REGISTERED NUMBER:
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STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
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AUDITED FINANCIAL STATEMENTS |
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FOR THE YEAR ENDED 30 APRIL 2021 |
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ECOPAC (U.K.) LIMITED |
REGISTERED NUMBER:
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STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
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AUDITED FINANCIAL STATEMENTS |
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FOR THE YEAR ENDED 30 APRIL 2021 |
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ECOPAC (U.K.) LIMITED |
ECOPAC (U.K.) LIMITED (REGISTERED NUMBER: 02783546) |
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CONTENTS OF THE FINANCIAL STATEMENTS |
for the year ended 30 April 2021 |
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Company Information | 1 |
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Strategic Report | 2 |
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Report of the Directors | 3 |
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Report of the Independent Auditors | 5 |
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Statement of Comprehensive Income | 7 |
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Balance Sheet | 8 |
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Statement of Changes in Equity | 9 |
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Notes to the Financial Statements | 10 |
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ECOPAC (U.K.) LIMITED |
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COMPANY INFORMATION |
for the year ended 30 April 2021 |
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DIRECTORS: |
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REGISTERED OFFICE: |
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REGISTERED NUMBER: |
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AUDITORS: |
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Chartered Accountants |
Statutory Auditor |
Unit 2, Charnwood Edge Business Park |
Syston Road |
Leicestershire |
LE7 4UZ |
ECOPAC (U.K.) LIMITED (REGISTERED NUMBER: 02783546) |
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STRATEGIC REPORT |
for the year ended 30 April 2021 |
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The directors present their strategic report for the year ended 30 April 2021. |
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REVIEW OF BUSINESS |
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Principal activity |
The principal activity of the Company is the distribution of packaging products. The Company is a wholly owned subsidiary of Macfarlane Group PLC ("the Group"), a company registered in Scotland and listed on the London Stock Exchange. Further information is contained in the consolidated accounts for Macfarlane Group PLC, which can be accessed at www.macfarlanegroup.com. |
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The directors are satisfied with the performance for the year. |
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PRINCIPAL RISKS AND UNCERTAINTIES |
As a distributor in a market where products are vulnerable to commodity-based raw material prices and manufacturer energy costs, profitability is sensitive to supplier price changes, including changes relating to exchange rate movements. The Company works closely with its supplier base to manage effectively the pass through of supplier price changes to the customer base. |
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The Company has a significant investment in working capital in the form of trade debtors and stocks and there is a risk that this investment is not fully recovered. This risk is mitigated by applying rigour to the management of trade debtors. Stock levels and order patterns are regularly reviewed. |
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FINANCIAL RISK MANAGEMENT, OBJECTIVES AND POLICIES |
The Company's principal financial assets are trade debtors and the Company's credit risk is primarily attributable to its trade debtors. The Company has no significant concentration of credit risk, with its exposure spread over a large number of customers. The Company's principal financial liabilities are bank borrowings, trade creditors, obligations under finance leases and intercompany creditors, which are paid under standard terms. The Directors believe that the Company is adequately placed to manage its financial risks given the current economic outlook. |
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GOING CONCERN |
As a wholly owned subsidiary of Macfarlane Group PLC, the Company is funded by having access to the Group's borrowing facility with Lloyds Banking Group PLC of £30 million which is in place until December 2025. |
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The ultimate parent company, Macfarlane Group PLC has carried out scenario planning for the continuing effects of the Covid-19 pandemic considering impacts on sales, profitability, cash flow, bad debt risk and the health, safety and well-being of all employees. This planning is constantly under review and based on experience to date, demonstrates that the Group is robust enough to operate safely, profitably and within its borrowing facilities under all reasonable scenarios. |
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The Directors of Ecopac (U.K.) Limited are of the opinion that the Company's cash flow forecasts and revenue projections, taking account of reasonably possible changes in trading performance given current market and economic conditions, show that the Company should be able to operate within its current facilities and that the Group will continue to comply with its banking covenants. |
