Registration number:
Pack34 Limited
for the Year Ended 31 December 2023
Pack34 Limited
Contents
Company Information |
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Strategic Report |
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Director's Report |
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Independent Auditor's Report |
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Consolidated Income Statement |
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Consolidated Statement of Comprehensive Income |
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Consolidated statement of Financial Position |
|
Statement of Financial Position |
|
Consolidated Statement of Changes in Equity |
|
Consolidated Statement of Cash Flows |
|
Notes to the Financial Statements |
Pack34 Limited
Company Information
Director |
Mr James Alexander Urquhart |
Registered office |
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Solicitors |
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Bankers |
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Auditors |
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Pack34 Limited
Strategic Report for the Year Ended 31 December 2023
The Director presents his strategic report for the year ended 31 December 2023.
Principal activity
The principal activity of the Group is the manufacture of high-grade flexible packaging materials.
Fair review of the business
The following strategic report provides an overview of the financial performance, key trends, and strategic recommendations for Pack34 Limited . This report aims to assist the group's management in making informed decisions to enhance profitability and sustainability in a highly competitive market.
Financial Performance Analysis
We have continued to grow the business year on year for the last four years with turnover at £11,316,214 in 2020, £13,016,736 in 2021, £15,649,937 in 2022 and now £16,230,190 in 2023. This was inline with our original forecast for 2023. The main reasons for this continued improvement were the ongoing drive with sustainability with a number of customers opting to change to more expensive materials in their drive towards net zero. We also continue to bring on new customers which were in the main, a result of the desire to onshore their products from mainly, the far east . It is good to see that there is a strong desire to continue to look at the benefits of security of supply and buying British. We will continue to promote that benefit alongside our innovative track record to try to maintain the same upward trend through 2024. Our customer and product base is quite diverse which has helped us to stay on an upward trend where one market may slow down another surges ahead. We will continue to look at other new markets and product ranges. Having the ability to offer more than one printing process works really well for us and is a strong selling point.
Cost Control
The key costs within the business have always been energy and raw materials. Both of these have been difficult to manage and control but through cost savings, improvements in efficiencies we have managed to, in the main, offset those costs. We do our utmost to keep these in balance and remain competitive against our peers. We are once againworking on cost reduction projects to remain competitive in 2024.
Profitability
We are happy to report that for the fifth year in succession we have continued to make incrementally improved profits. It is testament to the team within the business that with focus and determination we have managed to gradually increase our profits. This has been no small feat considering the volatility of external forces the company and in general the industry, has faced over the last few years.
Operating profit over the last 4 years has gradually improved from £308,621 in 2020, £561,687 in 2021, £882,924 in 2022 to £1,218,863 in 2023.
Our patents have not yet produced any sales, we believe mainly due to the lingering effects of covid, however we now see a real appetite for innovation from both potential and existing customers. The patents and innovations have however helped us generate sales of more standard products as customers want to work with companies that offer areal point of difference. This is an area where the business excels. There has been recent work on another project that we hope to patent in 2024 which will deliver sales late in the year and ongoing thereafter.
Pack34 Limited
Strategic Report for the Year Ended 31 December 2023
Defined Benefit Pension liability (also see note 20)
The defined benefit pension liability has reduced to £4,380,000. We have used the recommended discount rate in this current year for the calculation of the pension liability.
The company has a recovery plan of over 20 years and all repayments have been made as they fall due. The liability is a figure taken at a certain point in time taking into account discount and inflation rates and it changes day to day. We have agreed a recovery plan which aims to eliminate this shortfall by 30 April 2046.
The Company's PPF levy has been set at one of the highest bands for many years. However, due to the improving company financial performance, the levy band is now about a quarter of the fee it has been in historic years.
The financial performance of this company is such that at current profit levels, the underfund will comfortably be paid with excess funds available for business growth. The company also expects, taking the above information into account that the pension liability will decrease in the 2024 year, even though there are various factors which can affect this.
Pack34 Limited
Strategic Report for the Year Ended 31 December 2023
Principal risks and uncertainties
We expect 2024 to be a more challenging year than 2023. We still see concerns and volatility within the supply chain, the latest of those relating to the issues in the Red Sea. We do see continued opportunities to bring business back to the UK and real opportunities within sustainable packaging going forward as that comes to the forefront with many customers. We expect to launch some ground breaking products in 2024 relating to that and will activelypromote it. We have several trials at varying stages in completely new markets for us, which help expand our portfolio even further. We are always keen to accept a challenge and diversify further..
