the consolidated financial statements of its parent, The Brand Machine Limited, Unit 1 Windsor Industrial Estate, 424 Ware Road, Hertford, Hertfordshire, SG13 7EW. |
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Going concern |
The director believes that the financial statements of the company should be prepared on a going concern basis on the grounds that current and future sources of funding or support will be more than adequate for the company's needs. In making this assessment, the director has considered a period of at least twelve months from the date of approval of the financial statements and believes that no further disclosures relating to the ability of the company to continue as going concerns need to be made in the financial statements. |
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Financial Reporting Standard 102 - reduced disclosure exemptions |
The company has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": |
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• | the requirements of Section 7 Statement of Cash Flows. |
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Critical accounting judgements and key sources of estimation uncertainty |
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. |
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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. |
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The areas requiring a higher degree of judgement, or complexity, and areas where assumptions or estimates are most significant to the financial statements, are disclosed below: |
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Depreciation of tangible fixed assets |
Depreciation is calculated based on an estimate of the useful economic life of each category of fixed assets together with an estimate of the assets' residual values. The estimates of each asset category's useful economic life have been stated above. |
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Stock provisions |
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its realisable value, being selling price less costs to sell. The impairment loss is recognised immediately in the Statement of Comprehensive Income. |
BRAND MACHINE INTERNATIONAL LIMITED (REGISTERED NUMBER: 06873920) |
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Notes to the Financial Statements - continued |
for the year ended 30 June 2022 |
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2. | Accounting policies - continued |
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Turnover |
Revenue is recognised to the extent that it it probable that the economic benefits will flow to the company and the revenue can be reliably measured, which is usually when the goods are delivered. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. |
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Intangible assets |
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. |
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Tangible fixed assets |
Tangible fixed assets are all under the cost model, and are stated at historical cost less accumulated depreciation. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. |
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Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method. |
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Depreciation is provided on the following basis: |
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Motor vehicles | - | 3 years |
Fixtures and fittings | - | 3-9 years |
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. |
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Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of Comprehensive Income. |
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Investments in subsidiaries |
Investments in subsidiary undertakings are recognised at cost. |
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Stocks |
Stocks are stated at the lower of cost and net realisable value, after making due allowance for obsolete stock and slow moving stocks. Cost includes all direct costs. |
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At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to sell. The impairment loss is recognised immediately in the Statement of Comprehensive Income. |
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Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
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Current or deferred taxation assets and liabilities are not discounted. |
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Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
|
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
|
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
|
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
BRAND MACHINE INTERNATIONAL LIMITED (REGISTERED NUMBER: 06873920) |
|
Notes to the Financial Statements - continued |
for the year ended 30 June 2022 |
|
2. | Accounting policies - continued |
|
Foreign currencies |
Functional and presentation currency |
The company's functional and presentational currency is the Pound Sterling (£). |
|
Transactions and balances |
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions. |
|
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined. |
|
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income. |
|
Hire purchase and leasing commitments |
Leases are classified as finance leases whenever the terms of the lease transfer substantially all of the risks and rewards of ownership of the leased asset to the company. All other leases are classified as operating leases. |
|
