Company registration number 03561125 (England and Wales)
JM PACKAGING LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
JM PACKAGING LIMITED
COMPANY INFORMATION
Director
Mr J A McGill
Company number
03561125
Registered office
5 Malton Enterprise Park
Malton
North Yorkshire
YO17 6AB
Auditor
Henton & Co LLP
124 Acomb Road
York
YO24 4EY
Bankers
National Westminster Bank Plc
1 Market Street
York
YO1 8SR
JM PACKAGING LIMITED
CONTENTS
Page
Strategic report
1 - 2
Director's report
3
Director's responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 24
JM PACKAGING LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 1 -
The director presents the strategic report for the year ended 30 June 2023.
Review of the business
Our primary activity is the supply of added value high technology packaging materials to the Food Industry where we operate in a niche market providing quality convenience foods packaging and microwavable retort pouches for rice, sauces and pasta products with long shelf life.
Our main end customers are the Supermarket Groups and we supply to Food Producers who in turn supply to Supermarkets with our business therefore heavily focussed on high service levels of quality and fast availability of complex products.
Competitive pressures remained intense and we benefitted from earlier substantial capital investment in Buildings together with Computer Software to address these challenges. We continue to develop quality, innovation and service levels in support of the business with our storage facilities having doubled in capacity thereby further improving service levels to customers.
We continue to progress the diversification of new products and customer opportunities which will assist operational performance throughout the coming year. However the difficult market conditions are expected to continue within the medium term and the priority is to sustain and expand the business from current levels of turnover and profitability.
Despite the uncertain economic conditions, the packaging material business has seen minor disruption due to its essential nature.
The results for the year and the financial position at the year end were considered satisfactory by the director.
Principal risks and uncertainties
As with most businesses the company operates in an increasingly complex and competitive business environment and as such is potentially vulnerable to normal business risks such as market competition, pressures on cash-flow and the effects of the current economic climate, including bad and doubtful debts.
Key performance indicators
The company uses a range of performance measures as a means to monitor and manage the business.
The key financial performance indicators for the company are those of turnover, gross profit and net profit before tax with the KPI’s for the year ended 30 June 2023, with comparatives for 2022 being:
2023 2022
Turnover 16,151,604 14,511,434
Gross Profit 3,358,441 3,676,910
Gross Margin 20.79% 25.34%
Net Profit Before Tax 2,143,843 2,553,436
The director is pleased with the strength of these indicators
JM PACKAGING LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 2 -
Other performance indicators
The director anticipates the business environment will remain challenging during the foreseeable future although they consider the company’s financial strength will be important even if the most pessimistic forecasts should prove to be correct.
Financial Instruments
The company operates a treasury function which is responsible for managing liquidity and cashflow requirements associated with the company’s activities with robust controls in respect of the collection of debts thereby retaining favourable payment terms with its core suppliers.
The company has a normal level of exposure to price, credit liquidity and cash flow risks arising from trading activities conducted in sterling and euros although there are no formal hedging arrangements in place.
Other information and explanations
The company continually re-evaluates its products with regard to the future needs of the industry with regular reviews held in order to increase the efficiency and therefore the profitability.
Mr J A McGill
Director
21 March 2024
JM PACKAGING LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 3 -
The director presents his annual report and financial statements for the year ended 30 June 2023.
Principal activities
The principal activity of the company continued to be that of the sale, warehousing and distribution of packaging materials.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £255,000. The director does not recommend payment of a final dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Mr J A McGill
Auditor
In accordance with the company's articles, a resolution proposing that Henton & Co LLP be reappointed as auditor of the company will be put at a General Meeting.
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr J A McGill
Director
21 March 2024
JM PACKAGING LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 JUNE 2023
- 4 -
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.
JM PACKAGING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF JM PACKAGING LIMITED
- 5 -
Opinion
We have audited the financial statements of JM Packaging Limited (the 'company') for the year ended 30 June 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 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 June 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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 report 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.
JM PACKAGING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF JM PACKAGING LIMITED
- 6 -
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 director's report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, 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 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 responsibilities statement, 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:
The extent to which the audit was considered capable of detecting irregularities including fraud
We obtained an understanding of the legal and regulatory framework applicable to both the company itself and the industry in which it operates. We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our sector experience and through discussions with the director and other management. The most significant were identified as the Companies Act 2006, relevant tax legislation and Health and Safety.
We considered the extent of compliance with those laws and regulations as part of our procedures on the related financial statements. Our audit procedures included:
- Making enquiries of director and management as to where they consider there to be a susceptibility to fraud and whether they have any knowledge or suspicion of fraud;
- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.
Whilst our audit did not identify any significant matters relating to the detection of irregularities including fraud and despite the audit being planned and conducted in accordance with ISAs (UK), there remains an unavoidable risk that material misstatements in the financial statements may not be detected owing to inherent limitations of the audit, and that by their very nature, any such instances of fraud or irregularity would likely involve collusion, forgery, intentional misrepresentations, or the override of controls.
