Company Registration No. 02798524 (England and Wales)
EUROPLAST (BLACKBURN) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 MARCH 2020
EUROPLAST (BLACKBURN) LIMITED
COMPANY INFORMATION
Director
Mr Z V Issa
Secretary
Mr Z V Issa
Company number
02798524
Registered office
Unit 1 - 2 Euro House
Duttons Way
Shadsworth Business Park
Blackburn
Lancashire
BB1 2QR
Auditor
Pierce C A Limited
Mentor House
Ainsworth Street
Blackburn
Lancashire
BB1 6AY
Business address
Unit 1 - 2 Euro House
Duttons Way
Shadsworth Business Park
Blackburn
Lancashire
BB1 2QR
EUROPLAST (BLACKBURN) LIMITED
CONTENTS
Page
Strategic report
1
Director's report
2 - 3
Independent auditor's report
4 - 5
Profit and loss account
6
Balance sheet
7
Statement of changes in equity
8
Statement of cash flows
9
Notes to the financial statements
10 - 22
EUROPLAST (BLACKBURN) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 MARCH 2020
- 1 -
The director presents the strategic report and financial statements for the year ended 3
0
March 20
20
.
The results for the year are disclosed in the attached financial statements.
The principal activity of the company during the year was the manufacturing of bubble wraps, bubble bags, bubble envelopes & other bubble related products. The company manufactures LDPE films; tubings & bespoke LDPE bags.
Fair review of the business
The company returned an excellent pre tax profit in the year of
£1,443,682
before exceptional items. The director and management are pleased with the performance of the company in the year.
The company continues to seek to be the go to supplier for plastic packaging requirements.
The company has managed to increase its gross margin in the year from 50.50% in 201
9
to
5
1.55% in 20
20
arising from increased efficiencies, research & development, and continuous investment in plant & machinery.
The director and management continue to monitor trading levels, gross profit margins, and net profit margins on a regular basis and are optimistic about the company's future performance with due regard to the competitiveness of the industry.
As at the year end the company had shareholders funds of £6
,
342
,
938 (201
9
- £
5,894,304
).
Principal risks and uncertainties
A fundamental risk to the business comes from the quality of raw material used in production along with ensuring the correct quality of product is manufactured using this raw material. An inferior quality product would definitely damage the company's reputation as the premier supplier of packaging material in the U.K market.
The director has considered the risks arising from, and the impact of, the coronavirus pandemic on the company's trading performance. Whilst a reduction in turnover was experienced for the first two months of the lockdown in April and May 2020, the company has remained profitable and cash generative throughout the post year end period.
The company does not actively use financial instruments as part of its financial risk management. It is exposed to the usual credit risk and cash flow risk associated with selling on credit and manages this through standard credit control procedures.
Mr Z V Issa
Director
9 November 2020
EUROPLAST (BLACKBURN) LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 30 MARCH 2020
- 2 -
The director presents his annual report and financial statements for the year ended 30 March 2020.
Principal activities
The principal activity of the company continued to be that of polythene bag and bubble wrap manufacturers.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Mr Z V Issa
Results and dividends
The results for the year are set out on page 6.
Ordinary dividends were paid amounting to £2,280,000. The director does not recommend payment of a final dividend.
Auditor
Pierce C A Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Statement of director's responsibilities
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless 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:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them 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.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
EUROPLAST (BLACKBURN) LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 30 MARCH 2020
- 3 -
On behalf of the board
Mr Z V Issa
Director
9 November 2020
EUROPLAST (BLACKBURN) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF EUROPLAST (BLACKBURN) LIMITED
- 4 -
Opinion
We have audited the financial statements of Europlast (Blackburn) Limited (the 'company') for the year ended 30 March 2020 which comprise the profit and loss account, the balance sheet, the statement of changes in equity, the statement of cash flows 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 FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 30 March 2020 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the financial statements
section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the director's use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the director has not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue
.
The director is responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the
financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the director's r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
EUROPLAST (BLACKBURN) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EUROPLAST (BLACKBURN) LIMITED
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the director's
r
eport
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of director's remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of director
As explained more fully in the director's
r
esponsibilities
s
tatement, 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 is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the 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.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities
.
This description forms part of our auditor’s report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to him in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Jane Smith (Senior Statutory Auditor)
for and on behalf of Pierce C A Limited
9 November 2020
Statutory Auditor
Mentor House
Ainsworth Street
Blackburn
Lancashire
BB1 6AY
EUROPLAST (BLACKBURN) LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 MARCH 2020
- 6 -
2020
2019
Notes
£
£
Turnover
3
9,598,580
9,990,907
Cost of sales
(4,650,850)
(4,945,463)
Gross profit
4,947,730
5,045,444
Distribution costs
(888,203)
(1,039,347)
Administrative expenses
(2,626,473)
(2,735,029)
Other operating income
9,729
868
Operating profit
5
1,442,783
1,271,936
Interest receivable and similar income
8
4,483
37
Interest payable and similar expenses
9
(3,584)
(11,956)
Exceptional item
4
1,467,085
-
Profit before taxation
2,910,767
1,260,017
Tax on profit
11
(182,133)
(152,058)
Profit for the financial year
2,728,634
1,107,959
The profit and loss account has been prepared on the basis that all operations are continuing operations.