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After making enquiries, the Directors of Ecopac (U.K.) Limited have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and for a period extending at least twelve months from the date of signing these financial statements. For this reason they continue to adopt the going concern basis in preparing the financial statements. |
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ON BEHALF OF THE BOARD: |
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ECOPAC (U.K.) LIMITED (REGISTERED NUMBER: 02783546) |
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REPORT OF THE DIRECTORS |
for the year ended 30 April 2021 |
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The directors present their report with the financial statements of the company for the year ended 30 April 2021. |
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DIVIDENDS |
The results for the year are detailed in the profit and loss account on page 7 and the profit for the financial year of £419,000 (2020: £462,000) has been transferred to reserves. Dividends of £350,000 were paid during the current year (2020: £175,000). |
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DIRECTORS |
The directors shown below have held office during the whole of the period from 1 May 2020 to the date of this report. |
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Other changes in directors holding office are as follows: |
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FINANCIAL INSTRUMENTS |
The Company does not use complex financial instruments. The Company's financial instruments comprise cash and other items, such as trade debtors and trade creditors that arise directly from its operations. The main purpose of these financial instruments is to provide finance for the Company's operations. |
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It is, and has been throughout the year under review, the Company's policy that no trading in financial instruments shall be undertaken. The Company has not entered into any derivative financial instruments. The Company does not believe it will be exposed to any significant risks due to the nature of the financial instruments in the operation. |
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EMPLOYMENT OF DISABLED PERSONS |
Company policy is to encourage the employment of disabled persons where the disabilities do not hinder these persons in the performance of their duties. Where an employee becomes disabled every effort is made to re-settle that employee in a suitable post. Registered disabled persons, once employed, receive equal opportunities for training, career development and promotion. |
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EMPLOYEE INVOLVEMENT |
The Directors recognise the importance of meaningful communication and consultation in maintaining good employee relations. |
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PARENT COMPANY |
The Company is a wholly owned subsidiary of Carnweather Limited. |
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STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
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Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 101 'Reduced Disclosure Framework'. 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: |
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- | 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. |
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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. |
ECOPAC (U.K.) LIMITED (REGISTERED NUMBER: 02783546) |
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REPORT OF THE DIRECTORS |
for the year ended 30 April 2021 |
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STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
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AUDITORS |
The auditors, Magma Audit LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
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ON BEHALF OF THE BOARD: |
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REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
ECOPAC (U.K.) LIMITED |
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Opinion |
We have audited the financial statements of Ecopac (U.K.) Limited (the 'company') for the year ended 30 April 2021 which comprise the Profit and Loss Account, 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 101 'Reduced Disclosure Framework' (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 April 2021 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 directors' 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 directors with respect to going concern are described in the relevant sections of this report. |
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Other information |
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
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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 Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
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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 Directors. |
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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 directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit; or |
- | the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption from the requirement to prepare a Strategic Report. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
ECOPAC (U.K.) LIMITED |
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Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page three, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
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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. |
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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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The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
