The directors present the strategic report for the year ended 31 December 2022.
The significant market volatility in the UK and globally post the Covid-19 pandemic continued to impact business operations across the year. We had unprecedented significant cost increases in our raw materials, secondary packaging, and transport costs in 2022 which we were unable to mitigate completely and therefore had to pass through double-digit price increases to our customers. This had an immediate impact on our projected sales volumes as our customers struggled to pass on the increases into retail. The DIY market halved in 2022 as consumers started to travel again. We saw a drop of over 30% in our sales volumes as a direct impact of the necessary price increases.
The year also came with its challenges in relation to exports and throughout 2022 the group continued to face supply chain disruption in securing shipping containers for deliveries to the USA, as well as incurring a significant threefold rise in the cost of shipping the goods.
However, despite all the above and through other improvements across the business, we have seen a rise in revenue of 4% on last year, gross profit has risen from £2,943k to £3,840k and there has been a significant reduction in loss compared to last year
Printing
We continue to print for our own manufacturing lines, and we also took on contract work for non-competitive metal packaging companies to support our overhead recovery.
Can Production
The product range in the UK has a seasonality factor, which historically declines towards Christmas as the DIY season comes to an end. The reduced demand during the winter period is forecasted and reflected in production demands. A concerted effort to continually extend our markets internationally, and to grow sales in the North American regions is ongoing.
Due to the current situation in the Ukraine and the negative impact this has had on the energy markets we may see pressure on our cost of gas and electricity in 2023 and 2024. We continually adapt our business planning to meet these ever-changing market demands.
Whilst trading in international markets, there will always be the economic risk of fluctuating foreign exchange rates. We are also subject to fluctuating national and international raw material prices especially in the metal markets.
The 2023 forecasted landscape continues to be impacted by increases in raw material pricing and logistics costs. With the support of Group funding, we are focused on growing our market share utilising the operational efficiency and increased capacity of the new 5 litre line machinery and the investment in the training of our employees.
We expect to soon return solid operating profits with the continuance of our cost reduction and management activities.
| 2022 | 2021 | Change % |
|
|
|
|
Turnover | 12,506,478 | 12,022,709 | 4% |
Operating (loss) / profit before tax | 201,836 | (336,769) | 160% |
(Loss) / profit before tax | 144,144 | (561,083) | 126% |
|
|
|
|
Total equity | 655,474 | 1,001,498 | (35%) |
Current assets as % of current liabilities | 55% | 55% | 0% |
Number of employees | 84 | 74 | 14% |
We remain very optimistic about the future of our business. With the support of Group funding, we are focused on growing our market share through significant investment in a new Drum & Pail Combi Line that will expand our product offerings and therefore give us the opportunity to increase our supply footprint with our key customers. We expect to return solid operating profit with the continuance of our cost reduction and management activities.
In August 2023 we also appointed 1 new Director, to replace a resigning Director, based in the Envases Liverpool Office. This centralises a senior management team in the UK for local decision making, supported by our colleagues in Germany and Netherlands
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2022.
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The auditor, MHA Moore and Smalley, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
We have audited the financial statements of Envases Liverpool Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group 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).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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 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 group's and parent 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.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's 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.
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 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 group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine 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 directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.
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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, are detailed below:
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness;
Enquiries with management, about any known or suspected instances of non-compliance with laws and regulations and fraud;
Reviewing how management identify and track compliance with key laws and regulations. Scrutinising legal and professional costs incurred for indications of non-compliance and consequential financial implications;
Auditing the risk of fraud in revenue, including through the testing of income cut-off at the year end, through sales transaction testing and consideration of post year end sales credit notes to provide comfort that revenue is completely stated in the financial statements and recognised in the correct accounting period; and,
Challenging assumptions and judgements made by management in the accounting estimates.
Because of the field in which the client operates we identified employment law, the Data Protection Act, health and safety legislation and compliance with the UK Companies Act as the areas most likely to have a material impact on the financial statements.
Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognize the non-compliance.
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.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in 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.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £338,939 (2021 - £369,225 loss).
Envases Liverpool Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Trinity Park Industrial Estate, Orrell Lane, Liverpool, L20 6PB.
