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Registered number: 06246101











PACKAGING ENVIRONMENTAL LIMITED

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 APRIL 2023
















TWP ACCOUNTING LLP
Chartered Accountants & Statutory Auditors
The Old Rectory
Church Street
Weybridge
Surrey
KT13 8DE

 
PACKAGING ENVIRONMENTAL LIMITED
 

COMPANY INFORMATION


Directors
I Shah 
Y Shah 
Wispville Limited 




Registered number
06246101



Registered office
1 Launceston Gardens
Perivale

Greenford

Greater London

UB6 7EY




Independent auditor
TWP Accounting LLP
Chartered Accountants & Statutory Auditors

The Old Rectory

Church Street

Weybridge

Surrey

KT13 8DE





 
PACKAGING ENVIRONMENTAL LIMITED
 

CONTENTS



Page
Strategic Report
1 - 2
Directors' Report
3 - 4
Independent Auditor's Report
5 - 8
Statement of Comprehensive Income
9
Balance Sheet
10
Statement of Changes in Equity
11
Statement of Cash Flows
12
Analysis of Net Debt
13
Notes to the Financial Statements
14 - 27


 
PACKAGING ENVIRONMENTAL LIMITED
 

STRATEGIC REPORT
FOR THE YEAR ENDED 30 APRIL 2023

The directors present their strategic report for the year ended 30th April 2023.

Introduction
 
The Directors consider that they have, in good faith, acted in a way that they believe is most likely to promote the success of the company for the benefit of its shareholders and other stakeholders. Their actions take the interests of key stakeholders into account and their decisions are made with regard to the company’s long-term performance and reputation.
Principal activities
The Company is engaged in the sale of high-quality catering disposables, with a focus on supplying products made from environmentally friendly materials.

Business review
 
In Year Ending April 2023, the company’s revenues were £15.1m, representing a 3% growth from the prior year. Sales volume has remained fairly consistent and revenue levels have been maintained across all its separate revenue streams. Prior year profits (£312k) results were impacted by the supply chain crisis and high container charges, much of which the company absorbed. Its profits this year (£1,579k) show the benefits of reduced container pricing from the Far East.
The demand for disposable food packaging remains strong, especially following the pandemic. The company is also ahead of the curve in its sourcing of food packaging made from environmentally friendly materials to meet with current and expected legislation, as well as the consequent demand from its customers.
We expect to maintain our current revenue for the foreseeable future, and we also expect our profits to normalise over the following year.

Principal risks and uncertainties
 
The company’s main risks are linked to the fortunes of the hospitality industry, which faces challenges such as the cost of energy, the impact of the cost of living on discretionary spending, and dealing with the hybrid working environment.
The company’s customers are on the whole pivoting their offering well to overcome these difficulties, and as such demand for our products remains high.
Exchange rate volatility presents another risk as the majority of goods purchases are not in GBP. This is not a new risk – the company remains vigilant and is experienced in managing and reacting to changes in exchange rate.

Development and performance
 
The company continues to develop its customer base, building on its reputation within existing revenue streams, particularly among high profile businesses within urban centres.
The company is also continually engaged in streamlining and automating its operations to enable it to scale its business and keep overheads low.

Page 1

 
PACKAGING ENVIRONMENTAL LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023

Financial key performance indicators
 
The company has established KPI’s across all strategic areas of the business and operations. The Directors review and measure the company’s performance against these KPI’s regularly to help them make balanced decisions to ensure the long-term success of the Company.


This report was approved by the board on 17 November 2023 and signed on its behalf.







Y Shah
Director

Page 2

 
PACKAGING ENVIRONMENTAL LIMITED
 

 
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 APRIL 2023

The directors present their report and the financial statements for the year ended 30 April 2023.

Principal activity

Packaging Environmental Limited is a private company limited by shares. The principle activity of the Company is to trade in sustainable and eco-friendly food and drinks packaging with a focus on products made from renewable materials.

Results and dividends

The profit for the year, after taxation, amounted to £1,578,892 (2022 - £312,127).

No dividends were paid during the year and the directors do not recommend the payment of dividend for the financial year ended 30 April 2023 (2022: £nil).