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Based on our understanding of the company and the industry, we have identified that the principal risks of non-compliance with laws and regulations related to UK Tax and legislation and breaches of health and safety, and we have considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as Companies Act 2006. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to posting inappropriate journal entries, and management bias in accounting estimates. Audit procedures performed included: |
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- Enquiries with management for consideration of known or suspected instances of non-compliance with laws and |
regulations and fraud. |
- Challenging assumptions made by management in their accounting estimates |
- Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations. |
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There are inherent limitations in the audit procedures described above. The more removed non-compliance with laws and regulations is, from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by forgery or intentional misrepresentation, for example, or through collusion. |
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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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Chartered Accountants |
Statutory Auditor |
Unit 2, Charnwood Edge Business Park |
Syston Road |
Leicestershire |
LE7 4UZ |
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ECOPAC (U.K.) LIMITED (REGISTERED NUMBER: 02783546) |
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STATEMENT OF COMPREHENSIVE |
INCOME |
for the year ended 30 April 2021 |
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2021 | 2020 |
Notes | £'000 | £'000 |
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TURNOVER | 2 |
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Cost of sales | ( |
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GROSS PROFIT |
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Administrative expenses | ( |
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OPERATING PROFIT |
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Interest payable and similar expenses | 4 | ( |
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PROFIT BEFORE TAXATION | 5 |
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Tax on profit | 6 | ( |
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PROFIT FOR THE FINANCIAL YEAR |
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OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR |
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ECOPAC (U.K.) LIMITED (REGISTERED NUMBER: 02783546) |
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BALANCE SHEET |
30 April 2021 |
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2021 | 2020 |
Notes | £'000 | £'000 |
FIXED ASSETS |
Tangible assets | 8 |
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Right of use assets | 9 |
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CURRENT ASSETS |
Stocks |
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Debtors | 10 |
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Cash at bank and in hand |
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CREDITORS |
Amounts falling due within one year | 11 | ( |
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NET CURRENT ASSETS |
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TOTAL ASSETS LESS CURRENT
LIABILITIES |
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PROVISIONS FOR LIABILITIES | 14 | ( |
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NET ASSETS |
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CAPITAL AND RESERVES |
Called up share capital | 15 |
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Retained earnings | 16 |
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SHAREHOLDERS' FUNDS |
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The financial statements were approved by the Board of Directors and authorised for issue on
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ECOPAC (U.K.) LIMITED (REGISTERED NUMBER: 02783546) |
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STATEMENT OF CHANGES IN EQUITY |
for the year ended 30 April 2021 |
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Called up |
share | Retained | Total |
capital | earnings | equity |
£'000 | £'000 | £'000 |
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Balance at 1 May 2019 |
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Changes in equity |
Profit for the year | - | 462 | 462 |
Total comprehensive income | - |
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Dividends | - | ( |
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Balance at 30 April 2020 |
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1,136 |
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Changes in equity |
Profit for the year | - | 419 | 419 |
Total comprehensive income | - |
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Dividends | - | ( |
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Balance at 30 April 2021 |
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ECOPAC (U.K.) LIMITED (REGISTERED NUMBER: 02783546) |
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NOTES TO THE FINANCIAL STATEMENTS |
for the year ended 30 April 2021 |
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1. | ACCOUNTING POLICIES |
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Basis of preparation |
Ecopac (U.K.) Limited is a private company limited by shares, incorporated and domiciled in England and Wales. The Company's registered office is Siskin Parkway East, Middlemarch Business Park, Coventry CV3 4PE. |
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The Company meets the definition of a qualifying entity under "FRS 100 Application of Financial Reporting Requirements" issued by the FRC and accordingly, these financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework ("FRS 101"). |
