Euro Wrap Limited - Limited company accounts 23.1

REGISTERED NUMBER: 02871882 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 31 December 2022

for

Euro Wrap Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Income Statement

8

Other Comprehensive Income

9

Balance Sheet

10

Statement of Changes in Equity

11

Notes to the Financial Statements

12

DIRECTORS:

M Bramley

G M G Nusse

REGISTERED OFFICE:

Unit 2 Pikelaw Place

West Pimbo Industrial Estate

Skelmersdale

WN8 9PP

REGISTERED NUMBER:

02871882 (England and Wales)

AUDITORS:

Krogh & Partners Limited, (Statutory Auditor)

823 Salisbury House

29 Finsbury Circus

London

EC2M 5QQ

The directors present their strategic report for the year ended 31 December 2022.

REVIEW OF BUSINESS

The company turnover has increased from kGBP 14,783 to kGBP 18,211. Since lockdown there has been a marked improvement in customers attitude towards buying and having stock and as a result of this, we have seen our turnover improve.

The company's gross margin could have been even better if it had not suffered from a very high freight cost from the Far East in the first half of the year.

The company's profit for the period amounted to kGBP 1.678. The result for the period and the financial position at the year-end were considered very satisfactory by the directors.

PRINCIPAL RISKS AND UNCERTAINTIES

The company's operations expose it to a variety of financial risks the major ones being foreign exchange risk and credit risk.

Covid-19

The impact of Covid in China is creating uncertainty about the smooth running of production.

Foreign exchange risk

The company is exposed to foreign exchange risk and aims to maximise the forward booking of currency to ensure that purchase commitments in foreign currencies are appropriately covered. The situation is regularly reviewed by the managing director with a view to providing a minimum of 12 months cover as and when beneficial rates apply.

Credit risk

The company has implemented policies that require appropriate credit checks on all potential customers before deliveries are made.

Price risk and stock obsolescence

The company is exposed to a price risk as a direct result of its trading as well as a risk of stock obsolescence exists.

KEY PERFORMANCE INDICATORS

The key financial performance indicators reviewed by management via the monthly management accounts are sales, gross margins, overheads, stock levels and profit before tax. Orders, sales and stock received are reviewed on a weekly basis and compared with the comparative position in previous years.

Other key performance indicators such as staffing levels and waste production are monitored on a weekly basis and compared to previous years.

ON BEHALF OF THE BOARD:

M Bramley - Director

26 January 2023

The directors present their report with the financial statements of the company for the year ended 31 December 2022.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of selling gift wrapping paper, gift bags, gift boxes, general associated gift packaging and party items.

DIVIDENDS

The directors do not recommend the payment of a dividend.

FUTURE DEVELOPMENTS

Turnover is expected to remain stable however we can expect some price pressure from customers in the

ever-increasing competitive market.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2022 to the date of this report.

M Bramley

G M G Nusse

FINANCIAL INSTRUMENTS

The Company uses forward exchange contracts to hedge the exposure of financial risk of changes in the USD exchange rate and the resultant impact on purchases. Hedging is accomplished by the managing director with the overall target to hedge the transaction risk on a 6 month basis. The Company does not use derivative financial instruments for speculative purposes.

POLITICAL AND CHARITABLE CONTRIBUTIONS

The company made charitable donations during the year of GBP 0 (2021: kGBP 0). The company made no political donations or incurred any political expenditure during the period.

POST BALANCE SHEET EVENTS

No post balance sheet events have occurred since 31 December 2022 which require reporting or disclosing in the accounts.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 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 directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Krogh & Partners Limited, (Statutory Auditor), will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

M Bramley - Director

26 January 2023

Opinion

We have audited the financial statements of Euro Wrap Limited (the 'company') for the year ended 31 December 2022 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 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 31 December 2022 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.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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 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 directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether 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 the audit:

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page three, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

-

the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

-

we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge of the business;

-

we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, data protection, and anti-bribery;

-

we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and

-

identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

-

making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;

-

considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

-

performed analytical procedures to identify any unusual or unexpected relationships;

-

tested journal entries to identify unusual transactions;

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

-

agreeing financial statement disclosures to underlying supporting documentation;

-

enquiring of management as to actual and potential litigation and claims;