Directors

The directors who served during the year were:

I Shah 
Y Shah 
Wispville Limited 

Directors' responsibilities statement

The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
 
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Company's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Page 3

 
PACKAGING ENVIRONMENTAL LIMITED
 

 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023

Principal risks and uncertainties

The management of the business and the execution of the Company’s strategy are subject to a number of risks
.
Financial risk
In the ordinary course of business, the Company is exposed to a variety of financial risks that include credit risk and liquidity risk.
Operational risk
Operational risk is the risk of direct or indirect losses resulting from inadequate or failed internal processes or systems, human factors or from external agents.
Business risk
Business risk is the risk of adverse outcomes resulting from a weak competitive position or from poor choice of strategy, markets, products, activities or structures.
The Company is committed to the advanced management of financial, operational and business risks.

Future developments

The directors will continue to focus on developing the Company's principal activity, that of the sale of products related to sustainable and eco-friendly food and drinks packaging with a focus on products made from renewable materials.

Disclosure of information to auditor

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Auditor

The auditor, TWP Accounting LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 17 November 2023 and signed on its behalf.
 







Y Shah
Director

Page 4

 
PACKAGING ENVIRONMENTAL LIMITED
 

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PACKAGING ENVIRONMENTAL LIMITED
 

Qualified opinion


We have audited the financial statements of Packaging Environmental Limited (the 'Company') for the year ended 30 April 2023, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe 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, except for the possible effects of the matter described in the basis for qualified opinion section of our report, the financial statements:


give a true and fair view of the state of the Company's affairs as at 30 April 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for qualified opinion


We were not appointed as auditor of the company until after 30 April 2022 and thus did not observe the counting of physical inventories at the start of the period. We were unable to satisfy ourselves by alternative means concerning the inventory quantities held at 30 April 2022, which are included in the balance sheet at £2,868,728, by using other audit procedures. Consequently we were unable to determine whether any adjustment to this amount was necessary.


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 United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified 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.


Page 5

 
PACKAGING ENVIRONMENTAL LIMITED
 

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PACKAGING ENVIRONMENTAL LIMITED (CONTINUED)


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.
As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning the inventory quantities of £2,868,728 held at 30 April 2022. We have concluded that where the other information refers to the inventory balance or related balances such as cost of sales, it may be materially misstated for the same reason.


Opinion on other matters prescribed by the Companies Act 2006
 

Except for the matter described in the basis for qualified opinion on other matters prescribed by the Companies Act 2006 section of our report, in our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic Report of the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements.
Basis for qualified opinion on other matters prescribed by the Companies Act 2006
Except for the possible effects of the matter described in the basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of the audit:


- the information given in the directors' report for the financial statements; and
- the directors' report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

Except for the matter described in the basis for qualified opinion on other matters prescribed by the Companies Act 2006 section of our report, 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 Directors' Report.
Arising solely from the limitation on the scope of our work relating to the opening inventory position, referred to above:
- we have not obtained all the information and explanations that we considered necessary for the purpose of our    audit; and
- we were unable to determine whether adequate accounting records have been kept.
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:
- 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.


Page 6

 
PACKAGING ENVIRONMENTAL LIMITED
 

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PACKAGING ENVIRONMENTAL LIMITED (CONTINUED)


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 3, 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:
Obtain an understanding of the policies and procedures management has in place to detect and prevent fraud and non-compliance with laws and regulations.
Enquire of management any cases of actual or suspected fraud and non-compliance with laws and regulations.
Enquire of management and those charged with governance around actual and potential litigation and claims.
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
Assess the key risk areas within the financial statements which are susceptible to fraud or error and design our audit approach thereon.
Perform substantive tests on a sample of transactions throughout the financial statements to ensure that no material errors have been identified.
Perform cut off tests on a sample of transactions to ensure income has been accounted for in the correct period.
Review of after year end information to ensure expenditure has been accounted for in the correct period.
Perform analytical review procedures to identify any irregularities and investigation thereon. 
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.


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 Auditor's Report.


Other matters 
 

The financial statements of the Company for the year ended 30 April 2022 were not audited. The comparatives  presented as part of these financial statements of the Company have not been audited as a result.


Page 7

 
PACKAGING ENVIRONMENTAL LIMITED
 

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PACKAGING ENVIRONMENTAL LIMITED (CONTINUED)


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 2006Our 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.





Philip Munk  FCA FCCA (Senior Statutory Auditor)
  
for and on behalf of
TWP Accounting LLP
 
Chartered Accountants & Statutory Auditors
  
The Old Rectory
Church Street
Weybridge
Surrey
KT13 8DE

17 November 2023
Page 8

 
PACKAGING ENVIRONMENTAL LIMITED
 

STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 APRIL 2023

2023
2022
Note
£
£

  

Turnover
 4 
15,061,327
14,585,982

Cost of sales
  
(11,361,631)
(13,095,209)

Gross profit
  
3,699,696
1,490,773

Administrative expenses
  
(1,586,957)
(1,074,269)

Derivative loss
  
(66,112)
-

Operating profit
 5 
2,046,627
416,504

Disposal of investments
  
(1)
-

Interest payable and similar expenses
 9 
(56,820)
(36,105)

Profit before tax
  
1,989,806
380,399

Tax on profit
 10 
(410,914)
(68,272)

Profit for the financial year
  
1,578,892
312,127

There was no other comprehensive income for 2023 (2022:£NIL).