JM PACKAGING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF JM PACKAGING LIMITED
- 7 -
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Brett Davis
Senior Statutory Auditor
For and on behalf of Henton & Co LLP
21 March 2024
Chartered Accountants
Statutory Auditor
124 Acomb Road
York
YO24 4EY
JM PACKAGING LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
16,151,604
14,511,434
Cost of sales
(12,793,163)
(10,834,523)
Gross profit
3,358,441
3,676,911
Administrative expenses
(1,315,395)
(1,121,344)
Operating profit
4
2,043,046
2,555,567
Interest receivable and similar income
7
55,568
2,260
Interest payable and similar expenses
8
(4,771)
(4,391)
Amounts written off investments
9
50,000
-
Profit before taxation
2,143,843
2,553,436
Tax on profit
10
(435,936)
(333,821)
Profit for the financial year
1,707,907
2,219,615
The profit and loss account has been prepared on the basis that all operations are continuing operations.
JM PACKAGING LIMITED
BALANCE SHEET
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
819,607
862,954
Investments
13
300,000
819,607
1,162,954
Current assets
Stocks
15
1,692,032
1,654,908
Debtors
17
2,595,609
4,593,947
Cash at bank and in hand
12,665,862
9,128,946
16,953,503
15,377,801
Creditors: amounts falling due within one year
18
(3,577,028)
(3,737,199)
Net current assets
13,376,475
11,640,602
Total assets less current liabilities
14,196,082
12,803,556
Creditors: amounts falling due after more than one year
19
(45,000)
(103,747)
Provisions for liabilities
Deferred tax liability
21
1,634
-
(1,634)
Net assets
14,151,082
12,698,175
Capital and reserves
Called up share capital
23
1,000
1,000
Profit and loss reserves
14,150,082
12,697,175
Total equity
14,151,082
12,698,175
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true
The financial statements were approved and signed by the director and authorised for issue on 21 March 2024
Mr J A McGill
Director
Company registration number 03561125 (England and Wales)
JM PACKAGING LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 July 2021
1,000
10,727,560
10,728,560
Year ended 30 June 2022:
Profit and total comprehensive income
-
2,219,615
2,219,615
Dividends
11
-
(250,000)
(250,000)
Balance at 30 June 2022
1,000
12,697,175
12,698,175
Year ended 30 June 2023:
Profit and total comprehensive income
-
1,707,907
1,707,907
Dividends
11
-
(255,000)
(255,000)
Balance at 30 June 2023
1,000
14,150,082
14,151,082
JM PACKAGING LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
3,878,430
6,691,918
Interest paid
(4,771)
(4,391)
Income taxes paid
(328,991)
(388,999)
Net cash inflow from operating activities
3,544,668
6,298,528
Investing activities
Purchase of tangible fixed assets
(4,573)
(215)
Proceeds from disposal of subsidiaries
300,000
Proceeds from disposal of investments
50,000
Interest received
55,568
2,260
Net cash generated from investing activities
400,995
2,045
Financing activities
Repayment of bank loans
(153,747)
(51,907)
Dividends paid
(255,000)
(250,000)
Net cash used in financing activities
(408,747)
(301,907)
Net increase in cash and cash equivalents
3,536,916
5,998,666
Cash and cash equivalents at beginning of year
9,128,946
3,130,280
Cash and cash equivalents at end of year
12,665,862
9,128,946
JM PACKAGING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
- 12 -
1
Accounting policies
Company information
JM Packaging Limited is a private company limited by shares incorporated in England and Wales. The registered office is 5 Malton Enterprise Park, Malton, North Yorkshire, YO17 6AB.
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 amounts 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
Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods 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:
Freehold land and buildings
straight line over 50 years
Plant and equipment
10% straight line
Fixtures and fittings
33% straight line
Motor vehicles
25% straight line
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
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
JM PACKAGING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 13 -
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash at bank and in hand
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.
JM PACKAGING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 14 -
1.9
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.
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.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
JM PACKAGING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 15 -
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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts 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 subsequently 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 through 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.
1.10
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.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
JM PACKAGING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 16 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
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.
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.
JM PACKAGING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 17 -
3
Turnover and other revenue
The company's turnover is derived from the sale of food packaging materials.
Sales are made to customers in the United Kingdom.