We aim to outperform the 2023 result by doing the following;
Cost Saving Projects with deliverable targets will help us to remain competitive.
Improve operational efficiency: Streamline production processes further, reduce waste, and optimise resource allocation to enhance productivity and reduce costs.
Enhance our product portfolio: Identify opportunities to expand the product range, incorporating sustainable and eco-friendly packaging options to meet changing customer demands.
Strengthen customer relationships: Foster long-term partnerships with key customers, providing tailored solutions, excellent customer service, and responsiveness to gain a competitive edge.
Continue to Invest in research and development: Allocate resources to research and development efforts, focusing on innovative packaging solutions and staying ahead of emerging industry trends.
Expand market presence: Explore new markets and target industries that show potential for growth, while diversifying the customer base to reduce dependency on a single segment.
Embrace sustainability: Develop and implement sustainable products to help our customers aspirations.
Impact of Brexit related risks
Brexit still remains a factor, with increases in costs and supply chain disruptions our biggest risk at present.
Future developments
Projects to develop sustainable packaging solutions for our customers is still a high priority and will be reinstated as soon as coronavirus is under control.
We continue to develop new and exciting products which we hope to see launch at some point in 2024. We continue to protect these through intellectual property and patent applications. R&D is absolutely key to this business. We aim to be the go to company for new packaging ideas.
Approved and authorised by the
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Pack34 Limited
Director's Report for the Year Ended 31 December 2023
The Director presents his report and the for the year ended 31 December 2023.
Director of the Group
The Director who held office during the year was as follows:
Disclosure of information to the auditor
The Director has taken steps that he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the Company's auditor is aware of that information. The Director confirms that there is no relevant information that he knows of and of which he knows the auditor is unaware.
Approved and authorised by the
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Pack34 Limited
Independent Auditor's Report to the Members of Pack34 Limited
Opinion
We have audited the financial statements of Pack34 Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023, which comprise the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated statement of Financial Position, Statement of Financial Position, Consolidated Statement of Changes in Equity, Consolidated Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
• | give a true and fair view of the state of the Group's and the parent Company's affairs as at 31 December 2023 and of the Group's profit for the year then ended; |
• | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
• | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor responsibilities for the audit of the financial statements section of our report. We are independent of the Group 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 Director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were authorised for issue.
Our responsibilities and the responsibilities of the Director with respect to going concern are described in the relevant sections of this report.
Other information
The Director is responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
Pack34 Limited
Independent Auditor's Report to the Members of Pack34 Limited
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 Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
• |
the Strategic Report and Director's Report have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception
In the light of our 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 Director's 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:
• | adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or |
• | the parent Company financial statements are not in agreement with the accounting records and returns; or |
• | certain disclosures of Director's remuneration specified by law are not made; or |
• | we have not received all the information and explanations we require for our audit. |
Responsibilities of the Director
As explained more fully in the [set out on page ], the Director is 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 Director determines 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 Director is 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 Director either intends to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Auditor 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.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Pack34 Limited
Independent Auditor's Report to the Members of Pack34 Limited
• Enquiry of management and those charged with governance around actual and potential litigation and claims.
• Enquiry of entity staff in compliance functions to identify any instances of non-compliance with laws and regulations.
• Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
• 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.
The specific laws and regulations that have a specific impact on this company and the accounting preparation of the
company accounts will include:
• The Companies Act 2006
• FRS 102
• UK Corporate tax laws, which includes the plastic packaging tax, which is a specific tax for this industry.
• GDPR laws
• Health and Safety law
• Environmental laws and the disposal of waste material (as the manufacturing process use various chemicals)
We have assessed the information in the audit and have not found any significant issues with non-compliance with
laws and regulations.
The main specific risks relating to audit of the financial statements are income and expense recognition, harder to
audit sections such as work in progress and finished goods and accuracy and measurement of deferred tax asset and
the defined pension deficit. Specific procedures to help verify the accuracy of these sections have been used in each
case as was needed. These risks have been highlighted and have been cleared
This business has little risk of errors and fraud even though management have the potential of including incorrect
journal entries. As a result of the size of the business we can increase % of testing journal entries to reduce risk of
irregularities to very low especially those near the year-end. No irregularities have been found in the audit of this
company.
