XPEL MARKETING LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Company Registration No. 06557112 (England and Wales)
XPEL MARKETING LTD
COMPANY INFORMATION
Directors
Mr R M Porter
(Appointed 22 February 2021)
Mr D M Ralph
(Appointed 22 February 2021)
Company number
06557112
Registered office
Unit 7, Towngate Business Park
Everite Road
Widnes
Cheshire
WA8 8PT
Auditor
Champion Accountants LLP
7-9 Station Road
Hesketh Bank
Preston
Lancashire
PR4 6SN
XPEL MARKETING LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Statement of financial position
10
Statement of changes in equity
9
Statement of cash flows
11
Notes to the financial statements
12 - 26
XPEL MARKETING LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 1 -

The directors present the strategic report for the Year ended 31 December 2021.

Fair review of the business

The principal activity continued to be the supply and distribution of household cleaning products and toiletries.

 

The recent and ongoing COVID-19 pandemic is having a significant social and economic impact on the world’s economies. We have reacted positively to this challenge and have been able to react quickly with most of our colleagues being able to work from home during these unprecedented events.

During this period we have traded profitably and protected cash reserves, to ensure we remain a strong business. These events do not change our long-term vision and plans for the business.

Principal risks and uncertainties

The company discusses risks at a director level at monthly management meetings. There are also informal regular meetings where different aspects of the business are discussed.

 

The principal risks and uncertainties facing the company are broadly grouped as competitive and financial risk.

 

Competitive - Success of our new products in our key markets is critical to the long term growth of the company. The company currently generates most of its revenue in the UK. The company is investing in sales and distribution relationships outside the UK.

 

Financial, credit and liquidity risk - In common with other businesses, the company is subject to pricing pressures. The continued growth in new customers demonstrates that customers and consumers increasingly understand the benefit of our products.

 

Due to the volume of goods imported from overseas the company does have to deal with foreign exchange rate fluctuations. In the main this is managed by operating foreign currency bank accounts.

 

Credit risk is the risk that one party to a financial instrument will cause a financial loss for that other party by failing to discharge an obligation. Company policies are aimed at minimising such losses, and require that deferred terms are only granted to customers who demonstrate an appropriate payment history and satisfy credit worthiness procedures.

 

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The company has a factoring arrangement which aims to mitigate liquidity risk by helping to manage cash generation. As already noted deferred terms are only granted to customers who satisfy credit worthiness procedures.

Key performance indicators

Turnover increased by 13.5% for the year in comparison to the previous 8 months. If the turnover for the previous 8 months is apportioned over 12 months the turnover would have been approximately £26.1m and turnover would therefore have decreased by 24% for the comparable period. It is expected that turnover will grow in the foreseeable future.

 

Gross profit is closely monitored with targets set, the overall gross profit for the year was 34.9% compared to 31.2% for the previous 8 months. Net profit decreased by 8.6% to 13.4% for the year.

XPEL MARKETING LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 2 -
Future Developments

There is still uncertainty over the UK’s future, the risks to UK economic growth remain significant and future prospects may be influenced by the recovery from COVID-19.

The UK economy contracted by 0.2% in December 2021 due to the Omicron wave but this drop was less than forecasted. For the year to 31 December 2021, GDP grew by 7.3% following the 9.2% decrease in the year to 31 December 2020. This is a challenging period across the global economy, with recovery set to decelerate amid continued COVID-19 flare-ups and lingering supply bottlenecks.

We feel that our risk management policies relating to credit and liquidity risk protect us from experiencing any significant pressures relating to these developments.

Going forward we will continue to develop our relationships with suppliers and customers, generating new business where possible. We are forecasting further increases in turnover in the next 12 months.

On behalf of the board

Mr D M Ralph
Director
24 March 2022
XPEL MARKETING LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 3 -

The directors present their annual report and financial statements for the Year ended 31 December 2021.