-

reviewing correspondence with HMRC and relevant regulators

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

John Lindegaard (Senior Statutory Auditor)

for and on behalf of Krogh & Partners Limited, (Statutory Auditor)

823 Salisbury House

29 Finsbury Circus

London

EC2M 5QQ

26 January 2023

TURNOVER

3

18,211

14,783

Cost of sales

12,806

10,749

GROSS PROFIT

5,405

4,034

Administrative expenses

3,884

3,487

1,521

547

Other operating income

4

578

549

OPERATING PROFIT

7

2,099

1,096

Interest receivable and similar income

8

2

9

2,101

1,105

Interest payable and similar expenses

9

11

3

PROFIT BEFORE TAXATION

2,090

1,102

Tax on profit

10

412

219

PROFIT FOR THE FINANCIAL YEAR

1,678

883

PROFIT FOR THE YEAR

1,678

883

OTHER COMPREHENSIVE INCOME

Hedging of derivate financial instrument

(3

)

168

Income tax relating to other comprehensive income

1

(32

)

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

(2

)

136

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,676

1,019

FIXED ASSETS

Tangible assets

12

1,752

1,751

CURRENT ASSETS

Stocks

13

4,472

3,237

Debtors

14

3,838

3,375

Cash at bank

3,983

4,918

12,293

11,530

CREDITORS

Amounts falling due within one year

15

1,970

2,872

NET CURRENT ASSETS

10,323

8,658

TOTAL ASSETS LESS CURRENT LIABILITIES

12,075

10,409

CREDITORS

Amounts falling due after more than one year

16

20

30

NET ASSETS

12,055

10,379

CAPITAL AND RESERVES

Called up share capital

19

-

-

Retained earnings

12,055

10,379

SHAREHOLDERS' FUNDS

12,055

10,379

The financial statements were approved by the Board of Directors and authorised for issue on 26 January 2023 and were signed on its behalf by:

M Bramley - Director

Called up

share

Retained

Total

capital

earnings

equity

£'000

£'000

£'000

Balance at 1 January 2021

-

12,360

12,360

Changes in equity

Dividends

-

(3,000

)

(3,000

)

Total comprehensive income

-

1,019

1,019

Balance at 31 December 2021

-

10,379

10,379

Changes in equity

Total comprehensive income

-

1,676

1,676

Balance at 31 December 2022

-

12,055

12,055

1.	STATUTORY INFORMATION

Euro Wrap Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows.

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland", not to disclose related party transactions with wholly owned subsidiaries within the group.

Turnover

Turnover from the sale of goods is recognised in the income statement, provided that the transfer of risk, usually on delivery to the buyer, has taken place and that the income can be measured reliably and is expected to be received.

Turnover is measured at the fair value of the agreed consideration, excluding VAT and other indirect

taxes. Turnover is net of all types of discounts granted.

Net financials

Financial income and expenses include interest, realised and unrealised exchange adjustments, value adjustments on securities as well as amortisation of long-term receivables.

Tangible fixed assets

Tangible assets are stated at cost, net of depreciation and any provision for impairment.

Depreciation on fixed assets is provided at rates estimated to write off the cost amounts, less estimated residual value, of each asset over its expected useful life ad follows:

Freehold property 2% per annum

Motor vehicles 25% per annum

Fixtures and fittings 15% per annum

Plant and machinery 15% per annum

Computer equipment 33% per annum

Write down for impairment of fixed assets

The carrying amounts of tangible fixed assets are reviewed on an annual basis to determine whether there is any indication of impairment exceeding the writedowns in connection with general amortisation and depreciation. Where writedown for impairment is required, writedown is made to the recoverable amount, if lower. The recoverable amount of the asset is determined as the higher of net selling price and value in use. Where it is not possible to determine the recoverable amount of the individual asset, the impairment writedown requirement is assessed in respect of smallest group of assets for which it is possible to determine the recoverable.

Hire purchase agreements

Assets held under hire purchase agreements are capitalised and disclosed under tangible fixed assets at their fair value. The capital element of the future payments is treated as a liability and the interest is charged to the profit and loss account on a straight line basis.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. Cost includes import duties, transport and handling costs directly attributable to the acquisition of the goods.

Debtors

Debtors are measured at the lower of amortised cost or net realisable value corresponding to the nominal value less losses for uncollectibles. Losses on uncollectibles are calculated on the basis of an individual assessment of each debtor, and an additional general provision is made in respect of trade debtors.