A further description of our responsibilities is available on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Pack34 Limited
Independent Auditor's Report to the Members of Pack34 Limited
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For and on behalf of
29 Commercial Street
DD1 3DG
Pack34 Limited
Consolidated Income Statement for the Year Ended 31 December 2023
Note |
2023 |
2022 |
|
Turnover |
|
|
|
Cost of sales |
( |
( |
|
Gross profit |
|
|
|
Distribution costs |
( |
( |
|
Administrative expenses |
( |
( |
|
Other operating income |
|
|
|
Operating profit |
|
|
|
Costs relating to Net Benefit Pension Scheme |
( |
( |
|
Interest payable and similar expenses |
( |
( |
|
(378,560) |
(294,292) |
||
Profit before tax |
|
|
|
Tax on profit |
( |
|
|
Profit for the financial year |
|
|
|
Profit/(loss) attributable to: |
|||
Owners of the Company |
|
|
Pack34 Limited
Consolidated Statement of Comprehensive Income for the Year Ended 31 December 2023
2023 |
2022 |
|
Profit for the year |
|
|
Surplus on property, plant and equipment revaluation |
|
|
Deficit on revaluation of other assets |
( |
( |
Other actuarial pension adjustments |
|
|
Remeasurement loss on defined benefit pension schemes |
( |
( |
867,573 |
(45,911) |
|
Total comprehensive income for the year |
|
|
Total comprehensive income attributable to: |
||
Owners of the Company |
|
|
Pack34 Limited
(Registration number: SC618673)
Consolidated statement of Financial Position as at 31 December 2023
Note |
2023 |
2022 |
|
Fixed assets |
|||
Intangible assets |
|
|
|
Tangible assets |
|
|
|
|
|
||
Current assets |
|||
Stocks |
|
|
|
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Total assets less current liabilities |
|
|
|
Creditors: Amounts falling due after more than one year |
( |
( |
|
Net assets excluding pension asset/(liability) |
6,256,712 |
5,501,196 |
|
Annual adjustment relating to 20 year long term defined benefit |
(4,380,000) |
(5,225,000) |
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
|
|
|
Revaluation reserve |
|
|
|
Profit and loss account |
|
|
|
Equity attributable to owners of the company |
|
|
|
Total equity |
|
|
Approved and authorised by the
......................................... |
Pack34 Limited
(Registration number: SC618673)
Statement of Financial Position as at 31 December 2023
Note |
2023 |
2022 |
|
Current assets |
|||
Cash at bank and in hand |
|
|
|
Creditors: Amounts falling due within one year |
- |
( |
|
Net assets/(liabilities) |
|
( |
|
Capital and reserves |
|||
Called up share capital |
1 |
1 |
|
Retained earnings |
- |
(950) |
|
Shareholders' funds/(deficit) |
1 |
(949) |
Approved and authorised by the
......................................... |
Pack34 Limited
Consolidated Statement of Changes in Equity for the Year Ended 31 December 2023
Equity attributable to the parent company
Share capital |
Revaluation reserve |
Retained earnings |
Total |
Total equity |
|
At 1 January 2023 |
|
|
|
|
|
Profit for the year |
- |
- |
|
|
|
Other comprehensive income |
- |
( |
|
|
|
Total comprehensive income |
- |
( |
|
|
|
At 31 December 2023 |
|
|
|
|
|
Pack34 Limited
Consolidated Statement of Cash Flows for the Year Ended 31 December 2023
Note |
2023 |
2022 |
|
Cash flows from operating activities |
|||
Profit for the year |
|
|
|
Adjustments to cash flows from non-cash items |
|||
Depreciation and amortisation |
|
|
|
Finance costs |
|
|
|
Income tax expense |
|
( |
|
|
|
||
Working capital adjustments |
|||
Increase in stocks |
( |
( |
|
Decrease/(increase) in trade debtors |
|
( |
|
(Decrease)/increase in trade creditors |
( |
|
|
Decrease in retirement benefit obligation net of actuarial changes |
( |
( |
|
Net cash flow from operating activities |
|
|
|
Cash flows from investing activities |
|||
Acquisitions of tangible assets |
( |
( |
|
Acquisition of intangible assets |
- |
( |
|
Net cash flows from investing activities |
( |
( |
|
Cash flows from financing activities |
|||
Interest paid |
( |
( |
|
Payments to finance lease creditors |
( |
( |
|
Net cash flows from financing activities |
( |
( |
|
Net increase in cash and cash equivalents |
|
|
|
Cash and cash equivalents at 1 January |
( |
( |
|
Cash and cash equivalents at 31 December |
(786,755) |
(1,021,097) |
Pack34 Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
General information |
The Company is a private company limited by share capital, incorporated in Scotland .
