Registered number: 03844599
HG UKI LTD
Annual Report and Financial Statements
For the year ended 31 December 2022
|
Company Information
|
Diederik Van Dijk (appointed 2 July 2024)
|
|
HG International B.V. (appointed 2 July 2024)
|
|
|
|
|
|
|
|
|
|
|
|
Weston Business Centre Parsonage Road
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statutory Auditor & Chartered Accountants
|
|
|
|
168 Shoreditch High Street
|
|
|
|
|
|
|
|
|
|
Strategic Report
For the year ended 31 December 2022
The principal activity of the company is the marketing, sale and distribution of specialty cleaning products in the UK and Ireland.
HG UKI Ltd is a subsidiary of Brandblock Global BV.
The company operates in the highly competitive cleaning product market and has the mission to become the undisputed No. 1 in specialty cleaning products in the UK.
The company’s portfolio of specialty products covers all cleaning categories; Bathroom, Kitchen, Living room, Floors, Washroom & Textiles, Shed & Garage, and Garden & Outdoors and is distributed via the following channels:
Retail (including major supermarkets)
DIY
Household
Online/E-commerce
The unique position of being able to provide specialised products in any category provides a stable platform for the business to grow. The company continues to seek new product opportunities by innovation and or acquisition. During 2022 HG acquired Ecozone Ltd a recognised and accredited leading UK household eco brand as-well-as launching HG Eco and seeks growth in the Eco market.
Consumer trends are changing with more awareness of environmental impact of products in particular. With the acquisition of Ecozone and launch of HG Eco the company believes it is well placed to service the consumer needs.
Financial key performance indicators
|
The management of the company relies on a number of key performance indicators to monitor the health of the business. As indicated by the examples below, these expressed the strong performance of the company in such a competitive environment.
The integration of the group’s commercial operations in the UK in 2022 has resulted in the company offering a significant broader portfolio plus access to a pipeline of new products to be launched over the coming years. The addition of new innovative products and Eco products to the already established portfolio will lead to continued revenue growth in the years ahead, as the portfolio expansion will retain existing customers and attract new customers by ensuring HG can meet any consumers cleaning needs.
Page 1
|
Strategic Report (continued)
For the year ended 31 December 2022
There was no research and development activity during the year, with no costs being incurred (2021: £nil).
Principal risks and uncertainties
|
Competition and price pressure are the main commercial risks that the company faces, which are managed through strategic customer relationships, pricing strategies, a robust supply chain and cost control. The majority of the company’s portfolio is sourced from internal and external overseas suppliers and there is a risk that the value of sterling may decrease.
Financial risk management
All financial risk is borne by Brandblock Global BV in relation to borrowings. Within the UK, all cash requirements are sourced internally through intercompany borrowings as and when required.
Credit risk
All customers are subject to credit assessments upon acceptance and regular credit checks are performed to ensure risk is managed.
Interest rate and cash flow risk
The company has only interest-bearing liabilities. All borrowings are in the form of intercompany loans and are at a fixed rate of interest.
Litigation risk
Any failure to comply with applicable laws, rules and regulations may result in legal proceedings or regulatory sanctions. The company manages this risk through a strong ethical and compliance culture, training for all directors and employees, a Code of Conduct and global policies and standards applied across the group.
Employee policy
The company aims to consistently retain and recruit the best employees in the UK and the local market to provide good customer service and achieve objectives. This is achieved by offering competitive salary packages and benefits as well as having the goal of a healthy work/life balance for employees and family friendly policies. All employees are encouraged towards self-development and develop a level of autonomy in their own roles.
The company’s performance depends largely on its staff. The resignation of key individuals and the inability to recruit people with the right experience and skills from the local community could adversely impact the group results. To mitigate these issues, the company invests in development plans for all our staff and rewards performance appropriately.
This report was approved by the board on 18 July 2024 and signed on its behalf.
Diederik Van Dijk
Director
|
Page 2
|
Directors' Report
For the year ended 31 December 2022
The directors present their report and the financial statements for the year ended 31 December 2022.
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 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the year, after taxation, amounted to £1,547,418 (2021 - profit £352,217).
The directors who served during the year were:
Jeroen Mustert (resigned 3 August 2022)
|
Dirk Van Breen (resigned 31 May 2023)
|
Robert Uytdewillegen (appointed 1 September 2022, resigned 2 July 2024)
|
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.