The group consists of Envases Liverpool Ltd and all of its subsidiaries.
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.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company Envases Liverpool Ltd together with all UK entities controlled by the UK ultimate parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
The subsidiary company has taken the exemption from audit under Section 479C of the Companies Act.
All financial statements are made up to 31 December 2022. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between UK group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Where amounts owed to group/connected companies remain on consolidation, they are in relation to the worldwide group companies to which this group is related, but not consolidated at the UK level.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Following a review of the forecasts, future cash flows and wider business plan, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
The intermediate parent (Envases Ohringen GmbH) and the ultimate EEA parent (Envases Europe A/S) have provided confirmation that they have no intention to dispose of the UK business nor to request immediate repayment of the intercompany loan for a period of 12 months from the date of the statutory accounts approval.
They have also stated their intent to assist in meeting the liabilities of Envases Liverpool as they fall due, to the extent that the money is not otherwise available. All of this is set out in an unconditional letter of support, which has been provided to the company.
Turnover from the sale of goods is recognised to the extent that the company obtains the right to consideration in exchange for its performance. 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.
Sale of goods
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, taking into consideration, 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.
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 recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, 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, 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.
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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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.
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 group after deducting all of its 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.
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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 if, and only if, there is 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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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 leased asset are consumed.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
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.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
The useful economic life of tangible fixed assets is judged at the point of purchase and reviewed at each financial reporting date. The group depreciates its tangible assets over their estimated useful lives. The estimates of the useful lives of assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied.
As standard, a useful economic life of between 10 - 40 years is applied to Freehold buildings, 2 - 18 years for Plant and equipment and 3 - 18 years for fixtures and fittings.
Stocks are valued at the lower cost and net realisable value. Where necessary, provisions for slow moving and obsolete stocks are made. Calculation of these provisions requires judgements to be made, The provisions are based on both the age and use of the stock in the last 12 -24 months, with provision made as a percentage of these values.
At the balance sheet date the Directors assessed the carrying value of the Goodwill for impairment using a number of valuation methods, including future cash flows, industry standard EBITDA multiple and net asset valuations. It is the opinion of the Directors that the carrying value of the investment in Envases Hull does not exceed it's net asset value. The directors have therefore fully impaired goodwill and will continue to reassess this value, year on year. The Directors appreciate that such judgement includes elements of uncertainty in relation to the estimate of company value and future cash flows, however feel that their experience of the market and comparison of industry averages are considered to be relevant.
For the majority of the financial year the company has not received invoices from its energy provider. The directors have made an estimate within accruals for the unpaid element of this usage. Using known sources of information, such as contractual rates and metered usage, the directors have kept an accurate record of spend. However, an element of uncertainty surrounds provisions of this nature, especially in the current climate of ever increasing utilities costs, where limited information is received from suppliers and wholesale gas and electricity prices are difficult to track.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2021 - 1).
The actual charge/(credit) for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
The Chancellor stated his intention to maintain the main rate of corporation tax at 19%. This change to previously announced policy was substantively enacted on 17 March 2020. The Chancellor subsequently announced his intention to increase the headline rate of corporation tax to 25% from 1 April 2023, this policy was substantively enacted on 25 May 2021.
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
The impairment losses in respect of financial assets are recognised in other gains and losses in the profit and loss account.
More information on impairment movements in the year is given in note 11.
On 1 April 2015 Envaes Liverpool Ltd (formerly Huber Packaging Limited), acquired the trade and assets of Crown Packaging Limited. The negative Goodwill above was recognised on this acquisition and amortised fully over the 5 years to 31 December 2020. The Directors have assessed this Goodwill and believe that the trade and assets of Crown Packaging Limited have now been fully absorbed into Envases Liverpool Ltd and as such have disposed of this cost and accumulated amortisation in full.
On 9th November 2022 Envases Liverpool Ltd acquired the entire share capital of Envases Hull Ltd (formerly Nepak Ltd) through a share purchase agreement. All of the goodwill acquired during the year relates to the this acquisition. At the year end the directors have assessed the carrying value of this acquired goodwill and took the decision to impair its value in full. Further information on this impairment can be found within notes 1.6, 2 and 11 of the financial statements.