The address of its registered office is:
These financial statements were authorised for issue by the
Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.
Basis of preparation
These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.
Basis of consolidation
The consolidated financial statements consolidate the financial statements of the Company and its subsidiary undertakings drawn up to 31 December 2023.
Pack34 Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
A subsidiary is an entity controlled by the Company. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the Income Statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Group.
The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the Group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.
Inter-company transactions, balances and unrealised gains on transactions between the Company and its subsidiaries, which are related parties, are eliminated in full.
Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.
Going concern
The financial statements have been prepared on a going concern basis.
Revenue recognition
Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the Group’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts and after eliminating sales within the Group.
The Group recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the Group's activities.
Pack34 Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Foreign currency transactions and balances
Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.
Tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
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 Group operates and generates taxable income.
Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the consolidated financial statements.
Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.
Tangible assets
Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
Asset class |
Depreciation method and rate |
Office Equipment |
33% Straight line |
Plant and Machinery |
10% Straight line |
Equipment |
5% Straight line |
Business combinations
Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the Group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.
Pack34 Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Goodwill
Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date. Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.
Intangible assets
Separately acquired trademarks and licences are shown at historical cost.
Trademarks, licences (including software) and customer-related intangible assets acquired in a business combination are recognised at fair value at the acquisition date.
Trademarks, licences and customer-related intangible assets have a finite useful life and are carried at cost less accumulated amortisation and any accumulated impairment losses.
Amortisation
Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:
Asset class |
Amortisation method and rate |
Patents |
10% Straight line |
Investments
Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.
Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Trade debtors
Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.
Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables.
Pack34 Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.
The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are 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.
Trade creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the Group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.
Borrowings
Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the income statement over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
Leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.
Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation.
Lease payments are apportioned between finance costs in the income statement and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.
Pack34 Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the Group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
Financial instruments
Classification
Turnover |
The analysis of the Group's Turnover for the year from continuing operations is as follows:
2023 |
2022 |
|
Sale of goods |
|
|
Other operating income |
The analysis of the Group's other operating income for the year is as follows:
2023 |
2022 |
|
Government grants |
|
|
Operating profit |
Arrived at after charging/(crediting)
2023 |
2022 |
|
Depreciation expense |
|
|
Amortisation expense |
|
|
Operating lease expense - plant and machinery |
|
|
Pack34 Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Interest payable and similar expenses |
2023 |
2022 |
|
Interest on obligations under finance leases and hire purchase contracts |
|
|
Foreign exchange gains |
|
|
|
|
Pack34 Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Staff costs |
The aggregate payroll costs (including director's remuneration) were as follows:
2023 |
2022 |
|
Wages and salaries |
|
|
Social security costs |
|
|
Other short-term employee benefits |
|
|
Pension costs, defined contribution scheme |
|
|
Other employee expense |
|
|
|
|