The auditor, Kreston Reeves LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
Page 3
|
Directors' Report (continued)
For the year ended 31 December 2022
This report was approved by the board and signed on its behalf.
Diederik Van Dijk
Director
|
|
Page 4
|
Independent Auditor's Report to the Members of HG UKI LTD
We have audited the financial statements of HG UKI LTD (the 'company') for the year ended 31 December 2022, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
∙give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its loss 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.
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 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.
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.
Page 5
|
Independent Auditor's Report to the Members of HG UKI LTD (continued)
Opinion on other matters prescribed by the Companies Act 2006
|
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
|
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
∙adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
∙the financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of directors' remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
Responsibilities of directors
|
As explained more fully in the 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.
Page 6
|
Independent Auditor's Report to the Members of HG UKI LTD (continued)
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:
Capability of the audit in detecting irregularities, including fraud
The objectives of our audit are to identify and assess the risks of material misstatement of the financial statements due to fraud or error; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud or error; and to respond appropriately to those risks.
Based on our understanding of the company and industry, and through discussion with the directors and other
management (as required by auditing standards), we identified that the principal risks of non-compliance with
laws and regulations related to health and safety and employment law. We considered the extent to which noncompliance might have a material effect on the financial statements. We also considered those laws and
regulations that have a direct impact on the preparation of the financial statements such as the Companies Act
2006, UK GAAP and taxation legislation. We communicated identified laws and regulations throughout our team and examined alert to any indications of non-compliance throughout the audit. We evaluated management's
incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override
of controls), and determined that the principal risks were related to posting inappropriate journal entries to
increase revenue or reduce expenditure. Audit procedures performed by the engagement team included:
∙Discussions with management and assessment of known or suspected instances of non-compliance with laws and regulations (including health and safety) and fraud, and review of the reports made by management and internal audit; and
∙Performing analytical procedures to any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; and
∙Performing analytical procedures with automated data analytics tools to identify any unusual or unexpected relationships, including related party transactions, that may indicate risks of material misstatement due to fraud; and
∙Identifying and testing journal entries, in particular any manual entries made at the year end for financial statement preparation; and
∙Physical safeguarding controls for stock have been reviewed to ensure they are adequare for the business; and
∙Year end Trade debtors balances have been agreed to a mixture of third party confirmations and cash received.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.
Page 7
|
Independent Auditor's Report to the Members of HG UKI LTD (continued)
As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
∙Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
∙Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the company's internal control.
∙Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
∙Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditor's Report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditor's Report. However, future events or conditions may cause the company to cease to continue as a going concern.
∙Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an Auditor's Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Allan Pinner FCCA (Senior Statutory Auditor)
for and on behalf of
Kreston Reeves LLP
Statutory Auditor & Chartered Accountants
London
18 July 2024
Page 8
|
Statement of Comprehensive Income
For the year ended 31 December 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest payable and similar expenses
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/profit for the financial year
|
|
|
|
There was no other comprehensive income for 2022 (2021:£NIL).
|
The notes on pages 12 to 23 form part of these financial statements.
|
Page 9
|
|
|
|
HG UKI LTD
Registered number:03844599
|
Statement of Financial Position
As at 31 December 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debtors: amounts falling due within one year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Creditors: amounts falling due within one year
|
|
|
|
|
|
Net current (liabilities)/assets
|
|
|
|
|
|
Total assets less current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 12 to 23 form part of these financial statements.
Page 10
|
Statement of Changes in Equity
For the year ended 31 December 2022
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income for the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income for the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The notes on pages 12 to 23 form part of these financial statements.
|
Page 11
|
Notes to the Financial Statements
For the year ended 31 December 2022
HG UKI Ltd is a private company limited by shares incorporated in the United Kingdon under the Companies Act 2006 and registered in England. The company's registered address is Weston Business Centre Parsonage Road, Takeley, Bishop's Stortford, England, CM22 6PU.
2.Accounting policies
|
|
Basis of preparation of financial statements
|
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:
|
|
Exemption from preparing consolidated financial statements
|
The company is a parent company that is also a subsidiary included in the consolidated financial statements of a larger group by a parent undertaking established under the law of a state other than the United Kingdom and is therefore exempt from the requirement to prepare consolidated financial statements under section 401 of the Companies Act 2006.