Assets held under finance leases are recognised initially at the fair value of the leased asset (or, if lower, the present value of minimum lease payments) at the inception of the lease. The corresponding liability to the lessor is included in the Statement of Financial Position as a finance lease obligation. Lease payments are apportioned between finance charges and a reduction of the lease obligation using the effective interest method so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are deducted in measuring profit or loss. Assets held under finance leases are included in the tangible fixed assets and depreciated and assessed for impairment losses in the same way as owned assets. |
|
Rentals payable under operating leases are charged to profit or loss on a straight line basis over the lease term, unless the rental payments are structured to increase in line with expected general inflation, in which case the Company recognises annual rent expenses equal to amounts owed to the lessor. |
|
The aggregate benefit of lease incentives are recognised as a reduction to the expense recognised over the lease term on a straight line basis. |
|
Defined contribution pension plan |
The company operates a defined plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payments obligations. |
|
The contributions are recognised as an expense in the Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the company in independently administered funds. |
BRAND MACHINE INTERNATIONAL LIMITED (REGISTERED NUMBER: 06873920) |
|
Notes to the Financial Statements - continued |
for the year ended 30 June 2022 |
|
2. | Accounting policies - continued |
|
Financial instruments |
The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares. |
|
Debtors |
Short term debtors are measured at transaction price, less any impairment. |
|
Cash and cash equivalents |
Cash is represented by cash on hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value. |
|
Creditors |
Short term creditors are measured at the transaction price. |
|
Provisions for liabilities |
Provisions are made where an event has taken place that gives the company the legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation. |
|
Provisions are charged as an expense to the Statement of Comprehensive Income in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Statement of Financial Position date of the expenditure required to settle the obligation, taking account relevant risks and uncertainties. |
|
When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position. |
|
3. | Turnover |
|
The turnover and profit before taxation are attributable to the one principal activity of the company. |
|
An analysis of turnover by geographical market is given below: |
|
Period |
1/2/20 |
Year ended | to |
30/6/22 | 30/6/21 |
£ | £ |
United Kingdom |
|
|
Europe |
|
|
Rest of World | 9,979,961 | 818,405 |
|
|
|
4. | Employees and directors |
Period |
1/2/20 |
Year ended | to |
30/6/22 | 30/6/21 |
£ | £ |
Wages and salaries |
|
|
Social security costs |
|
|
Other pension costs |
|
|
|
|
BRAND MACHINE INTERNATIONAL LIMITED (REGISTERED NUMBER: 06873920) |
|
Notes to the Financial Statements - continued |
for the year ended 30 June 2022 |
|
4. | Employees and directors - continued |
|
The average number of employees during the year was as follows: |
Period |
1/2/20 |
Year ended | to |
30/6/22 | 30/6/21 |
|
Management | 6 | 6 |
Administration | 7 | 7 |
Selling and distribution | 64 | 42 |
|
|
|
Period |
1/2/20 |
Year ended | to |
30/6/22 | 30/6/21 |
£ | £ |
Director's remuneration |
|
|
|
5. | Operating profit |
|
The operating profit is stated after charging: |
|
Period |
1/2/20 |
Year ended | to |
30/6/22 | 30/6/21 |
£ | £ |
Hire of plant and machinery |
|
|
Other operating leases |
|
|
Depreciation - owned assets |
|
|
Computer software amortisation |
|
|
Auditors' remuneration |
|
|
Auditors' remuneration for non audit work |
|
|
Foreign exchange differences |
|
|
|
Auditors' remuneration |
The company has borne the auditors' fees for the year ended 30 June 2022 on behalf of fellow group companies, The Brand Machine Limited, and Flyers CNV Limited. |
|
For the period ended 30 June 2021, the auditors' fees were borne by fellow subsidiary company, Flyers Group Plc (now dormant.). |
|
6. | Interest payable and similar expenses |
Period |
1/2/20 |
Year ended | to |
30/6/22 | 30/6/21 |
£ | £ |
Other interest and charges |
|
|
BRAND MACHINE INTERNATIONAL LIMITED (REGISTERED NUMBER: 06873920) |
|
Notes to the Financial Statements - continued |
for the year ended 30 June 2022 |
|
7. | Taxation |
|
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
Period |
1/2/20 |
Year ended | to |
30/6/22 | 30/6/21 |
£ | £ |
Current tax: |
UK corporation tax |
|
|
Over-provision in prior year | (3,231 | ) | - |
|
Tax on profit |
|
|
|
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
|
Period |
1/2/20 |
Year ended | to |
30/6/22 | 30/6/21 |
£ | £ |
Profit before tax |
|
|
Profit multiplied by the standard rate of corporation tax in the UK of
(2021 - |
|
|
|
Effects of: |
Expenses not deductible for tax purposes |
|
|
Capital allowances in excess of depreciation | ( |
) | ( |
) |
Utilisation of tax losses | ( |
) |
|
Adjustments to tax charge in respect of previous periods | ( |
) |
|
Total tax charge | 2,295,374 | 3,231 |
|
8. | Intangible fixed assets |
Computer |
software |
£ |
Cost |
At 1 July 2021 |
|
Additions |
|
At 30 June 2022 |
|
Amortisation |
At 1 July 2021 |
|
Amortisation for year |
|
At 30 June 2022 |
|
Net book value |
At 30 June 2022 |
|
At 30 June 2021 |
|
BRAND MACHINE INTERNATIONAL LIMITED (REGISTERED NUMBER: 06873920) |
|
Notes to the Financial Statements - continued |