Principal activities

The principal activity of the company continued to be the supply and distribution of household cleaning products.

Results and dividends

The results for the Year are set out on page 8.

Ordinary dividends were paid amounting to £6,200,000. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the Year and up to the date of signature of the financial statements were as follows:

Mr J McKeown
(Resigned 22 February 2021)
Mr S A Roberts
(Resigned 22 February 2021)
Mr R M Porter
(Appointed 22 February 2021)
Mr D M Ralph
(Appointed 22 February 2021)
Auditor

In accordance with the company's articles, a resolution proposing that Champion Accountants LLP be reappointed as auditor of the company will be put at a General Meeting.

Strategic report

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of principle risks and uncertainties, and future developments.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
Mr D M Ralph
Director
24 March 2022
XPEL MARKETING LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 4 -

The directors are responsible for preparing the annual 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 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:

 

 

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.

XPEL MARKETING LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF XPEL MARKETING LTD
- 5 -
Opinion

We have audited the financial statements of Xpel Marketing Ltd (the 'company') for the Year ended 31 December 2021 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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 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 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:

XPEL MARKETING LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF XPEL MARKETING LTD
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.

 

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:

 

Responsibilities of directors

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 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.

Auditor's responsibilities for the audit of the financial statements

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

The responsibility for the prevention and detection of irregularities, including fraud, lies with the directors and with those charged with governance. The objectives of our audit in respect of irregularities and fraud are to assess the risk of material misstatement of the financial statements due to fraud, to obtain sufficient, appropriate audit evidence regarding the assessed risks and to respond appropriately to fraud or suspected fraud identified during the audit.

XPEL MARKETING LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF XPEL MARKETING LTD
- 7 -

We determine significant applicable laws and regulations through discussion with those charged with governance and our own knowledge of the industry and design audit procedures to help identify instances of non-compliance with those laws and regulations that may have a material effect on the financial statements.

 

We consider the applicable laws and regulations to be the financial reporting framework (FRS 102 and the Companies Act 2006), the relevant tax regulations in the UK, employment law and the Health and Safety at Work Act 1974.

 

We consider the control environment and the procedures in place to address identified risks, including management override, non-compliance with laws and regulations and to prevent and detect fraud or irregularity. Our procedures are designed to provide reasonable assurance that the financial statements are free from material misstatement or error and include: enquiries of management and of staff in key compliance functions; review of minutes of meetings of those charged with governance; review and testing of manual journals and significant transactions outside the normal course of business; review of financial statement disclosures and testing to supporting documentation; performance of analytical procedures.

 

We are not responsible for preventing non-compliance and due to the inherent limitations of an audit, as described above, the audit cannot be relied upon to detect all instances of non-compliance with laws and regulations.

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

Peter Buck FCA, DChA (Senior Statutory Auditor)
For and on behalf of Champion Accountants LLP
24 March 2022
Chartered Accountants
Statutory Auditor
7-9 Station Road
Hesketh Bank
Preston
Lancashire
PR4 6SN
XPEL MARKETING LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
- 8 -
Year
8 months
ended
ended
31 December
31 December
2021
2020
Notes
£
£
Turnover
3
19,753,722
17,398,965
Cost of sales
(12,862,397)
(11,965,683)
Gross profit
6,891,325
5,433,282
Distribution costs
(2,653,661)
(981,697)
Administrative expenses
(1,602,111)
(1,004,026)
Other operating income
20,500
378,583
Operating profit
4
2,656,053
3,826,142
Interest receivable and similar income
8
214
3,209
Interest payable and similar expenses
9
-
0
(61)
Profit before taxation
2,656,267
3,829,290
Tax on profit
10
(69,230)
(732,324)
Profit for the financial Year
2,587,037
3,096,966

The income statement has been prepared on the basis that all operations are continuing operations.

