Registered number: NI015669
MSO CLELAND LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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MSO CLELAND LTD
COMPANY INFORMATION
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Mr Danny Goris (appointed 24 November 2023)
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Prof. Frank Ohle (appointed 24 November 2023)
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Mr Jeffrey Bruce McNeill (resigned 28 September 2023)
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Mr Ralph Wilson Chalmers (resigned 24 November 2023)
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ABN AMRO Commercial Finance PLC
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MSO CLELAND LTD
CONTENTS
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Independent Auditors' Report
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Statement of Comprehensive Income
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Statement of Changes in Equity
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Notes to the Financial Statements
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MSO CLELAND LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present our Strategic Report for the year to 31 December 2023.
Principal activities and business review
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The principal activity of the Company continued to be that of the manufacture of cartons and self-adhesive labels.
As identified in last year’s Strategic Report we entered into a Joint Venture with Van Genechten Packaging (VGP) in October 2022. The success of this relationship led to VGP acquiring 100% of the Cartoncare Group in November 2023, when the following press release was issued:
Van Genechten Packaging Strengthens Presence in UK with Acquisition of Cartoncare Group:
December 8, 2023 - Van Genechten Packaging (VGP) proudly announces that it has acquired 100% of its UK joint venture with CartonCare Group, an expert in printing and packaging. This strategic move strengthens VGP’s position in the UK market, providing enhanced value to customers through expanded design and production capabilities. A significant milestone in VGP’s growth strategy.
One year ago, VGP entered a joint venture partnership with CartonCare Group. This group of privately-owned companies, including CartonCare Ltd, MSO Cleland Ltd and Pendragon Presentation Packaging Ltd, has a combined annual turnover of 30 million euros. The acquisition of the group brings the number of VGP sites to a total of 12 locations in 9 countries.
Frank Ohle, CEO of Van Genechten Packaging Group states:
By integrating CartonCare Group in the VGP family, we strengthen our position in the UK market. Their wide customer base in general and premium packaging enables us to bring even greater value to our customers, with expanded design and production capabilities. Together, we can grow and prosper in the UK and EU market of folding carton.”
For existing business partners of CartonCare Group, this acquisition brings continuity. The operational teams remain in place and Managing Director Joanna Calixto keeps control over the day-to-day business. According to her, this merger is the best way forward:
“Guided by the resources and expertise of VGP, we are even better equipped to innovate, create and deliver the best sustainable packaging for our customers. We’re looking forward to a bright and exciting future, together with all our partners and customers.”
Turning to the results for 2023, the slowdown in pressures on supply chains seen at the end of 2022 continued and overstocking during the chaos led to a drop in demand reflected in the slight drop in turnover for the year.
Results for the year ended December 2023 are as follows: with further, and more detailed comments on the Group including Pendragon and Cartoncare Group are to be found in the Consolidated CartonCare Accounts.
Page 1
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MSO CLELAND LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Principal activities and business review (continued)
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As will be seen from the following accounts the net profit is after a charge to depreciation of over £1 million.
The steady improvement in Net Asset Value from 2013: (£2.014m) to 2023: £5.15m has been accelerating and we are confident that as part of the VGP Group we will see further improvements.
The Company continues to be regularly Audited, both by way of ISO 9001, BRC, ISO 14001 etc as well as being adjudicated in relation to our attitude, approach and commitment to Corporate, Social and Sustainability responsibilities via Ecovadis where we again scored very highly achieving Gold Award Status, putting us in the top 5% of Companies evaluated.
We create brand value through outstanding packaging solutions to achieve our customers’ business objectives. Van Genechten’s vision is to be the leading independent European folding carton solution provider driven by these CORE values (we find synergy indeed with the values of the CartonCare Group over the preceding years):
• Customer focus
• Collaboration
• Ownership
• Respect
• Excellence
The knowledge gained via our Knowledge Transfer Partnership in association with the University of Ulster continues to be ever more relevant, enabling us to bring some science to what is a very emotive subject; and assist our customers with the reality of improving their carbon impact.
We also endeavour to make the right decisions throughout our processes, and during 2023 made a number of improvements which have a positive effect, for example the replacement of single glazed windows with double glazing and the changeover of company vehicles to electric ones.