EUROPLAST (BLACKBURN) LIMITED
BALANCE SHEET
AS AT
30 MARCH 2020
30 March 2020
- 7 -
2020
2019
Notes
£
£
£
£
Fixed assets
Tangible assets
12
1,788,884
1,896,895
Current assets
Stocks
13
807,432
972,313
Debtors falling due after more than one year
25
3,362,005
5,642,005
Debtors falling due within one year
14
1,232,289
1,294,649
Cash at bank and in hand
2,290,826
860,635
7,692,552
8,769,602
Creditors: amounts falling due within one year
15
(2,968,347)
(4,605,428)
Net current assets
4,724,205
4,164,174
Total assets less current liabilities
6,513,089
6,061,069
Creditors: amounts falling due after more than one year
16
(33,816)
(42,351)
Provisions for liabilities
18
(136,335)
(124,414)
Net assets
6,342,938
5,894,304
Capital and reserves
Called up share capital
21
20,000
20,000
Profit and loss reserves
6,322,938
5,874,304
Total equity
6,342,938
5,894,304
The financial statements were approved and signed by the director and authorised for issue on 9 November 2020
Mr Z V Issa
Director
Company Registration No. 02798524
EUROPLAST (BLACKBURN) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 MARCH 2020
- 8 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 31 March 2018
20,000
4,766,345
4,786,345
Period ended 30 March 2019:
Profit and total comprehensive income for the period
-
1,107,959
1,107,959
Balance at 30 March 2019
20,000
5,874,304
5,894,304
Year ended 30 March 2020:
Profit and total comprehensive income for the year
-
2,728,634
2,728,634
Dividends
10
-
(2,280,000)
(2,280,000)
Balance at 30 March 2020
20,000
6,322,938
6,342,938
EUROPLAST (BLACKBURN) LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 MARCH 2020
- 9 -
2020
2019
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
4,105,670
472,199
Interest paid
(3,584)
(11,956)
Income taxes paid
(36,991)
(175,000)
Net cash inflow from operating activities
4,065,095
285,243
Investing activities
Purchase of tangible fixed assets
(233,344)
(29,164)
Proceeds on disposal of tangible fixed assets
88,482
47,691
Interest received
4,483
37
Net cash (used in)/generated from investing activities
(140,379)
18,564
Financing activities
Payment of finance leases obligations
(214,555)
(179,031)
Dividends paid
(2,280,000)
-
Net cash used in financing activities
(2,494,555)
(179,031)
Net increase in cash and cash equivalents
1,430,161
124,776
Cash and cash equivalents at beginning of year
860,635
735,859
Cash and cash equivalents at end of year
2,290,796
860,635
Relating to:
Cash at bank and in hand
2,290,826
860,635
Bank overdrafts included in creditors payable within one year
(30)
-
EUROPLAST (BLACKBURN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 MARCH 2020
- 10 -
1
Accounting policies
Company information
Europlast (Blackburn) Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Unit 1 - 2 Euro House, Duttons Way, Shadsworth Business Park, Blackburn, Lancashire, BB1 2QR.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
The director
true
is
not aware of any material uncertainties affecting the company and consider
s
that the company will have sufficient resources to continue trading for the foreseeable future. As a result the director ha
s
continued to adopt the going concern basis in preparing the financial statements.
Whilst the director has adopted the going concern basis set out above, the impact of the worldwide Coronavirus pandemic, Covid -19, on all businesses represents an uncertainty and the true impact of this pandemic will only become apparent over time.
The director has given full and due consideration to the impact of the pandemic on the company in arriving at his going concern assessment and considers that the company has adequate resources to manage through this period.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer
(usually on dispatch of the goods)
, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and machinery
15% reducing balance
Fixtures, fittings & equipment
15% reducing balance
Computer equipment
15% reducing balance
Motor vehicles
15% reducing balance
EUROPLAST (BLACKBURN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MARCH 2020
1
Accounting policies
(Continued)
- 11 -
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.5
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
1.6
Stocks
Stocks are stated at the lower of cost and
net realisable value after making due allowance for obsolete and slow moving items. Cost comprises direct materials cost.