Creditors

Financial debt

Fixed-rate loans such as mortgagees and loans held to maturity are recognised initially at the proceeds received net of transaction expenses incurred. In subsequent periods, borrowing are stated at amortised cost corresponding to the capitalised value using the effective interest method; the difference between proceeds and the nominal value (the capital loss) is recognised in the profit and loss account over the loan period. Other debts are measured at amortised cost, materially corresponding to nominal value.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the start of each month. Exchange differences are taken into account in arriving at the operating profit.

Financial instruments

Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

3.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

2022

2021

£'000

£'000

United Kingdom

11,598

9,392

Europe

5,845

4,739

Rest of the world

768

652

18,211

14,783

4.	OTHER OPERATING INCOME

2022

2021

£'000

£'000

Other operating income

578

329

Government grants

-

220

578

549

5.	EMPLOYEES AND DIRECTORS

2022

2021

£'000

£'000

Wages and salaries

1,974

1,798

Social security costs

211

182

Other pension costs

35

31

2,220

2,011

The average number of employees during the year was as follows:

2022

2021

Warehouse

16

14

Sales

14

12

Administration

24

22

54

48

6.	DIRECTORS' EMOLUMENTS

Year ended

Year ended

31.12.22

31.12.21

£'000

£'000

Aggregate emoluments (including benefits in kind)

205

213

Information regarding the highest paid director is as follows:

Year ended

ear ended

31.12.22

31.12.21

£'000

£'000

Emoluments etc.

205

213

7.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

Year ended

Year ended

31.12.22

31.12.21

£'000

£'000

Auditors' remuneration - in total

19

16

Depreciation - owned tangible fixed assets

71

72

Depreciation of assets held under hire purchase agreements

24

22

(Profit)/loss on disposal of fixed assets

13

-

Operating lease rentals - other:

226

213

8.

INTEREST RECEIVABLE AND SIMILAR INCOME

2022

2021

£'000

£'000

Other interest

2

9

9.

INTEREST PAYABLE AND SIMILAR EXPENSES

2022

2021

£'000

£'000

Other various interest

11

3

10.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2022

2021

£'000

£'000

Current tax:

UK corporation tax

402

229

Previous year

2

-

Total current tax

404

229

Deferred tax

8

(10

)

Tax on profit

412

219

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2022

2021

£'000

£'000

Profit before tax

2,090

1,102

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2021 - 19%)

397

209

Effects of:

Expenses not deductible for tax purposes

10

6

Depreciation in excess of capital allowances

2

15

Adjustments to tax charge in respect of previous periods

2

(3

)

Other timing differences

(7

)

2

Deferred tax movement

8

(10

)

Total tax charge

412

219

Tax effects relating to effects of other comprehensive income

2022

Gross

Tax

Net

£'000

£'000

£'000

Hedging of derivate financial instrument

(3

)

1

(2

)

2021

Gross

Tax

Net

£'000

£'000

£'000

Hedging of derivate financial instrument

168

(32

)

136

11.

DIVIDENDS

2022

2021

£'000

£'000

Ordinary shares of 0.01 each

Paid

-

3,000

12.	TANGIBLE FIXED ASSETS

Fixtures

Freehold

Plant and

and

Motor

property

machinery

fittings

vehicles

Totals

£'000

£'000

£'000

£'000

£'000

COST

At 1 January 2022

1,955

257

482

191

2,885

Additions

-

6

35

76

117

Disposals

-

-

(9

)

(37

)

(46

)

At 31 December 2022

1,955

263

508

230

2,956

DEPRECIATION

At 1 January 2022

369

238

435

92

1,134

Charge for year

23

5

28

39

95

Eliminated on disposal

-

-

(9

)

(16

)

(25

)

At 31 December 2022

392

243

454

115

1,204

NET BOOK VALUE

At 31 December 2022

1,563

20

54

115

1,752

At 31 December 2021

1,586

19

47

99

1,751

Hire purchase agreements

Included within plant and machinery is kGBP 0 (2021 - kGBP 0) relating to assets held under finance lease agreements. Included within motor vehicles is kGBP 51 (2021 - kGBP 75) relating to assets held under finance lease agreements.