The notes on pages 14 to 27 form part of these financial statements.

Page 9

 
PACKAGING ENVIRONMENTAL LIMITED
REGISTERED NUMBER: 06246101

BALANCE SHEET
AS AT 30 APRIL 2023

2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 11 
64,734
58,244

Tangible assets
 12 
62,581
62,346

Investments
 13 
-
1

  
127,315
120,591

Current assets
  

Stocks
 14 
2,648,637
2,868,728

Debtors: amounts falling due within one year
 15 
2,571,838
2,069,934

Cash at bank and in hand
 16 
1,103,457
588,325

  
6,323,932
5,526,987

Creditors: amounts falling due within one year
 17 
(1,932,392)
(2,670,286)

Net current assets
  
 
 
4,391,540
 
 
2,856,701

Total assets less current liabilities
  
4,518,855
2,977,292

Creditors: amounts falling due after more than one year
 18 
(104,167)
(154,167)

Provisions for liabilities
  

Deferred tax
 20 
(39,715)
(27,044)

  
 
 
(39,715)
 
 
(27,044)

Net assets
  
4,374,973
2,796,081


Capital and reserves
  

Called up share capital 
 21 
1,344
1,344

Share premium account
 22 
71,328
71,328

Profit and loss account
 22 
4,302,301
2,723,409

  
4,374,973
2,796,081


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 17 November 2023.






Y Shah
Director

The notes on pages 14 to 27 form part of these financial statements.

Page 10

 
PACKAGING ENVIRONMENTAL LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2023


Called up share capital
Share premium account
Profit and loss account
Total equity

£
£
£
£


At 1 May 2021
1,344
71,328
2,411,282
2,483,954



Profit for the year
-
-
312,127
312,127



At 1 May 2022
1,344
71,328
2,723,409
2,796,081



Profit for the year
-
-
1,578,892
1,578,892


At 30 April 2023
1,344
71,328
4,302,301
4,374,973


The notes on pages 14 to 27 form part of these financial statements.

Page 11

 
PACKAGING ENVIRONMENTAL LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 APRIL 2023

2023
2022
£
£

Cash flows from operating activities

Profit for the financial year
1,578,892
312,127

Adjustments for:

Depreciation of tangible assets
17,325
19,576

Loss on disposal of tangible assets
10,307
19,608

Interest paid
56,820
36,105

Taxation charge
410,914
68,272

Decrease/(increase) in stocks
220,091
(1,269,815)

(Increase) in debtors
(501,904)
(401,577)

(Decrease)/increase in creditors
(1,268,202)
1,612,032

Corporation tax receivable/(payable)
132,065
(197,269)

Net cash generated from operating activities

656,308
199,059


Cash flows from investing activities

Purchase of intangible fixed assets
(6,490)
(58,244)

Purchase of tangible fixed assets
(27,866)
(24,882)

Sale of tangible fixed assets
(1)
-

Sale of fixed asset investments
1
-

Net cash from investing activities

(34,356)
(83,126)

Cash flows from financing activities

Repayment of loans
(50,000)
(45,833)

Interest paid
(56,820)
(36,105)

Net cash used in financing activities
(106,820)
(81,938)

Net increase in cash and cash equivalents
515,132
33,995

Cash and cash equivalents at beginning of year
588,325
554,330

Cash and cash equivalents at the end of year
1,103,457
588,325


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
1,103,457
588,325

1,103,457
588,325


The notes on pages 14 to 27 form part of these financial statements.

Page 12

 
PACKAGING ENVIRONMENTAL LIMITED
 

ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 30 APRIL 2023




At 1 May 2022
Cash flows
At 30 April 2023
£

£

£

Cash at bank and in hand

588,325

515,132

1,103,457

Debt due after 1 year

(154,167)

50,000

(104,167)

Debt due within 1 year

(50,000)

-

(50,000)


384,158
565,132
949,290

The notes on pages 14 to 27 form part of these financial statements.

Page 13

 
PACKAGING ENVIRONMENTAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

1.