XPEL MARKETING LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
- 9 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 May 2020
8
5,856,088
5,856,096
Period ended 31 December 2020:
Profit and total comprehensive income for the period
-
3,096,966
3,096,966
Dividends
11
-
(93,000)
(93,000)
Own shares acquired
-
(74,851)
(74,851)
Balance at 31 December 2020
8
8,785,203
8,785,211
Period ended 31 December 2021:
Profit and total comprehensive income for the period
-
2,587,037
2,587,037
Dividends
11
-
(6,200,000)
(6,200,000)
Reduction of shares
20
(4)
-
0
(4)
Other movements
4
-
4
Balance at 31 December 2021
8
5,172,240
5,172,248
XPEL MARKETING LTD
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2021
31 December 2021
- 10 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
12
38,223
55,053
Current assets
Stocks
13
3,243,264
1,344,855
Debtors
14
1,736,049
3,469,174
Cash at bank and in hand
3,619,750
7,323,603
8,599,063
12,137,632
Creditors: amounts falling due within one year
15
(3,457,776)
(3,394,075)
Net current assets
5,141,287
8,743,557
Total assets less current liabilities
5,179,510
8,798,610
Creditors: amounts falling due after more than one year
16
-
0
(2,939)
Provisions for liabilities
Deferred tax liability
18
7,262
10,460
(7,262)
(10,460)
Net assets
5,172,248
8,785,211
Capital and reserves
Called up share capital
20
8
8
Profit and loss reserves
5,172,240
8,785,203
Total equity
5,172,248
8,785,211
The financial statements were approved by the board of directors and authorised for issue on 24 March 2022 and are signed on its behalf by:
Mr D M Ralph
Director
Company Registration No. 06557112
XPEL MARKETING LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 11 -
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
25
2,566,453
4,030,613
Interest paid
-
0
(61)
Income taxes paid
(487,378)
(673,053)
Net cash inflow from operating activities
2,079,075
3,357,499
Investing activities
Purchase of tangible fixed assets
(6,599)
-
0
Proceeds on disposal of tangible fixed assets
5,900
-
0
Other investments and loans made
-
0
(44,750)
Proceeds from other investments and loans
424,750
-
0
Interest received
214
3,209
Net cash generated from/(used in) investing activities
424,265
(41,541)
Financing activities
Purchase of own shares
-
0
(74,851)
Payment of finance leases obligations
(7,193)
(4,795)
Dividends paid
(6,200,000)
(93,000)
Net cash used in financing activities
(6,207,193)
(172,646)
Net (decrease)/increase in cash and cash equivalents
(3,703,853)
3,143,312
Cash and cash equivalents at beginning of Year
7,323,603
4,180,291
Cash and cash equivalents at end of Year
3,619,750
7,323,603
XPEL MARKETING LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 12 -
1
Accounting policies
Company information

Xpel Marketing Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Unit 7, Towngate Business Park, Everite Road, Widnes, Cheshire, WA8 8PT.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources. Financial projections that consider the current and future impact of COVID-19 indicate that the company will continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Reporting period

The financial statements cover the year to 31 December 2021.

 

The comparative amounts cover the eight month period 1 May 2020 to 31 December 2020.

1.4
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rental income from operating leases (net of any incentive given) is recognised on a straight-line basis over the lease term.

1.5
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

XPEL MARKETING LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 13 -

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Leasehold improvements
10% straight line
Fixtures and fittings
3 years straight line
Motor vehicles
25% straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.6
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.7
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.8
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

XPEL MARKETING LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 14 -
1.9
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

XPEL MARKETING LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 15 -
Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.10
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.11
Derivatives

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

 

A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.

1.12
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

XPEL MARKETING LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 16 -
Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

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 income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.13
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.14
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.15
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

XPEL MARKETING LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 17 -

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

1.16
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

1.17
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the 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.