The directors have, at the time of approving the financial statements, a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. During the year the Company made losses of £1,547,418 (2021: profits of £352,217). At the year end the Company had net current liabilities of £6,820,390 (2021: assets of £1,083,948) and net liabilities of £450,461 (2021: assets of £1,096,957). The Company has the support of its parent company. Due to this support, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
|
|
Financial Reporting Standard 102 - reduced disclosure exemptions
|
The Company has taken advantage of the following disclosure exemptions in preparing these
financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
- the requirements of Section 7 Statement of Cash Flows;
- the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
- the requirements of Section 33 Related Party Disclosures paragraphs 33.1A and 33.7.
This information is included in the consolidated financial statements of Brandblock Holding B.V. as at 31 December 2022. The group accounts are available from Brandblock Holding B.V., Damsluisweg 70, Almere, 1332 EJ, The Netherlands.
Page 12
|
Notes to the Financial Statements
For the year ended 31 December 2022
2.Accounting policies (continued)
|
|
Foreign currency translation
|
Functional and presentation currency
The company's functional and presentational currency is pound sterling.
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.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
∙the company has transferred the significant risks and rewards of ownership to the buyer;
∙the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙the amount of revenue can be measured reliably;
∙it is probable that the company will receive the consideration due under the transaction; and
∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
|
|
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.
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.
Page 13
|
Notes to the Financial Statements
For the year ended 31 December 2022
2.Accounting policies (continued)
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 Statement of Financial Position. The assets of the plan are held separately from the company in independently administered funds.
|
|
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 reporting 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 reporting 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 reporting date.
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Statement of Comprehensive Income over its useful economic life of 10 years.
Other 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.
Page 14
|
Notes to the Financial Statements
For the year ended 31 December 2022
2.Accounting policies (continued)
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.
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 bases:
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.
Investments in subsidiaries are measured at cost less accumulated impairment.
Stocks are stated at the lower of cost and net realisable value. Cost is based on the cost of purchase on a first in, first out basis.
At each reporting 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.
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.
|
|
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.
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
|
Notes to the Financial Statements
For the year ended 31 December 2022
2.Accounting policies (continued)
The company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities such as trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.
|
Judgments in applying accounting policies and key sources of estimation uncertainty
|
Management makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimate and assumption that has a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next year is addressed below:
Amortisation of Goodwill
The Company has recognised goodwill arising from business combinations with a carrying value of £4,500,914 (2021: £Nil) at the reporting date. On acquisition, the company determines a reliable estimate of useful life of the goodwill based upon factors such as the expected use of the acquired business and forecasts of expected future results and cashflows. A finite 10 year useful economic life has been chosen.
|
|
|
An analysis of turnover by class of business is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All turnover arose within the United Kingdom.
|
|
|
|
During the year, the company obtained the following services from the company's auditor:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit of the company's financial statements
|
|
|
|
Preparation of the company's financial statements
|
|
|
|
|
|
|
|
Foreign currency translation
|
The company recognised £278,019 of costs relating to exchange differences during the period.
Page 16
|
Notes to the Financial Statements
For the year ended 31 December 2022
|
|
|
Staff costs were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of defined contribution scheme
|
|
|
|
|
|
|
|
|
|
|
|
The average monthly number of employees, including directors, during the year was 18 (2021 - 16).
This average constituted the average number of employees within the following departments:
Commercial: 6
Field sales: 6
Finance: 2
Sales office: 4
|
|
There was no directors' remuneration in the year (2021: nil).
|
|
|
|
Interest payable and similar expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans from group undertakings
|
|
|
|
|
|
|
|
|
|
|
|
Origination and reversal of timing differences
|
|
|
|
|
|
|
|
|
|
|
|
Taxation on profit on ordinary activities
|
|
|
Page 17
|
Notes to the Financial Statements
For the year ended 31 December 2022
10.Taxation (continued)
|
Factors affecting tax charge for the year
|
|
The tax assessed for the year is higher than (2021 - higher than) the standard rate of corporation tax in the UK of 19% (2021 - 19%). The differences are explained below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/profit on ordinary activities before tax
|
|
|
|
(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
|
|
|
|
|
|
|
|
Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
|
|
|
|
Capital allowances for year in excess of depreciation
|
|
|
|
Utilisation of tax losses
|
|
|
|
Changes in provisions leading to an increase (decrease) in the tax charge
|
|
|
|
Unrelieved tax losses carried forward
|
|
|
|
Deferred tax charge for year
|
|
|
|
Total tax charge for the year
|
|
|
|
Factors that may affect future tax charges
|
Following the end of the accounting period, on 1 April 2023, Finance Bill 2021 was substantively enacted,
increasing the rate of corporation tax that will apply for financial year 2023 onwards to 25% (on taxable
profits above £250,000).