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In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements of International Financial Reporting Standards as adopted by the EU ("Adopted IFRSs"), but makes amendments where necessary in order to comply with Companies Act 2006 and has set out below where FRS 101 disclosure exemptions have been applied. |
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These financial statements are presented in pounds sterling which is the currency of the primary economic environment in which the Company operates. All amounts have been rounded to the nearest thousand, unless otherwise indicated. |
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The Company's ultimate parent undertaking, Macfarlane Group PLC includes the Company in its consolidated financial statements. Under Section 401 of the Companies Act 2006, the Company is therefore exempt from the requirement to prepare group financial statements. These financial statements therefore present information about the Company as an individual undertaking and not about its Group. |
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The consolidated financial statements of Macfarlane Group PLC are prepared in accordance with Adopted IFRSs and are available on the Group website www.macfarlanegroup.com and may be obtained from 3 Park Gardens, Glasgow, G3 7YE. |
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The Company has applied the exemptions available under FRS 101 in these financial statements in respect of the following disclosures: |
(i) Cash flow statement and related notes; |
(ii) Comparative period reconciliations for share capital, tangible assets, Right of Use assets and intangible assets; |
(iii) Disclosures in respect of transactions with wholly owned subsidiaries; |
(iv) Disclosures in respect of capital management; |
(v) The effects of new but not yet effective IFRSs; and |
(vi) Disclosures in respect of the compensation of Key Management Personnel. |
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As the consolidated financial statements of Macfarlane Group PLC include equivalent disclosures, the Company has also applied the exemptions under FRS 101 available for the following disclosures: |
(i) Certain disclosures required by IAS 36 Impairment of Assets in respect of the impairment of goodwill and indefinite life intangible assets; |
(ii) Certain disclosures required by IFRS 3 Business Combinations in respect of business combinations undertaken by the Company in the current and prior periods including the comparative period reconciliation for goodwill; and |
(iii) Certain disclosures required by IFRS 13 Fair Value Measurement and the disclosures required by IFRS 7 Financial Instrument Disclosures. |
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Going concern |
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The Directors are of the opinion that the Company's cash flow forecasts and revenue projections, taking account of reasonably possible changes in trading performance given current market and economic conditions, show that the Company should be able to operate within its current facilities and that the Group will continue to comply with its banking covenants. |
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The ultimate parent company, Macfarlane Group PLC has carried out scenario planning for the continuing effects of the Covid-19 pandemic considering impacts on sales, profitability, cash flow, bad debt risk and the health, safety and well-being of all employees. This planning is constantly under review and based on experience to date, demonstrates that the Group is robust enough to operate safely, profitably and within its borrowing facilities under all reasonable scenarios. |
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After making enquiries, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for at least twelve months from the date of signing these financial statements. For this reason they continue to adopt the going concern basis in preparing the financial statements. |
ECOPAC (U.K.) LIMITED (REGISTERED NUMBER: 02783546) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 30 April 2021 |
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Key sources of estimation uncertainty |
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The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. Due to the nature of estimation, the actual outcomes may well differ from these estimates. No significant judgements have been made in the current or prior year. |
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The key sources of estimation uncertainty that have a significant effect on the carrying amounts of assets and liabilities are discussed below: |
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Valuation of trade receivables |
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The provision held against trade receivables is based on applying an expected credit loss model and related estimates of recoverable amounts, as detailed in note 14. Whilst every attempt is made to ensure that the provision held against doubtful trade receivables is as accurate as possible, there remains a risk that the provision may not match the level of debt which ultimately proves uncollectable. An increase in the average default rate of trade receivables beyond terms from 0.50% to 1.50% above the historic loss rates observed would lead to an increase in the provision of £4,000. |
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Application of accounting policies |
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The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the preparation of these financial statements. |
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The financial statements are prepared on the historical cost basis except that certain of the following assets and liabilities are stated at their fair value as explained on the following pages. |
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Revenue recognition |