Page 2
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MSO CLELAND LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Principal risks and uncertainties
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The process of risk management is addressed through a framework of policies, procedures and internal controls. All policies are subject to Board approval and ongoing review by the Management Team. Compliance with regulations including the full range of certifications required in order to service our Customer’s legal and ethical standards are a high priority for the Company. All such approvals and Certifications are current.
The Company uses financial instruments throughout the business. The core risks associated with the Company's financial instruments (i.e. interest-bearing loans, cash, short dated liquid investments and finance leases, on the operational level trade receivables and payables) are: Currency Risk, Interest Rate Risk and Credit Risk.
Currency Risk
The Company’s activities in the Republic of Ireland are conducted primarily in Euros and the Company’s activities in the UK obviously in Sterling, Variances affecting operational activities in this regard are reflected in the profit and loss account in the years in which they arise. Significantly reducing the currency risk is the fact that in addition to selling in both Euros and Sterling – we also have significant purchases in both currencies. As part of a larger group now which has operations across Europe this is a diminishing risk.
Finance and interest rate risk.
The Company’s objective in relation to interest-rate management is to minimize the impact of interest rate volatility on interest rate costs in order to protect recorded profitability.
Credit risk
The Company has no significant concentrations of credit risk. Customers who wish to trade on credit terms are subject to strict verification procedures in advance of credit being awarded; they are continually monitored, credit limits set and appropriate levels of Credit Insurance in place.
The Board will continue to monitor all these positions closely.
At the point that CartonCare acquired MSO Cleland, the rationale for doing so was to save, protect, and grow the number of jobs, I believe that the involvement of the VGP group now secures the future, and added to the improvements made, including the new kit purchased, I believe that we will continue to be very well placed to provide our excellent services to all existing customers, as well as new ones.
Therefore once again I thank all of our customers and reaffirm that we continue to strive to improve MSO in order to support their businesses as they move forward, especially in these continued challenging times. Thank you also to our suppliers - we will continue to strive to develop meaningful partnerships; and especially thank you to our employees who have continued to work with us and helped deliver another profitable year.
This report was approved by the board on 5 September 2024 and signed on its behalf.
Mrs Joanna Calixto
Director
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Page 3
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MSO CLELAND LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
The principal activity of the Company continues to be that of the manufacturing of cartons and self-adhesive labels.
The profit for the year, after taxation, amounted to £854,113 (2022 - £1,189,645).
The Directors have not recommended a dividend (2022: £NIL).
The directors who served during the year and up to the date of signing the financial statements were:
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Mr Danny Goris (appointed 24 November 2023)
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Prof. Frank Ohle (appointed 24 November 2023)
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Mr Jeffrey Bruce McNeill (resigned 28 September 2023)
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Mr Ralph Wilson Chalmers (resigned 24 November 2023)
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The Directors plan to continue its current activities and believes that performance will improve for the incoming year.
Research and development activities
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The Company undertook research and development activities during the financial period. The Company believes that the performance will continue to improve as a result of this ongoing research and development work.
Page 4
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MSO CLELAND LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Directors' responsibilities statement
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The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The auditors, AAB Group Accountants Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Disclosure of information to auditors
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Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.
Post balance sheet events
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There have been no significant events affecting the Company since the year end.
This report was approved by the board on 5 September 2024 and signed on its behalf.
Mrs Joanna Calixto
Director
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Page 5
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MSO CLELAND LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MSO CLELAND LTD
We have audited the financial statements of MSO Cleland Ltd (the 'Company') for the year ended 31 December 2023, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
∙give a true and fair view of the state of the Company's affairs as at 31 December 2023 and of its profit for the year then ended;
∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
∙have been prepared in accordance with the requirements of the Companies Act 2006.
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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
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In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
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MSO CLELAND LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MSO CLELAND LTD (CONTINUED)
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
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In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
∙adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
∙the financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of directors' remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
Responsibilities of directors
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As explained more fully in the Directors' Responsibilities Statement set out on page 5, 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.
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MSO CLELAND LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MSO CLELAND LTD (CONTINUED)
Auditors' responsibilities for the audit of the financial statements
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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 Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We obtained an understanding of the legal and regulatory framework applicable to the company through enquiry of management, industry research and the application of cumulative audit knowledge. We identified the following principal laws and regulations relevant to the company – Companies Act 2006 and the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102).