3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2021
2020
£
£
Turnover analysed by class of business
Household cleaning products
19,753,722
17,398,965
2021
2020
£
£
Turnover analysed by geographical market
UK
16,552,165
13,834,177
EC
872,725
1,317,412
Other Export
2,328,832
2,247,376
19,753,722
17,398,965
XPEL MARKETING LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
3
Turnover and other revenue
(Continued)
- 18 -
2021
2020
£
£
Other significant revenue
Interest income
214
3,209
Grants received
-
0
4,083
4
Operating profit
2021
2020
Operating profit for the period is stated after charging/(crediting):
£
£
Government grants
-
0
(4,083)
Depreciation of owned tangible fixed assets
11,373
9,701
Depreciation of tangible fixed assets held under finance leases
6,125
4,083
Loss on disposal of tangible fixed assets
31
-
0
Operating lease charges
207,602
114,670
5
Auditor's remuneration
2021
2020
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
12,000
9,250
For other services
Other assurance services
-
0
2,750
Taxation compliance services
250
250
Other taxation services
-
0
400
All other non-audit services
2,827
12,423
3,077
15,823
6
Employees

The average monthly number of persons (including directors) employed by the company during the Year was:

2021
2020
Number
Number
Management and office
8
12
Production and sales
13
13
Total
21
25
XPEL MARKETING LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
6
Employees
(Continued)
- 19 -

Their aggregate remuneration comprised:

2021
2020
£
£
Wages and salaries
745,325
558,883
Social security costs
79,702
60,980
Pension costs
18,351
12,428
843,378
632,291
7
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
2,928
11,712
8
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
214
3,209

Investment income includes the following:

Interest on financial assets not measured at fair value through profit or loss
214
3,209
9
Interest payable and similar expenses
2021
2020
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
-
0
61
10
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
72,428
734,944
Deferred tax
Origination and reversal of timing differences
(3,198)
(2,620)
Total tax charge
69,230
732,324
XPEL MARKETING LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
10
Taxation
(Continued)
- 20 -

The actual charge for the Year can be reconciled to the expected charge for the Year based on the profit or loss and the standard rate of tax as follows:

2021
2020
£
£
Profit before taxation
2,656,267
3,829,290
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
504,691
727,565
Tax effect of expenses that are not deductible in determining taxable profit
502
4,759
Group relief
(435,962)
-
0
Permanent capital allowances in excess of depreciation
3,197
2,619
Accelerated capital allowances
(3,198)
(2,619)
Taxation charge for the period
69,230
732,324
11
Dividends
2021
2020
£
£
Interim paid
6,200,000
93,000
XPEL MARKETING LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 21 -
12
Tangible fixed assets
Leasehold improvements
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2021
75,281
54,497
24,500
154,278
Additions
-
0
6,599
-
0
6,599
Disposals
-
0
(13,345)
-
0
(13,345)
At 31 December 2021
75,281
47,751
24,500
147,532
Depreciation and impairment
At 1 January 2021
42,488
46,529
10,208
99,225
Depreciation charged in the Year
7,528
3,845
6,125
17,498
Eliminated in respect of disposals
-
0
(7,414)
-
0
(7,414)
At 31 December 2021
50,016
42,960
16,333
109,309
Carrying amount
At 31 December 2021
25,265
4,791
8,167
38,223
At 31 December 2020
32,793
7,968
14,292
55,053

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2021
2020
£
£
Motor vehicles
8,167
14,292
13
Stocks
2021
2020
£
£
Finished goods and goods for resale
3,243,264
1,344,855
14
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
1,473,950
2,766,740
Other debtors
63,285
653,617
Prepayments and accrued income
198,814
48,817
1,736,049
3,469,174
XPEL MARKETING LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 22 -
15
Creditors: amounts falling due within one year
2021
2020
Notes
£
£
Obligations under finance leases
17
2,299
6,553
Trade creditors
2,740,720
2,170,231
Corporation tax
70,003
484,953
Other taxation and social security
279,400
305,219
Other creditors
4,168
3,540
Accruals and deferred income
361,186
423,579
3,457,776
3,394,075

Finance leases are secured against the asset financed.