The average number of persons employed by the group (including the director) during the year, analysed by category was as follows:
2023 |
2022 |
|
Production |
|
|
Administration and support |
|
|
|
|
Pack34 Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Director's remuneration |
The Director's remuneration for the year was as follows:
2023 |
2022 |
|
Remuneration |
|
|
Auditors' remuneration |
2023 |
2022 |
|
Audit of these financial statements |
950 |
900 |
Audit of the financial statements of subsidiaries of the company pursuant to legislation |
15,550 |
15,100 |
|
|
Taxation |
Tax charged/(credited) in the consolidated income statement
2023 |
2022 |
|
Current taxation |
||
UK corporation tax |
( |
( |
Deferred taxation |
||
Arising from origination and reversal of timing differences |
|
|
Arising from changes in tax rates and laws |
- |
( |
Total deferred taxation |
|
( |
Tax expense/(receipt) in the income statement |
|
( |
Pack34 Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Intangible assets |
Group
Goodwill |
Trademarks, patents and licenses |
Total |
|
Cost or valuation |
|||
At 1 January 2023 |
|
|
|
At 31 December 2023 |
|
|
|
Amortisation |
|||
At 1 January 2023 |
- |
|
|
Amortisation charge |
|
|
|
At 31 December 2023 |
|
|
|
Carrying amount |
|||
At 31 December 2023 |
|
|
|
At 31 December 2022 |
|
|
|
Pack34 Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Tangible assets |
Group
Equipment |
Plant and machinery |
Office equipment |
Total |
|
Cost or valuation |
||||
At 1 January 2023 |
|
|
|
|
Additions |
|
|
|
|
At 31 December 2023 |
|
|
|
|
Depreciation |
||||
At 1 January 2023 |
|
|
|
|
Charge for the year |
|
|
|
|
At 31 December 2023 |
|
|
|
|
Carrying amount |
||||
At 31 December 2023 |
|
|
|
|
At 31 December 2022 |
|
|
|
|
Stocks |
Group |
Company |
|||
2023 |
2022 |
2023 |
2022 |
|
Raw materials and consumables |
|
|
- |
- |
Work in progress |
|
|
- |
- |
Finished goods and goods for resale |
|
|
- |
- |
|
|
- |
- |
Pack34 Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Debtors |
Group |
Company |
||||
Current |
Note |
2023 |
2022 |
2023 |
2022 |
Trade debtors |
|
|
- |
- |
|
Prepayments |
|
|
- |
- |
|
Deferred tax assets |
|
|
- |
- |
|
Income tax asset |
|
|
- |
- |
|
|
|
- |
- |
Cash and cash equivalents |
Group |
Company |
|||
2023 |
2022 |
2023 |
2022 |
|
Cash on hand |
|
|
- |
- |
Cash at bank |
|
|
|
|
|
|
|
|
|
Bank overdrafts |
( |
( |
- |
- |
Cash and cash equivalents in statement of cash flows |
(786,755) |
(1,021,097) |
1 |
1 |
Creditors |
Group |
Company |
||||
Note |
2023 |
2022 |
2023 |
2022 |
|
Due within one year |
|||||
Loans and borrowings |
|
|
- |
- |
|
Trade creditors |
|
|
- |
- |
|
Social security and other taxes |
|
|
- |
- |
|
Other payables |
- |
- |
- |
|
|
Accruals |
|
|
- |
- |
|
Income tax liability |
89,087 |
99,734 |
- |
- |
|
|
|
- |
|
Pack34 Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Group |
Company |
||||
Note |
2023 |
2022 |
2023 |
2022 |
|
Due after one year |
|||||
Loans and borrowings |
- |
|
- |
- |
|
Other non-current financial liabilities |
132,119 |
186,228 |
- |
- |
|
|
|
- |
- |
Pack34 Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Pension and other schemes |
Defined contribution pension scheme
The Group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the Group to the scheme and amounted to £
Defined benefit pension schemes
As stated in the accounting policies, the company operates a retirement benefit scheme. The scheme is a defined
benefit occupational pension scheme with assets held in separate trustee administered funds and is contracted-out of
the state earnings related scheme. The scheme was closed to new entrants with effect from 1 January 2003. The
scheme ceased accruals of future service benefits with effect from 31 August 2009. Contributions to the retirement
benefit scheme are determined by a qualified actuary using the projected unit method.
Pack34 Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
The date of the most recent comprehensive actuarial valuation was
valuation are as follows:
Discount rate -
The discount rate will be calculated using the Nominal Gilt Yield curve plus 0.25% p.a at each term.
Return on existing assets and new contributions over the deficit recover period -
The return on assets over the deficity recover period will be calculated as 1.25% p.a. above the discount rate used to
value the technical provisions at each term. This is higher than the assumptions used to value the technical
provisions, in order to take same advance credit for the additional investment returns anticipated from the trustee's
investment strategy.
Rate of inflation (Retail Prices Index) -
The rate of inflation as measured by RPI growth will be calculated using the Gilt Inflation Curve less 0.1% p.a. at
each term to reflect the "inflation risk premium" for fixed interest gilts and the high demand/low supply of index
linked gilts relative to fixed interest gilts.
Rate of inflation (Customer Prices Index) -
The assumption for CPI growth will be calcuated as the assumption for RPI inflation less 0.70% p.a. at each term
until 2030 and as the assumption for RPI inflation thereafer.