We developed an understanding of the key fraud risks to the entity (including how fraud might occur), the controls in place to help mitigate those risks, and the accounts, balances and disclosures within the financial statements which may be susceptible to management bias. Our understanding was obtained through review of the financial statements for significant accounting estimates, analysis of journal entries, walkthrough of the key controls cycles in place and enquiry of management.
As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
∙Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
∙Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Company's internal control.
∙Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
∙Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors' Report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditors' Report. However, future events or conditions may cause the Company to cease to continue as a going concern.
∙Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
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MSO CLELAND LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MSO CLELAND LTD (CONTINUED)
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 Auditors' 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.
Teresa Campbell (Senior Statutory Auditor)
for and on behalf of
AAB Group Accountants Limited
Statutory Auditors
The Quays
Newry
Down
BT358QS
5 September 2024
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MSO CLELAND LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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Interest receivable and similar income
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Interest payable and similar expenses
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Profit for the financial year
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There was no other comprehensive income for 2023 (2022:£NIL).
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The notes on pages 13 to 29 form part of these financial statements.
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Page 10
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MSO CLELAND LTD
REGISTERED NUMBER: NI015669
BALANCE SHEET
AS AT 31 DECEMBER 2023
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Capital redemption reserve
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 13 to 29 form part of these financial statements.
Page 11
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MSO CLELAND LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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Capital redemption reserve
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Comprehensive income for the year
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Comprehensive income for the year
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The notes on pages 13 to 29 form part of these financial statements.
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Page 12
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MSO CLELAND LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
MSO Cleland Limited is a private company limited by shares incorporated in Northern Ireland. The registered office is 399 Castlereagh Road, Belfast, Co.Antrim, Northern Ireland, BT5 6QP.
The principal activity of the Company continues to be that of the manufacturing of cartons and self-adhesive labels.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
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Financial Reporting Standard 102 - reduced disclosure exemptions
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The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Cartoncare Limited as at 31 December 2023 and these financial statements may be obtained from Companies House..
At the time of approving the financial statements, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus the Directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Page 13
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MSO CLELAND LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
∙the Company has transferred the significant risks and rewards of ownership to the buyer;
∙the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙the amount of revenue can be measured reliably;
∙it is probable that the Company will receive the consideration due under the transaction; and
∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of revenue can be measured reliably;
∙it is probable that the Company will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
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MSO CLELAND LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.
Interest income is recognised in profit or loss using the effective interest method.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.
Page 15
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MSO CLELAND LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted average basis. Work in progress and finished goods include labour and attributable overheads.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Page 16
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MSO CLELAND LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
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Provisions for liabilities
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Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
Increases in provisions are generally charged as an expense to profit or loss.
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.
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 trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Page 17
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MSO CLELAND LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Financial instruments (continued)
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Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.
Page 18
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MSO CLELAND LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Judgments in applying accounting policies and key sources of estimation uncertainty
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In the application of the Company’s accounting policies, the directors required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Carrying value of stock
Stock represents goods held for sale and is measured at the lower of cost and net realisable value. Net realisable value is the estimated selling prices in the ordinary course of business, less estimated costs necessary to make the sale. Provision is made where the carrying value exceeds the expected net realisable value based on historical experience.
Recoverability of debtors
Estimates are made in respect of the recoverable value of trade and other debtors. When assessing the level of provisions required, factors including current trading experience, historical experience and the ageing profile of debtors is considered.
Valuation of tangible fixed assets
Tangible fixed assets are depreciated over their useful lives, taking into account residual values where appropriate. The actual lives of the assets and residual values are assessed annually and my vary depending on a number of factors. In assessing asset lives, factors such as technological advancements, product life cycles and maintenance programs are taken into account. Residual value assessments consider such issues as remaining life of the asset, projected disposal value and future market conditions.
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An analysis of turnover by class of business is as follows:
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Cartons and self-adhesive labels
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All turnover arose within the United Kingdom.
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Page 19
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MSO CLELAND LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Government grants receivable
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The operating profit is stated after charging:
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Other operating lease rentals
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Depreciation of owned tangible fixed assets
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Depreciation of tangible fixed assets held under finance leases
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Profit on disposal of tangible fixed assets
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During the year, the Company obtained the following services from the Company's auditors:
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Fees payable to the Company's auditors for the audit of the Company's financial statements
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Page 20
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MSO CLELAND LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the year was as follows:
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Company contributions to defined contribution pension schemes
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During the year retirement benefits were accruing to no directors (2022 - NIL) in respect of defined contribution pension schemes.