16
Creditors: amounts falling due after more than one year
2021
2020
Notes
£
£
Obligations under finance leases
17
-
0
2,939

Finance leases are secured against the asset financed.

17
Finance lease obligations
2021
2020
Future minimum lease payments due under finance leases:
£
£
Within one year
4,795
7,193
In two to five years
-
0
4,795
4,795
11,988
Less: future finance charges
(2,496)
(2,496)
2,299
9,492

Finance lease payments represent rentals payable by the company for certain motor vehicles. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

XPEL MARKETING LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 23 -
18
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2021
2020
Balances:
£
£
Accelerated capital allowances
7,262
10,460
2021
Movements in the Year:
£
Liability at 1 January 2021
10,460
Credit to profit or loss
(3,198)
Liability at 31 December 2021
7,262

 

19
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
18,351
12,428

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

20
Share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of 1p each
800
400
8
4
A Ordinary of 1p each
-
200
-
2
B Ordinary of 1p each
-
200
-
2
800
800
8
8

In the year the A Ordinary and B Ordinary shares were converted to Ordinary shares.

 

In the prior period 24 C Ordinary shares with an aggregate nominal value of 24p were purchased by the company. The shares were acquired for a consideration of £74,851, at a price of £3,118.80 per share.

XPEL MARKETING LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 24 -
21
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2021
2020
£
£
Within one year
148,500
147,437
Between two and five years
61,875
210,375
210,375
357,812
22
Related party transactions
Transactions with related parties

During the Year the company entered into the following transactions with related parties:

Sales
Purchases
2021
2020
2021
2020
£
£
£
£
Other related parties
-
0
533,603
22,692
3,035,240
Dividends
2021
2020
£
£
Entities with control, joint control or significant influence over the company
6,200,000
-
Close family member of key management personnel
-
46,500

The following amounts were outstanding at the reporting end date:

2021
2020
Amounts due to related parties
£
£
Other related parties
9,214
190,117

The balance of £9,214 (2020: £190,117) is included within trade creditors within the accounts.

The following amounts were outstanding at the reporting end date:

2021
2020
Amounts due from related parties
£
£
Other related parties
-
445,200

The comparative balance of £445,200 was included within trade debtors within the accounts.

XPEL MARKETING LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
22
Related party transactions
(Continued)
- 25 -
Other information

Sales of goods and purchase of goods to related parties were made at normal commercial rates.

 

The amounts outstanding that have arisen from the above transactions are unsecured and will be settled in cash under normal trading terms.

23
Directors' transactions

At the balance sheet date, the company was owed £nil (2020: £424,750) by the directors and their wives. No interest was charged on the loans and the loans were repaid within 9 months of the period end.

Dividends totalling £0 (2020 - £46,500) were paid in the Year in respect of shares held by the company's directors.

24
Ultimate controlling party

The immediate parent company is Solent Global Holdings Limited, by virtue of its majority shareholding. The registered office of this company is 7 Lynwood Court, Priestlands Place, Lymington, Hampshire, SO41 9GA.

The ultimate controlling company is Humble Group Ab (Publ), incorporated in Sweden, registration number 556794-4797. The correspondence address of this company is Klara Norra Kyrkogata 29, Se-11122, Stockholm, Sweden.

