Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2021
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LATTICE LABELS LIMITED
COMPANY INFORMATION
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LATTICE LABELS LIMITED
CONTENTS
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LATTICE LABELS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
This is a balanced and comprehensive review of the performance of our business during the year and its position at the year end consistent with the size and nature of our business and is written in the context of the risks and uncertainties we face.
Financial overview
The Company achieved a profit before taxation for the year ended 31 December 2021 of £463,634 (2020: £647,327) The Directors are delighted with the performance of the business considering the effects of the COVID-19 pandemic the world is currently facing and expect a similar level of performance for the year ahead subject to influence of external economic factors. 2022 has thrown up a new set of challenges however and the effects on profit of runaway inflation must not be underestimated. Turnover Management consider the results for the year to be in line with overall performance of the market. Operating costs Operating costs have been controlled and remain consistent with the prior financial year.
The management of the business and the nature of the Company's strategy are subject to a number of risks. Management have set out below the principal risks facing the business. Where possible processes are in place to monitor and mitigate such risks.
Economic downturn The success of the business is reliant on consumer demand. An economic downturn, resulting in reduction of consumer demand, will have an impact on the income achieved by the Company. In response to this risk, management aim to keep abreast of economic downturn, marketing and pricing strategies are modified to reflect the new market conditions. Manufacturing of products The Company is reliant on its products being of a high quality and up to date with its customer's demand. This exposes the Company to risks in a number of areas which is dependent on its manufacturing in respect of: - quality of the labels - pricing of the labels - range of types of labels offered Management are confident that the products produced will be of a continued high quality and will meet the market's demand.
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LATTICE LABELS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
The Company measures its financial performance in several areas as follows:
1. Growth in turnover is a key measure of the company’s success in winning new business and retaining existing clients. Despite the easing of COVID-19 related lockdowns the consumer market continued to shop from home and have products delivered to home or work. This has led to a continued strong demand for delivery labels. Many more labels are consumed when an item is delivered to a home rather than delivered to a store. This resulted in turnover increasing by 10.0 percentage points compared to 2020. Gross margins improved by 12.0 percentage points compared to 2020. 2. Cash collection and stock leveraging forms part of our working capital management. At the year end average debtor days were 55.2 days (2020 - 58.6 days) compared to a target of 65.0 days. A proportion of the turnover growth was from one customer we incentivised them to pay earlier resulting in lower debtor days. Stock turns of 11.8:1 (2020 - 18.7:1) compares less favourably with 2020. We took a concious decision to increase raw material stocks at the year end to offset any impending price increases in 2022.
The Company measures its non-financial performance in several areas as follows:
1. The securing of new business is a critical area if the business is to continue to grow. The value of contracts won during the year is therefore closely monitored. During the year the level of new business won exceeded our target and helped mitigate our losses. 2. The level of contract losses is also measured. Contract losses are categorised into two areas- those under our control and those outside our control. The level of contract losses under our control was in line with anticipated levels, whilst contract losses outside of our control (receiverships and closures) was broadly as expected. 3. Productivity and efficiency is monitored and assessed using different metrics compared to previous years performance, across a wide range of indicators our performance has improved facilitated by product mix improvements and continued targeted capital expenditure.
This report was approved by the board
and signed on its behalf.
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LATTICE LABELS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
The directors present their report and the financial statements for the year ended 31 December 2021.
The directors who served during the year were:
The profit for the year, after taxation, amounted to £
364,616
(2020 -
£
519,276
)
.
The Directors recommend the payment of a dividend this year totalling £50,000 (2020: £66,400).
The directors are responsible for preparing the Strategic Report, the Directors' Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year
. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙
select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙
make judgments and accounting estimates that are reasonable and prudent;
∙
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to 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.
The Directors anticipate no significant changes in the Company's activities for the foreseeable future.
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LATTICE LABELS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
There have been no significant events affecting the Company since the year end.
Under section 487(2) of the Companies Act 2006, Price Bailey LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board and signed on its behalf.
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LATTICE LABELS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LATTICE LABELS LIMITED
We have audited the financial statements of Lattice Labels Limited (the 'Company') for the year ended 31 December 2021, which comprise the Statement of Income and Retained Earnings, the Balance Sheet
and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards,
including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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 United Kingdom, including the Financial Reporting Council'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.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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LATTICE LABELS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LATTICE LABELS LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙
the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
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 Directors' Report.