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The highest paid director received remuneration of £73,288 (2022 - £77,583).
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Other interest receivable
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Page 21
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MSO CLELAND LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Interest payable and similar expenses
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Other loan interest payable
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Finance leases and hire purchase contracts
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Origination and reversal of timing differences
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Page 22
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MSO CLELAND LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
12.Taxation (continued)
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Factors affecting tax charge for the year
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The tax assessed for the year is lower than (2022 - lower than) the standard rate of corporation tax in the UK of 23.5% (2022 - 19%). The differences are explained below:
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.5% (2022 - 19%)
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
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Capital allowances for year in excess of depreciation
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Utilisation of tax losses
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Non-taxable income less expenses not deductible for tax purposes, other than goodwill and impairment
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Total tax charge for the year
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Factors that may affect future tax charges
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There were no factors that may affect future tax charges.
Page 23
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MSO CLELAND LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Assets under construction
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Transfers between classes
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Charge for the year on owned assets
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Charge for the year on financed assets
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The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
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Page 24
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MSO CLELAND LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Raw materials and consumables
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Finished goods and goods for resale
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Inventory is stated after a provision of £543,687 (2022: £809,802).
The difference between purchase price or production cost of stocks and their replacement cost is not material.
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Amounts owed by group undertakings
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Prepayments and accrued income
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Trade debtors are subject to invoice discounting where appropriate.
Amounts owed by group undertakings are interest free, unsecured and repayable on demand.
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Cash and cash equivalents
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Page 25
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MSO CLELAND LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Obligations under finance lease and hire purchase contracts
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Accruals and deferred income
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Included in other loans are commercial finance facilities of £2,067,468 (2022: £1,505,572) which are secured by a fixed and floating charge over the assets of the Company, together with a cross guarantee from parent and fellow subsidiary companies.
Close Brothers Limited has charges over assets held within property plant and equipment, in relation to loan facilities, which will crystallise in the event of default by the Company. The total amount of the facilities are accounted for within obligations under finance lease and hire purchase contracts and other loans.
Amounts owed to group undertakings are unsecured, interest free and repayable on demand.
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Creditors: Amounts falling due after more than one year
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Net obligations under finance leases and hire purchase contracts
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Government grants received
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Close Brothers Limited has charges over assets held within property plant and equipment, in relation to loan facilities, which will crystallise in the event of default by the Company. The total amount of the facilities are accounted for within obligations under finance lease and hire purchase contracts and other loans.
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Page 26
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MSO CLELAND LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Analysis of the maturity of loans is given below:
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Amounts falling due within one year
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Amounts falling due 2-5 years
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Hire purchase and finance leases
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Minimum lease payments under hire purchase fall due as follows:
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Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
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Charged to profit or loss
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Page 27
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MSO CLELAND LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
21.Deferred taxation (continued)
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The provision for deferred taxation is made up as follows:
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Accelerated capital allowances
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Tax losses carried forward
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Short term timing differences
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Allotted, called up and fully paid
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426,000 (2022 - 426,000) Ordinary Shares shares of £1.00 each
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The company has a contingent liability to repay government grants should certain conditions under which they were awarded cease to be met.
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £160,354 (2022 - £132,780). Contributions totalling £34,000 (2022 - £26,748) were payable to the fund at the balance sheet date and are included in creditors.
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Commitments under operating leases
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At 31 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Page 28
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MSO CLELAND LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Related party transactions
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The Company is a 100% subsidiary of MSO Group Limited. The Company has taken advantage of the exemption under FRS102 Section 33. This exemption permits non-disclosure of related party transactions between wholly owned subsidiaries within a group.
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The immediate parent undertaking is MSO Group Limited, a Company incorporated in Northern Ireland. The ultimate parent undertaking is Van Genechten NV, a company incorporated in Belgium.
The smallest group which the results of MSO Cleland Limited are consolidated is that headed by Cartoncare Limited. The consolidated financial statements are available to the public from Companies House. The largest group of undertakings for which group financial statements are drawn up and of which the company is a member is Van Genechten NV.
The ultimate controlling party is Philippe De Somer by virtue of his shareholding in the ultimate parent undertaking
Page 29
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