Page 18
|
Notes to the Financial Statements
For the year ended 31 December 2022
|
Business combinations and goodwill
|
On 5th January 2022 the company signed an agreement for the sale and purchase of 100% of the issued
share capital of Ecozone Limited. The total consideration was £6,718,184 comprising an initial cash payment to the seller of £6,651,729 and legal and professional fees of £66,455. At the completion of the acquisition, transaction cost of investment in subsidiary amounted to £6,718,184.
At the end of March 2022 the operations and net assets of Ecozone Limited were transferred to the company. This resulted in recognition of goodwill at the end year-end in the amount of £4,865,854, using acquisition method of accounting. The balance of fixed investment amounted to £1,852,330 which reflects interest of the company in Ecozone Limited's equity as at the date of acquisition.
The fair values of the assets and liabilities acquired are set out below
There were no differences between the fair value of the assets acquired and their book values at the date of acquisition. The goodwill arising on the acquisition is included in intangible fixed assets, and is deemed to have a useful economic life of 10 years.
Ecozone Limited's registered office is Weston Business Centre Parsonage Road, Takeley, Bishop's Stortford, England, CM22 6PU. Through acquisition of 100% of the Ordinary share capital of the company, HG UKI Limited and Brandblock Holding B.V. became the owner and ultimate controlling party respectively.
The Ecozone Limited's loss for the period ended 31 December 2021 amounted £443,676 and net asset position of £1,852,330.
Page 19
|
Notes to the Financial Statements
For the year ended 31 December 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charge for the year on owned assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The company's goodwill arises on the transfer to the company of the net assets of Ecozone Ltd on 31 Mach 2022. The goodwill represents excess of the consideration paid over the book value of the net assets transferred.
|
Page 20
|
Notes to the Financial Statements
For the year ended 31 December 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charge for the year on owned assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in subsidiary companies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On 5th January 2022, the company purchased the entire share capital of Ecozone Limited. The subsidiary undertaking is incorporated in the United Kingdom and has share capital consisting solely of ordinary equity shares. The subsidiary undertaking continued trading after acquisition until April 2022. The aggregate of the share capital and reserves as at 31 December 2022 was £1,948,927 and loss for the period then ended was £31,489.
|
Page 21
|
Notes to the Financial Statements
For the year ended 31 December 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepayments and accrued income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Creditors: Amounts falling due within one year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts owed to group undertakings
|
|
|
|
Other taxation and social security
|
|
|
|
Accruals and deferred income
|
|
|
|
|
|
|
|
|
|
|
|
|
Allotted, called up and fully paid
|
|
|
|
|
|
|
|
|
|
1,000 (2021 - 1,000) Ordinary shares of £1.00 each
|
|
|
|
This represents the nominal value of shares that have been issued by the company.
|
Profit and loss account
This reserve comprises all current and prior period retained profits and losses after deducting any distributions made to the company’s shareholders.
Page 22
|
Notes to the Financial Statements
For the year ended 31 December 2022
The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost paid during the year was £15,311 (2020: £10,004) and the contributions payable by the company to the fund at the balance sheet date amounted to £Nil (2020: £2,637).
|
Commitments under operating leases
|
|
At 31 December 2022 the company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Later than 1 year and not later than 5 years
|
|
|
|
|
|
|
The directors consider that the ultimate parent undertaking of this company is COPEBA S.A.
The largest and smallest group of undertakings for which group accounts have been drawn up is that headed by Brandblock Holding B.V incorporated in Netherlands.
The group accounts are available from Brandblock Holding B.V., Damsluisweg 70, Almere, 1332 EJ, The Netherlands.
Page 23
|