Revalution of penions in deferment -
Statutory revaluation is calculated by splitting the accrued pension into the Guaranteed Minimum Pension ("GMP")
component and the excess. The GMP element will increase by a fixed rate. The remaining deferred pension will
increase during deferment by 5% per annum or the increase in inflation if lower (this is based on RPI until 2010 and
CPI thereafter).
Increases in pension payments -
Pre 6 April 1988 GMP: Nil
Post 5 April 1988 GMP: CPI subject to a maximum of 3% p.a.
Pre 1 July 1991 non GMP pension (members of the old Low & Bonar Group RBS): 3% p.a.
Pre 1 July 1991 non-GMP pension (all other member): Nil
Post 30 June 1991, pre 6 April 2006 non-GMP pension: RPI subject to a maximum of 5% p.a.
Post 5 April 2006 pension: RPI subject to a maximum of 2.5% p.a.
Pensions are increased on 1 April each year.
The total cost relating to defined benefit schemes for the year recognised in profit or loss as an expense was
£318,000 (2022 - £232,000).
The total cost relating to defined benefit schemes for the year included in the cost of an asset was £Nil (2022 - £-).
The total cost relating to defined benefit schemes for the year recognised in profit or loss as an expense was £318,000 (2022 - £232,000).
The total cost relating to defined benefit schemes for the year included in the cost of an asset was £Nil (2022 - £-).
Pack34 Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Research into the discount rate assumption has shown that most companies allowed for asset outperformance over
the discount rate assumption of more than 0.5%.
The company has a recovery plan of over 20 years and all repayments have been made as they fall due. The liability
is a figure taken at a certain point in time taking into account discount and inflation rates and it changes day to day.
We have agreed a recovery plan which aims to eliminate this shortfall by 30 April 2046.
The company’s PPF levy has been set at one of the highest bands for many years. However, due to the improving
company financial performance, the levy band is now about quarter of the fee it has been in historic years..
The financial performance of this company is such that at current profit levels, the underfund will comfortably be
paid with excess funds available for business growth. The company also expects, taking above information into
account that the pension liability will decrease in the 2024 year, even though there are various factors that can affect
this.
Reconciliation of scheme assets and liabilities to assets and liabilities recognised
The amounts recognised in the statement of financial position are as follows:
2023 |
2022 |
|
Fair value of scheme assets |
|
|
Present value of defined benefit obligation |
( |
( |
Defined benefit pension scheme deficit |
( |
( |
Defined benefit obligation
Changes in the defined benefit obligation are as follows:
2023 |
|
Present value at start of year |
|
Current service cost |
|
Interest cost |
|
Actuarial gains and losses |
|
Benefits paid |
( |
Present value at end of year |
|
Fair value of scheme assets
Changes in the fair value of scheme assets are as follows:
Pack34 Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
2023 |
|
Fair value at start of year |
|
Interest income |
|
Return on plan assets, excluding amounts included in interest income/(expense) |
|
Employer contributions |
|
Benefits paid |
( |
Fair value at end of year |
|
Pack34 Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Analysis of assets
The major categories of scheme assets are as follows:
2023 |
2022 |
|
Cash and cash equivalents |
|
|
Equity instruments |
|
|
Debt instruments |
|
|
Other |
11,847,000 |
12,099,000 |
|
|
Return on scheme assets
2023 |
2022 |
|
Return on scheme assets |
|
( |
The pension scheme has not invested in any of the Group's own financial instruments or in properties or other assets used by the Group.
Principal actuarial assumptions
The principal actuarial assumptions at the statement of financial position date are as follows:
2023 |
2022 |
|
Discount rate |
|
|
Future pension increases |
|
|
Inflation |
|
|
Pack34 Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Post retirement mortality assumptions
2023 |
2022 |
|
Current UK pensioners at retirement age - male |
20.00 |
21.00 |
Current UK pensioners at retirement age - female |
23.00 |
23.00 |
Future UK pensioners at retirement age - male |
22.00 |
22.00 |
Future UK pensioners at retirement age - female |
24.00 |
24.00 |
Share capital |
Allotted, called up and fully paid shares
2023 |
2022 |
|||
No. |
£ |
No. |
£ |
|
|
|
1 |
|
1 |
Loans and borrowings |
Group |
Company |
|
2023 |
2023 |
|
Current loans and borrowings |
||
Bank overdrafts |
|
- |
HP and finance lease liabilities |
|
- |
Other borrowings |
|
- |
|
- |
Parent and ultimate parent undertaking |
This is the ultimate parent company of the group.