for the year ended 30 June 2022 |
|
9. | Tangible fixed assets |
Fixtures |
and | Motor |
fittings | vehicles | Totals |
£ | £ | £ |
Cost |
At 1 July 2021 |
|
|
|
Additions |
|
|
|
At 30 June 2022 |
|
|
|
Depreciation |
At 1 July 2021 |
|
|
|
Charge for year |
|
|
|
At 30 June 2022 |
|
|
|
Net book value |
At 30 June 2022 |
|
|
|
At 30 June 2021 |
|
|
|
|
10. | Fixed asset investments |
Shares in |
group |
undertakings |
£ |
Cost |
At 1 July 2021 |
and 30 June 2022 |
|
Net book value |
At 30 June 2022 |
|
At 30 June 2021 |
|
|
The company's investments at the Balance Sheet date in the share capital of companies include the following: |
|
|
Registered office: United States of America |
Nature of business:
|
% |
Class of shares: | holding |
|
|
2022 | 2021 |
£ | £ |
Aggregate capital and reserves | ( |
) | ( |
) |
(Loss)/profit for the year/period | ( |
) |
|
|
|
Registered office: Germany |
Nature of business:
|
% |
Class of shares: | holding |
|
|
2022 | 2021 |
£ | £ |
Aggregate capital and reserves | ( |
) | ( |
) |
Loss for the year/period | ( |
) | ( |
) |
BRAND MACHINE INTERNATIONAL LIMITED (REGISTERED NUMBER: 06873920) |
|
Notes to the Financial Statements - continued |
for the year ended 30 June 2022 |
|
11. | Stocks |
2022 | 2021 |
£ | £ |
Finished goods |
|
|
|
12. | Debtors: amounts falling due within one year |
2022 | 2021 |
£ | £ |
Trade debtors |
|
|
Amounts owed by group undertakings |
|
|
Amounts owed by participating interests | 662,235 | 686,022 |
Other debtors |
|
|
VAT |
|
|
Called up share capital not paid |
|
|
Prepayments |
|
|
|
|
|
13. | Creditors: amounts falling due within one year |
2022 | 2021 |
£ | £ |
Hire purchase contracts (see note 15) |
|
|
Trade creditors |
|
|
Amounts owed to group undertakings |
|
|
Amounts owed to participating interests | 2,374,220 | - |
Corporation tax |
|
|
Social security and other taxes |
|
|
VAT | - | 341,076 |
Other creditors |
|
|
Directors' loan accounts | 1,227,274 | 9,100,480 |
Accruals and deferred income |
|
|
|
|
|
14. | Creditors: amounts falling due after more than one year |
2022 | 2021 |
£ | £ |
Hire purchase contracts (see note 15) |
|
|
Directors' loan accounts | 1,000,000 | 1,000,000 |
|
|
|
The director's loan account is an interest free loan repayable upon demand of the director except for £1,000,000 (2021: £1,000,000) for which payment is deferred for more than 1 year. |
|
15. | Leasing agreements |
|
Minimum lease payments fall due as follows: |
|
Hire purchase contracts |
2022 | 2021 |
£ | £ |
Net obligations repayable: |
Within one year |
|
|
Between one and five years |
|
|
|
|
BRAND MACHINE INTERNATIONAL LIMITED (REGISTERED NUMBER: 06873920) |
|
Notes to the Financial Statements - continued |
for the year ended 30 June 2022 |
|
15. | Leasing agreements - continued |
|
Non-cancellable |
operating leases |
2022 | 2021 |
£ | £ |
Within one year |
|
|
Between one and five years |
|
|
In more than five years |
|
|
|
|
|
16. | Secured debts |
|
The following secured debts are included within creditors: |
|
2022 | 2021 |
£ | £ |
Trade finance facility | 1,079,795 | - |
Hire purchase liabilities | 22,112 | - |
|
|
|
The company has a trade finance facility with Conance Limited. The debt under this agreement is secured by a debenture dated 22/11/2021 giving a fixed and floating charge over the company's stock. |
|
Liabilities under hire purchase agreements are secured on the individual assets concerned. |
|
17. | Called up share capital |
|
|
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2022 | 2021 |
value: | £ | £ |
|
Ordinary | £1 | 100 | 100 |
|
18. | Reserves |
Retained |
earnings |
£ |
|
At 1 July 2021 | ( |
) |
Profit for the year |
|
At 30 June 2022 |
|
|
19. | Pension commitments |
|
The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions paid by the company to the fund. |
|
Contributions payable by the company for the period were £121,859 (2021: £8,869). |
|
20. | Related party disclosures |
|
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
BRAND MACHINE INTERNATIONAL LIMITED (REGISTERED NUMBER: 06873920) |
|
Notes to the Financial Statements - continued |
for the year ended 30 June 2022 |
|
20. | Related party disclosures - continued |
|
At the year end, the company owed £2,227,273 (2021: £10,100,480) to the director. The loan is interest free, repayable upon demand of the director except for £1,000,000 (2021: £1,000,000) for which payment is deferred for more than 1 year. |
|
Included in debtors are balances with the following companies all under the common control of the director: |
|
2022 | 2021 |
Duchamp Licencing Limited | £213,897 | £63,388 |
Penfield Licencing Limited | £415,825 | £619,634 |
Brand Machine Retail Limited | £3,000 | £3,000 |
Peckham Rye Licencing Limited | £29,513 | - |
Total | £662,235 | £686.022 |
|
Included in creditors are balances with the following companies under the common control of the director: |
|
Brand Machine Licencing Limited | £2,374,220 | - |
|
During the period the company incurred expenses with the below named companies under common control of the director: |
2022 | 2021 |
Duchamp Licencing Limited | £17,342 | - |
Penfield Licencing Limited | £169,841 | - |
Brand Machine Licencing Limited | £4,283,972 | - |
|
|
21. | Ultimate controlling party |
|
The immediate parent undertaking, and the smallest and largest group of which the company is a member, is The Brand Machine Limited. Copies of the financial statements of the immediate parent undertaking can be obtained from The Brand Machine Limited, Unit 1 Windsor Industrial Estate, 424 Ware Road, Hertford, Hertfordshire, SG13 7EW. |
|
The ultimate controlling party is A T Jalil. |