General information

Packaging Environmental Limited is a private company limited by shares incorporated in England and Wales. The registered office is 1 Launceston Gardens, Perivale, Greenford, England, UB6 7EY.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The 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 preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:

 
2.2

Turnover

Turnover comprises revenue recognised by the company in respect of environmentally friendly packaging and catering disposable goods supplied during the year, exclusive of Value Added Tax and trade discounts.
Turnover is recognised in the period in which the goods are dispatched.

 
2.3

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

Intangible assets relating to website costs are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
The website is considered to have a finite useful life and amortisation is recognised over a 5 year straight line basis, to write off the cost of the website over its useful life.

 
2.4

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Page 14

 
PACKAGING ENVIRONMENTAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

2.Accounting policies (continued)


2.4
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Plant and machinery
-
Over 10 years
Office equipment
-
Over 3 and 5 years

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.5

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.6

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.7

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.8

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

 
2.9

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Page 15

 
PACKAGING ENVIRONMENTAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

2.Accounting policies (continued)

 
2.10

Provisions for liabilities

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance Sheet.

 
2.11

Financial instruments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.

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 income as appropriate. The company does not currently apply hedge accounting for interest rate and foreign exchange derivatives.

Page 16

 
PACKAGING ENVIRONMENTAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

2.Accounting policies (continued)

 
2.12

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

 
2.13

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.14

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.15

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.

Page 17

 
PACKAGING ENVIRONMENTAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

2.Accounting policies (continued)

 
2.16

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Page 18

 
PACKAGING ENVIRONMENTAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

In  the  application  of  the  company's  accounting  policies,  the directors  are required  to make judgments, 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 assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.
Critical judgments
Accounting for finance costs
Finance costs are accounted for at amortised cost using effective interest rates. Given the nature of the financing agreements in place the estimation of an effective interest rate requires judgments to be made in  respect  of  estimating   future  repayment   profiles   and  allocation   of  associated   transaction   costs. Judgments  have been made based on the future expected project programme and repayment  of funds under the facilities as at the reporting date.
                                                                                                                      ·
Accounting for financial instruments
Derivative financial instruments are recorded in the Company's balance sheet at fair value. The assessment of fair value depends on assuming a market price for the instrument  in question.   The Company  uses its assessment  of forward curves, largely from readily attainable quotations,  and third party sources.  Where such instruments extend beyond the liquid portion of the forward curve the level of judgemental increases.
Useful lives of assets
The expected useful life of production assets is determined based on historical experience and expectations concerning the future use of these assets. The expected future applications may subsequently prove not to be realisable, which may require useful lives to be reassessed.
 


4.


Turnover

The whole of the turnover is attributable to the sale of sustainable and eco-friendly packaging.

Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
14,883,174
14,138,161

Rest of Europe
178,153
447,821

15,061,327
14,585,982


Page 19

 
PACKAGING ENVIRONMENTAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

5.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Exchange differences
(141,253)
(27,129)

Other operating lease rentals
114,376
65,247


6.


Auditor's remuneration

During the year, the Company obtained the following services from the Company's auditor:


2023
2022
£
£

Auditor's remuneration

12,500
-

7.


Employees

Staff costs, including directors' remuneration, were as follows:


2023
2022
£
£

Wages and salaries
759,219
543,826

Social security costs
71,433
48,465

Cost of defined contribution scheme
23,448
15,063

854,100
607,354


The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Operations team
16
14

Page 20

 
PACKAGING ENVIRONMENTAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

8.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
214,634
184,930

Company contributions to defined contribution pension schemes
7,168
7,518

221,802
192,448


During the year retirement benefits were accruing to 2 directors (2022 - 2) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £156,169 (2022 - £121,671).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £4,126 (2022 - £4,235).


9.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
56,630
35,539

Other loan interest payable
190
566

56,820
36,105


10.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
398,243
55,449


398,243
55,449


Total current tax
398,243
55,449

Deferred tax


Origination and reversal of timing differences
12,671
12,823

Total deferred tax
12,671
12,823


Tax on profit
410,914
68,272
Page 21

 
PACKAGING ENVIRONMENTAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023
 
10.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is lower than (2022 - lower than) the standard rate of corporation tax in the UK of 25% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
1,989,806
380,399


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2022 - 19%)
497,452
72,276

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
20,003
4,346

Capital allowances for year in excess of depreciation
(6,617)
(16,833)

Increase or decrease in pension fund prepayment leading to an increase (decrease) in tax
(91)
42

Short-term timing difference leading to an increase (decrease) in taxation
12,671
12,823

Adjustment in research and development tax credit leading to an increase (decrease) in the tax charge
-
(4,382)

Other differences leading to an increase (decrease) in the tax charge
(112,504)
-

Total tax charge for the year
410,914
68,272


11.