1.7
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
EUROPLAST (BLACKBURN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MARCH 2020
1
Accounting policies
(Continued)
- 12 -
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities. Trade creditors are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
EUROPLAST (BLACKBURN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MARCH 2020
1
Accounting policies
(Continued)
- 13 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair
value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
1.14
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met
. Where a
grant does not specify performance conditions
it
is recognised in income when the proceeds are received or receivable
. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
EUROPLAST (BLACKBURN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MARCH 2020
1
Accounting policies
(Continued)
- 14 -
1.16
The company has created a trust whose beneficiaries include employees of the company and their dependants. Assets held under this trust will be controlled by trustees who will be acting independently and entirely at their own discretion.
Where assets are held in the trust and these are considered by the company to be in respect of services already provided by employees to the company, the company will account for these as assets of the company until the earlier of it no longer having de facto control of these assets and it not obtaining future economic benefit from these assets. The value transferred will be charged in the company's profit and loss account for the year to which it relates.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2020
2019
£
£
Turnover analysed by class of business
Sale of goods
9,598,580
9,990,907
2020
2019
£
£
Other significant revenue
Interest income
4,483
37
Grants received
9,729
868
2020
2019
£
£
Turnover analysed by geographical market
United Kingdom
9,437,058
9,750,589
Overseas
161,522
240,318
9,598,580
9,990,907
EUROPLAST (BLACKBURN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MARCH 2020
- 15 -
4
Exceptional item
The exceptional item relates to an adjustment arising as a result of an element of a settlement, agreed with HMRC in respect of Employee Benefit Trusts and Employer Financed Retirement Benefit Schemes previously entered into, being treated as a personal liability.
The adjustment was referred to in the 2019 financial statements; it was anticipated that the adjustment would be in the region of £1.95m, the actual adjustment is lower than anticipated as the final assessment was different to the estimate originally used in the accounts.
5
Operating profit
2020
2019
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
(50,046)
(11,081)
Government grants
(9,729)
(868)
Fees payable to the company's auditor for the audit of the company's financial statements
7,500
5,000
Depreciation of owned tangible fixed assets
202,422
229,550
Depreciation of tangible fixed assets held under finance leases
93,103
101,967
Profit on disposal of tangible fixed assets
(14,046)
(3,018)
Operating lease charges
300,408
300,397
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2020
2019
Number
Number
Administration
5
5
Production
64
65
Sales
1
1
70
71
Their aggregate remuneration comprised:
2020
2019
£
£
Wages and salaries
1,178,510
1,134,109
Social security costs
80,888
77,987
Pension costs
17,617
11,846
1,277,015
1,223,942
EUROPLAST (BLACKBURN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MARCH 2020
- 16 -
7
Director's remuneration
2020
2019
£
£
Remuneration for qualifying services
-
5,000
8
Interest receivable and similar income
2020
2019
£
£
Interest income
Interest on bank deposits
4,483
37
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
4,483
37
9
Interest payable and similar expenses
2020
2019
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
3,584
9,926
Other interest
-
2,030
3,584
11,956
10
Dividends
2020
2019
£
£
Interim paid
2,280,000
-
11
Taxation
2020
2019
£
£
Current tax
UK corporation tax on profits for the current period
245,567
256,547
Adjustments in respect of prior periods
(75,355)
(94,332)
Total current tax
170,212
162,215
Deferred tax
Origination and reversal of timing differences
11,921
(10,157)
Total tax charge
182,133
152,058
EUROPLAST (BLACKBURN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MARCH 2020
11
Taxation
(Continued)
- 17 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2020
2019
£
£
Profit before taxation
2,910,767
1,260,017
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2019: 19.00%)
553,046
239,403
Tax effect of expenses that are not deductible in determining taxable profit
(281,415)
415
Adjustments in respect of prior years
-
(94,332)
Permanent capital allowances in excess of depreciation
(14,143)
6,572
Under/(over) provided in prior years
(75,355)
-
Taxation charge for the year
182,133
152,058
12
Tangible fixed assets
Plant and machinery
Fixtures, fittings & equipment
Computer equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 31 March 2019
4,273,616
79,201
49,121
105,250
4,507,188
Additions
112,500
-
3,933
145,517
261,950
Disposals
(95,761)
-
(1,842)
(65,455)
(163,058)
At 30 March 2020
4,290,355
79,201
51,212
185,312
4,606,080
Depreciation and impairment
At 31 March 2019
2,482,008
70,011
16,971
41,303
2,610,293
Depreciation charged in the year
266,407
1,382
4,904
22,832
295,525
Eliminated in respect of disposals
(52,110)
-
(1,495)
(35,017)
(88,622)
At 30 March 2020
2,696,305
71,393
20,380
29,118
2,817,196
Carrying amount
At 30 March 2020
1,594,050
7,808
30,832
156,194
1,788,884
At 30 March 2019
1,791,608
9,190
32,150
63,947
1,896,895
EUROPLAST (BLACKBURN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MARCH 2020
12
Tangible fixed assets
(Continued)
- 18 -
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2020
2019
£
£
Plant and machinery
487,590
573,913
Motor vehicles
52,102
27,691
539,692
601,604
13
Stocks
2020
2019
£
£
Raw materials and consumables
670,415
579,729
Finished goods and goods for resale
137,017
151,949
807,432
972,313
14
Debtors
2020
2019
Amounts falling due within one year:
£
£
Trade debtors
1,127,058
1,276,405
Prepayments and accrued income
105,231
18,244
1,232,289
1,294,649
15
Creditors: amounts falling due within one year
2020
2019
Notes
£
£
Bank loans and overdrafts
30
-
Obligations under finance leases
17
27,350
204,764
Trade creditors
1,309,703
1,250,758
Corporation tax
141,067
7,846
Other taxation and social security
1,217,573
2,412,168
Government grants
22
4,180
4,917
Other creditors
129,721
220,661
Accruals and deferred income
138,723
504,314
2,968,347
4,605,428
EUROPLAST (BLACKBURN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MARCH 2020
- 19 -
16
Creditors: amounts falling due after more than one year
2020
2019
Notes
£
£
Obligations under finance leases
17
33,816
42,351
17
Finance lease obligations
2020
2019
Future minimum lease payments due under finance leases:
£
£
Within one year
27,350
204,764
In two to five years
33,816
42,351
61,166
247,115
Assets held under hire purchase or finance lease contracts are secured over the assets concerned.