2023
2022
£
£
Other revenue
Interest income
55,568
2,260
4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Exchange losses
21,860
22,270
Fees payable to the company's auditor for the audit of the company's financial statements
6,100
5,600
Depreciation of owned tangible fixed assets
47,920
48,114
Operating lease charges
13,360
13,735
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Directors
1
1
Sales and logistics
6
6
Administrative
4
4
Warehouse
3
3
Total
14
14
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
658,978
639,586
Social security costs
78,726
73,297
Pension costs
7,371
8,118
745,075
721,001
JM PACKAGING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 18 -
6
Director's remuneration
2023
2022
£
£
Remuneration for qualifying services
235,000
235,000
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
235,000
235,000
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
55,568
2,260
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
55,568
2,260
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
4,514
4,391
Other finance costs:
Other interest
257
4,771
4,391
9
Amounts written off investments
2023
2022
£
£
Gain on disposal of fixed asset investments
50,000
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
437,570
338,698
JM PACKAGING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
10
Taxation
2023
2022
£
£
(Continued)
- 19 -
Deferred tax
Origination and reversal of timing differences
(1,634)
(4,877)
Total tax charge
435,936
333,821
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:
2023
2022
£
£
Profit before taxation
2,143,843
2,553,436
Expected tax charge based on the standard rate of corporation tax in the UK of 20.50% (2022: 19.00%)
439,399
485,153
Tax effect of expenses that are not deductible in determining taxable profit
954
1,003
Gains not taxable
(10,250)
Group relief
(154,988)
Permanent capital allowances in excess of depreciation
4,590
Depreciation on assets not qualifying for tax allowances
2,877
2,653
Movement in deferred tax
(1,634)
Taxation charge for the year
435,936
333,821
11
Dividends
2023
2022
£
£
Interim paid
255,000
250,000
JM PACKAGING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 20 -
12
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 July 2022
939,763
253,341
134,432
31,288
1,358,824
Additions
399
4,174
4,573
At 30 June 2023
939,763
253,740
138,606
31,288
1,363,397
Depreciation and impairment
At 1 July 2022
126,253
219,378
118,951
31,288
495,870
Depreciation charged in the year
14,028
24,720
9,172
47,920
At 30 June 2023
140,281
244,098
128,123
31,288
543,790
Carrying amount
At 30 June 2023
799,482
9,642
10,483
819,607
At 30 June 2022
813,510
33,963
15,481
862,954
13
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
14
300,000
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 July 2022
300,000
Disposals
(300,000)
At 30 June 2023
-
Carrying amount
At 30 June 2023
-
At 30 June 2022
300,000
On 5th July 2022 the company disposed of its 412,500 shares in York City Football Club for £350,000.
14
Subsidiaries
Details of the company's subsidiaries at 30 June 2023 are as follows:
JM PACKAGING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
14
Subsidiaries
(Continued)
- 21 -
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
York City Football Club Limited
England & Wales
Ordinary
0
York Stadium Management Company Limited
England & Wales
Ordinary
0
On 5th July 2022 the company disposed of its 412,500 shares in York City Football Club for £350,000.
15
Stocks
2023
2022
£
£
Finished goods and goods for resale
1,692,032
1,654,908
16
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
2,519,058
4,518,919
Carrying amount of financial liabilities
Measured at fair value through profit or loss
Measured at amortised cost
2,842,205
3,535,445
17
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,097,281
3,448,086
Amounts owed by group undertakings
1,046,633
Other debtors
421,777
24,200
Prepayments and accrued income
76,551
75,028
2,595,609
4,593,947
JM PACKAGING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 22 -
18
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
20
50,000
Trade creditors
2,205,853
2,733,775
Corporation tax
145,279
36,700
Other taxation and social security
634,544
268,801
Other creditors
577,766
470,460
Accruals and deferred income
13,586
177,463
3,577,028
3,737,199
19
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
20
103,747
Other creditors
45,000
45,000
103,747
20
Loans and overdrafts
2023
2022
£
£
Bank loans
153,747
Payable within one year
50,000
Payable after one year
103,747
The bank loans are secured by a debenture and legal charge over the assets of the company.
Interest is payable at bank base rate plus 2.1%.
21
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
-
1,634
JM PACKAGING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
21
Deferred taxation
(Continued)
- 23 -
2023
Movements in the year:
£
Liability at 1 July 2022
1,634
Credit to profit or loss
(1,634)
Liability at 30 June 2023
-
22
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
7,371
8,118
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.
23
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
1,000
1,000
1,000
1,000
24
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:
2023
2022
£
£
Within one year
9,421
24,212
Between two and five years
1,596
11,017
11,017
35,229
25
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Included in debtors: £420,398 (2022: £1,045,779) due from York City Football Club Limited and £1,138 to York Stadium Management Company Limited (2022: £855).
JM PACKAGING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 24 -
26
Ultimate controlling party
The ultimate controlling party is J A McGill, a director of the company who holds 100% of the issued share capital.
27
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
1,707,907
2,219,615
Adjustments for:
Taxation charged
435,936
333,821
Finance costs
4,771
4,391
Investment income
(55,568)
(2,260)
Depreciation and impairment of tangible fixed assets
47,920
48,114
Gain on sale of investments
(50,000)
-
Movements in working capital:
Increase in stocks
(37,124)
(331,985)
Decrease in debtors
1,998,338
3,550,642
(Decrease)/increase in creditors
(173,750)
869,580
Cash generated from operations
3,878,430
6,691,918
28
Analysis of changes in net funds
1 July 2022
Cash flows
30 June 2023
£
£
£
Cash at bank and in hand
9,128,946
3,536,916
12,665,862
Borrowings excluding overdrafts
(153,747)
153,747
-
8,975,199
3,690,663
12,665,862
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