Intangible assets




Website

£



Cost


At 1 May 2022
58,244


Additions
6,490



At 30 April 2023

64,734






Net book value



At 30 April 2023
64,734



At 30 April 2022
58,244



Page 22

 
PACKAGING ENVIRONMENTAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

12.


Tangible fixed assets





Plant and machinery
Office equipment
Total

£
£
£



Cost or valuation


At 1 May 2022
43,524
76,689
120,213


Additions
22,747
5,119
27,866


Disposals
(11,715)
(20,287)
(32,002)



At 30 April 2023

54,556
61,521
116,077



Depreciation


At 1 May 2022
15,120
42,747
57,867


Charge for the year on owned assets
4,130
13,195
17,325


Disposals
(4,906)
(16,790)
(21,696)



At 30 April 2023

14,344
39,152
53,496



Net book value



At 30 April 2023
40,212
22,369
62,581



At 30 April 2022
28,404
33,942
62,346


13.


Fixed asset investments





Investments in subsidiary companies

£





At 1 May 2022
1


Disposals
(1)



At 30 April 2023
-




Page 23

 
PACKAGING ENVIRONMENTAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

14.


Stocks

2023
2022
£
£

Finished goods
2,648,637
2,868,728

2,648,637
2,868,728



15.


Debtors

2023
2022
£
£


Trade debtors
2,204,122
1,636,622

Other debtors
367,716
433,312

2,571,838
2,069,934



16.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
1,103,457
588,325

1,103,457
588,325


Included within cash at bank and in hand is an invoice factoring balance of £121,034 (2022 - £nil) that is  secured by a fixed and floating charge over all the assets of the company.


17.


Creditors: Amounts falling due within one year

2023
2022
£
£

Bank loans
50,000
50,000

Trade creditors
764,462
1,513,535

Taxation and social security
618,567
88,259

Other creditors
433,251
1,018,492

Derivative
66,112
-

1,932,392
2,670,286


Included within creditors falling due within one year are bank borrowings of £50,000 (2022 - £50,000) that are secured by a fixed and floating charge over all the assets of the company.
Included within other creditors an invoice factoring balance of £nil (2022 - £615,520) that is secured by a fixed and floating charge over all the assets of the company.

Page 24

 
PACKAGING ENVIRONMENTAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

18.


Creditors: Amounts falling due after more than one year

2023
2022
£
£

Bank loans
104,167
154,167

104,167
154,167


Included within creditors falling due more than one year are bank borrowings of £104,167 (2022 - £154,167) that are secured by a fixed and floating charge over all the assets of the company.


19.


Loans


Analysis of the maturity of loans is given below:


2023
2022
£
£

Amounts falling due within one year

Bank loans
50,000
50,000

Amounts falling due 1-2 years

Bank loans
104,167
154,167



154,167
204,167


Page 25

 
PACKAGING ENVIRONMENTAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

20.


Deferred taxation




2023


£






At beginning of year
(27,044)


Charged to profit or loss
(12,671)



At end of year
(39,715)

The provision for deferred taxation is made up as follows:

2023
2022
£
£


Accelerated capital allowances
(39,715)
(27,044)

(39,715)
(27,044)


21.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



672 (2022 - 672) Ordinary A shares shares of £1.00 each
672
672
672 (2022 - 672) Ordinary B shares shares of £1.00 each
672
672

1,344

1,344



22.


Reserves

Share premium account

The share premium reserve represents cumulative amounts paid in excess of the issued share capital
above par.

Profit and loss account

The profit and loss account represents cumulative profits and losses.


23.


Pension commitments

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £23,448 (2022: £15,063). Contributions totalling £1,138 (2022: £2,655) were payable to the fund at the reporting date and are included in creditors.

Page 26

 
PACKAGING ENVIRONMENTAL LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023

24.


Commitments under operating leases

At 30 April 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£


Not later than 1 year
66,717
57,250

Later than 1 year and not later than 5 years
63,516
115,000

130,233
172,250


25.Financial commitments

At 30 April 2023, the company was committed to £1,866,300 (2022: £1,521,635) in respect of forward currency contracts. Fair value measurement at the year end amounted to a derivative loss of £66,112 (2022: £71,310 Gain).


26.


Controlling party

The company is controlled commonly by its directors. There is no one controlling party.


Page 27