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LATTICE LABELS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LATTICE LABELS LIMITED (CONTINUED)
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 Auditors' 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:
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates and considered the risk of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations. This included those regulations directly related to the financial statements, including financial reporting, tax legislation and distributable profits and industry regulations including GDPR, employment law and health and safety. We communicated the identified laws and regulations with the audit team and remained alert to any indications of non-compliance throughout the audit. We carried out specific procedures to address the risks identified. These included the following: - agreeing the financial statement disclosures to underlying supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements; - enquiries of management including those responsible for key regulations; - performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; In addressing the risk of management override of controls, we carried out testing of journal entries and other adjustments for appropriateness, assessing whether the judgements made in making accounting estimates are indicative of a potential bias and evaluating the business rationale of significant transactions outside the normal course of business. Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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 Auditors' Report.
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LATTICE LABELS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LATTICE LABELS LIMITED (CONTINUED)
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' 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.
for and on behalf of
Chartered Accountants
Statutory Auditors
Tennyson House
Cambridge Business Park
CB4 0WZ
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LATTICE LABELS LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2021
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LATTICE LABELS LIMITED
REGISTERED NUMBER:
02589295
BALANCE SHEET
AS AT
31 DECEMBER 2021
The financial statements were approved and authorised for issue by the board and were signed on its behalf by
:
The notes on pages 12 to 25 form part of these financial statements.
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LATTICE LABELS LIMITED
REGISTERED NUMBER:
02589295
ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2021
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LATTICE LABELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Lattice Labels Limited is a private Company limited by shares incorporated in England and Wales, United Kingdom. The registered office is 2 Chester Road, Colmworth Business Park, St Neots, PE19 8YT.
The principal activity of the company continued to be that of a label producer and supplier.
2.
ACCOUNTING POLICIES
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in
the UK and the Republic of Ireland and the Companies Act 2006
.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The Company's level of rounding is to the nearest Pound.
The following principal accounting policies have been applied:
The directors have considered the impact of the COVID-19 pandemic on the Company's operations and going concern status. In making their assessment they have prepared sales, profit and loss and
cash flow forecasts, which have been prepared using various scenarios in relation the continued impact of COVID-19 and management's best estimate of future demand. The Finnish paper strike which started on the 4th January 2022 and lasted 4 months, impacted heavily on the whole label industry through the first half of 2022. This caused poor availability and also contributed to significant raw material inflation of between 20 and 45%. This has intern led to disruption of customer demand with some demand moving to China. We anticipate this will impact negatively on our turnover through the second half of 2022. Despite the pandemic, the directors anticipate that the company will remain profitable for the year ahead. The directors continue to monitor cashflow closely and exercise tight credit control and, based on their forecasts and built up reserves, consider it appropriate to continue to prepare the financial statements on a going concern basis.
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LATTICE LABELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.
ACCOUNTING POLICIES (CONTINUED)
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.
Depreciation is provided on the following basis:
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete the sell. The impairment loss is recognised immediately in profit or loss.
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LATTICE LABELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.
ACCOUNTING POLICIES (CONTINUED)
Functional and presentation currency
Transactions and balances
Grants of a revenue nature are recognised in the Statement of Income and Retained Earnings in the same period as the related expenditure.
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LATTICE LABELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.
ACCOUNTING POLICIES (CONTINUED)
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Balance Sheet.
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LATTICE LABELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.
ACCOUNTING POLICIES (CONTINUED)
Estimates and judgements are continually evaluated. 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 revision and future periods where the revision affects both current and future periods. Details of the company's significant accounting judgements and critical estimates include: Impairment of stock and work in progress Management have assessed the need to write off or provide against any specific items based on the levels held at period end and the expected sales of such items in the immediate period post year end. Management take into account historic sales data at the date the estimate is made. Impairment of trade debtors The recoverability of trade debtors has been assessed at the year end and up until the date of signing these financial statements. Management have based the decision to provide for any amounts based on their judgement of all the available information and their experience of the specific nature of the trade debtor in question.
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LATTICE LABELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
The whole of the turnover is attributable to the one principal activity of the Company.
Analysis of turnover by country of destination:
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LATTICE LABELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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LATTICE LABELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
There were no factors that may affect future tax charges.
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LATTICE LABELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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LATTICE LABELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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LATTICE LABELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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LATTICE LABELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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LATTICE LABELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Profit and loss account
Intercompany bank guarantees have been given to the parent company, Random Factor Limited, via a fixed and floating charge over the net book value of the company's assets. The amount of this guarantee as at 31 December 2021 is £1,284,690 (2020 - £1,456,311).
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £179,410 (2020 - £113,499). No contributions (2020 - £Nil) were Payable to the fund at the balance sheet date.
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LATTICE LABELS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
The ultimate parent undertaking of the Company is Random Factor Limited. The ultimate controlling party of the Company are the Board of Directors of Random Factor Limited by virtue of their directorships and shareholdings of the company.
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