Company Registration No. 01558016 (England and Wales)
LC PACKAGING UK LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2023
1-4 London Road
Spalding
Lincolnshire
PE11 2TA
LC PACKAGING UK LIMITED
COMPANY INFORMATION
Directors
Mr L Lammers
Mr G N Jansen
Company number
01558016
Registered office
Bridge Road
Long Sutton
Spalding
Lincs
PE12 9EF
Auditor
TC Group
1-4 London Road
Spalding
Lincolnshire
PE11 2TA
LC PACKAGING UK LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Profit and loss account
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 25
LC PACKAGING UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

Fair Review of the business

The company experienced a reduction in turnover during 2023 as a result of sales price deflation and weaker demand from customers across a number of market sectors.

 

Relationships with the bank and it’s creditors remain strong as does the balance sheet that now exceeds £5.4m

 

As shown in the profit and loss, the profit for the period after taxation amounted to £701,511 (2022: ££935,428). The profit for the period is wholly from the continuous operations of the company, all of which are derived from the principal activities of the company.

 

 

The company's key financial and other performance indicators during the year were as follows:

 

Unit 2023 2022

Turnover £ 16,674,610 19,685,833

Gross profit margin % 15 14

Profit before tax £ 916,911 1,170,899

Principal risks and uncertainties

The company has established a financial management framework whose primary objectives are to protect the company from events that hinder the achievement of the company's performance objectives. The objectives aim to limit undue counterparty exposure, ensure sufficient working capital exists, increase market share and monitor the management of risk.

 

The key risks affecting the company are set out below:

 

Market

The industry in which the company operates, particularly the sector supplying the multiple retailers, continues to be highly competitive. The company operates a policy of continuously reviewing its product range and works together with its retail customers to ensure product offerings continue to meet and exceed consumer expectation and are priced to deliver demand volume at an acceptable rate of return to the stakeholders. The company considers all risks in its priced product offerings.

 

Customer and Supplier relationships

The company recognises the importance of both its customer and supplier relationships in delivering both its strategy and continued growth aspirations. The company interacts closely and regularly with its customers and suppliers to develop open and honest relationships ensuring focus on product offerings are maintained and allowing challenges to be overcome in an efficient and practical manner.

 

Foreign exchange

The company precures certain raw materials from overseas supplies which are traded and paid for in Euros and US Dollars. The company works closely with its banking partners to mitigate and limit any negative effects of currency fluctuations. As a result, the directors believe the potential risks are reduced to acceptable levels.

Future developments

We expect the year ahead to remain challenging due to uncertainty over customer demand. However we are confident that we will continue to make progress in 2024 through strong new business efforts, the continued effective management of input prices and operational efficiencies.

LC PACKAGING UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

On behalf of the board

Mr L Lammers
Director
7 May 2024
LC PACKAGING UK LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company continued to be that of the wholesaling and retailing of packaging products.

Results and dividends

The results for the year are set out on page 9.

The directors recommend a final dividend payment of £701,515 be made in respect of the financial period ending 31 December 2023 (2022 - £800,000).

Directors

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

Mr L Lammers
Mr G N Jansen
Auditor

The auditor, TC Group, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of disclosure to auditor

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

Political donations

The company made no political contributions or incurred any political expenditure during the period (2022 - £Nil).

On behalf of the board
Mr L Lammers
Mr G N Jansen
Director
Director
7 May 2024
LC PACKAGING UK LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

LC PACKAGING UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LC PACKAGING UK LIMITED
- 5 -
Opinion

We have audited the financial statements of LC Packaging UK Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

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

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

LC PACKAGING UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LC PACKAGING UK LIMITED
- 6 -

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

Matters on which we are required to report by exception

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

 

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

 

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

Extent to which the audit was considered capable of detecting irregularities, including fraud

The objectives of our audit, in respect of fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. however, the primary responsibility for the prevention and detection of fraud rests with those charged with governance of the entity and its management.

 

LC PACKAGING UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LC PACKAGING UK LIMITED
- 7 -

Our approach was as follows:

 

Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.

 

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

 

A further description of our responsibilities is available on the Financial Reporting Council’s website at:

https://www.frc.org.uk/Our-Work/Audit/Audit-and-assurance/Standards-and-guidance/Standards-and-guidance-forauditors/Auditors-This description forms part of our auditor’s report.

LC PACKAGING UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LC PACKAGING UK LIMITED
- 8 -

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.

Andrew Atkins (Senior Statutory Auditor)
For and on behalf of TC Group
23 May 2024
Statutory Auditor
1-4 London Road
Spalding
Lincolnshire
PE11 2TA
LC PACKAGING UK LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
16,674,610
19,685,833
Cost of sales
(14,126,275)
(16,870,334)
Gross profit
2,548,335
2,815,499
Administrative expenses
(1,567,326)
(1,558,229)
Operating profit
4
981,009
1,257,270
Interest payable and similar expenses
6
(64,098)
(86,371)
Profit before taxation
916,911
1,170,899
Tax on profit
7
(215,400)
(235,471)
Profit for the financial year
701,511
935,428

The profit and loss account has been prepared on the basis that all operations are continuing operations.