25
Cash generated from operations
2021
2020
£
£
Profit for the Year after tax
2,587,037
3,096,966
Adjustments for:
Taxation charged
69,230
732,324
Finance costs
-
0
61
Investment income
(214)
(3,209)
Loss on disposal of tangible fixed assets
31
-
0
Depreciation and impairment of tangible fixed assets
17,498
13,784
Movements in working capital:
(Increase)/decrease in stocks
(1,898,409)
1,010,145
Decrease/(increase) in debtors
1,308,375
(516,174)
Increase/(decrease) in creditors
482,905
(303,284)
Cash generated from operations
2,566,453
4,030,613
XPEL MARKETING LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 26 -
26
Analysis of changes in net funds
1 January 2021
Cash flows
31 December 2021
£
£
£
Cash at bank and in hand
7,323,603
(3,703,853)
3,619,750
Obligations under finance leases
(9,492)
7,193
(2,299)
7,314,111
(3,696,660)
3,617,451
2021-12-312021-01-01falseCCH SoftwareCCH Accounts Production 2022.100Mr J McKeownMr J McKeownMr S A RobertsMr R M Porter065571122021-01-012021-12-3106557112bus:Director42021-01-012021-12-3106557112bus:Director52021-01-012021-12-3106557112bus:Director22021-01-012021-12-3106557112bus:Director32021-01-012021-12-3106557112bus:Director12021-01-012021-12-3106557112bus:RegisteredOffice2021-01-012021-12-31065571122021-12-31065571122020-05-012020-12-3106557112core:RetainedEarningsAccumulatedLosses2020-05-012020-12-3106557112core:RetainedEarningsAccumulatedLosses2021-01-012021-12-3106557112core:ShareCapital2020-04-3006557112core:RetainedEarningsAccumulatedLosses2020-04-30065571122020-04-3006557112core:ShareCapital2020-12-3106557112core:RetainedEarningsAccumulatedLosses2020-12-31065571122020-12-3106557112core:ShareCapital2021-12-3106557112core:RetainedEarningsAccumulatedLosses2021-12-3106557112core:ShareCapitalOrdinaryShares2021-12-3106557112core:ShareCapitalOrdinaryShares2020-12-3106557112core:ShareCapital2021-01-012021-12-3106557112core:LeaseholdImprovements2021-12-3106557112core:FurnitureFittings2021-12-3106557112core:MotorVehicles2021-12-3106557112core:LeaseholdImprovements2020-12-3106557112core:FurnitureFittings2020-12-3106557112core:MotorVehicles2020-12-3106557112core:CurrentFinancialInstrumentscore:WithinOneYear2021-12-3106557112core:CurrentFinancialInstrumentscore:WithinOneYear2020-12-3106557112core:Non-currentFinancialInstrumentscore:AfterOneYear2021-12-3106557112core:Non-currentFinancialInstrumentscore:AfterOneYear2020-12-3106557112core:CurrentFinancialInstruments2021-12-3106557112core:CurrentFinancialInstruments2020-12-310655711212021-01-012021-12-310655711212020-05-012020-12-31065571122020-12-3106557112core:LeaseholdImprovements2021-01-012021-12-3106557112core:FurnitureFittings2021-01-012021-12-3106557112core:MotorVehicles2021-01-012021-12-3106557112core:UKTax2021-01-012021-12-3106557112core:UKTax2020-05-012020-12-3106557112core:LeaseholdImprovements2020-12-3106557112core:FurnitureFittings2020-12-3106557112core:MotorVehicles2020-12-3106557112core:Non-currentFinancialInstruments2021-12-3106557112core:Non-currentFinancialInstruments2020-12-3106557112core:WithinOneYear2021-12-3106557112core:WithinOneYear2020-12-3106557112core:BetweenTwoFiveYears2021-12-3106557112core:BetweenTwoFiveYears2020-12-3106557112core:OtherRelatedPartiescore:SaleOrPurchaseGoods2021-01-012021-12-3106557112core:OtherRelatedPartiescore:SaleOrPurchaseGoods2020-05-012020-12-3106557112bus:PrivateLimitedCompanyLtd2021-01-012021-12-3106557112bus:FRS1022021-01-012021-12-3106557112bus:Audited2021-01-012021-12-3106557112bus:FullAccounts2021-01-012021-12-31xbrli:purexbrli:sharesiso4217:GBP