The Company is engaged in the design, manufacturing and distribution of packaging materials to customers. Revenue is not recognised if there is significant uncertainty regarding the recovery of the revenue consideration. Revenue represents amounts receivable for goods provided to third parties in the normal course of business, net of discounts, customer rebates, VAT and other sales related taxes. |
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IFRS 15 'Revenue from Contracts with Customers' requires the Company to apportion revenues from customer contracts to separate performance obligations and recognise revenues as each performance obligation is satisfied. The Company has reviewed its arrangements with customers and concluded that the Company's revenue is generated from the delivery of packaging materials to customers and this represents a single performance obligation. The Company does not enter into any repurchase agreements. It is therefore appropriate to recognise revenue at the point of transfer of goods to the customer, consistent with the revenue recognition framework in IFRS 15. |
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Tangible fixed assets |
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. No depreciation is provided on land. Depreciation is calculated at fixed rates on a reducing balance basis to write off the cost or valuation of the assets to their estimated residual values over the period of their expected useful lives. The rates of depreciation vary between 15% - 25% per annum on plant and equipment. Rates of depreciation are reviewed annually to ensure they remain relevant and residual values are reviewed once in each calender year. |
ECOPAC (U.K.) LIMITED (REGISTERED NUMBER: 02783546) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 30 April 2021 |
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1. | ACCOUNTING POLICIES - continued |
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Non-derivative financial instruments |
Non-derivative financial instruments comprise investments in equity and debt securities, trade and other debtors, cash and cash equivalents, loans and borrowings, trade and other creditors. |
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Trade and other debtors |
Trade and other debtors are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less an allowance for expected credit losses ("ECL"). |
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Trade and other creditors |
Trade and other creditors are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised costs using the effective interest method. |
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Interest-bearing borrowings |
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost using the effective interest method. |
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Financial instruments |
Financial assets and financial liabilities are recognised in the Company's balance sheet when the Company becomes a party to the contractual provisions of the instrument. |
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Financial assets |
Financial assets categories as investments, comprise investments in debt and equity securities and are initially recognised at fair value with any subsequent gains or losses recognised in the profit and loss accounts. |
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Other financial assets comprise trade and other debtors that have fixed or determinable recoveries and are classified as trade, intercompany and other debtors. The classification takes account of the nature and purpose of the financial assets and is determined on initial recognition. These are measured at amortised cost less impairment under the expected credit loss model. |
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Indicators are assessed for the impairment of financial assets at each balance sheet date. Financial assets are impaired when 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 impacted. For trade debtors the amount of the impairment is the difference between the asset's carrying amount and the present value of estimated future cash flows. |
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The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade debtors where the carrying amount is measured on an expected credit loss model at inception rather than an incurred loss model. When a trade debtor is uncollectible, it is written off against the provision made on inception or at a previous reporting period end. Subsequent recoveries of amounts previously written off are credited against the provision in accordance with IFRS 9. Changes in the carrying value of the provision are recognised in the profit and loss accounts. |
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Cash at bank and in hand comprise cash on hand and on demand deposits, readily convertible to a known amount of cash and are subject to insignificant risk of changes in value. |
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Financial liabilities and equity instruments |
Financial liabilities and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements. |
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Financial liabilities comprise solely other financial liabilities under the terms of IFRS 7. Financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost, with interest expense measured on an effective yield basis. |
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Equity instruments are any contracts evidencing a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs. |
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Derivative financial instruments were not used in the current or preceding year. |
ECOPAC (U.K.) LIMITED (REGISTERED NUMBER: 02783546) |
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NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 30 April 2021 |
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1. | ACCOUNTING POLICIES - continued |
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Stocks |
Stocks are stated at the lower of cost and net realisable value. Such cost is determined by purchase costs and is stated less any provisions required for obsolescence. In the case of work in progress and finished goods, cost comprises material and labour costs plus attributable manufacturing overheads, based on normal operating capacity. |