 

The company has no recognised gains or losses for the year other than the results above.

LC PACKAGING UK LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
214,440
221,352
Investments
11
200
200
214,640
221,552
Current assets
Stocks
13
4,641,110
6,353,805
Debtors
14
2,518,923
3,190,954
Cash at bank and in hand
485,400
2,517
7,645,433
9,547,276
Creditors: amounts falling due within one year
16
(2,922,857)
(4,746,435)
Net current assets
4,722,576
4,800,841
Total assets less current liabilities
4,937,216
5,022,393
Creditors: amounts falling due after more than one year
17
(164,700)
(248,349)
Provisions for liabilities
Deferred tax liability
19
53,212
54,736
(53,212)
(54,736)
Net assets
4,719,304
4,719,308
Capital and reserves
Called up share capital
21
65,000
65,000
Profit and loss reserves
4,654,304
4,654,308
Total equity
4,719,304
4,719,308
The financial statements were approved by the board of directors and authorised for issue on 7 May 2024 and are signed on its behalf by:
Mr L Lammers
Mr G N Jansen
Director
Director
Company Registration No. 01558016
LC PACKAGING UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
65,000
4,518,880
4,583,880
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
935,428
935,428
Dividends
8
-
(800,000)
(800,000)
Balance at 31 December 2022
65,000
4,654,308
4,719,308
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
701,511
701,511
Dividends
8
-
(701,515)
(701,515)
Balance at 31 December 2023
65,000
4,654,304
4,719,304
LC PACKAGING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information

LC Packaging UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is Bridge Road, Long Sutton, Spalding, Lincs, PE12 9EF.

1.1
Accounting convention

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

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

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value.

Summary of disclosure exemptions;

- FRS 102 Section 33, the requirement to disclose transactions with group companies on the grounds that the consolidated financial statements are prepared by the ultimate parent company.

 

- FRS 102 Section 7, the requirement to prepare a Statement of Cash Flows on the grounds that the consolidated financial statements are prepared by the ultimate parent company.

 

- FRS 102 paragraph 1, 12(e), the requirement to disclose total compensation of key management personnel, on the basis that it is a qualifying entity and its ultimate parent company includes key management compensation in its own consolidated financial statements.

1.2
Going concern

The Directors have a reasonable expectation that the Company have adequate facilities to continue for a period of at least 12 months following the date of these financial statements. Given this, the financial statements have been prepared on a going concern basis.true

1.3
Turnover

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

 

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

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

LC PACKAGING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

1.4
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is between 5 and 10 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.5
Tangible fixed assets

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

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

Freehold land and buildings
4% straight line
Fixtures and fittings
15% - 33% straight line
Office Equipment
15% - 33% straight line
Motor vehicles
25% straight line

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

1.6
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

LC PACKAGING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -

Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.7
Impairment of fixed assets

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

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

 

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

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

1.8
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the average cost (AVCO) 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.

1.9
Cash and cash equivalents

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

LC PACKAGING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.10
Financial instruments

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

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

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

Basic financial assets

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

Other financial assets

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

Impairment of financial assets

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

 

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

 

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

Derecognition of financial assets

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

LC PACKAGING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Classification of financial liabilities

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

Basic financial liabilities

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

 

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

 

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

Other financial liabilities

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

 

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

Derecognition of financial liabilities

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

1.11
Equity instruments

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

1.12
Taxation

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

LC PACKAGING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
Current tax

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

Deferred tax

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

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.13
Employee benefits

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

 

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

 

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

1.14
Retirement benefits

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

1.15
Leases

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

1.16
Foreign exchange

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

LC PACKAGING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
2
Judgements and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimated and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. These include an estimate over the carrying value of goodwill, the valuation and obsolescence of stock as well as provisions for bad debts. It has been deemed that no other judgements have a significant effect on the financial statements other than those discussed.

 

Goodwill - Positive purchased goodwill has been capitalised and classified as an asset on the balance sheet and amortised over its expected useful life being 5-10 years.

 

Obsolete stock - Stock movements in the period are reviewed and provisions calculated based on the number of items sold, all items with no movement after 5 years will have a £nil value.

 

Bad debts - Debtors are reviewed monthly for those balances over 120 days at which point a bad debt provision is considered.

 

Valuation of investments - Investments are reviewed annually for indications of impairment.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
UK
16,557,600
19,272,010
Europe
100,121
339,232
Rest of world
16,889
74,591
16,674,610
19,685,833
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
(59,646)
123,125
Fees payable to the company's auditor for the audit of the company's financial statements
14,600
14,100
Depreciation of owned tangible fixed assets
88,029
90,966
Loss on disposal of tangible fixed assets
13
-
Operating lease charges
283,431
286,384
LC PACKAGING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
5
Employees

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

2023
2022
Number
Number
Administration and support
19
20
Sales
22
27
Total
41
47

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
1,665,556
1,721,743
Social security costs
176,599
191,935
Advertising staff
1,241
36,654
Other employee expense
6,080
14,299
Pension costs
112,829
84,493
1,962,306
2,049,123

There were no directors included on the payroll for the year.