A valuation of the Trinity Park trading premises took place on 30th March 2021 by Matthews & Goodman chartered surveyors. The company has elected to not apply the revaluation model as per FRS102 Section 17 and instead are holding the entirety of owner-occupied freehold buildings at cost. The value of the land and property was deemed to be £4.45m. The property was originally purchased for £3.53m on 31st March 2015 and at no time during this period have the buildings been held for rental return or capital appreciation.
On 9th November 2022 Envases Liverpool Ltd acquired the entire share capital of Envases Hull Ltd (formerly Nepak Ltd) through a share purchase agreement. At the year end the fair value of the investment has been impaired downwards to a value equivalent to the net assets of the subsidiary at the year end, with these assessed as being the recoverable amount for the subsidiary investment asset. Further information can be found within note 1.9 of the financial statements.
Details of the company's subsidiaries at 31 December 2022 are as follows:
Envases Hull Ltd has taken the exemption in Section 479C of the Companies Act 2006 ("the Act") from the requirement in the Act for their individual accounts to be audited. The guarantee given by the company under Section 479C of the Act is disclosed in Note 24.
An impairment provision of £134,625 (2021 - £38,569) was charged to the Income Statement during the year.
Amounts owed from group undertakings are unsecured, interest free and repayable on demand.
Amounts owed to group undertakings (other than those under formal loan agreements and included in other borrowings, note 19) are unsecured, interest free and repayable on demand.
Loans are from the group parent undertaking in Germany (Envases Germany Holding GmbH). Loans are unsecured and include the following terms:
- £1.37m at 3% per annum.
- £6.66m at EURIBOR +3% per annum.
- £4.21m interest free.
All loans were consolidated, after the year end, in to a new loan agreement dated 1st April 2023. Interest is now chargeable at EURIBOR plus 1% and the total balance of the loan is due for repayment on 31st March 2028.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Deferred tax losses in the Company of £596,946 (2021: £456,610) have been provided for specifically to cover deferred tax liabilities in respect of accelerated capital allowances of £596,946 (2021: £Nil) and are sufficient to reverse within 12 months if required, however are anticipated to reverse within 3-5 years. Additional unrecognised tax losses, with an asset value of £469,443 are not recognised as a company asset on the basis that their utilisation is presently uncertain and may reverse in greater than 5 years.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
There has been no change to the structure or value of the share capital of the parent company during the year.
On 9 November 2022 the group acquired 100% of the issued capital of Envases Hull Ltd. This acquisition has been accounted for under the acquisition method of accounting for business combinations.
In order for the subsidiary company, Envases Hull Ltd, to take the audit exemption in section 479C of the Companies Act 2006, the company has guaranteed all outstanding liabilities of the subsidiary at 31 December 2022 until those liabilities are satisfied in full.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Amounts contracted for but not provided in the financial statements:
A binding commitment for the purchase of a tangible fixed asset was made during the year ended 31 December 2022. The total amount is for $375,000, translated to GBP at the 31 December 2022 spot rate.
The remuneration of key management personnel is as follows.
Certain senior employees who have authority and responsibility for planning, directing and controlling the activities of the Company are considered to be Key Management Personnel, these individuals are in addition to the company Directors, whose remuneration is disclosed separately in note 7 of these financial statements.
During the year the group entered into the following transactions with related parties:
£104,931 (2021: £103,561) of the purchases from Envases Germany Holding GmbH relate to management charges and £203,722 (2021: £255,738) relate to loan interest payments.
The following amounts were outstanding at the reporting end date:
The following amounts were outstanding at the reporting end date:
The company has taken advantage of the exemption conferred by paragraph 33.1A relating to "Related party disclosures" not to disclose transactions with group members included in these consolidated accounts.
The ultimate EEA parent undertaking and controlling party is Envases Europe A/S for which group financial statements are drawn up in which the entity is included, for the year ended 31 December 2022; which can be obtained from https://datacvr.virk.dk/
The registered office of Envases Europe A/S is:
Hedenstedvej 14
Løsning
8723
Denmark