18
Provisions for liabilities
2020
2019
Notes
£
£
Deferred tax liabilities
19
136,335
124,414
19
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2020
2019
Balances:
£
£
Accelerated capital allowances
136,335
124,414
2020
Movements in the year:
£
Liability at 31 March 2019
124,414
Charge to profit or loss
11,921
Liability at 30 March 2020
136,335
EUROPLAST (BLACKBURN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MARCH 2020
- 20 -
20
Retirement benefit schemes
2020
2019
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
17,617
11,846
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
21
Share capital
2020
2019
£
£
Ordinary share capital
Issued and fully paid
20,000 Ordinary shares of £1 each
20,000
20,000
22
Government grants
2020
2019
£
£
Deferred income is included in the financial statements as follows:
Current liabilities
4,180
4,917
23
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2020
2019
£
£
Within one year
300,000
300,000
24
Capital commitments
Amounts contracted for but not provided in the financial statements:
2020
2019
£
£
Acquisition of tangible fixed assets
-
114,326
EUROPLAST (BLACKBURN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MARCH 2020
- 21 -
25
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Purchase of goods
2020
2019
£
£
Other related parties
-
30,957
Rent charged
Recharge of costs
2020
2019
2020
2019
£
£
£
£
Entities over which the entity has control, joint control or significant influence
300,000
300,000
88,826
95,377
The following amounts were outstanding at the reporting end date:
2020
2019
Amounts owed to related parties
£
£
Entities over which the entity has control, joint control or significant influence
-
30,000
Key management personnel
104,724
4,820
Other related parties
22,087
26,758
The following amounts were outstanding at the reporting end date:
2020
Balance
Amounts owed by related parties
£
Entities with control, joint control or significant influence over the company
3,362,005
Entities over which the entity has control, joint control or significant influence
17,303
2019
Balance
Amounts owed in previous period
£
Entities with control, joint control or significant influence over the company
5,642,005
Entities over which the entity has control, joint control or significant influence
7,726
EUROPLAST (BLACKBURN) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MARCH 2020
- 22 -
26
Ultimate controlling party
The parent company of Europlast (Blackburn) Limited is EP Holdings Limited, a company registered in Jersey.
The ultimate controlling party is Mr Zakir Issa, the director.
27
Cash generated from operations
2020
2019
£
£
Profit for the year after tax
2,728,634
1,107,959
Adjustments for:
Taxation charged
182,133
152,058
Finance costs
3,584
11,956
Investment income
(4,483)
(37)
Gain on disposal of tangible fixed assets
(14,046)
(3,018)
Exceptional income
(1,467,085)
-
Depreciation and impairment of tangible fixed assets
295,525
331,517
Movements in working capital:
Decrease/(increase) in stocks
164,881
(216,726)
Decrease/(increase) in debtors
2,342,360
(530,767)
(Decrease) in creditors
(125,096)
(379,875)
(Decrease) in deferred income
(737)
(868)
Cash generated from operations
4,105,670
472,199
28
Analysis of changes in net funds
31 March 2019
Cash flows
New finance leases
30 March 2020
£
£
£
£
Cash at bank and in hand
860,635
1,430,191
-
2,290,826
Bank overdrafts
-
(30)
-
(30)
860,635
1,430,161
-
2,290,796
Obligations under finance leases
(247,115)
214,555
(28,606)
(61,166)
613,520
1,644,716
(28,606)
2,229,630
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