6
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
25,919
51,688
Other interest on financial liabilities
38,179
34,683
64,098
86,371
7
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
216,924
239,733
LC PACKAGING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Taxation
2023
2022
£
£
(Continued)
- 20 -
Deferred tax
Origination and reversal of timing differences
(1,524)
(4,262)
Total tax charge
215,400
235,471

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

2023
2022
£
£
Profit before taxation
916,911
1,170,899
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
229,228
222,471
Effect of change in corporation tax rate
(13,828)
13,000
Taxation charge for the year
215,400
235,471
8
Dividends
2023
2022
£
£
Final paid
701,515
-
0
Interim paid
-
0
800,000
701,515
800,000
LC PACKAGING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
9
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2023 and 31 December 2023
6,386,587
Amortisation and impairment
At 1 January 2023 and 31 December 2023
6,386,587
Carrying amount
At 31 December 2023
-
0
At 31 December 2022
-
0
10
Tangible fixed assets
Freehold land and buildings
Fixtures and fittings
Office Equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2023
274,022
988,892
203,556
-
0
1,466,470
Additions
-
0
42,500
-
0
38,625
81,125
Disposals
(259,630)
(47,506)
(94,129)
-
0
(401,265)
At 31 December 2023
14,392
983,886
109,427
38,625
1,146,330
Depreciation and impairment
At 1 January 2023
273,299
768,263
203,556
-
0
1,245,118
Depreciation charged in the year
115
82,446
(9)
5,477
88,029
Eliminated in respect of disposals
(259,630)
(47,498)
(94,129)
-
0
(401,257)
At 31 December 2023
13,784
803,211
109,418
5,477
931,890
Carrying amount
At 31 December 2023
608
180,675
9
33,148
214,440
At 31 December 2022
723
220,629
-
0
-
0
221,352
11
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
12
200
200
LC PACKAGING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
12
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
S G Baker Limited
England and Wales
Dormant
Ordinary £1 shares
100.00
13
Stocks
2023
2022
£
£
Raw materials and consumables
4,641,110
6,353,805
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,434,724
3,179,028
Prepayments and accrued income
84,199
11,926
2,518,923
3,190,954
16
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
18
84,993
1,304,761
Trade creditors
501,751
565,288
Amounts owed to group undertakings
725,265
823,939
Corporation tax
119,020
159,139
Other taxation and social security
639,596
952,398
Other creditors
18,088
200
Accruals and deferred income
834,144
940,710
2,922,857
4,746,435
LC PACKAGING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
17
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
18
164,700
248,349
18
Loans and overdrafts
2023
2022
£
£
Bank loans
249,693
345,624
Bank overdrafts
-
0
1,207,486
249,693
1,553,110
Payable within one year
84,993
1,304,761
Payable after one year
164,700
248,349

All bank borrowings are unsecured, there is no security held in relation to bank borrowings or borrowings from related parties.

 

19
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
53,212
54,736
LC PACKAGING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
19
Deferred taxation
(Continued)
- 24 -
2023
Movements in the year:
£
Liability at 1 January 2023
54,736
Credit to profit or loss
(1,524)
Liability at 31 December 2023
53,212
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
112,829
84,493

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

21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
65,000
65,000
65,000
65,000

Rights, preferences and restrictions

Ordinary shares have the following rights, preferences and restrictions:

Shares with full and equal rights to participate in voting in all circumstances and in dividends and capital distributions. The shares are not redeemable.

 

LC PACKAGING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
22
Operating lease commitments
Lessee

The amount of non-cancellable operating lease payments recognised as an expense during the year was £329,230 (2022 - £337,105).

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

2023
2022
£
£
Within one year
183,247
245,346
Between two and five years
45,557
39,374
228,804
284,720
23
Capital commitments

At the year end the company had no capital commitments (2022 - £Nil). The total amount contracted for but not provided in the financial statements was £Nil (2022 - £Nil).

24
Other financial commitments

At the year end the company has entered into forward contracts totalling £1,080,947 (2022 - £1,022,958).

The total amount of other financial commitments not provided for in the financial statements was £1,080,947 (2022 - £1,022,958).

25
Related party transactions
Other information

The company have taken advantage of the exemption of in FRS 102 Section 33 from requirement to disclose transactions with group companies on the grounds that consolidated financial statements are prepared by the ultimate parent company.

26
Ultimate controlling party

The company's immediate parent is LC Packaging International BV, incorporated in Holland.

 

These financial statements are available upon request from Otto Matseweg 9, 2742 JW, Waddinxveen, The Netherlands.

 

The ultimate controlling party is considered by the directors to be Sylard BV and Landapack CVBVA who each have a 50% interest in Beheermaatschappij LaPiPack BV.

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