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Taxation |
The tax expense represents the sum of the current tax payable and deferred tax. |
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Current tax payable is based on the taxable profit for the year. Taxable profit differs from profit before tax as reported in the profit and loss account as it excludes items of income and expense that are taxable or deductible in other years and also excludes items that are never taxable or deductible. The current tax liability is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. |
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Deferred tax balances represent the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax assets and liabilities are not discounted. |
|
The carrying value of deferred tax liabilities is reviewed at each balance sheet 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 liabilities are generally recognised for all taxable temporary differences. |
|
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 based on tax laws and rates that have been substantively enacted at the balance sheet date. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited in other comprehensive income, in which case the deferred tax is also recorded in the statement of other comprehensive income. |
|
Foreign currencies |
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
ECOPAC (U.K.) LIMITED (REGISTERED NUMBER: 02783546) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 30 April 2021 |
|
|
1. | ACCOUNTING POLICIES - continued |
|
Leases and right of use ("rou") assets |
The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets below £4,000. For these short-term or low value leases, the Company recognises the lease payments as an operating expense disclosed in administrative expenses on a straight-line basis over the term of the lease. |
|
For all other leases the lease liability is initially measured at the present value of lease payments that are not paid at the commencement date, discounted using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate. |
|
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the liability by payments made. The Company remeasures the lease liability (and adjusts the related right-of-use asset) whenever the lease term has changed or a lease contract is modified and the modification is not accounted for as a separate lease. The Company did not make any such adjustments during the period presented. |
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ROU assets comprise the initial measurement of the corresponding lease liability and are subsequently measured at cost less accumulated depreciation and impairment losses. ROU assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the ROU asset reflects that the Company expects to exercise a purchase option, the related ROU asset is depreciated over the useful life of the asset. Depreciation starts on commencement date of the lease. |
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As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Company has not used this practical expedient and has separated out the non-lease components for its leases. These non-lease components, typically servicing and maintenance costs, have been recognised as an expense on a straight-line basis and disclosed in administrative expenses in the profit and loss account. |
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The Company's incremental borrowing rates applied to lease liabilities in 2021 is 2.75% (2020: 2.75%). |
|
ROU assets are tested for impairment in accordance with IAS 36 Impairment of Assets. |
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Movements in lease liabilities and ROU assets in 2021 are set out in note 9, 12 and 13. |
|
Retirement benefit costs |
|
The Company is a participating employer in the Group's defined contribution pension plans, which are available to all staff. A defined contribution scheme is a post-employment benefit scheme under which the Company pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension schemes are recognised as an expense in the profit and loss account in the periods during which services are rendered by employees. |
|
Government grants |
The company has received funding in the form of grants relating to the Coronavirus Job Retention Scheme (CJRS). The grant funding is released to the profit and loss account in full in the period the conditions of the grant funding have been met. |
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2. | TURNOVER |
|
Turnover represents amounts derived from the provision of goods and services after deduction of trade discounts and value added tax. Revenue is recognised at a point in time when the product is delivered to customers. Turnover and profit before taxation are both attributable to the distribution of packaging products. |
ECOPAC (U.K.) LIMITED (REGISTERED NUMBER: 02783546) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 30 April 2021 |
|
|
3. | EMPLOYEES AND DIRECTORS |
2021 | 2020 |
£'000 | £'000 |
Wages and salaries | 694 | 706 |
Social security costs |
|
|
Other pension costs |
|
|
|
|
|
The average number of employees during the year was as follows: |
2021 | 2020 |
|
Sales and distribution | 11 | 15 |
Administration | 6 | 5 |
|
|
|
2021 | 2020 |
£ | £ |
Directors' remuneration |
|
|
Directors' pension contributions to money purchase schemes |
|
|
|
Retirement benefits accrue to three directors (2020: three) under the parent company's pension schemes. These directors are remunerated by Macfarlane Group PLC, the ultimate parent company. They are not remunerated for their services as directors of Ecopac (U.K.) Limited and therefore there is no directors' remuneration included in the costs set out above. |
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On 1 May 2019, all employees of Ecopac (U.K.) Limited, transferred into the employment of Macfarlane Group UK Limited. All employee costs are now borne by that Company and costs incurred for employees recharged to each of the companies as set out above. |
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4. | INTEREST PAYABLE AND SIMILAR EXPENSES |
|
2021 | 2020 |
£ | £ |
Interest on lease obligations | 6 | 11 |
6 | 11 |
|
5. | PROFIT BEFORE TAXATION |
|
The profit before taxation is stated after charging/(crediting): |
|
2021 | 2020 |
£ | £ |
Cost of inventories recognised as expense | 4,205 | 4,321 |
Leases | 31 | 92 |
Depreciation - owned fixed assets | 34 | 31 |
Profit on disposal of fixed assets | - | (3 | ) |
Auditors' remuneration | 6 | 7 |
ECOPAC (U.K.) LIMITED (REGISTERED NUMBER: 02783546) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 30 April 2021 |
|
|
6. | TAXATION |
|
Analysis of tax expense |
2021 | 2020 |
£'000 | £'000 |
Current tax: |
Tax |
|
|
|
Deferred tax | ( |
) | ( |
) |
Total tax expense in statement of comprehensive income |
|
|
|
Factors affecting the tax expense |
The tax assessed for the year is higher (2020 - lower) than the standard rate of corporation tax in the UK. The difference is explained below: |
|
2021 | 2020 |
£'000 | £'000 |
Profit before income tax |
|
|
Profit multiplied by the standard rate of corporation tax in the UK of
(2020 - |
101 |
108 |
|
Effects of: |
Expenses not deductible for tax purposes | 10 | (1 | ) |
|
Tax expense |
|
|
|
The average rate of current tax for the year, based on the UK standard rate of corporation tax, is 19% (2020: 19%). The actual tax charge for the current and prior years varies from 19% (2020: 19%) for the reasons set out in the following reconciliation: |
|
7. | DIVIDENDS |
|
Amounts recognised as distributions to equity holders in the year |
|
2021 | 2020 |
£ | £ |
Interim dividend of £4,605.26 per share | 350 | - |
Interim dividend of £2,302.63 per share | - | 175 |
350 | 175 |
ECOPAC (U.K.) LIMITED (REGISTERED NUMBER: 02783546) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 30 April 2021 |
|
|
8. | TANGIBLE FIXED ASSETS |
Fixtures |
and |
fittings |
£'000 |
COST |
At 1 May 2020 |
|
Additions |
|
Disposals | ( |
) |
At 30 April 2021 |
|
DEPRECIATION |
At 1 May 2020 |
|
Charge for year |
|
Eliminated on disposal | ( |
) |
At 30 April 2021 |
|
NET BOOK VALUE |
At 30 April 2021 |
|
At 30 April 2020 |
|
|
9. | RIGHT OF USE ASSETS |
Right of |
use |
assets |
£'000 |
COST |
At 1 May 2020 |
and 30 April 2021 | 561 |
PROVISIONS |
At 1 May 2020 | 264 |
Provision for year | 264 |
At 30 April 2021 | 528 |
NET BOOK VALUE |
At 30 April 2021 | 33 |
At 30 April 2020 | 297 |
|
10. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2021 | 2020 |
£'000 | £'000 |
Trade debtors |
|
|
Amounts owed by group undertakings |
|
|
Other debtors |
|
|
Prepayments and accrued income |
|
|
|
|
ECOPAC (U.K.) LIMITED (REGISTERED NUMBER: 02783546) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 30 April 2021 |
|
|
11. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2021 | 2020 |
£'000 | £'000 |
Leases (see note 12) |
|
|
Trade creditors |
|
|
Tax |
|
|
VAT | 66 | 78 |
Accruals and deferred income |
|
|
|
|
|
12. | FINANCIAL LIABILITIES - BORROWINGS |
|
2021 | 2020 |
£'000 | £'000 |
Current: |
Leases (see note 13) | 3 | 278 |
|
Terms and debt repayment schedule |
|
1 year or |
less |
£'000 |
Leases | 3 |
|
13. | LEASING |
|
Lease liabilities |
Minimum lease payments fall dues as follows: |
2021 | 2020 |
£ | £ |
Gross obligations repayable: |
Within one year | 3 | 278 |
3 | 278 |
|
Finance charges repayable: | 1 | 4 |
Net onbligations repayable: |
Within one year | 2 | 274 |
|
|
|
|
14. | PROVISIONS FOR LIABILITIES |
2021 | 2020 |
£'000 | £'000 |
Deferred tax |
|
|
|
Deferred |
tax |
£'000 |
Balance at 1 May 2020 |
|
Movement in the year | (2 | ) |
Balance at 30 April 2021 |
|
ECOPAC (U.K.) LIMITED (REGISTERED NUMBER: 02783546) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the year ended 30 April 2021 |
|
|
14. | PROVISIONS FOR LIABILITIES - continued |
|
Deferred tax liabilities at 30 April 2021 have been calculated based on a long-term corporation tax rate of 19%. |
|
15. | CALLED UP SHARE CAPITAL |
|
|
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2021 | 2020 |
value: | £ | £ |
|
Ordinary shares of £1 each | 1 | 76 | 76 |
|
The company has one class of ordinary shares, which carry equal rights in relation to voting, entitlement to dividends and entitlement on any winding up of the Company. |
|
16. | RESERVES |
|
Retained earnings |
Retained earnings includes all current and prior period retained profits and losses. |
|
17. | RELATED PARTY DISCLOSURES AND RELATED UNDERTAKINGS |
|
The Company has related party relationships with |
|
(i) its ultimate parent company, Macfarlane Group PLC; |
(ii) its immediate parent company Carnweather Limited and other fellow subsidiary companies, and |
(iii) its Directors. |
|
The Company's related undertakings are the ultimate parent company, disclosed in note 18 and its immediate parent company and fellow subsidiary undertakings. |
|
Directors' remuneration is set out in note 3. P. D. Atkinson and J. Love are also directors of the parent company and their remuneration is disclosed in the accounts of Macfarlane Group PLC. I Gray was a director of Macfarlane Group PLC and Macfarlane Group UK Limited during the year and his remuneration is disclosed in the results of those companies. |
|
The Directors have considered the implications of IAS24 "Related Party Disclosures" and are satisfied that there are no other related party transactions occurring during the year, which require disclosure other than those already disclosed in these financial statements. |
|
18. | ULTIMATE CONTROLLING PARTY |
|
The ultimate parent company is Macfarlane Group PLC, a company registered in Scotland. Macfarlane Group PLC is the parent undertaking of the smallest and largest group, which includes the Company and for which group financial statements are prepared. Group financial statements may be obtained from Macfarlane Group PLC's registered office at 3 Park Gardens, Glasgow, G3 7YE. |